"If I had the money to move, you think I'd stay here?". That rhetorical question is how one resident stuck in East Palestine expressed his frustration on a petition demanding Norfolk Southern fully compensate victims of its devastating derailment and detonation last year. The petition with its thousand signatures fell on deaf ears at Norfolk Southern corporate headquarters. Maximizing corporate profit took precedence over minimizing human suffering in East Palestine, at least in principle. In practice, however, Norfolk Southern failed miserably at both outcomes in 2023.
That fateful year was not only an unmitigated disaster for East Palestine, but also for Norfolk Southern's bottom line. As reported in its recently released 4th Quarter Report, quarterly profits fell by 33% and derailment costs soared by $150 million. For the year, expenses associated with the February catastrophe totaled over $1.1 billion, and counting; railway operating revenues were $12.2 billion, down 5% from the previous year; income from railway operations was $2.9 billion, down 41% from 2022; and diluted earnings per share came in at $8.02, far below expectations, and down 42% compared to 2022; profit estimates were missed for three consecutive quarters; and, to help cut costs, about 7% of its management and staff are to lose their jobs in 2024.
Not mentioned anywhere in that dismal report is the $6 million invested by Norfolk Southern into fooling voters in the Queen City to sell off the Cincinnati Southern Railway, the last publicly owned railway in the nation. The sale, projected to be closed in March, carries a $1.6 billion price tag.
"This sale represents a brutal kick in the teeth for residents in East Palestine", said Werner Lange, Chair of the Ohio Peace Council and an active participant in the Derail the Sale effort, "It reveals the utter moral depravity of this greedy corporation willing to spend $6 million on pro-sale propaganda rather than invest those badly needed funds into compensating victims of its derailment disaster."
In July and August, as its East Palestine victims struggled with deep anxiety and various health problems, Norfolk Southern sunk $3.5 million into "Build Cincinnati's Future", its pro-sale PAC; and then in mid-October, when polls showed a close election on the railroad sale, it dumped another $2.4 million into its propaganda machine rather than pump those funds into East Palestine. Despite its massive pro-sale funding, Norfolk Southern only won the election by the skin of its teeth; and its corporate clients, not its East Palestine victims, cashed in handsomely on the hefty campaign treasury. Foremost among the benefactors was SKDknickerbockers, a national media consultant favorite of Democratic politicians, which received $5.4 million for its production and purchase of massive amounts of deceptive ads and slick mailers flooding every Cincinnati household; $139,000 went to EMC to test effectiveness of ads; and Jens Sutmoller, a local campaign strategy guru as well as the Mayor's campaign treasurer, raked in $345,900 for his firm on consulting services, printing, election day staffing and robo calls. Had those expenditures been driven by minimizing human suffering rather than maximizing corporate profit each East Palestine man, woman and child would have received a $1,304 check.
In reality, very little compensation went directly to East Palestine residents. Of the $100 million in "commitments" touted by Norfolk Southern to East Palestine, only about $2 million actually went to or are earmarked for residents instead of infrastructure, equipment and remediation. That includes the $1000 "inconvenience fee" offered select residents; a $400,000 scholarship endowment fund for high school seniors; and relocation fees of about $500 per week for those who chose to temporarily leave their toxic cages. The relocation program ends completely in early February, leaving some 50 households without resources to live in a safe environment. $6 million would allow those 50 families to receive the standard subsidy in relocation assistance for 20 years.
Scores, if not hundreds, of residents in greater East Palestine would leave if they could afford it. But rather than simply buy properties of East Palestine residents who wish to escape their toxic cages, Norfolk Southern developed a convoluted sale subsidy called Value Assurance Program (VAP), which compensates sellers of eligible properties for the difference between the sale price and market value. However, sellers must use NS-approved agents and appraisers as well as sign a "release of property claims", which frees NS for any liability forever. Little wonder that of the 92 properties sold in greater East Palestine since the derailment, only 9 sellers subjected themselves to VAP's onerous conditions. VAP, a thinly disguised scheme to escape liability claims against Norfolk Southern, is a well-deserved flop.
There are currently some 22 homes for sale with an asking price under $400,000 in greater East Palestine. Purchasing them all would cost Norfolk Southern $3,442,000, far less than the $6 million spent on its pro-sale propaganda. According to Zillow rental analysis, median monthly rent in East Palestine plummeted from $1200 in July 2023 to $800 by October. Assuming there are some 660 occupied rental units in East Palestine, $6 million would cover the rental cost of all of them somewhere safe for 11 months.
As another petition signer stated as his reason for signing: "This is what most people want: full market value, paid in full immediately, so they can move out of this hellhole, courtesy of Norfolk Southern." Not a single residential property in East Palestine was purchased by Norfolk Southern. Instead, ignoring the plight of its victims in East Palestine, it shamelessly bought another railroad for $1.6 billion and spent $6 million fooling voters into selling it in 2023. Placing profit before people elevates corporate greed over human need, a formula for inevitable disaster, like the one which exploded in East Palestine last February and continues to leave residents uncomfortable and uncompensated. High time for Norfolk Southern to put its money where its mouth is and really make things right in East Palestine.
