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Ny Times report
From : "nelson284@juno.com" <nelson284@juno.com>
CSX Signals and Crossings.
Below is a report from The NY Times which is Signals efforts to stop
the Fraud and safety
issue. This represents your efforts to protect Train Crews, the
Products and the people.
Sorry! I have the interview for all Signalmen involved to the Times but
somehow didn't
read it until a couple months ago.
First read this part!
"But Steven H. Parton, chief of the economic crimes division of the
Florida Attorney
General's office, disputed that contention. He said that his office's
inquiry determined
that Mr. Nelson had first brought the billing problem to CSX's
attention in 1991. CSX
confirmed the overbilling in an audit undertaken that year, he said,
but the company
waited until 1993 before refunding any funds to state governments."
So where was I in 1991?
What was I doing?
How long did it take for CSX to refund stolen funds?
Florida was responsible for regulating CSX. Where was Florida?
CSX Will Pay Whistle-Blower $1.18 Million
By BARRY MEIERSEPT. 30, 1995
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About the Archive
This is a digitized version of an article from The Timess print
archive, before the
start of online publication in 1996. To preserve these articles as they
originally
appeared, The Times does not alter, edit or update them.
Occasionally the digitization process introduces transcription errors
or other problems.
Please send reports of such problems to archive_feedback@nytimes.com.
The article as it originally appeared.
VIEW PAGE IN TIMESMACHINE
September 30, 1995, Page 001033Buy Reprints
The New York Times Archives
When he told officials of the CSX Corporation's giant railroad
subsidiary in 1991 about
cost overruns on Government-financed programs, A. David Nelson said, he
expected a pat on
the back. Instead, Mr. Nelson contended last year in a Federal
whistle-blower lawsuit, he
was told by his bosses to keep his mouth shut or face being dismissed.
Yesterday, a Federal judge in Washington signed off on a settlement
that would cost the
company $5.9 million, of which about $1.18 million would go to Mr.
Nelson. At issue were
inflated labor and equipment charges for work done by CSX at highway
railroad crossings
in more than 10 states.
Under a little-known program administered by state governments, the
Federal Department of
Transportation supplies 90 percent of the funds used to pay railroads
to maintain and
repair highway crossings. The states pick up the rest of the costs.
According to Mr. Nelson's lawsuit, which was filed under the Federal
False Claims Act,
CSX regularly overbilled Federal and state governments for both labor
and materials used
at the crossings. He also contended that he had told more than 20 CSX
employees,
including several vice presidents, about the problem but that they had
failed to take any
action.
"My director told me to back off and said that I was beating a dead
horse," Mr.
Nelson said in an interview.
Continue reading the main story
Marty Fiorentino, a spokesman for CSX Transportation in Jacksonville,
Fla., said that the
company had done nothing wrong and had settled the case to avoid the
cost of litigation.
He said that Mr. Nelson had first got in touch with CSX officials about
the situation in
1993 and that the company had immediately begun an internal audit that
uncovered the
problem.
Mr. Fiorentino said the overcharges had occurred because CSX's billing
system was based
on the average time it took to complete a job 20 years ago. As soon as
the problem was
discovered, he said, CSX quickly refunded any overcharges to the
affected states.
"Technology had changed and our billing process had failed to take
that into
account," he said.
But Steven H. Parton, chief of the economic crimes division of the
Florida Attorney
General's office, disputed that contention. He said that his office's
inquiry determined
that Mr. Nelson had first brought the billing problem to CSX's
attention in 1991. CSX
confirmed the overbilling in an audit undertaken that year, he said,
but the company
waited until 1993 before refunding any funds to state governments.
"Our biggest problem with them was that they were not remitting the
money," Mr.
Parton said.
Mr. Nelson said he had faced many problems common to whistle-blowers.
In his lawsuit, Mr.
Nelson asserted that he agreed to resign from CSX in 1991 because
company officials had
told him that he could use his exit interview as an opportunity to make
higher-ups
outside the purchasing department aware of the billing overcharges.
But when he agreed to resign his $40,000-a-year job, Mr. Nelson's
lawsuit stated, he was
denied an exit interview. Mr. Fiorentino, the CSX spokesman, said that
Mr. Nelson had
resigned on his own accord and no one suggested that he do so.
Whatever the case, Mr. Nelson first reported his concerns to Federal
and state officials
in 1992. He also said he and his family soon began a steady descent
into poverty.
"The only job I could get was for $5 to $7 an hour working for the
telephone
company," he said.
In April 1993, CSX, which is based in Jacksonville,t refunded $2.1
million to 18 states as
adjustments to amounts previously billed for the construction of
signals at highway
crossings. Earlier this year, the company also agreed to pay 12 of
those states --
including Florida -- $1.4 million.
The Justice Department also charged that CSX had overbilled the Federal
Government for
parts used at railroad crossings by selling them at a profit to
third-party vendors, then
repurchasing the parts, and charging the Government the higher
repurchase price.
ADVERTISEMENT
In one case, according to Mr. Nelson's lawsuit, CSX manufactured shunt
plates, which are
used at crossings to signal a train's approach, for about $29 each. It
then sold each
plate to a third-party vendor for $68 and then later repurchased the
part for $78, the
price that the Government was charged.
Mr. Fiorentino said that he was unaware of any overcharges on parts.
Mr. Parton, the
Florida investigator, said his inquiry found no evidence of kickbacks
between vendors and
CSX in the billing arrangement.
Mr. Nelson, who said he came with a hair's breath of losing his home,
said he now
believed that he had been vindicated. But even with the handsome fee
from the Federal
Government for his efforts, it is time, he said, to move on.
"I can't remain in Jacksonville and start my life over again," he
said.
A version of this article appears in print on September 30, 1995, on
Page 1001033 of the
National edition with the headline: CSX Will Pay Whistle-Blower $1.18
Million.
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