Board official defends dismissal of Amtrak president

Amtrak's board of directors "had no choice" but to fire the president of the government-subsidized passenger railroad, Chairman David Laney told lawmakers Tuesday.

Laney defended David Gunn's Nov. 9 dismissal in a hearing before the House Transportation and Infrastructure Railroads Subcommittee. He said Gunn was accountable to no one and that keeping him as chief executive officer would head Amtrak down a track to financial ruin. "Amtrak's financial performance has not improved in the last three years," Laney wrote in prepared testimony. He added that Gunn was "at best, an unwilling bystander" in the board's effort to reform the company, which consumes about $2 billion in federal and state subsidies each year.

One of those reforms was the directors' Sept. 22 decision to create a wholly owned subsidiary to take charge of infrastructure along the busy Northeast Corridor between Washington and Boston. It is one of only two profitable Amtrak routes, but carries a $4 billion backlog of needed repairs.

In his prepared testimony, Gunn denied resisting strategic reforms initiated in April. "Those reforms were supported by management," he wrote, adding that "we were on track to implement the reforms that were within our control."

However, Gunn did resist the subsidiary decision, which he said came as a surprise in late August and ultimately resulted in his termination.

Gunn said that over his three-and-a-half-year tenure, Amtrak addressed material weaknesses in its financial reporting system, stabilized its operating losses, improved its capital improvement program's productivity, increased ridership to record levels and cut more than 5,000 employees.

Laney acknowledged that Gunn helped Amtrak achieve much-needed financial stability, but noted that the company still loses about $500 million a year. He said Amtrak's business needs "substantial reengineering" that Gunn was neither suited nor eager to oversee.