News & Reviews News Wire Gloves come off in DM&E, Mayo Clinic dispute

Gloves come off in DM&E, Mayo Clinic dispute

By Trains Staff | July 20, 2006

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WASHINGTON and SIOUX FALLS, S.D. — The fight between the Dakota, Minnesota & Eastern and the Mayo Clinic over DM&E’s effort to expand into Wyoming’s Powder River Basin and route coal trains through Mayo’s home city of Rochester, Minn., grew testy as each side made accusations about the other Thursday.

At a news conference at the National Press Club in Washington, Mayo Clinic officials accused the railroad of having a poor safety record and said DM&E should be denied a $2.5 billion loan from the Federal Railroad Administration, the Minneapolis Star Tribune reported. “We have a medical and moral obligation to protect and defend the health and safety of our patients and staff,” said Dr. Glenn Forbes, chief executive officer of the Mayo Clinic.

Retiring Sen. Mark Dayton, D-Minn., said he is asking the Federal Railroad Administration (FRA) to consider the risk to public safety when the agency decides whether to give the railroad the loan. The Surface Transportation Board already examined public safety when it approved the project, and found it would be enhanced if the project were built. Using government statistics, the Mayo Clinic prepared a report for the FRA showing that DM&E “has one of the worst, if not the worst safety records of all U.S. railroads.” According to the report, DM&E had 107 accidents involving trains carrying hazardous materials in the past 10 years, including a record 16 in 2005, and the company reported train accidents at a rate of 7.5 times higher than the national average from 2000 to 2005. Dayton, said that at a minimum the rail line must bypass Rochester, and that a rail spill of hazardous materials in downtown Rochester would be “absolutely disastrous.”

At another news conference Thursday in Sioux Falls, S.D., Kevin V. Schieffer, president and CEO of the DM&E, revealed that Dr. Forbes had contacted him earlier and asked him to make a “secret deal” to reroute coal trains off the DM&E before they reached Rochester. He said if Schieffer did not agree to the secret arrangement, Forbes would bring all of Mayo’s forces to bear on DM&E to oppose the project, which Schieffer said is just what Mayo has done.

Schieffer vigorously defended his company’s record. In response to a question from TRAINS News Wire, Schieffer said, “there has been a constant effort by Mayo to discredit the good name of this company and it’s getting to the point where it is enough already. Mayo Clinic is in no position to throw stones in looking after taxpayer dollars. It is a tax-free entity of $7 billion a year. They live off of federal grants and I’m not criticizing them a bit – those serve a public purpose as well. But these attacks on the DM&E Railroad and the sort of scoffing at us compared to them, I’ve had about all we can take of that. The DM&E Railroad has operated honorably and within the law at every turn. Just last year the Mayo Clinic paid a $6.5 million fine for abusing federal grants. They paid the fine for purposely and intentionally misrepresenting the records to get those federal grants and they are in no position to be casting stones at us when it comes to looking after the taxpayers.”

“We are asking for a loan, it’s not a grant, it will be paid back and it will not cost the taxpayers a nickel. DM&E Railroad will not violate the law. It will not knowingly and intentionally change any records to cheat the taxpayers out of any money and then criticize somebody else later. That’s what Mayo Clinic has done and I have no desire to get in a fight with them but we are sort of to the end of being chastised by the Mayo Clinic when they have plenty of their own problems to worry about. I cannot imagine another railroad in this country ever even applying, much less getting, any federal funds after they’ve been caught purposely manipulating programs and purposely falsifying records to cheat taxpayers out of money. I hope we can stop this belittling of companies. We need to get this debate focused on the merits and end the ‘holier than thou’ business.”

Schieffer added, “The name of the game with opponents is delay. If you can’t kill it on merit, delay it long enough to kill it. That is their game plan very clearly.” He continued, “because of the sort of tactics used by the Mayo Clinic (to delay the project) a loan from the federal government is more important to make this project happen because of the uncertainty of the timing.”

The FRA is considering the DM&E’s loan application, with a decision expected later this summer. Mayo Clinic, the City of Rochester, Olmsted County, and the Mid-States Coalition for Progress, a Wyoming rancher’s organization, have also appealed the STB decision approving the project to the United States Court of Appeals for the Eighth Circuit

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