UTU News Digest - Friday, January 21, 2000

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Friday, January 21, 2000

WASHINGTON: Chemical lobby opposes CN Rail/BNSF deal

WASHINGTON -- The Chemical Manufacturers Association (CMA) said Thursday in a press release it would oppose the proposed merger between Burlington Northern Santa Fe Corp. and Canadian National Railway Co.

The chemical industry lobby group said that, if U.S. regulators do approve the merger, they should only do so while attaching a condition allowing ``captive shippers,'' those with no alternative railroad, to seek service from a competing railroad.

The combination announced in December would create a rail network with almost 50,000 miles (80,500 kilometers) of track, stretching from Halifax on the Atlantic Coast to Vancouver on the Pacific and south to New Orleans and the U.S. West Coast.

Surface Transportation Board Chairman Linda Morgan has already expressed concern that the merger could touch off a new round of industry consolidation at a time when the rail industry is still adjusting to previous mega-mergers.

In letters to both Burlington and Canadian, CMA President Fred Webber said: "CMA members have suffered from severe service problems after recent rail mergers.''

MICHIGAN: Rail fire causes evacuation

FLINT -- A propane train car caught fire early today near several other tankers, forcing police to evacuate hundreds of homes in a 1-mile radius and close several schools near the CSX railyard for fear of an explosion, the Associated Press reported.

There were no immediate reports of injuries. Witnesses described flames shooting out of a hole in the top of the tanker much like a massive wood stove.

The tanker began leaking propane and started to burn about 4:30 a.m. Officials said it was linked to other tanker cars also carrying thousands of gallons of propane.

Police said they evacuated hundreds of homes adjacent to the industrial area. The fire also forced two Flint schools and the entire nearby Beecher school district to close for the day. A 2-mile stretch of Interstate 475 also was closed.

Officials established a shelter at a nearby church for evacuated residents.

Investigators did not immediately know the cause of the fire.

MISSOURI: Judge reduces damages in rail crossing accident to $80 million

KANSAS CITY -- A Jackson County judge reduced by more than half the $160 million jury award to a Sedalia woman severely injured in a rail crossing accident, but it remains among the highest such awards nationwide, the Kansas City Star reported.

Circuit Judge Charles Atwell cut the verdict to $75 million but upheld the jury's finding of punitive damages against the nation's largest railroad.

Union Pacific Railroad Co. did not tell state officials about the dangerous crossing near Warrensburg, where plaintiff Kimberly Alcorn was injured on Aug. 29, 1997, the judge wrote, and the company waited for the government to pay for installing lights and gates. Union Pacific itself did "virtually nothing" to protect the public, Atwell wrote.

Alcorn's $160 million jury award was among the 10 highest in the United States last year, according to Lawyers Weekly USA, and was the largest verdict ever to a single plaintiff in a rail-crossing accident. Lawyers said the previous record damage award in Missouri was about $11 million.

Alcorn is a 34-year-old mother of two who was a passenger in a car hit by an Amtrak train traveling about 70 mph. She suffered multiple broken bones and permanent brain damage.

According to evidence, state officials had warned Union Pacific in fall 1996 that brush and terrain blocked the view at the crossing by about 90 percent. A few months later, a passenger train killed a 22-year-old man at the crossing, four months before Alcorn was hit. An Amtrak assistant engineer testified that he had almost hit five vehicles at the crossing, including a propane truck.

At trial last year, jurors awarded Alcorn $40.4 million in actual damages and found Union Pacific at fault for 75 percent and Amtrak at fault for 25 percent. Jurors also found that Union Pacific alone should pay $120 million in punitive damages.

Ted Williams, the attorney for the railroads, argued after the verdicts that punitive damages were improper. He also said the large verdicts showed "inflamed passion and prejudice" by the jurors, and he requested a new trial.

On Wednesday, Atwell reduced Alcorn's actual damages to $25 million and the punitive damages to $50 million.

A Union Pacific spokesman said that the verdicts were still excessive and that the railroad would appeal.

