'Secrecy and shenanigans': Cincinnati rail board settles secret meetings lawsuit

The board that oversees Cincinnati's city-owned railroad has agreed to pay $100,500 to settle a lawsuit alleging it brokered the sale of the railroad to Norfolk Southern Corp. in a series of secret and illegal meetings and wrongly withheld public documents about the sale.

The five-member Cincinnati Southern Railway Board − made up of three former elected city officials, a lawyer and an accountant who are appointed by the mayor − decided last November to sell the 143-year old railroad to Norfolk Southern Corp. for $1.6 billion. They argued it's a better deal for citizens than continuing to lease the railroad, as it has been since it was built.

The final decision rests with Cincinnati residents, who will vote in November on a ballot measure approving the sale.

Tom Brinkman, a former state lawmaker, brought the lawsuit in Hamilton County Common Pleas Court against the railroad as a citizen. Attorney Curt Hartman represented Brinkman in the lawsuit. Both are Republicans. The mayor and eight of city council's nine members are Democrats. The rail board has both Republicans and Democrats.

The settlement, which will come from a $5 million transaction fee Norfolk Southern is giving the city upfront as part of the deal, pays Brinkman $500 and Hartman $100,000.

Board calls suit 'politically motivated'

The settlement agreement, obtained from the city via a public records request, does not specifically admit wrongdoing by the board. It does acknowledge the executive sessions happened and includes a pledge that the board would no longer talk about the sale in executive sessions.

State law allows boards to meet in executive sessions to discuss the sale of property, but only when the sale is competitive. In this case, Norfolk Southern, under its current lease, was the only purchaser because its current lease gave it exclusive rights to the railroad for another 25 years after the current lease expires in 2026.

Brinkman, earlier this year, also acting as a citizen, asked Cincinnati City Solicitor Emily Smart Woerner to remove the railroad board members, alleging the board failed to protect taxpayer interests when negotiating the sale. He argued the deal was done in secret and that the board accepted $500,000 less than first promised as part of the deal's upfront transaction fee, which was not beneficial to citizens. The latter was first reported by The Enquirer and revealed in public records that were at first withheld. After the story published, Norfolk Southern returned the $500,000 to taxpayers.

Woerner brought the removal issue to city council, which unanimously declined to remove the members.

The railroad board voted Aug. 15 to settle the lawsuit.

Board President Paul Muething issued a statement calling the lawsuit "politically motivated," initiated by "one person opposing the railway transaction."

"Even though we believe that the board had meritorious defenses in both suits, we concluded that ending these lawsuits was the greater good for the citizens of Cincinnati," Muething wrote. "With these legal issues now ended, Cincinnati voters can focus solely on the merits of the proposed sale which we believe to be many, overwhelming and transformational for the citizens of Cincinnati for generations to come."

Council 'stuck their ... heads in the sand'

Brinkman and Hartman say they were seeking transparency on what's considered by many as one of the biggest financial decisions voters will ever have before them. Voter will have to decide if it's better to sell or continue leasing, and whether they trust limits on the spending detailed by the board and city.

Cincinnati City Council last week asked the city manager's office to draw up a report that outlines how the money can be spent, which council sought after repeatedly being asked that question by citizens. That report is expected to come back to council before the end of the month.

"My only thoughts are that we went to city council and told them this was going on," Brinkman said. "The administration hired expensive law firms to tell them that there was nothing wrong and city council stuck their collective heads in the sand and ignored a clear violation of the Open Meetings Act and the theft of $500,000 from the taxpayers. What more can a private citizen do to expose blatant corruption in city government? The corruption on Cincinnati City Council continues.”

The railroad settlement comes on the heels of a series of corruption cases at City Hall which led to three members of council being arrested on federal charges and a high-profile violation of the Open Meetings Act that resulted in five members of council admitting they broke the law.

"Through this litigation, we believe we have been successful in obtaining an acknowledgment that the numerous executive sessions that ultimately led to the proposed sale of the railway were not in compliance with the Open Meetings Act," Hartman told The Enquirer. "To what extent the people of Cincinnati take issue with or object to such secrecy and shenanigans in how this proposed sale came about will ultimately be for the people of Cincinnati to have their voices heard when voting on whether to approve the sale."

Who's on the Cincinnati Southern Railway board of trustees?

Paul Muething: Muething, a Republican, is the board's president. He has served as a board trustee since 2018, appointed by then-Cincinnati Mayor John Cranley. Muething is an attorney with Keating Muething & Klekamp PLL, where he is chairman of the firm’s board of directors.

Paul Sylvester: Sylvester, a Democrat, has served on the board since 1984, most recently reappointed by Cranley in 2021. Sylvester is a CPA with Coopers & Lybrand.

Charlie Luken: Luken, a Democrat, has served on the board since 2018, appointed by Cranley. He was Cincinnati's longest-serving mayor, serving his first term from 1983 to 1991 and his second term from 1999 to 2005. Luken is an attorney with Calfee, Halter & Griswold LLP, where he focuses primarily on government relations and legislation matters.

Mark Mallory: Mallory, a Democrat, has served on the board since 2018. He is Cincinnati’s first directly elected Black mayor, serving two terms from 2005 to 2013. Mallory is president of Mark Mallory & Associates Consulting and most recently worked for FC Cincinnati doing community outreach.

Amy Murray: Murray, a Republican, has served as a board trustee since 2019, appointed by Cranley. Murray is a former Cincinnati city councilwoman and served in former President Donald Trump's administration as director of the Department of Defense's small business programs. Prior to serving on council, Murray worked for Procter & Gamble in global business development for 14 years and started a consulting firm that assists American companies to grow business in Japan and with Japanese companies in the United States.

This article originally appeared on Cincinnati Enquirer: Cincinnati Southern Railway board settles secret meeting lawsuit