Railroad attorney makes case for high-speed rail compensation to state Claims Board

Industrials Associated Press

A Canadian Pacific Railway attorney tried Tuesday to persuade the state Claims Board to hand the railroad more than half a million dollars for helping develop a high-speed rail plan before Gov. Scott Walker killed the project.

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The railroad wants $500,715 for work performed in 2009 and 2010 to help the state prepare a bid for federal funding to build the line between Madison and Milwaukee. The railroad's attorney, Brian Baird, said Canadian Pacific employees developed construction plans, designs for passenger depots and even moved into state Department of Transportation offices full-time to help the agency.

But Walker, a Republican, abandoned the project shortly after he won election to his first term in 2010, saying the line would be too expensive to maintain. Canadian Pacific was never compensated, Baird said.

"(Canadian Pacific employees) gave tremendous effort and provided tremendous value," Baird told the board.

State Department of Transportation attorney Kathleen Chung said the agency can't pay the railroad because the company never entered into a written contract with the state. The two sides were close to a deal when Walker abandoned the project, she said.

"The truth is, a contract would have solved a lot of these issues," Chung said.

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Baird countered that the railroad acted without a contract because then-Gov. Jim Doyle, a Democrat, asked for help and the railroad felt an obligation to be a responsible corporate citizen. The railroad also had to move quickly to make deadlines, he added. Democrats had touted the project as a key job creator and wanted it well on its way before the 2010 elections because Doyle had decided not to run again.

Looking weary after listening to three hours of speakers in other compensation cases Tuesday, board members kept their questions to a minimum.

Board member Greg Murray, a state Department of Administration attorney, pointed out that the maximum amount of compensation the board can award in a claim that doesn't involve a wrongful criminal conviction is $10,000. Baird said that money would at least send a signal that the state appreciated Canadian Pacific's efforts.

It wasn't clear when the board might issue a decision.

The panel already has rejected two other high-speed rail compensation claims.

Last year, the board denied Wisconsin & Southern Railroad's claim for $160,000 for work it did in 2010 to prepare to share its tracks from Madison to Milwaukee before Walker stopped the project. The railroad began the work before it brokered a contract with the DOT. The board said no state employees were negligent and the state wasn't liable for the railroad's expenses.

This past spring, the board rejected a $66 million claim by train manufacturer Talgo Inc. The state signed a deal with Talgo in 2009 to buy at least two train sets for the high-speed line and entered into a 20-year maintenance agreement for the trains. Talgo claimed the state failed to live up to its purchase agreement and Walker repeatedly acted in bad faith to frustrate the deal. The state argued that Talgo never completed building and testing the cars and never delivered them despite being paid $40 million.

Talgo has filed a lawsuit alleging the state defaulted on its purchase agreement. That case is pending in Dane County.