I remember back in 2006 when the Bush Adminisration tried to push that farce of a port deal with the United Arab Emirates. In February of 2006, Democrat Senator Barbara Mikulski testified at a joint committee hearing in the Maryland General Assembly about the Dubai Ports Deal because many Maryland ports would be affected. One of the things she pointed out was the cronyism taking place within this deal. The Secretary of the Treasury at the time was John Snow who had been the former President and CEO of CSX. CSX has major holdings in the ports up and down the East Coast. After Snow left CSX, it sold its international port operations to Dubai Ports World for over a billion dollars. President Bush had also nominated a former executive at Dubai Ports World to head the Maritime Administration.
There is a reason why I mentioned that whole bit about CSX. CSX covers more than 21,000 miles in 23 states and connects more than 70 river, ocean and lake ports, as well as 200 short line railroads. CSX is the gateway to the west for goods coming into eastern ports and it is also the main shipper of ethanol from the Midwest to the east coast. CSX also is a major transport for the armed forces and the nation’s energy companies. Twenty-one million tons of grain ships annually via CSX and they also run the Tropicana Train. As one can see, there is a lot at stake in regards to CSX and all the reason needed to keep this an American run and held company. But something is happening here that is passing under the radar.
Last month, CSX introduced an initiative to spend $700 million to build and expand intermodal terminals and raise tunnels because they want to start shipping via double stack trains to take more trucks off the road which would protect the environment and cause less wear and tear on the highways. They will provide $300 million of it and look to the government, both the state and federal, to cough up the other $400 million. That means the taxpayers, which I believe should give us as much say in any nefarious deals as stockholders. CSX is trying to protect itself and sent a letter out to stockholders to vote to keep the current board. But another group wants to take over and have control at CSX and is pushing to gain 5 of the 12 board seats. This group is a foreign hedge fund known as The Children’s Investment Fund or TCI. Doesn’t sound like such a dangerous group, but one has to question what is going on when the Senate Banking Committee is investigating TCI and asked them to reveal their investors to make sure they are not foreign investors particularly from our enemies. Senator Evan Byah says that TCI says their investors are “innocuous”, but refuse to reveal more. All that is known is that these are sovereign wealth funds and that TCI teamed with another foreign hedge fund to get 8% of shares and make a $5 billion dollar investment. I don’t know about you, but sovereign wealth fund screams foreign sovereign country to me. You know, someplace like Dubai.
Let’s hope CSX is successful in fighting this hostile attack from TCI and that the Senate does its job in protecting our infrastructure.