Amtrak also will appeal, said spokesman Cliff Black. The driver of the car carrying Alcorn should have watched for the train, Black said, and railroad companies are not required to upgrade the signals.

"It's not the railroad's responsibility to accomplish highway engineering projects," Black said.

Union Pacific and other railroads almost always wait for government subsidies to pay $100,000 to $200,000 to install lights and crossing gates at crossings.

Jackson County jurors in the Alcorn case said they wanted to force Union Pacific to pay to upgrade signals at dangerous crossings. A Union Pacific expert testified at trial that lights and crossing gates could stop up to 90 percent of the nation's crossing accidents, which killed 431 persons in 1998.

Alcorn's attorney, Grant Davis, said that the verdict, even after being reduced, set new levels of damages and was a prelude to more like it. Railroads should start to pay for signals, he said.

"It is more cost-efficient to do the right thing," Davis said. "The days of railroads killing hundreds of people at crossings each year without accountability are coming to an end."

Davis said he and his client would be willing to reduce the punitive damages if Union Pacific would use the money to put lights and gates at Missouri crossings.

ILLINOIS: City backs METRA's $60 million extension

GENEVA -- In an effort to address Geneva's increasing parking needs, aldermen have agreed to support Metra's planned $60 million commuter-rail extension west to Elburn, with a completion goal of 2004, the Chicago Tribune reported.

For more than 40 years, Geneva has been the last stop on Metra's Union Pacific Railroad west commuter line. Growth in and west of the city has swelled the number of daily commuters at the station to 1,642, with 202 commuters on the parking permit waiting list.

The city has bought and leased property to provide the 810 commuter parking places and a 100-space park-and-ride facility in the western area of the city. But overflow commuters also park in commercial lots and on residential streets, which are needed by residents and customers.

LOUISIANA: Strict exams sought for bus drivers

NEW ORLEANS -- Bus drivers and truckers should face the same strict medical exams that pilots take to avoid being grounded, the head of the National Transportation Safety Board says.

"You wouldn't want to get on an airplane with a pilot who is unfit,'' said NTSB chairman James Hall. "Each and every day we are sharing our highways with (bus and truck) drivers who are unfit.''

Hall spoke Thursday during a break from a hearing about a bus crash in New Orleans last May that killed 22 people. The hearing was to resume today.

An NTSB investigation found that driver Frank Bedell had a history of heart and kidney problems before the crash, but flaws in the licensing system allowed him to keep on driving.

The Federal Aviation Administration program to make sure pilots are healthy and free of drugs was held up as a model that the U.S. Transportation Department should adopt to improve bus and truck safety.

The FAA requires doctors to take a one-week training course before they can examine pilots, said Dr. Warren Silberman, chief medical officer with the FAA's pilot medical certification program.

All results are forwarded to the FAA for possible review. Also provided to the FAA are results of drug and alcohol tests. Pilots who test positive are grounded while they undergo treatment.

Congress last year passed laws revamping the federal agency responsible for bus and truck regulations, requiring employers to report positive drug tests to state officials and mandating that employers check driver drug test histories.

Yet transportation experts testified that commercial drivers with serious health problems "doctor shop'' for physicians who give easy exams. Others said doctors are unaware of rules about driver health and that oversight by federal officials is virtually nonexistent.

Doctors who perform exams bus drivers and truckers must get every two years never receive training on how commercial drivers should be assessed. And no one monitors their performance, said Dr. Natalie Hartenbaum, a Philadelphia physician who wrote a guide on medical certification for the Transportation Department.

"To do a complete exam takes 20 minutes. Many of them do it in five,'' Dr. Hartenbaum testified.

Safety advocates attending the hearing said the number of highway deaths will drop if federal officials do a better job making sure bus drivers and truckers are healthy and drug-free.

Bedell "should have been caught before that tragic crash occurred,'' said Daphne Izer, a founder of Parents Against Tired Truckers, based in Lisbon Falls, Maine.

The chartered bus Bedell drove was carrying mostly elderly women on a day trip to a Mississippi casino when it veered off Interstate 610 and overturned. Police said Bedell's use of marijuana hours earlier was the main cause.

