FOR IMMEDIATE RELEASE                                         CIV
FRIDAY, SEPTEMBER 29, 1995                         (202) 616-2765
                                               TDD (202) 514-1888



     WASHINGTON, D.C. -- CSX Transportation Inc. will pay the
United States $5.9 million to settle claims the company
overcharged the government millions of dollars for railroad
crossing signals installed under a federal safety program, the
Department of Justice announced today.  
     Assistant Attorney General Frank W. Hunger, in charge of the
Civil Division, said the agreement settles claims that CSX
Transportation inflated labor hours for wiring signal houses;
failed to obtain the lowest price possible from third-party
vendors for parts; and overcharged for certain parts by selling
them at a profit to third-party vendors, then repurchased the
parts and charged the United States the higher repurchase price.
      Funds for the railroad signal crossing equipment, which were
installed primarily in southeastern states, were provided under
the Rail Highways Crossing Program administered by the Federal-Aid
 Highway Program of the Department of Transportation.  The
federal government provides 90 percent of the money for the
program with the states providing 10 percent in matching funds.
     Hunger said A. David Nelson, a former employee of CSX
Transportation, brought the matter to the government's attention
in February 1993, then filed a qui tam suit March 17, 1994, in
U.S. District Court in Jacksonville, Florida, under the False
Claims Act, 31 U.S.C.  3729.      
     A two-year investigation by the Department of
Transportation's Office of Inspector General and Florida
Department of Transportation confirmed the allegations.  
     In April 1993, CSX Transportation voluntarily refunded $2.1
million to 18 states as an adjustment to amounts billed for the
construction of signals at grade crossings and on January 11,
1995, CSX Transportation agreed to pay Florida and 11 of the 18
states $1.4 million for adjusted costs related to grade crossing
     In addition to the money CSX Transportation has paid the
United States and the states, the company also must absorb all of
its expenses, including legal and accounting costs incurred in
this matter.  
     The settlement resolves any potential claims by the United
States against CSX Transportation under the False Claims Act for
fraud and under common law concerning allegations of cost
mischarging to the Rail Highways Crossing Program.     
     Pursuant to the False Claims Act, Nelson will receive
$1,180,000 of the settlement.