WASHINGTON — Republican members of the House Committee on Transportation and Infrastructure have asked Amtrak board chairman Tony Coscia for a briefing to explain “six-figure bonuses to top executives paid largely from taxpayer funds, even while the company experienced historic financial and ridership losses.”
A letter released by Missouri Rep. Sam Graves, ranking member of the committee, and Arkansas Rep. Eric A. (Rick) Crawford, ranking member of the Subcommittee on Railroads, Pipelines, and Hazardous Materials, cites recent articles by the New York Times [see “Amtrak paid $2.3 million in executive bonuses …,” Trains News Wire, Aug. 5, 2022] and New York Post. The two legislators write that “we remain concerned about plans for awarding executive bonuses when the company expects billions of dollars in annual future losses” and that such bonuses “seem inappropriate, wasteful and disrespectful to Amtrak’s nonexecutive front-line employees and taxpayers.”
So, by Nov. 17, they seek a briefing to address five topics:
— The metrics on which the bonuses are based;
— How they compare to bonuses in similar transportation-industry businesses and in those “substantially owned or financed by the federal government.”
— The Amtrak executive board’s role in determining and approving executive bonuses.
— Whether Amtrak employs an independent compensation committee to determine executive compensation, including bonuses.
— How Amtrak will measure performance compensation on projects and activities funded by the federal Infrastructure Investment and Jobs Act.
It’s sad to say, but Amtrak could go away tomorrow and almost know one would be the wiser. Giving 6-figure bonuses to anyone in any company with such a lack of importance in the greater scheme of things is a waste. I have a warm spot in my heart for Amtrak, but its usefulness is minimal.
Unless M.E. Singer has access to Amtrak’s books, which is doubtful, he does not know what he is talking about. In addition, nothing that he says about GAAP or auditing suggests that he even understands the difference between financial accounting and cost accounting.
M. E. Singer says it best. Stop taking the shots at the D & R’s and just clean house. The states have been screaming for opening the books to justify what they are paying and Amtrak has been less than honest.
Once again I will state my perspective:
– Amtrak should be reorganized as an authority like the FAA.
– Establish design and engineering standards for passenger rail (not unlike airplanes)
– Setup a national train traffic control system so that Amtrak managed routes provide the least amount of interference with freight
– Set up service regions and slots and have them bid out to a service provider (just like gates)
– Run train terminals like airport gates. When someone bids for a service slot, they get a gate
– Allow multiple providers to serve a service region/slot
– If a state(s) wants to create a new service slot, they have to pay for it
– If the slot can maintain 2 bidders for at least 5 years, the slot goes from the state bid authority to the national bid authority
– If a city want a service slot, and the state won’t seed fund it, the city has to seed fund it.
– If the city slot can maintain 2 bidders for at least 5 years, then it can go to state bidding, or if the volume warrants it, straight to national bidding.
By partitioning the bid authority by city, state and national, it allows new routes or low volume routes to be developed but keep large national bidders from pushing out regional bidders to keep new markets from being opened.
If a city or state wants a slot and they have no existing rail service, it will be up to them to get the needed funding to build the connection via their local highway departments and state DOT’s. Treat new rail service like a highway essentially from a funding perspective. Any routes funded by the state or local DOT’s do not have to pay the “Amtrak Tax” to reimburse legacy railroads for use of their rails.
Mr Rice, your excellent suggestion should be directed to the Secretary of Transportation Pete Butegieg and the FRA.
So true Mr Markfelder but I’m afraid its too late the wealthy & Corp have this country on the verge of going from a Democracy to an Oligarchy. It appears from this story the Repubs have their bibs on & Amtrak is going to be the first course followed by Social Security, Medicare, Medicaid & anything that is in the way of the monied ruling class to further profiteer & control the common worker.
The big money is now the Democrat party is now the party of the super and the elite college nobless oblige [ control you all because you are stupid] and we can best control the power and money The GOP has become the party of union blue collar workers, my brothers, but not the union leadership who rule with our dues money.
As I have repeatedly stated in opinion pieces here in other media, Amtrak’s gouging very questionable bonuses at the taxpayers trough is the direct result of Congress leadership failing to demand full accountability by Amtrak’s leadership.
Amtrak’s Board of Directors has been crippled for years unable to function pursuant to the explicit requirements of expertise as defined in Railpax. This is a Board in name only unable to provide a check-and-balance, as well as stewardship to encourage correct decisions by management. Amtrak’s management lacked the requisite gatekeepers to prevent gouging the taxpayer overtly with unreasonable bonuses, and indirectly by such inexperienced corporate management resting on their self-conferred laurels to push through pathetic decision-making to close down the system and lose seasoned employees in reaction to the pandemic.
Note how it required the federal government to directly intervene in Boeing and GE when their patsy Boards failed to function to ensure quality and cost control. Why did Congress think Amtrak would be any different? Indeed, if Congress is “shocked” by the unapproved, unaudited bonuses, just wait until they really wade into and expose the fraud and waste at Amtrak by auditing its books.
Depending upon which set of books are opened for audit (by a third party private firm), Congress will learn about the extent of its own dereliction of duty by allowing Amtrak to play a “shell game” with the allocation of costs. This includes:
1) Hiding the excessive operational, maintenance, and repair costs of the Amtrak-owned NEC by shifting those costs onto the LD and state-supported corridors.
2) Willfully avoiding GAAP (Generally Acceptable Accounting Principles) by manipulating how costs and revenues are manipulated and accounted for, burying the LD and burning the state routes.
