Amtrak as Object Lesson in How Not to Run a … Board Meeting

In a stunning coincidence, on the very day I am due to give a guest lecture on the subject of government corporations to my wife’s Business Associations class, the New York Times has published an article about corporate governance issues relating to Amtrak, a federally chartered for-profit (but always money-losing) corporation.

Days after Amtrak’s board of directors fired the railroad’s president, the chairman of the House subcommittee that oversees Amtrak said Tuesday that the board might have acted illegally because it lacked a quorum. …

Amtrak’s board chairman and the Transportation Department’s representatives on the board sat stoically through the hearing. Places were set for two other members of the board, but they did not appear.

The unpopular move by the directors has focused attention on their legal status. Mr. LaTourette, head of the railroad subcommittee of the House transportation panel, said the board had apparently not had a quorum in the last few years. He said that under the board’s bylaws, a quorum would be five of seven directors. The board has only four directors, and two of those will lose their seats when Congress recesses for the year in a few weeks.

The Transportation Department’s chief counsel, Jeffrey A. Rosen, who also serves on the Amtrak board as the representative of the transportation secretary, disputed Mr. LaTourette on that point and others. But others at the hearing, some seeking to reinstate Mr. Gunn, seized on the procedural questions surrounding the board.

“You’ve opened up a whole Pandora’s box,” said Eleanor Holmes Norton, the District of Columbia’s delegate to the House and a member of the transportation committee, addressing David M. Laney, the board chairman.

Ms. Norton described the board’s uncertain legal status as “a lawsuit waiting to happen.”

I claim to be one of the leading authorities on the delicious, if obscure, subject of federal government corporations, as I wrote one of my first articles about them, Reinventing the Government Corporation, 1995 Ill. L. Rev. 543. Please note that I am available for guest lectures, faculty seminars, children’s birthday parties and, of course, expensive consulting gigs.

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2 Responses to Amtrak as Object Lesson in How Not to Run a … Board Meeting

  1. BlaytonJ says:

    …so, is AMTRAK a Constitutionally authorized function of the Federal government ??

  2. ARTHUR GAVENDER says:

    To: The Chairman,
    Board of Directors

    As a Professional Engineer and Amtrak passenger I warned Mr Gunn and his Chief Engineer that the most immediately needed measure to prevent Amtrak derailments and prevent injuries was to . . . SLOW TRAINS DOWN to speeds necessary to meet deteriorated track conditions . . . Amtrak train speeds far exceeded safety margins in my experience and in reports given to me by the train crew.

    Amtrak advised me to take it up with CSX Railroad since they said Amtrak was not responsible for the rail bed, completely ignoring the fact that excessive train speeds were, in my experience, the primary cause of their multiple derailments. They stated that I would be notified of the outcome of their investigation. I never was.

    Two weeks later a horrific derailment in Maryland caused many passenger injuries, Amtrak’s response was to start a police enquiry into any possible “Terrorist” activities on my part.

    Safety last seemed to be their method of operation, and still is, as indicated by current reports in the media. But perhaps the Amtrak Board is catching on to what its priorities ought to be. You might also do well to rethink this entire matter and the still needed immediate speed modifications.

    Please advise.

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