Norfolk Southern CEO To Face Rare Bipartisan Heat From Congress Over Ohio Train Derailment
The Railway Safety Act would raise the maximum fee for a safety violation to 1 percent of a company’s annual income, up from $225,000.
The Senate Commerce Committee will hold a hearing on the East Palestine train derailment Wednesday during which the CEO of Norfolk Southern, Alan Shaw, is expected to face harsh criticism from Democrats and Republicans alike as Congress considers launching a formal investigation into the incident.
Norfolk Southern and Mr. Shaw have been under fire for their handling of the train derailment in Ohio that leaked huge amounts of pollutants into nearby waterways and generated widespread complaints of health problems among area residents.
Although the removal of hazardous waste is ongoing, residents of East Palestine are skeptical that the town will ever return to the way it was before the crash.
“They’ll never make us whole,” one East Palestine resident told the Holler, an Appalachian regional publication. “They can’t make you whole for — you know — us having to relocate and my daughter not being able to go to her grandparent’s house.”
In a hearing at the Pennsylvania senate on Monday, Mr. Shaw apologized for the derailment and the damage done to East Palestine and other communities, promising that he is “determined to make this right.
“I want to begin today by expressing how deeply sorry I am for the impact this derailment has had on the citizens of East Palestine and the communities in western Pennsylvania,” Mr. Shaw said at the hearing.
The company has been tasked with conducting all cleanups related to the February derailment, including identifying and cleaning contaminated soil and water. So far, Norfolk Southern has made an “initial commitment” of $7.4 million.
The company is also responsible for reimbursing the Environmental Protection Agency for the cleaning services that the agency is offering to residents and businesses.
If Norfolk Southern fails to perform the task to the EPA’s standards, the agency will step in to complete the cleanup and Norfolk Southern will be forced to pay triple what it costs the EPA to finish the job.
The hearing comes days after shareholders alleged that the company defrauded them by sacrificing safety to increase profits and by embracing a “culture of increased risk-taking.”
The lawsuit came shortly after another train derailment in Alabama that, though less destructive, has deepened suspicions about the company’s ability to safely operate trains.
Criticism of the company has become a venue for rare bipartisanship in Washington, D.C., with Senator Brown, a Democrat, and Senator Vance, a Republican freshman, introducing a Railway Safety Act aimed at tightening railway safety regulations.
Among other regulatory changes, the bill would raise the maximum fee for a safety violation to 1 percent of a company’s annual income, up from $225,000.
Mr. Vance sent a memo to his Republican colleagues, urging them to rally against the company in the coming hearing.
“It’s a long road ahead for the people of East Palestine. They are being exposed, on a daily basis, to toxins,” Mr. Vance wrote in the memo obtained by Fox News. “Their ecosystem has been permanently contaminated.”
He went on to ask “is one percent of annual operating income ($48 million for Norfolk Southern in 2022) too much to ask when a railroad company poisons an entire community?”
Mr. Shaw has said he backs some of the measures in the bill, such the voluntary safety upgrades, though he has not expressed full support for the bill and its proposed fines.
Some conservative groups, such as the FreedomWorks, the National Taxpayers Union, and the Taxpayer Protection Alliance, are opposing the bill, saying it would “do little to improve safety while creating gross inefficiencies for thousands of businesses.”
“More broadly, we ask that lawmakers consider potential unintended consequences of the Railway Safety Act of 2023 and understand that, despite the preventable accident in Ohio, U.S. railroads are safe overall,” the groups wrote in a letter last week.
Messrs. Vance and Brown will deliver introductory remarks during Wednesday’s hearing, alongside Governor DeWine and an East Palestine resident, Misti Allison.
Aside from Mr. Shaw, the CEO of the Association of American Railroads, Ian Jefferies, and the chairman of the National Transportation Safety Board, Jennifer Homendy, will testify at the hearing.