A new report from the California High-Speed Rail Authority’s inspector general found nearly $600,000 in consultant travel expenses that violated state rules or the agency’s contracts.
The expenses included premium Uber rides, first-class flights and trips to restaurants without documented business purposes.
Democratic Senate Transportation Chair Dave Cortese in a statement condemned the consultants for the unauthorized travel expenses and said he would demand management accountability if any rail authority employee was complicit.
Republican Senate Transportation Vice Chair Tony Strickland separately called for more accountability over how taxpayer dollars are being spent on the project.
And a spokesperson for the rail authority told CapRadio the agency is working with the inspector general to strengthen internal controls and is attempting to recover unauthorized expenses.
CapRadio’s Gerardo Zavala spoke with Inspector General Ben Belnap about what his office found, and what it says about the rail authority’s financial oversight.
This interview has been edited for length and clarity.
Interview highlights
There are examples in the report of premium ride share trips, an example of which is a 1-mile Uber ride in downtown Sacramento that cost $40. What does that tell you about how the rail authority is conducting its own financial oversight?
I don’t think that any one example you can point to and say this tells you everything you need to know about the High-Speed Rail project. That’s completely unfair. But in this review, we found a pattern of non-compliance with travel rules and regulations. So that tells you something, the overall pattern, not one Lyft to downtown Sacramento. We’re concerned about the culture of non-compliance around travel requirements. That’s the pattern we saw here.
Whenever you find issues like inappropriate ride shares and whatnot, you have to ask yourself, metaphorically speaking, is this a sickness or a symptom? And I would argue that it’s a symptom of something. It’s a symptom of lack of controls over travel and a culture that needs to be bolstered, a culture of compliance that needs to be improved.
Your office has also warned that the authority could exhaust its current funding resources within the next several months if it doesn’t secure additional financing. When you’re telling lawmakers the project needs more money, is it concerning to find that the rail authority wasn’t adequately controlling how some of that money was being spent?
The full scope of this investigation was $2 million. That’s the universe upon which we were reviewing invoices. And this is a multi-billion-dollar project. So I’m not going to sit here and say that this investigatory report is the most important thing going on right now. Travel is something they got to get right, but it is not within the top 10 priorities in which the High-Speed Rail Authority needs to be dealing with. But what you touched on earlier, the cash problem — I hate to say cash crisis, but it’s becoming that. We did conclude based on our analysis and theirs, the High-Speed Rail Authority’s analysis, that they would run out of cash by December 2027. So we’re going into 2027 without financing and that’s the most important problem they’re going to be dealing with in 2027.
Does spending like this make it harder for the rail authority to make the case that it needs additional money from taxpayers?
Now you’re touching on a very important point. So it’s not the dollars. Again, the full scope of this investigation was $2 million. That’s the denominator. That doesn’t make or break this project. But you make a good point. The High-Speed Rail Authority needs stakeholders, the public, they need their trust because they have important asks. They need from state lawmakers the ability to do financing. At some point they’ll likely need additional funding, so they need to restore and build that public trust. And you can only do that by establishing appropriate controls so that you’re not doing inappropriate things and building a culture of compliance. Those are two things they must do.
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