Buffett’s new company sure knows how to lobby

Introduction

President Obama wants Washington to get more creative on infrastructure funding. Railroads are undoubtedly part of that big financial future. Warren Buffett, an Obama economic confidante, has just placed a huge bet that could accelerate that creativity to his and rail’s overall benefit.

Buffett-chaired Berkshire Hathaway’s $26 billion acquisition of freight railroad Burlington Northern Santa Fe (BNSF) comes amidst an administration that transportation lobbyists hope will make serious investments in American rail. Even before Buffett, BNSF was certainly in as good a position as anyone to take advantage of such a climate — with 33 federal lobbyists in its employ over the course of 2009 at a cost of $4,380,000 through September. In fact, between itself and its trade association, the Association of American Railroads — which has employed 49 lobbyists this year at a cost of $6,987,515 — BNSF enjoys a seriously comprehensive web of beltway relationships largely unrivaled in the transportation sectors, except perhaps by its other freight rail counterparts. And all of the industry’s efforts come at a key time for transportation policy.

The below charts provide an overview of BNSF’s multiple connections to key House and Senate committees through former members, their personal staffers, and committee staffers, all of whom have contracted with BNSF across seven different firms. The second chart shows the entirely separate but equally impressive series of relationships through the rail trade association’s 12 lobbying firms and in-house staff. To add to all that lobbying, BNSF has also contributed $895,441 to federal candidates this year – eleventh among companies nationwide according to the Center for Responsive Politics.

“We really do not have a federal vision for our supply chain,” BNSF chief executive Matt Rose said this summer while sitting on an industry panel with his peers from Norfolk Southern and Kansas City Southern railroads. “That’s really hard to come up with.”

The railroads are trying to get Washington moving on that vision. With environmentalists and reformers in their corner, the newly minted OneRail Coalition is part of an effort to push policy toward moving more goods and people by rail — which by default would mean increased capacity as lines are dealing with just about all they can handle. The broader Freight Stakeholders Coalition is the largest among the many voices pushing for a massive investment across the entire freight network — from America’s ports to both the rail and trucks that deliver the goods the rest of the way.

It isn’t just coal, after all, that BNSF and the wider railroad industry is thinking of in its supply chain. It’s everything. But Congress has not appropriately tackled a nationwide policy in recent transport bills.

The railroads are hoping for help primarily in the form of expanded tax credits to reinvest in their own lines without any new accompanying regulation. “If there’s a deep seated change in railroad regulation,” Rose cautioned, “then we don’t get it.” The CEO was happy to see President Obama frequently using the word rail and even making a down payment on high-speed passenger lines. But Rose believes Washington faces a massive challenge. “If we don’t reform the highway bill,” he said, “then we’re going backwards.”

“I think everybody’s starting to get it,” Rose added. Perhaps if Buffett’s move is any indication, the White House is “getting it” even more than he let on.