Audit the California High Speed Rail Authority

Morris Brown
Resident of Menlo Park and Founder of DERAIL, a grassroots effort against the California high-speed rail project

The California High Speed Rail Authority (CSHRA) once again opposes oversight of its actions.  On Tuesday the Joint Legislative Audit Committee (JLAC) held a hearing on the request by State Senator Andy Vidak to have the State Auditor conduct an audit of the Authority’s activities.

The Committee on a strictly party line vote denied the request. The request was triggered by the explosive Sunday, Oct 25th LA Times article, which disclosed a previously un-disclosed report by the Authority’s contractor, Parson Brinkerhoff (PB).  The report projected a $9 billion increase in construction costs of the initial Merced to Burbank segment. (The article also disclosed from interviews with experts, that time lines, and budget targets would not be met) 

The Times article, authored by Ralph Vartabedian, noted the cost increase report was delivered months before the 2014 business plan was released.  The 2014 business plan did not include the projected $9 billion cost increase and instead continued to use cost projections from the 2012 business plan.

The first responses from the Authority to the Times article were, we don’t know about such a report, followed then by a blunt statement from Authority Chair Dan Richard, stating the article was “Bunk”.

The Authority’s often restated position is, the Authority is the most transparent of public agencies.  Yet its actions reveal a completely different picture.

The Times article, was followed by numerous Freedom of Information act requests, which belatedly forced the Authority to release the report. The reportwas in the form a PowerPoint presentation, and was presented several months before the 2014 Business Plan was released.

Assemblywoman Toni Atkins, then announced that a hearing would be held on the issues raised in the article. The hearing is now set to take place on Jan 27th.  Indeed the argument used by Democrats at the JLAC hearing to deny the audit, was an audit by the State Auditor was unnecessary and would be redundant to what would be revealed at the Legislative hearing.

But there is a whole world of difference between an audit conducted by the non-partisan State Auditor, and any legislative hearing being conducted by a Democratic controlled committee.  Indeed, already announced by Atkins was that subpoenas would not be issued by the committee conducting the hearing.

Transparency and oversight in the Authority’s view, have many restrictions.  The Authority denies many Public Record requests using one excuse or another.  Many times disclosure comes only after immense pressure is exerted on the Authority.  This was certainly the case which finally caused the release of the Powerpoint report disclosed in the LA Times article. This was also the case regarding final disclosure last year to the public, of the responses from private investors to the Authority’s request for Expressions of Interest in the project. (None of the finally revealed 36 responses indicated any willingness to invest.)

The Authority, throughout its existence, has used many tactics to avoid oversight.  During 2010 to 2012, when the State Senate Housing and Transportation committee was led by Democrats, Senators Alan Lowenthal and Joe Simitian, numerous hearings were held and on many occasions the committee had to fight very hard to obtain needed information.

Last year the Authority managed to get the Legislature to remove the Authority’s obligation to report twice yearly and instead only reporting once every 2 years; removing one more level of oversight.

During the JLAC hearing on Tuesday, the State Auditor, Elaine Howle, presented her plan for the Audit. She disclosed the audit would take about 2100 hours and would need 5 months to complete. Considering the Authority has now spent almost $2 billion, the cost of this modest audit was hardly a consideration.  Nevertheless, the Democrat controlled committee rejected the request.

The Authority has stopped releasing the Funding Contribution Plans.  These reports are mandated by the funding agreement between the Authority and the Federal Railway Administration (FRA).  The reports are due quarterly within 30 days after the end of a quarter.  The last report disclosed was the March 2015 report. Thus as of this date the June and Sept 2015 reports are delinquent, and at the end of this month, the Dec 2015 report will also be past due.  These are the key reports showing how the Authority is performing on its project.  Apparently the FRA has quit worrying about the Authority’s compliance with the funding agreement.  The FRA has thus far not replied to my Freedom of Information request concerning the missing Funding Contribution Plans.

A just released poll from the Stanford University Hoover Institution reported “53 percent of Californians would vote for a ballot measure ending high-speed rail and using the unspent money on water-storage projects.” (poll details). The poll also reveals only 20% strongly approve, whereas 33% strongly disapprove of the California HSR project.

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