Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW

Congress fears deal will derail security

Jeremy Hobson Jun 6, 2008
HTML EMBED:
COPY

Congress fears deal will derail security

Jeremy Hobson Jun 6, 2008
HTML EMBED:
COPY

TEXT OF STORY

Scott Jagow: Congress is getting involved in a fight over who sits on the board of a major railroad company. The company, CSX, controls 21,000 miles of train tracks in the U.S. A British hedge fund called TCI wants to take control of CSX’s board of directors. Jeremy Hobson has more.


Jeremy Hobson: TCI is shorthand for the Children’s Investment Fund. The British fund gives some of its profits to children’s charities.

But in a letter this week to the Treasury Department, several U.S. senators called TCI an “aggressive hedge fund from the Cayman Islands.” The senators said an investigation is necessary to prevent a possible threat to national security.

Nancy McLernon at the Organization for International Investment says that’s way over the top.

Nancy McLernon: Look, absolutely railroads are an important part of our infrastructure. But the issue at hand here has nothing to do with national security. TCI can’t do anything on its own. That’s the point. They are a minority investor. And that’s all this is. This is a proxy fight.

A CSX spokesman said national security was not the company’s concern. But he did say that TCI would cut capital investment and impede the growth of CSX. The two sides face off at a shareholder meeting later this month.

In Washington, I’m Jeremy Hobson for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.