POLITICIANS HAVE TO BE WATCHED AT ALL TIMES, especially when their jobs are on the line at election time.
It doesn't surprise us, therefore, that Sen. Bob Packwood, R-Ore. - one of the more genial, bright and accessible members of Congress - is using his powerful position as chairman of the Senate Finance and Commerce committees for his own electable advantage.Naturally, the export of Oregon lumber is uppermost in the senator's mind these days. Anything that would add to the price of that lumber would understandably be a detriment to exporting it. However, that doesn't justify Sen. Packwood's blatant and boldfaced threat to scrutinize the TransPacific Westbound Rate Agreement's antitrust exemption should it impose strike surcharges if U.S. East Coast ports are struck by the International Longshoremen's Association.
The TWRA sets rates for the 14 shipping lines it represents to transport goods to Asia from North America. Under the Shipping Act of 1984, supported and voted for by Sen. Packwood, the TWRA has placed an advance filing with the Federal Maritime Commission to impose what would amount to a 30 percent surcharge on exported cargo in the event of a prolonged strike.
The surcharge would be used to offset anticipated increased charges by the railroads and truckers. Rail and truck service to and from West Coast ports, in the event of a strike, would be overtaxed. The resulting congestion would bring about delay and with it added cost.
The TWRA is not alone in seeking a surcharge in the event of a strike. The three eastbound trans-Pacific shipping conferences, which set rates for member lines on Asian exports to North America, have filed similar surcharges. The Shipping Act of 1984 also permits this.
Whether these surcharges are justifiable (and we suspect they are) is not what most disturbs us. It's Sen. Packwood's threat to hold hearings on the TWRA's antitrust exemption that is most disturbing. That threat is an arrogant abuse of power by a politician catering to the more parochial interests of his constituents. If Sen. Packwood has a problem with the surcharge, the law allows him, like any other affected interest, to contest the filing with the FMC. That is the legal redress and the one for which he voted.
One also suspects the senator from Oregon might be responsible for another abuse of power.
In the Tax Reform Act that he fathered as chairman of the Finance Committee, the customs brokers and freight forwarders obtained an unusual and unanticipated monetary benefit.
A provision was inserted in the Tax Reform Bill that mandates ocean common carriers compensate freight forwarders and customhouse brokers at no less than 1.25 percent of aggregate rates and charges assessed on the forwarded cargo. This means extras such as bunker surcharges and currency adjustments, which have not been included in the base on which forwarder compensation was computed, are now to be included in that base. It's a major revenue increase for the forwarders and customs brokers.
The provision also permits carriers to take independent action, that is action independent of other conference members, on the level of freight forwarder compensation. Last year the Federal Maritime Commission ruled conferences could prohibit independent action on this by their individual members.
We take no issue with either change in how freight forwarders and customs brokers are compensated. In fact, permitting carriers to take independent action on compensation is pro-competitive and ultimately should improve service by forwarders and customs brokers and reduce costs to shippers. Our criticism is with how the provision became part of the Tax Reform Bill. It was slipped in while the bill was in conference only to be discovered when it was too late to do anything about it. Sen. Packwood, when asked about it on the Senate floor, could not remember who inserted the provision. In effect, it was an orphan.
Peter A. Friedmann, attorney with Kominers, Forte, Schleter & Boyd in Washington, represents the Pacific Coast Council of Customs Brokers and Freight Forwarders. Mr. Friedmann formerly was chief counsel of the Marine and Ocean Services subcommittee of the Senate Commerce Committee. He is also a good friend of Sen. Packwood's.
Sources in Washington contend that Sen. Packwood included the provisions in the bill. At the very least, he did not prevent their inclusion. That's a shoddy way to operate in Congress. Mr. Friedmann, who is usually upheld as an exemplar of integrity, said he did not think the inclusion of the bill was ''limited to" his friendship with Sen. Packwood. The frustration experienced by Mr. Friedmann and the freight forwarders stems from the fact that no change could be expected in how they bill carriers until the Shipping Act is reviewed in 1989. "A lot of freight forwarders could be out of business by that time," Mr. Friedmann said by way of explanation. Again, we support the provisions; we object to the way they were included. If Sen. Packwood did in fact author the inclusion of the provision, and we have every reason to believe he did, it was an inappropriate use of the power voters have entrusted to him. It is something we would not expect of Sen. Packwood but something we have come toexpect from politicians, especially when their jobs are on the line.