High-Speed Rail Authority used taxpayer money on questionable travel for consultants, report finds
The office of the inspector general said it investigated and substantiated allegations that the California High-Speed Rail Authority violated state rules and contract requirements when it reimbursed travel costs for four consulting firms, resulting in more than half a million dollars in wasteful or unallowable spending.
SACRAMENTO, Calif. —
California taxpayers have been funding more than half a million dollars in questionable travel for consultants working with the California High-Speed Rail Authority, according to a report released Tuesday by the project’s independent inspector general.
The office of the inspector general said it investigated and substantiated allegations that the California High-Speed Rail Authority violated state rules and contract requirements when it reimbursed travel costs for four consulting firms, resulting in about $600,000 in wasteful or unallowable spending.
(Previous coverage in the video above: California high-speed rail project faces delays, rising costs, and criticism.)
The four firms are financial advisors KPMG, legal services contractor Nossaman LLP, AECOM-Fluor Joint Venture which provides program delivery support, and SYSTRA/TYPSA Joint Venture involved in the project’s track and systems design.
Some examples of the questionable spending included first-class or premium airfare without required documentation. It also included premium rideshare trips to a gym, night clubs, an escape room, a cigar lounge in Washington, D.C., and a sushi restaurant in Denver.
The inspector general said in one case, consultants billed travel for a luxury rideshare ride to travel one mile within downtown Sacramento, costing taxpayers nearly $40.
In another case, on a single trip one consultant working for KPMG took comfort Uber rides from his house to the airport, from the airport to the Authority’s office, and then from that office to a steakhouse in Folsom more than 25 miles away.
The report said the authority paid more than $2 million in travel related costs for the four firms between June of 2024 and April of 2026. Of that $2 million, the inspector general reviewed more than half of those expenses and said $81,000 of it was not allowable under state travel rules. Another $543,400 were not allowable under the state’s contract with each firm. The report said $680,500 of the reimbursed expenses did not receive advanced approval form the High-Speed Rail Authority.
The inspector general said the authority routinely failed to show that it had properly determined travel was necessary, economical, contractually permitted, and compliant with state rules. The report also noted the authority often times did not question costs or require proof or documentation, such as receipts.
Contract managers are in charge of reviewing and reimbursing costs for the consultants.
The inspector general’s office said when it questioned the unnamed contract manager overseeing the legal services firm why she approved the questionable travel expenses that were not compliant with the contract, she said she received direction primarily from the acting chief counsel of the High-Speed Rail Authority at the time to approve the consultant’s travel expenses because the travel had occurred at the request of the CEO.
The inspector general noted the CEO, Ian Choudri, does not have the authority to override requirements laid out in contracts.
In an email to KCRA 3, Inspector General Benjamin Belnap said the wasteful spending is part of a broader pattern. Belnap noted his office flagged issues earlier this summer with the authority’s business plan that did not comply with state law.
“The broader pattern in both instances is that the Authority has not developed sufficient controls, and reinforced a culture, that ensures compliance with state laws and regulations,” Belnap said. “To build trust with its stakeholders and the broader public, the Authority—with oversight provided by its Board of Directors—needs reverse this broader pattern.”
“The Authority appreciates the Office of the Inspector General’s oversight and remains committed to transparency and continuous improvements as we build the nation’s first high-speed rail system,” said a spokesperson for the California High-Speed Rail Authority in a statement. “We take these findings seriously. In response, the Authority will strengthen internal controls around consultant travel, implement more rigorous documentation and approval requirements, and recover any improper costs identified. We are also working closely with the OIG to ensure corrective action that is both accurate and fair.”
“California created an independent Office of Inspector General because good government means transparency and accountability,” said Anthony Martinez, a spokesman for Gov. Gavin Newsom’s office. “That’s exactly why the High-Speed Rail Authority has its own OIG: to ensure continued, independent review of the project.”
“In my role as Senate Transportation chair, I will not tolerate unauthorized travel expenses by professional consultants,” said State Sen. Dave Cortese, D-San Jose. “Consultants should expect that when they make an executive decision to travel without authorization, that they’re taking on the expense themselves. The Office of Inspector General’s findings are as sound as those of any Auditor. I trust his work. I will be formally requesting reimbursement to the Authority of the dollars in question in the days ahead. Should there be any employee complicity at HSRA, I will demand management accountability.”
“Quite frankly, the Inspector General’s report comes as no shock,” said State Sen. Tony Strickland, R-Huntington Beach, who is the vice chairman of the Senate’s Transportation Committee. “More than $600,000 in consultant travel expenses were flagged as questionable, while California families are struggling with the high cost of living and deserve answers and accountability for how their taxpayer dollars are being spent on this project. At the same time, Sacramento Democrats continue to pour billions into the High-Speed Rail project, including $1 billion a year from the Greenhouse Gas Reduction Fund — what I describe as a slush fund for the high-speed fail. It’s time to pull the plug and put those taxpayer dollars toward the needs of Californians today,”
The report laid out a series of recommendations to correct the issues, including updating the High-Speed Rail Authority’s travel policy, establishing a uniform travel request firm, and seeking reimbursement from the four firms for the unallowable expenses.
The High-Speed Rail Authority told the inspector general’s office it would implement some of the recommendations by March of 2027. The inspector general’s office said it will evaluate the authority’s progress then.
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