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[KevinKorell]

Railroad Passengers Challenge Mineta’s Statement

For Immediate Release

Tuesday, November 8, 2005 - #05-35

Washington, D.C.—The National Association of Railroad Passengers (NARP) strongly disagrees with this morning's remarks and directives from Secretary of Transportation Norman Y. Mineta. NARP recognizes the need for effective, judicious oversight of Amtrak, but believes that more layers of bureaucracy will not help Amtrak improve and grow.

NARP Executive Director Ross B. Capon said, "It seems 'Rube Goldbergesque' for Secretary Mineta, an Amtrak Board member, to direct FRA to secure still more information from Amtrak on top of what is already required and likely to be required by Congress, and ask FRA to write an annual report for Mineta to read. Secretary Mineta should focus on his most pressing Amtrak responsibility--working for a full, bipartisan slate of seven, voting board members."

As things now stand, when Congress adjourns, the board will have just two members--Mineta (in practice, his representative Jeffrey Rosen) and Chairman David Laney. The other two current members (both Republicans) are recess appointments which expire with Congress's adjournment.

Capon noted, "Secretary Mineta has been on the Amtrak Board since June 28, 2001--over four years. If Amtrak is really the mess he claims, you would expect him to show a real hands-on interest and to acknowledge some responsibility. But he has not attended one board meeting over that 52-plus-month period."

Mineta's comments about Amtrak are not credible and must be measured against Amtrak's considerable progress of recent years. Evidence of progress was in our release 05-34 (Nov. 3); more is in bullet form at the end of this release.

Even DOT General Counsel Jeffrey Rosen, a harsh critic, testified September 21, "In 2005, the independent audit was completed in March instead of September and no material weaknesses were found. While Amtrak's auditors still find significant areas for improvement, they comment favorably on developments over the last three years."

Amtrak has complied with much-strengthened accounting controls under the terms of the July 2002 emergency $100 million DOT loan, and subsequent appropriations bills.

Now, the Senate's appropriations bill earmarks $5 million for "development and implementation of a managerial cost accounting system, which includes average and marginal unit cost capability" which should further enhance Amtrak's ability to control and monitor costs.

The Administration's "plan" for intercity passenger rail was "dead on arrival" at Capitol Hill. The Senate on November 3 voted 93-6 for a version of reform with no significant ideas from the Administration's bill.

The Administration's attack on long-distance trains (the only trains serving 25 states, all but one of which voted for President Bush in 2004) has not resonated on Capitol Hill. The House on a June 29 voice vote rejected Administration and committee efforts to scale back Amtrak funding sharply, and voted 269-152 to drop "kill-long-distance-trains" language.

Regarding evidence of progress, beyond items in our release 05-34, Amtrak:

* Has taken on no new debt since the July, 2002, DOT loan provided shortly after Gunn arrived at Amtrak and discovered its cash crisis. Amtrak is reducing its debt.

* "Reports monthly results more quickly than most companies our size," and makes detailed monthly performance reports available on-line. [This quotation and the one in the next paragraph are from President/CEO David L. Gunn's letter of September 2, 2005, to the Government Accountability Office.]

* Has, regarding accounting, from Fiscal 2002 to 2004, "reduced our material weaknesses from 5 to 0 and our reportable conditions from 12 to 1...our net audit adjustments have also decreased from $109 million in FY02 to just $7 million in FY04. According to our independent auditors, KPMG..., there has been a strong emphasis on improving our controls and updating our policies and procedures."


* Has not "purchased" its ridership growth with low fares. The FY05 yield (average fare per passenger-mile) was 15% above the FY00 level, and yield has risen each year during that period except in FY03.

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