Skip to: Content
Skip to: Site Navigation
Skip to: Search
SUNDAY, NOVEMBER 22, 2009
| Subscribe to Newser's RSS feeds RSS | Follow Newser on Twitter Twitter


2

Tax Deal Derailed DC Train Upgrade

Outlawed tax shelter scheme blamed for lack of modern safety features

Share

(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.

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.
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.
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.
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.
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
OFF THE GRID
11.20.09
The Health-Care Wars Have Just Begun
11.19.09
Sarah Palin Deserves Some More Attention
2 comments
VIEWING:
 
SPH
Jun 26, 09 6:48 PM CDT
Is there no evil that these tax-cheating banks won't do?...... Reply
Vote up! Vote down!
0
radnip
Jun 29, 09 4:48 AM CDT
Is there no evil that politicians won't do to appear to be anti-tax to their voters, who, by the way, greatly dislike any taxes, particularly ones to fund public services...? Reply
Vote up! Vote down!
0
LEAVE A
COMMENT Comment Policy
Facebook ConnectPost this comment to Facebook?

After connecting you will have the option to post your comment on your Facebook profile.

 

Related Newser Stories

5 Stories

 Circuit Flaw 
 Suspected 
 in DC Crash 

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

Jun 25, 09 2:22 AM CDT
(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 »

MORE ABOUT:
Washington DC • NTSB • Washington Metro • train crash • commuter train • subway accident

(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... More »

MORE ABOUT:
subway • NTSB • Washington Metro • train crash • National Transportation Safety Board • Washington, DC • commuter train • subway accident

(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... More »

MORE ABOUT:
subway • Washington DC • accident • Washington Metro • train crash • collisions • subway accident

5 Stories


'Tax-advantage lease' left DC stuck with older train cars
New York Times

Transit authority agrees not to funnel cash into lease-back deals
Bloomberg


US 
TwitterFollow @NewserUS on Twitter

 
Washington DC • Washington Metro • tax breaks • train crash • tax shelter

from our news partners