AN ISLAND OF SOCIALISM IN A SEA OF CAPITALISM

By Russell Mokhiber and Robert Weissman

What a sight.

Here you had Dr. Glenn Forbes, CEO of the Mayo Clinic, one of the most powerful institutions — and the largest employer — in Minnesota.

And standing next to him is Stephen Ryan — a partner at Manatt Phelps & Phillips — one of the most powerful law firms in Washington, D.C.

And next to Forbes and Ryan is the retiring Senator Mark Dayton, D-Minnesota.

All gathered last week at the Zenger Room in the National Press Club to hold a press conference.

Why?

Running right next to the Mayo Clinic campus in Rochester is a rail line.

And a small railroad — the Dakota, Minnesota & Eastern Railroad (DM&E) — with powerful political connections wants a $2.5 billion loan from the federal government.

DM&E’s president Kevin Schieffer wants to turn his little $220 million-a-year pipsqueak railroad into a major $1 billion-a-year coal-carrying behemoth.

He wants to carry the mega-tonnage of coal from the Powder River Basin in Wyoming through South Dakota and Minnesota and on to Chicago and then to coal-burning plants throughout the United States. The 2,800-mile line would run right through Rochester, Minnesota. Home to the Mayo Clinic.

And so, Dayton, and Forbes and Ryan gathered last week at the National Press Club to make their points to the national media.

The DM&E is an unsafe railroad, they said. In fact, they claim it has the worst safety record in its class of railroad. They say its accident record is more than double that of all railroads in its class. And it is one of only two railroads in America operating under a safety compliance agreement the Federal Railroad Administration.

Yes, its rail line currently runs right next to the Mayo Clinic. Trains run by there now, they concede — but at a slow speed — 10 to 15 miles per hour. If the company gets the loan to upgrade the line, the trains will run much faster than they run now — 40 to 50 miles per hour.

In addition to carrying coal, they will carry hazardous materials. What if this accident-prone railroad has a hazmat accident, and there is a spill, or an explosion? Our patients, who fly here from around the world, would be put at risk. Can’t you see?

And then Stephen Ryan of Manatt Phelps slaps DM&E with a Red Card: “This is an island of socialism in a sea of capitalism.”

By which he means that DM&E is seeking a $2.5 billion government loan.

And so we asked Manatt’s Ryan: Mr. Ryan, Manatt Phelps is a powerful Washington, D.C. law firm.

Isn’t it conceivable that Manatt Phelps has in the past represented other corporate entities who have sought bailouts from the federal government?

“No,” Mr. Ryan says.

No?

A five-second search found at least one example — Manatt represented US Airways before the Congress in the post-9/11 bailout of the airline industry.

Maybe it’s just a sea of corporate socialism?

Senator Dayton made his statement in defense of Mayo and in opposition to the federal loan to DM&E — but then Ryan announced that the senator was too busy to take questions. Maybe that’s because of something the Senator said to Fortune magazine earlier this year: “The Mayo Clinic is worth a hell of a lot more than the whole state of South Dakota.”

Nice.

Dayton is retiring at the end of this year.

No harm, no foul.

And by the way, South Dakota does have its fingers all over this pie. South Dakota Republican Senator John Thune is a big supporter of the government loan. Before becoming a Senator, DM&E was a big Thune lobbying client. And when he became senator, Thune authored the legislation that would grease the skids for the loan from the Federal Railroad Administration.

DM&E President Schieffer himself was an aide to former South Dakota Senator Larry Pressler — where he was introduced to railroad issues.

Former Senate Minority Leader Tom Daschle, D-South Dakota, sits on Mayo’s board of directors.

And on and on.

Another thing that concerns Manatt’s Ryan is that DM&E is privately held. He’s not sure who the investors are. He speculates: Are they from the Gulf?

And Mr. Ryan doesn’t mean the Gulf of Mexico. He means the Arabian Gulf.

And so we ask — is there any indication that there is foreign ownership of DM&E? “No,” Ryan says. “We just don’t know who owns it.” And there’s no way to find out.

They could get the $2.5 billion from the taxpayers — and then sell off the company.

We ask Dr. Forbes — aren’t you also concerned about the trucks carrying hazardous materials through the heart of Rochester?

Yes, of course he is.

But then Ryan interjects — of course, but we’re dealing with a railroad here — they carry bigger volumes — therefore bigger accidents are possible.

Mayo could perhaps show its bona fides on this issue by supporting a national program to transition to a solar economy — a legitimate public health position — rather than just objecting to the particular rail route.

As for Manatt, well, its pretense of principle in this dispute is preposterous. And not just because of its corporate welfare hypocrisy.

DM&E’s main cargo is coal. Which mega-law firms represent the coal industry? One of them is Manatt Phelps & Phillips, which advertises that it has BHP Billiton — one of the world’s largest coal companies — as among its clients. Manatt fights for whoever pays.

It’s a sleazefest all around.

But in this fight, put your money on Mayo.

Big powerful Mayo trumps a tiny little railroad every day.

Maybe not the trucking industry.

But a railroad company?

No problem.

Plus, there’s an alternate route.

At the press conference, Ryan said the trains could cut south at Winona — before they get to Rochester.

An aide whispers in his ear.

Whoops — I’m sorry, not Winona — Owatonna, Ryan says.

The trains could cut south at Owatonna.

Don’t pass Rochester.

Don’t collect $2.5 billion.

Deliver the coal to the coal-fired plants.

Warm the globe, but take care of the client.