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The STB, with a staff of some 120, has exclusive jurisdiction over railroad common carrier unreasonable rate and service disputes and railroad mergers. It has been operating with only two Senate-confirmed members since late 2017—Chairman Ann Begeman, a Republican, whose second term expires Dec. 31, 2020, and Democrat Deb Miller, whose first term expired Dec. 31, 2017. Miller is in a statutory 12-month maximum holdover period. If not renominated and Senate confirmed, she must depart Dec. 31.
Oberman was nominated for a dual term expiring Dec. 31, 2023—the remaining term of former STB Democratic member and chairman Dan Elliott, who resigned in 2017 ahead of his term expiration of Dec. 31, 2018, plus a new five-year term beginning Jan. 1, 2019. By statute, STB members are limited to two terms, regardless of the time remaining on the first term to which they are confirmed.
Also awaiting Senate confirmation are two Republicans nominated by President Trump in March to seats unfilled since their creation by the 2015 Surface Transportation Board Reauthorization Act. They are Patrick J. Fuchs, 30, and Michelle A. Schultz, 44. Their five-year terms will begin upon Senate confirmation. This means three of five STB seats—those of Fuchs, Oberman and Schultz—will be ripe for nominations within months of each other in 2023. Historically, agency seats have expired at least a year apart.
By statute, the STB may have no more than three Senate-confirmed members of a single political party, and the party controlling the White House earns the right to a majority of STB members, with the President designating a permanent chairman among those seated. Elliott was named chairman by President Obama; Begeman by President Trump.
Oberman earned an undergraduate degree from Yale in 1966, and a juris doctorate from the University of Wisconsin in 1969. At age 13, he earned a merit-based appointment as a U.S. House of Representative page. He completed high school studies at a military academy.
In a city and state notorious for political corruption, Oberman has a reputation as a reformer, and is said “never” to have associated himself with Chicago Democratic machine politics.
James Coston, chief executive of Chicago-based Corridor Capital, a rail passenger development, finance and management company, recalls Oberman’s years (1975-1987) as a Chicago alderman: “He took on the political majority on issues of great significance to the city.” Three times during his alderman years, Oberman unsuccessfully ran for Illinois attorney general. Oberman supported the candidacy of Chicago’s first African-American mayor, Harold Washington.
Prior to election to city council, Oberman was general counsel to the Illinois Racing Commission, where he distinguished himself by investigating and prosecuting charges of race-horse drugging, race fixing and political payoffs.
Chicago Mayor Rahm Emanuel, previously President Obama’s White House chief of staff, appointed Oberman to the Chicago Metra board—America’s fourth-busiest commuter railroad—in 2013, and he was elected its chairman the following year, serving into late 2017. Oberman supported unpopular fare increases as essential to funding a backlog of capital improvements, and advocated technology advancements such as allowing riders to purchase tickets via Smartphones.
Known for his ubiquitous bow ties, Oberman customarily rides a bicycle to work and to meetings about Chicago—never with a serious mishap, he says, and in all seasons and weather conditions.
If confirmed, Oberman, at 73, will be the oldest regulator in the 131-year history of the STB and its ICC predecessor—five years older than was Republican Wayne O. Burkes upon his 1999 confirmation, and Democrat Henry J. Ford, who was given a recess appointment for eight months by President Wilson in 1920. By contrast, Fuchs, at 30, will be the second-youngest. In 1982, President Reagan’s nominee, Heather J. Gradison, then married to Rep. Willis Gradison (R-Ohio), was confirmed to the ICC at age 29. Begeman is 53; Miller, 63.
While the Senate Commerce Committee recommended confirmation of Fuchs and Schultz following a hearing into their qualifications, Senate Majority Leader Mitch McConnell (R-Ky.) has delayed sending the names to the Senate floor for a confirmation vote pending Commerce Committee referral of a Democrat—now Oberman, whose committee interrogation has yet to be scheduled.
