Inspectors’ Ties to Rail Industry Assailed

Congressional investigators charged Monday that scores of federal railroad safety inspectors have “intolerable” conflicts of interest because they have re-employment rights with railroads that come under their regulatory powers.

Rep. Barbara Boxer (D-Greenbrae), chairwoman of the House Government Operations subcommittee on government activities and transportation, demanded an end to the practice of allowing an estimated 65 inspectors to remain on rehiring lists of the railroads at which they once worked. Four of the Federal Railroad Administration’s eight regional directors have such a conflict, she said.

“This is worse than the fox guarding the chicken coop,” Boxer said. “This is the fox in the chicken coop.”

At a time of rising rail accidents and concern over spills of hazardous chemicals, she said, the government needs to have inspectors who are “objective, aggressive and without a taint of conflict of interest.”

Grady C. Cothen Jr., associate administrator for safety of the FRA who appeared at Monday’s hearing, disagreed with Boxer, saying that he sees nothing wrong with inspectors regulating railroads that will rehire them.

These inspectors, Cothen said, might bend over backward to make sure they showed no favoritism to their former employers.

“Even Mother Teresa would have a conflict of interest if she had re-employment rights,” Boxer retorted.

Subcommittee investigators found that about 25% of the FRA inspectors still have re-employment rights, despite the agency’s own finding in 1978 that the practice represented a serious ethical problem.

While the FRA’s general counsel found in 1981 that re-employment rights for 70 inspectors represented a conflict of interest, most of the inspectors appealed the ruling.

“Believe it or not, 10 years have passed without FRA or the Department of Transportation resolving a single appeal,” Boxer said. Under questioning, Cothen said that the FRA has not acted on the appeals because the paperwork has disappeared. New letters were written to 65 inspectors in 1991, including 23 who got the same notice of a conflict of interest in 1981, the subcommittee said.

Consumer activist Ralph Nader, who also testified at Monday’s hearing, said that it is a clear violation of federal law for any U.S. government employee to have a direct or indirect financial interest that conflicts with official duties.

“The conflicts of interest between FRA safety inspectors and their former employers clearly undermine the credibility of the FRA’s inspection program,” Nader said.

Because inspectors have discretion on whether to impose fines on railroads for safety violations and determine which carriers should be checked, Nader said, they should be free of any financial ties to railroads under their jurisdiction.

Boxer said that inspectors could retain their re-employment rights if they were assigned to railroads with which they had no financial connection.

“There is no reason why it cannot be done today,” she said.

Boxer, a Democratic contender for the U.S. Senate this year, has been investigating rail safety since derailments in California last year caused a chemical spill that contaminated a 45-mile stretch of the Sacramento River and blocked the only major North-South freeway near Ventura for five days.