Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Hot on Facebook

Uproar After NC State Agent 'Fixes' Girl's Lunch Preschooler has to eat chicken nuggets instead of mom's meal »

Tax Deal Derailed DC Train Upgrade

Outlawed tax shelter scheme blamed for lack of modern safety features

By Rob Quinn, Newser Staff

Posted Jun 26, 2009 6:17 AM CDT

(Newser) – Safer cars might have saved lives in Monday's DC train crash, but a tax-dodge deal made with a bank prevented the transit authority from replacing aging stock until 2014, the Wall Street Journal reports. The National Transportation Safety Board urged the authority years ago to either replace its older cars or add safety features, but the authority said it was unable to do so under a "tax advantage" agreement in which its rolling stock was sold to a bank and leased back.

Such deals, which let banks claim tax deductions on the depreciation in return for payments to municipalities, were outlawed in 2004, but earlier contracts still stand. The transit authority appears to have "disregarded risks to passenger safety in order to fulfill a contract entered into as an accommodation party to a tax shelter," railed GOP Sen. Charles Grassley, calling for measures to ensure new funding for the Metro isn't used to pay off its tax-shelter partners.

[Images (4)]

[Quotes (1)]

Officials continue to work around the scene of a rush-hour collision between two Metro transit trains in northeast Washington, D.C., Tuesday evening, June 23, 2009. (AP Photo/Jacquelyn Martin)

Officials continue to work around the scene of a rush-hour collision between two Metro transit trains in northeast Washington, D.C., Tuesday morning, June 23, 2009. (AP Photo/Charles Dharapak)

Investigators and officials look over the collision scene of two Metro transit trains in Northeast Washington, Tuesday, June 23, 2009. (AP Photo/Gerald Herbert)

Investigators and officials look over the collision scene of two Metro transit trains in northeast Washington earlier this week. (AP Photo/Gerald Herbert)

« Prev« Prev | Next »Next » Slideshow

By entering into tax-shelter contracts, the WMATA appears to have allowed banks—rather than experts on passenger safety—to dictate what kind of trains Metro riders use.
- Sen. Charles Grassley (R-Iowa)

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

Washington Plows to a Halt

Public transit mostly shut; residents advised to stay inside

(NEWSER) - Much of Washington is at a halt tonight, with snow falling at the rate of up to 3 inches an hour from the fearsome storm—perhaps the worst in modern history—working its way toward the capital. Above-ground portions of the city’s Metro system are closed, and expected to remain so through at least Saturday, the Post reports; bus service is also stopped indefinitely. More»

DC Launches Mass Transit Terror Drill

Metro will be scene of simulated mass-casualty attacks

(NEWSER) - Commuters at one of Washington Metro's busiest stations are being met today by dozens of transit police officers and bomb specialists as part of the system's biggest-ever security drill. "There is no immediate or credible threat" to the Metro, a spokeswoman tells the Washington Post. "We want to stay a step ahead." More»

Circuit Flaw Suspected in DC Crash

Electronic 'anomalies' found, markings indicated driver hit emergency brakes

(NEWSER) - Federal investigators believe an electronic problem may have caused Monday's deadly train crash in Washington DC, the Washington Post reports. Teesting has uncovered "anomalies" in a section of the Metro's automated control system, which senses train locations and sends speed commands, according to investigators. More»

Feds Had Told DC to Bench Crashed Train

(AP) - The subway train that plowed into another stopped train yesterday, killing nine people and injuring scores of others in Washington, was part of an aging fleet that federal officials had sought to phase out because of safety concerns, an investigator said today. The Metrorail transit system kept the old trains running despite warnings in 2006, Debbie Hersman of the National Transportation Safety Board said. More»

System, Driver Error Suspected in DC Train Crash

(NEWSER) - Experts suspect yesterday’s deadly subway collision in Washington was the result of both a system failure and human error, the Washington Post reports. The city’s trains are run by onboard computers, which should, theoretically, prevent trains from colliding. The system has failed once before, in 2005, but the operators hit the emergency brakes in time. It appears yesterday’s operator did not. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Tax Deal Derailed DC Train Upgrade