Congressman-elect Tim Walz is urging a House oversight committee to quickly call hearings on the DM&E;’s $2.3 billion federal loan application when the new Congress convenes on Jan. 4.

Walz, D-Mankato, has also recruited a veteran member of the House Committee on Government Reform to ask committee chairman-designate Henry Waxman to hold the hearings on the taxpayer-financed loan. Rep. Carolyn Maloney, D-N.Y., co-signed a letter with Walz detailing concerns about the loan and asking that more public scrutiny be applied to the loan application process.

Maloney is a 14-year incumbent and serves on the Government Reform Committee’s Subcommittee on Government Management, Finance and Accountability.

“I promised in the campaign that this thing would be shook out in the light of day,” Walz said Tuesday. “... This is what the people voted me in to do. They want to know their voice is heard.”

The loan will be the largest federal loan to a private company in American history if it is approved by the Federal Railroad Administration. The Dakota, Minnesota and Eastern Railroad is hoping to use the money to expand into the coal-rich Powder River Basin of Wyoming and upgrade its existing line through southern Minnesota to handle up to 34 daily mile-long coal trains.

Calling the loan “one of the worst examples that we have seen of government waste,” Walz and Maloney’s letter to Waxman details five concerns about the project and its proposed financing.

The letter suggests that the Sioux Falls-based DM&E; is “a poor credit risk and the project appears unlikely to be able to cover its debt service.” It also notes the railroad’s history of accidents and raises the prospect of a derailment near Rochester’s Mayo Clinic.

The letter questions the FRA’s decision to forgo doing its own environmental study, instead adopting a nearly-5-year-old study done by the Surface Transportation Board.

In addition, Walz and Maloney note how little is publicly known about the DM&E;’s ownership, the structure of the business and the loan application. And they note that the loan became available to the DM&E; only after Sen. John Thune, R-S.D., a former lobbyist for the DM&E;, worked to expand the FRA loan program by ten-fold.

The FRA currently has the authority to grant the loan without congressional approval, but Walz said he believes that won’t occur until mid-January at the earliest. Even if Waxman doesn’t hold hearings before then, he could signal to FRA and its mother agency — the Department of Transportation — that he’s interested in discussing the loan before a decision is made.

“We respectfully request that you consider sending a letter to the Secretary of Transportation to alert the Department and the FRA that the incoming Committee leadership believes that this record-breaking loan warrants careful congressional oversight,” the letter states. “Additionally, the Secretary should provide to you the full set of documents and information concerning this loan so that these issues can be examined in the full light of the public that is being asked to bankroll this loan.”

DM&E; officials have accused project opponents of trying to kill the expansion through delaying tactics, something Walz said he’s not attempting to do that with his request for oversight.

As for defending the project on its merits, DM&E; President Kevin Schieffer said last month that he’d be happy to do that before congressional committees.

“There’s nothing I’d invite more than an open dialogue on this,” Schieffer said.