A Senator's Railroad No-Brainer

By Robert D. Novak
Monday, March 5, 2007

The Federal Railroad Administration handed a rare victory to the American taxpayer last week by denying a questionable $2.3 billion loan application by the Dakota, Minnesota and Eastern (DM&E) Railroad. What makes this news of special interest is the paramount role Sen. John Thune (R-S.D.) played in boosting the loan. Here is a cautionary tale of political life in Washington and how it corrupts.

Thune guided through Congress legislative changes that made the loan possible. But an assessment that DM&E was a poor credit risk was shared by two other conservative senators -- Tom Coburn of Oklahoma and Jim DeMint of South Carolina -- who took the extraordinary step of advocating rejection of a colleague's pet project. Making matters worse, Thune worked as a paid lobbyist for the South Dakota-based railroad before his election to the Senate and has received political contributions from company executives.

Thune entered the Senate in 2005 as a rising GOP star after defeating Democratic leader Tom Daschle. He declared himself eager to rein in spending in a Republican-controlled government. But instead of aligning with his party's reformers, Thune has been energetic in promoting pork for South Dakota. After the embarrassment of the DM&E loan rejection, a Republican Senate source who did not want to be identified said: "One can hope this episode helps Thune recover his revolutionary zeal."

DM&E applied for the loan guarantee under the Railroad Rehabilitation and Improvement Financing (RRIF) program to build and renovate a railway from the Powder River Basin in Wyoming, across South Dakota and into Minnesota to carry coal, ethanol and other agricultural products. This area is already served by two railway giants, Union Pacific and Burlington Northern Santa Fe.

The fact that RRIF still exists is testimony to Thune's energy and skill. The program was zeroed out of President Bush's 2005 and 2006 budgets, but it was saved and revised behind closed doors under Thune's leadership as part of the 2005 transportation appropriations bill (which contained the infamous "Bridge to Nowhere"). Indeed, Thune took credit for it, traveling through South Dakota in November 2005 to spread the good news.

Whether this qualifies as an earmark is a matter of opinion. Coburn and DeMint contend that the loan is about policy. Normally, when senators dislike a colleague's protected project, they follow the chamber's politesse and swallow their objections. Not Coburn and DeMint, who since their election in 2004 have waged war on pork.

On Jan. 23, without telling Thune, they wrote Transportation Secretary Mary Peters: "Because the applicant could not secure private funding, we are concerned that a loan of this size unnecessarily puts taxpayers at risk." Rep. Jeff Flake (R-Ariz.), the leading House opponent of earmarks, opposed the loan for the same reason, as did the conservative National Taxpayers Union and Citizens Against Government Waste.

Last Monday, Federal Railroad Administrator Joseph H. Boardman indicated he agreed, denying the loan application because there was "too high a risk concerning the railroad's ability to repay."

None of these critics mentions Thune's connections with DM&E. Since 2001, the railroad's executives have given him $21,750 in contributions (all but $2,000 before his election in 2004). In 2003 and 2004, when Thune was a private citizen between service in the House and Senate, he received $220,000 as a lobbyist for DM&E. (Thune says he never worked on the loan application as a lobbyist.)

If he had it to do over again, I asked the senator last week, would he still advocate the loan project? Thune replied: "I don't know what else I could do. I was strong for my state. It was a no-brainer."

The DM&E loan cannot prove a cautionary tale for Thune unless he knows he went in the wrong direction and admits it, at least to himself. If he has not come to terms with this, he is not alone. Well-meaning conservatives such as Thune get caught up in procuring the benefits of the federal leviathan for their states and their constituents. It is much of what ails the Republicans.

© 2007 Creators Syndicate Inc.

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