(Washington, DC) - Congresswoman Corrine Brown made the following statement:

“I have traveled on numerous Transportation Committee CODELS throughout the world to meet with transportation officials and compare and discuss rail and infrastructure systems.  Regardless of where I go, whether it is Russia or other surrounding Eastern European countries, France, Spain, England, or Asia, the Transportation Ministers and local transportation officials always tell me that the freight rail system in the United States is the best in the world.

Our nation’s freight railroads play an absolutely critical role in the economy by providing vital commuter and passenger rail service throughout the country.  The railroads employ over 180,000 people, and have spent $10 billion over the last eight years to expand tracks and purchase rolling stock.

Freight railroads are also responsible for transporting hazardous materials and carrying vital munitions and cargo for the U.S. military, and play a key role in efforts to improve the environment and deal with the anticipated future growth throughout our transportation system.

Unfortunately, hedge funds and other short time investors do not have the best interests of the rail industry in mind.  Their demand for cuts in capital expenditures and large rate increases will only lead to a slowdown in capacity growth, which will eventually damage the industry, as well as the economy over time.  

Since hedge funds cannot literally pick up the railroads and move them to countries with cheaper minimum wage and labor standards, they are attempting to squeeze the railroads for quick returns at the expense of companies and their employees.  One such company, The Children’s Investment Fund (TCI), who is testifying today, has been referred to as a “locust” by the German government and has met serious resistance from the Japanese government, where they are trying to force higher energy prices on Japanese citizens.

Congress has acted to prevent foreign companies from managing U.S. port operations and owning U.S. Airlines because they wanted to protect our countries’ infrastructure from harm.  The nation’s freight railroads are just as critical, and if damaged, could cripple the nation if placed in the hands of unknown foreign ownership or short sighted investors.

I strongly believe that unknown and unaccountable hedge funds owning or controlling freight railroads is something that should be closely scrutinized by Congress and the federal agencies that have jurisdiction over these type of financial transactions, and this Hearing is the first step in that direction.” 

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