3) Designing the PRIIA Act of 2009 to reward the states composing the NEC with a no charge, free ride of twice per hour intercity trains between Washington-Boston. Despite a route of only 457 miles, Amtrak does not charge these states for their trains or infrastructure; yet, books as revenue payments from states required to pay for every cost Amtrak identifies on state routes up to 750 miles.
To reassert its forgone oversight of Amtrak, Congress must move after the mid-term elections:
a) Dismiss by 31 Dec Coscia as Board Chair, as he either knew of the financial issues and did nothing; or, did not know, but should have known.
b) Dismiss by 31 Dec Gardner as CEO, as he knew and was up to his neck in bad decisions; he lacked requisite experience in railroad operations to be at his level.
-Assuming failure of Amtrak leaders to justify their bonuses, such bonus payments shall be “clawed back,” at least from the corporate level (even corporate counsel!)
c) Authorize a Sense of Congress to admonish Senator Schumer for using his power to overtly interrupt Amtrak’s affairs to his benefit and at the behest of Coscia; require Schumer to keep his distance from any role in Amtrak. Require the FBI to investigate and identify what real estate investments in Hudson Yards, etc. in the name of the wives of Schumer and/or Coscia.
d) Authorize in-depth audit identifying allocation of costs and expenses. (Don’t be surprised if it reveals such non-compliance that would make ex VP Marketing ownership of hotel in Chicago for referring travelers with broken connections to look like a misdemeanor).
e) Immediately close Board of Directors and have Amtrak report to ex-FRA Administrator, Ron Batory; rely on Batory to establish an environment of compliance and operational expertise. (Airline jocks must earn their positions).
f) Place a hold on the $66 Million donation by Congress to Amtrak; institute a commission well beyond Amtrak to determine how routes will be invested in.
Sadly, the best leaders of Amtrak were forced out due to health or politics. Unfortunately, we will soon find the unauthorized bonuses are just the spoiled cream rising to the top. With rising inflation and riding at flank speed into a recession, it’s going to get a lot worse before we get control over this runaway train.
You are correct Mr. Adams except I don”t know if any of those Biden Board nominees has even been approved yet.
Executive bonuses in any company or corporation should be outlawed. Givng money to fat cat executives who don’t do anything to grow the company or improve working conditions for the workers who support them is just absurd and unwarranted. How many hard working loyal and dependable American workers put their heart and soul and sweat into their jobs and the company they work for get anything for their labor and efforts ? The answer is not a thing, nothing at all. Once again an example of how the American worker is victimized by their greedy corporate executives and in turn by the money hungry and insensitive investors and stockholders who answer only to their master which is Wall Street As they say the more things change, the more things stay the same The worker takes it on the chin while the executive and investor laughs all the way to the bank with blood money
Joseph C. Markfelder
Hopefully one good outcome would be if bonuses are paid if ridership and revenue grow and innovative ideas are implemented to achieve this. One can only hope.
Not much different from the “real world” of private corporations. There are countless cases of businesses loosing money while the already very highly paid executives take home huge bonuses.
It’s a big part of what’s wrong with this country.
With Amtrak it’s “the people’s money” which makes it all the worse.
Hope investigation will be used to improve intercity passenger rail and not destroy it. If investigation does occur, whether they have Bob Johnston, PTJ editors or Rail Passenger Association witnesses or written testimony will tell alot
It won’t do any good until/ unless the Democrats are chased out of power. The Democrats who have promised to bolster Amtrak have ruined it.
The most wasteful stash of taxpayer money is the cost of paying the entire 535 executive bodies who run the House and Senate. Over paid and under achieved! Amtrak is just a small iota of wasted money doled out by this bunch.
Excuse me, Charles, but refresh my memory on how well Amtrak fared under the tRump administration, where both houses and the executive were under Repo control?
Jay you took the words right out of my mouth.
No wonder rank and file employees leave the company so readily. I recall Lee Iococca taking an annual salary of $1 when took over a failing Chrysler. When I was the CEO, COO, and HR manager of my small business, I realized that I would be the last one paid after all my creditors, lenders and employees were paid. Anything left over was for the business then me. Took a while, but that business worked out well for all. And I did not get government handouts. It took hard work every day. Would that Amtrak management would say the same thing.
The Iaccocatollah’s $1.00 salary was for one year, the first. After that he got tons of money, while Harold Sperlich and later Bob Lutz saved the company.
Who do you think got Sperlich and Lutz to come over to Chrysler?
Sperlich got there shortly before Iaccoca. Iacocca hired Lutz.
This is overdue for Amtrak’s upper management being held to account. Executive bonuses would be bad business in the private sector for an unprofitable company with financial shortfall and service reduction.
I hope this is just the beginning of management reform with improved operations and services to follow.
It’s about time someone investigates this travesty. But I don’t expect much except the usual political format speech. Both Coscia and Gardner are Democrat operatives in a Democrat run government. Plus, Coscia is a buddy of Chuck Schumer another powerful Democrat from New York who will, no doubt, squash any report that he doesn’t like. The Amtrak board has just become a dumping ground where the party in power rewards those who help them get into and keep power with board and management positions.
Five days to go.
While I am not a big fan of most of these board members, these members were on the Amtrak board under Republican administrations as well. They also were operating under the “false” guidance that Amtrak is to make a profit, not what was the statutory language of operated like a for profit company– which may also have retracted under prior “reauthorizations” Certainly the R’s have criticized Amtrak in the past for not making a profit– like the airlines or road ssytem ever have!
One fault that the Biden administration can be blamed for is renaming the very same board, instead of taking real advantage of the recent reauthorization that required riders reps and board members representing the LD network (or at least outside the NE).