It is extremely rare that the Commerce Committee declines to endorse White House nominees to the STB or its ICC predecessor. Oberman has a strong endorsement from Illinois Democratic Sen. Dick Durbin of Chicago, who holds the second highest Democratic leadership position in the Senate, as well as that of Senate Minority Leader Chuck Schumer (D-N.Y.).
Oberman may face a difficult question at his confirmation hearing. He is said to have enquired whether he could remain in Chicago and work from his law office there. While there is no statutory requirement as to where Senate-confirmed STB members actually work, or what hours they work, former STB member Gus Owen was the subject of a 1999 ethics investigation—invited by Sen. John McCain (R-Ariz.), then Commerce Committee chairman—that found, as part of the investigation, that Owen spent one-third of his time away from Washington (no charges were brought against Owen, who had resigned his seat).
The purpose of increasing STB membership from three to five members was to solve a Sunshine Act prohibition on a majority of STB members exchanging viewpoints prior to decision-making (now, with a five-member board, two can enter into discussions and not constitute a majority). Another provision allows members to meet—under certain conditions including providing a public summary of the discussion—with parties to a case, allowing STB members a better understanding of often difficult data-laden issues and not being limited to reading sometimes befuddling legal briefs. Lengthy absences by Oberman would run counter to the intent of the 2015 legislation.
As for the two Republican nominees awaiting Senate confirmation, Fuchs is a senior legislative aide to Sen. John Thune (R-S.D.), the third-highest-ranking Senate Republican. Schultz, deputy general counsel for commuter railroad Southeastern Pennsylvania Transportation Authority (SEPTA), is married to James D. Schultz, a former senior associate White House counsel to President Trump (January-November 2017), who has returned to private law practice.
Since joining the Senate Commerce Committee staff in January 2015, Fuchs has participated in the drafting and passage of five bills directly affecting freight and passenger railroads, including the 2015 Surface Transportation Board Reauthorization Act, intended to improve the Board’s dispute resolution processes.
Fuchs also participated in drafting the rail and hazardous materials titles of the Fixing America’s Surface Transportation (FAST) Act. It was the first rail passenger-service reauthorization in almost a decade, instituting reforms to improve Amtrak’s performance and to permit and encourage private-sector competition on at least three Amtrak long-distance routes.
Previously, Fuchs was a policy analyst with the White House Office of Management and Budget, a State Department Presidential Management Fellow serving in The Hague, Netherlands, and a research assistant at the National Center for Freight and Infrastructure Research and Education.
Fuchs earned a double-major undergraduate degree in economics and political science, and a master’s degree in public policy analysis and management, with an emphasis on transportation policy, economics and statistics—all from the University of Wisconsin. He participated in an international academic program with the University of Singapore, focusing on international policy and economics.
Schultz has been SEPTA’s deputy general counsel since January 2014, focusing primarily on procurement, major capital projects and commuter rail regulation. She joined SEPTA in 2006 as manager, and later director, of legislative affairs. Earlier in her career, Schultz was an associate with the Philadelphia-based law firm of White and Williams, dealing with bankruptcy and commercial litigation, and a law clerk with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania.
Schultz earned an undergraduate degree in English from Penn State, a master’s degree in government administration from the University of Pennsylvania, and a law degree from Widener University.
The STB has been ducking decision-making on high-profile cases since Elliott’s departure in 2017, with Chairman Begeman choosing to hold in abeyance decision-making on those cases pending the arrival of additional board members. The STB chairman controls the docket.
Among the significant policy issues awaiting STB action are whether and how to allow so-called competitive switching at certain sole-served facilities to allow shippers a second railroad choice; evaluating what constitutes railroad revenue adequacy; whether to limit rail rate increases for revenue-adequate railroads; setting standards under which railroads may impose fuel surcharges; and finding a less costly and more efficient method of determining rate reasonableness than its current Stand-Alone Cost (SAC) test. Railroads have been content with the status quo, as there is little upside for them in any of the pending decisions.
Frank N. Wilner
Frank N. Wilner is author of six books, including, Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and, Railroad Mergers: History, Analysis, Insight. He earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Change (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.
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