Bedell had a history of failing bus company drug tests, but the information was never passed on to licensing officials because no federal rules required the disclosure.

NTSB investigators also found that a doctor had diagnosed Bedell with congestive heart failure in 1998 but signed his medical certificate - even though federal law prohibits commercial drivers with the disease from driving.

And less than 12 hours before the crash, Bedell was treated in a hospital emergency room for dehydration and extremely low blood pressure.

Bedell died in August before giving a detailed statement about his drug use, health problems or the crash.

NEW YORK: Union Pacific CEO sees growth in rail transport business

NEW YORK -- Railroad and trucking company Union Pacific Corp.'s (UNP) positive fourth-quarter earnings are a clear illustration of what a difference a year makes, news wires reported.

"There was a huge difference this quarter (compared with last year's period)," said Dick Davidson, Union's chairman and chief executive, in a CNBC interview Thursday.

The company reported fourth-quarter earnings of 95 cents, beating analysts' expectations of 88 cents and a year-ago pro forma profit of 39 cents.

"In '98 we were recovering from service problems after the company merged with Southern Pacific ... but '99 was a year of rebuilding," said Davidson.

Although Union Pacific's merger with Southern Pacific in 1996 affected 1998 earnings, it produced assets that complemented the merged company, Davidson said.

On the downside, Davidson mentioned that the company's trucking division, Overnight Transportation, had some distractions in the second half of the year, mainly because of strikes from the Teamsters union.

"In spite of the adversity," Davidson said, "the company is running well."

Davidson also told CNBC that rail transportation will look more attractive to customers if high fuel prices send trucking prices up.

Davidson said he sees growth in rail transportation but is less optimistic about the trucking business.

"We have to see how the strike will play out," he said.

Finally, Davidson said that Union Pacific is quickly trying to capitalize on e-commerce by offering easier customer access to more real-time information.

TEXAS: Burlington Northern Santa Fe Corporation declares dividend

FORT WORTH -- Directors of Burlington Northern Santa Fe Corporation (NYSE: BNI) voted to pay a regular quarterly dividend of 12 cents per share on outstanding common stock, a company press release said.

Dividends on common stock will be paid April 3, 2000, to shareholders of record March 13, 2000. Common shares outstanding on December 31, 1999, totaled approximately 454 million.

Through its subsidiary, The Burlington Northern and Santa Fe Railway Company, BNSF operates one of the largest rail networks in North America, with 33,500 route miles of track covering 28 states and two Canadian provinces.

