June 10, 2008

CSX rails run smoothly through Washington

In today's business section, The New York Times exposes more questionable links between CSX Corp and Washington politicians who benefit from the rail company's largesse:

CSX has managed to turn a proxy contest for 5 of 12 board seats (it is hardly a takeover, at least not yet) into a debate about national security.

Six senators (members of the Senate Banking Committee) wrote a letter to the Treasury secretary, Henry M. Paulson Jr., last week suggesting, absurdly, that TCI (The Children's Investment Fund, based in London) is “anonymous and invisible to government regulators.”

What about all that support in Washington? The uproar is over the fact that in addition to transporting tens of thousands of other carloads last year, CSX also moved 9,575 military carloads as well as 312 carloads of nuclear material.

But take a look at where some of the senators and congressmen have been getting donations lately — and their pet projects — and the timing may seem a bit suspicious.

Two of the six senators who sent the letter — Mel Martinez of Florida and Tom Carper of Delaware — have been beneficiaries of CSX’s largess, receiving $5,000 each this year.

Representative Corrine Brown, a Democrat from Florida, who is chairwoman of the House subcommittee with jurisdiction over the rail industry, has been particularly vocal in trying to prevent TCI from getting on CSX’s board. She has received $38,750 since 1989, including $5,000 in the 2008 election cycle, from CSX, according to the Center for Responsive Politics. And CSX gave $25,000 to Edward Waters College, in Jacksonville, her alma mater. And then CSX’s chief executive, Michael J. Ward, personally donated another $1 million to Edward Waters College just over a week after Ms. Brown spoke out on behalf of the company. He had never donated money to the college before and has no connection to the school.

  • CSX grasping at straws to end battle
  • See also . . . RiskMetrics Group: CSX proxy fight review

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