Amtrak paid $2.2M in dues to group targeting it in court fight

By Sean Reilly | 05/29/2015 12:59 PM EDT

Since 2011, the Association of American Railroads has waged a legal war — fighting all the way to the U.S. Supreme Court — to undermine part of a law aimed at helping Amtrak run on time.

Helping fund the association the entire time: Amtrak.

From the time the trade group filed suit in August 2011, the passenger railroad has paid at least $2.2 million in membership dues, plus several hundred thousand dollars for expenses, according to records obtained by Greenwire under the Freedom of Information Act.

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The actual total of what Amtrak paid is certainly higher. While the railroad didn’t release monthly invoices for the period beyond last September, it remains a "full" member, according to the association’s website. At last year’s rate of almost $60,000 per month, Amtrak’s dues payments from October through May would add up to almost another $500,000.

The money amounts to a small share of the association’s total yearly revenue. As a large Class I railroad, Amtrak finds it "beneficial to engage" with freight carriers that control much of the track used by its passenger trains, spokeswoman Christina Leeds said in an email.

But Amtrak’s membership in the association — known by the abbreviation AAR — can also be seen as emblematic of the forced embrace between the nation’s leading freight and passenger rail companies.

"It’s definitely a strange relationship," said Ken Prendergast, executive director of All Aboard Ohio, a passenger rail advocacy group that last year warned of dire consequences if AAR prevailed in the litigation.

Relations have been cordial enough that Amtrak once rented office space at the association’s Washington, D.C., headquarters, the invoices indicate. But more recently, Amtrak has asked federal regulators to investigate whether three freight railroads are contributing to punctuality problems by failing to give passenger trains legally required preference on their tracks (Greenwire, Nov. 18, 2014).

Although the AAR lawsuit avoids a direct conflict of interest by not naming Amtrak as a defendant, Prendergast said, "when you get down to what it’s really about, I can see some concerns there."

The suit targeted a provision in the 2008 Passenger Rail Investment and Improvement Act that instructed Amtrak and the Federal Railroad Administration (FRA) to set yardsticks for assessing passenger train punctuality and other key performance yardsticks. A separate part of the law also gave the Surface Transportation Board, which oversees the freight rail industry, the authority to investigate whenever on-time train performance on any Amtrak route averaged less than 80 percent over a six-month period.

Tardy trains have been a long-standing headache for Amtrak, costing it almost $137 million in one year alone because of lower ticket revenue and higher expenses, according to a 2008 report by the Transportation Department’s inspector general.

Amtrak and the railroad administration issued the final standards in 2010. The next year, AAR sued on behalf of seven large freight railroads, arguing that Amtrak was a private entity lacking the authority to help set government regulations.

The suit was filed against FRA and its parent agency, the Department of Transportation. After judges at the district and appellate court levels handed down conflicting decisions, the Supreme Court in March unanimously ruled that Amtrak is part of the government, but sent the case back to the U.S. Court of Appeals for the District of Columbia Circuit to deal with any "substantial questions" related to the actual performance standards (Greenwire, March 9).

The result will be "years and years and years of litigation," Karen Torrent, an attorney with the nonprofit Environmental Law and Policy Center, recently predicted.

Torrent wrote last year’s friend-of-the-court brief on behalf of All Aboard Ohio and two other advocacy groups, warning that the lawsuit threatened the future of passenger rail service. Rather than paying for AAR membership, Torrent said in an interview, Amtrak should spend the money on the "positive train control" safety system that has gotten renewed attention following this month’s fatal train derailment in Philadelphia.

AAR spokesman Ed Greenberg declined to comment on the association’s plans for pursuing the litigation, saying they are under review. He also declined to say whether anything prevents the association from using Amtrak’s money to help pay for the lawsuit.

FOIA request

Each monthly invoice obtained by Greenwire spells out an estimated percentage used for AAR lobbying. But Leeds said Amtrak pays half the normal dues amount "so as not to contribute to lobbying or other activities that don’t benefit Amtrak." She also provided a copy of the 1976 agreement setting out the terms of Amtrak’s membership in the association.

While the document references the cut-rate dues structure, it doesn’t spell out any prohibition on the use of Amtrak’s money for activities contrary to its interests.

In 2013, the last year for which AAR’s annual nonprofit filing with the IRS is available, the group collected a total of $46 million in dues from its members.

Greenwire filed the Freedom of Information request for almost five years’ worth of payment records last October after Amtrak officials declined to say how much AAR membership was costing. The railroad released them, with minor redactions, last month. Under Amtrak’s regulations, it does not have to provide any records after the date of the request.

The dues are tied to Amtrak revenue; between 2010 and last year, they rose more than 20 percent, the records indicate.

The invoices also show Amtrak contributed some $2.5 million — the bulk of it before August 2011 — to a joint program to reduce train congestion and improve service in the Chicago area.

In addition, Amtrak paid about $161,000 in rent in 2010 to the association for leased office space. The extra room was needed to accommodate Amtrak employees who didn’t have space in the railroad’s headquarters in Washington, D.C.’s Union Station, Leeds said, adding that the arrangement ended in 2010.

Another reason for Amtrak’s membership in the association, she said, is that AAR supports "best practices," such as safety and security, that "Amtrak wants to be part of."

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