WASHINGTON: Report alleges corruption in largest government union
WASHINGTON -- An internal union report lays out a picture of extensive corruption in the nation's largest union of government workers, the American Federation of State, County and Municipal Employees, the New York Times reported.
The report, which was made available by a union official eager to have the federation take a tougher stance on corruption, provides an unusual look at a major union's internal problems and describes corruption far beyond the well-known scandal at the union's giant New York City affiliate, District Council 37.
In all, the report describes corrupt activities by 35 union officials, ranging from the $2.2 million known to have been misappropriated by an official at District Council 37, to $96,000 stolen by the treasurer of Local 366 in Milwaukee to $51,000 taken by a senior official at District Council 20 in Washington.
In dry language, the report describes how union officials forged checks, made unauthorized withdrawals from union accounts, siphoned union dues into their personal accounts and used union credit cards for personal expenses.
The report is a comprehensive list detailing the $4.6 million in claims that the union made to its insurance company, seeking reimbursement under a policy that covers fraud by union officials. The report involved claims pending last November.
Since many unions do not release information about internal corruption, it remains unclear how the amount stolen compares with what has happened at other unions, particularly those better known for struggling with corruption. But the report offers an unusually detailed portrait of internal problems at a union that is on the rise in influence and power.
The federation is the nation's second-largest union, a 1.4-million-member organization that recently surpassed the Teamsters in size, while remaining behind the National Education Association. The union's president, Gerald McEntee, heads the A.F.L.-C.I.O.'s political committee. He is one of labor's most prominent backers of Vice President Al Gore and has overseen more than $4 million in contributions to Democratic causes over the last three years.
While acknowledging the accuracy of the information in the report, officials with the American Federation of State, County and Municipal Employees, known as Afscme, insisted that corruption was no worse in their union than in many others. These officials said that the report attested to the success of the union's stepped-up efforts to audit locals and uncover financial wrongdoing.
More than half the claims arise from New York's District Council 37, with 56 union locals, in which two dozen officials have been indicted. Other corruption claims involved locals in Indiana, Massachusetts, Minnesota, Montana, New Jersey, Ohio and Pennsylvania.
"Clearly something has happened to this union in the past five years," said Carl Biers, executive director of the Association for Union Democracy, a watchdog group in New York. "Things have fallen apart in many, many regions. It wasn't always like this. Clearly, whatever McEntee's strengths are, he has been turning a blind eye to a lot of this."
Lawrence Weinberg, the union's general counsel, said that considering how many locals were in the parent union, it was not extraordinary that there were some corruption problems in a dozen or two locals.
"I think Afscme is cleaner than most unions," Mr. Weinberg said. "When you add up all this union's locals and chapters, we have between 7,000 and 8,000 subordinate bodies, and what you're looking at is a pretty small number out of that universe."
In many cases, union-sponsored audits uncovered the thefts detailed in the report. In addition, officials accused of theft have usually been stripped of their jobs, and some have been indicted. Several of the District Council 37 officials involved in the claims have pleaded guilty to embezzlement.
Officials with the union said that in 1998 the union, concerned about spiraling corruption in New York City and elsewhere, adopted tighter auditing procedures, requiring, for instance, annual audits of any union local or district council with more than 2,000 members.
"We have an aggressive auditing program," Mr. Weinberg said. "We have a zero-tolerance policy for wrongdoing. We believe we're more aggressive in cleaning up than any other union. There may be a price to pay for that. This type of information comes out. But we're doing all the right things."
Like most other unions, the federation of state, county and municipal employees has what is known as a fidelity bond insurance policy that provides for reimbursing the union if an official commits dishonest acts that cause the union to lose money.
In the claims processed by the union's insurance company, the St. Paul Companies, from last Oct. 1 to Nov. 22, the report said, the company paid $605,000 of $2.6 million in claims.
The main reason the company paid less than the amount sought was that the union claimed $2.2 million for money it said was stolen by Charles Hughes, the former president of a local in District Council 37, representing New York City's school crossing guards and cafeteria aides. The policy covering Mr. Hughes provided a maximum of $500,000 in reimbursement to the union.
Mr. Hughes has been charged with embezzlement.
Mr. Hughes's lawyer, Sarita Kedia, said yesterday that her client was not guilty of any wrongdoing.
Glenn Twigg, an agent for the St. Paul Companies, said of the union: "I don't know if they have more claims than other unions. I don't find them to be extraordinary or unextraordinary."
Mr. Twigg said his company examined all claims for reimbursement to make sure they were valid.
Some labor experts said that the corruption in the union, while lamentable, did not approach levels seen decades ago in three unions that were controlled or influenced by organized crime: the Teamsters, the International Longshoremen's Association and the Laborers' International Union of North America.
Speaking about the state, county and municipal employees' union, Edward A. McDonald, former director of the Organized Crime Strike Force for Eastern New York, said: "Any time you have multiple acts of corruption in an international labor organization, it doesn't look good, but if there are 3,000, 4,000 locals and you're talking about three dozen people, it's certainly not a crime wave. But the corruption that's reported pales in comparison to the racketeering activities that characterized certain mob-dominated unions throughout the 70's and 80's."
Mr. Weinberg said one explanation for the corruption was that the union was highly decentralized, so that its locals had more financial autonomy than most other unions.
One episode of corruption in the report involves Robert Gordon, who was ousted as treasurer of the Milwaukee local representing 220 sewer workers after a bookkeeper discovered that some money was missing. A union audit reported that Mr. Gordon had apparently embezzled $96,000 by writing 208 checks to himself that were not approved and were not used for union purposes.
Mr. Gordon has not been indicted. His lawyer, Gerald Boyle, said his client was talking to law-enforcement officials and working with union officials. "We will take care of making sure that whatever needs to be put back into the union's coffers is put back," Mr. Boyle said.
Richard Abelson, a top official with the union, said: "We hold ourselves to very high standards, not only in Afscme, but in Wisconsin. Our expectation is things like that don't happen here."
The report said Steven K. Grubb, the treasurer of a municipal workers' local in Elkhart, Ind., wrote $13,500 in union checks for his personal benefit.
Linda Ard, executive director of the council representing all of the union's 8,000 workers in Indiana, said Mr. Grubb had been removed from office when the local's other officers uncovered the theft.
"This is not anybody's personal money," Ms. Ard said. "This money belongs to the members of the union." Mr. Grubb had admitted that he siphoned off the money, she said. He has not been indicated.
Another claim involved the president of a Long Island chapter of the union, who the union said stole $14,870. The official, Pasquale Ferraro, was removed by a union judicial panel, although he has repeatedly denied any wrongdoing. Mr. Ferraro was indicted in the case.
The report did not mention several prominent episodes of corruption not covered by the claims report. In 1998, for example, the secretary-treasurer of the union's district council in Washington, Thomas W. Waters, pleaded guilty to embezzling $761,000, while the council's finance director, Barbara T. Wood, confessed to stealing $73,500.

WASHINGTON: Justice Dept. to relax oversight of Laborers Union

WASHINGTON -- The Justice Department has agreed to relax its oversight of anti-corruption efforts within the Laborers union, which has operated under threat of a federal takeover for five years, the Associated Press reported.

"We're not walking away from reform in the union, but substantial progress had been made, '' Assistant Attorney General James Robinson, head of the criminal division at Justice, said Thursday.

Under the new agreement, effective Feb. 1, the union will have to keep internal anti-corruption programs intact into 2006, and the government has the right to challenge any substantial changes in court.

The Justice Department, however, is giving up authority it has held since 1995 to place the union under the control of a court-appointed federal trustee at any time it is dissatisfied with the progress of reforms.

Also, after Sept. 30, 2006, the union will be free to modify any of the internal changes that have resulted from federal oversight.

"This agreement is a clear acknowledgment by the government that our union's innovative internal reforms have been effective in ridding the influence of organized crime and corruption, and in building a union that is more open and responsive to its members,'' said Laborers president Terence M. O'Sullivan.

Robinson said the union's overall success at reform was behind the government's action, but among the factors considered is that none of the people named by Justice in a proposed 1995 lawsuit against the union as members or associates of organized crime now hold any position of trust in the union -- including its former president, Arthur Coia.

Coia was cleared last year by an independent hearing officer of charges that he had ties to organized crime. But he resigned Dec. 31, saying he was tired of continuing scrutiny of his conduct.

Union officials said Coia's departure was not a condition required by the government.

"The conversations at the table certainly did not make Mr. Coia's status an issue in these negotiations,'' union attorney Bob Luskin said.

The Laborers International Union of North America has more than 800,000 members, mostly in the construction, environmental cleanup and maintenance industries.

In the 1980s, President Reagan's Commission on Organized Crime accused the Laborers of having mob ties. To avoid racketeering charges, the union entered a formal agreement with the Justice Department in 1995, promising to weed out alleged mob lieutenants from its ranks and hold direct elections of its officers.

The Laborers voluntary deal has been seen as setting a precedent. The government has forced supervision on other unions, including the International Brotherhood of Teamsters and the Hotel Employees and Restaurant Employees International Union.

"It is my hope that this reform program may set an example that more can be achieved through cooperation than through conflict,'' Robinson said Thursday.

The Teamsters are instituting voluntary internal reform programs similar to the Laborers' in hopes of shaking government control.

The Laborers' anti-corruption efforts have removed 220 individuals from union posts, including 127 who were members or associates of organized crime.

Reforms have also included the first direct rank-and-file elections of national union leaders and an ethics code enforced by independent officers who have placed locals and district councils representing 68,000 members under supervision or trusteeship, including in New York and Chicago.

The internal corruption investigations reached as high as Coia. Although cleared of allegations of mob ties, he was fined $100,000 for a separate ethics violation: purchasing a Ferrari in a joint arrangement with a dealer who leased cars to the union.

That had launched a new criminal investigation by federal officials who were disappointed Coia was not ousted from the union.

SOUTH CAROLINA: Dockers clash with police over stevedore

CHARLESTON, S.C. -- Several hundred longshoremen, angry at a ship line's use of a nonunion stevedore at the Port of Charleston, brawled with police Wednesday night and early Thursday before being dispersed with shock grenades, the Journal of Commerce reported.

Hundreds of angry longshoremen marched from their union hall here early Thursday to the entrance of a South Carolina State Ports Authority terminal where they pelted police in riot gear with stones, railroad ties and other debris.

During the melee, several members of the International Longshoremen's Association were injured, and one police officer was hurt when a brick hit his head.

After a half-hour standoff, police, some with dogs, fired shock grenades and charged the group, eventually forcing them to retreat to the union hall, about 200 yards away. By 3:30 a.m., at least eight people had been arrested. Police closed off several blocks leading to the terminal following the incident.

Union dockworkers are upset that Nordana Line switched to a nonunion stevedore in December after using an ILA stevedore for the past 22 years.

Port authority officials were bracing for the worst after about 75 angry longshoremen stormed through the SPA's Columbus Street Terminal Jan. 2. The mob disrupted Nordana's operations, vandalized cargo and roughed up two nonunion workers. Union leaders vowed to continue the protests whenever a Nordana ship called Charleston.

Wednesday afternoon, as the Nordana vessel Skodsborg approached Charleston Harbor, ILA officials met with the line's representatives at the port authority's offices to work out a last-ditch compromise.

"We offered to work the ship for nothing, and we had other deals on the table," said Kenneth Riley Jr., president of ILA Local 1422. Another scenario that was discussed called for ILA longshoremen to work under the supervision of Winyah Stevedoring of Georgetown, S.C., Nordana's nonunion stevedore. "Unfortunately we had an impasse," Riley said.

By Wednesday night, some 600 police officers from across the state had converged on the SPA's Columbus Street Terminal, on the edge of downtown Charleston's historic district.

By 8 p.m., when Winyah Stevedoring started working the ship, no protesters were in sight. Then two showed up. ILA members interviewed at the union hall at that time said they were insulted by the show of force.

"If you're training for some type of terrorist attack, I can understand this response," Riley said just before midnight. "But you're not dealing with a bunch of thugs here. These guys are hardworking, good citizens of the city."

As midnight approached, approximately 600 ILA workers returned to the hall. After a closed-door meeting, they poured out into the parking lot carrying placards, chanting "ILA, ILA" and uttering obscenities. Many were carrying beer bottles that they later threw at police.

When the mob met the line of police, some in the back started throwing rocks and bricks. Several men beat a television cameraman.

Riley also was injured. "I was trying to pull some of the guys back, and they swung the doggone thing at me," he said several hours later.

At about 1 a.m., police fired smoke grenades at the crowd and pushed it back to the union hall. Several men were seen being taken into custody.

It was the most serious labor disruption in Charleston since a strike in 1969.

Before the riot, Bernard S. Groseclose Jr., the port authority's president and chief executive, said he was concerned about the port's image.

"Charleston has had an enviable reputation of having agreeable labor relationships, very smooth operations, and high productivity. And that's a credit to longshore labor, our people and all the parties here," he said. "All this is something our customers pay attention to."

The situation puts the port authority in a difficult spot. Port executives want to maintain good relations with the ILA and the long-established stevedores that employ ILA labor at the port, but they can't legally discriminate in favor of unionized companies because South Carolina's right to work law prohibits union membership as a condition of employment.