10
Loading video...
By Joe Edwards
Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
California’s high-speed rail agency paid $592,900 in travel expenses for contracted consultants that appeared to violate state rules, contract terms or both, according to a state watchdog report released Tuesday.
The Office of the Inspector General for High-Speed Rail said the California High-Speed Rail Authority paid more than $2 million in travel-related costs for four consulting contractors during fiscal years 2024-25 and 2025-26. Investigators reviewed approximately $1.15 million and found $680,500, or about 60 percent, lacked documented approval before the travel occurred.
The review covered contractors providing financial and commercial advice, legal services, program-delivery support, and track and overhead contact-system design. The inspector general said it substantiated allegations of inappropriate travel reimbursements.
Read More on News
...
“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. We take these findings seriously,” a spokesperson for the California High-Speed Rail Authority told Newsweek.
“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.”
The watchdog report identified $81,000 in payments that appeared unallowable under state travel regulations and $543,400 that were not allowable under the contracts. Because some expenses fell into both categories, the combined total was $592,900.
According to the report, investigators found reimbursements for first-class and other premium flights without explanations establishing their necessity. One consultant flew a private plane from Washington, D.C., to California and proposed reimbursement based on a premium commercial fare. The authority paid it, although investigators found no documentation showing advance approval for the private aircraft or a determination that the premium fare was appropriate.
The authority also reimbursed premium Uber and Lyft trips, the report said. One luxury ride costing nearly $40 covered less than a mile in downtown Sacramento. Another consultant billed premium rides to Planet Fitness locations and, on one trip, rides to and from a restaurant, bar and nightclub between 9:40 p.m. and 2:30 a.m.
Other reimbursed destinations included an escape room, a tiki bar, a Denver sushi restaurant, Folsom restaurants, and a Washington cigar lounge. The report said authority records it reviewed contained no state-business purpose for those trips and said the late-night restaurant, bar and nightclub journeys “clearly appear to be for personal enjoyment rather than for the benefit of the State.”
How Much Is California High-Speed Rail Costing?
California voters approved the project in 2008 when its estimated cost was approximately $33 billion, according to ABC10. The authority’s final 2026 Business Plan estimates approximately $126 billion for Phase 1 between San Francisco and Los Angeles/Anaheim. Its initial Merced-to-Bakersfield service is budgeted at $35.7 billion.
The watchdog also found the authority paid more than $118,000 in costs involving travelers from other countries under a track-and-systems design contract stating that no international travel was authorized.
The report said a legal consultant made more than 30 travel claims in roughly a year, mostly for trips between Denver and Sacramento. The authority paid $40,800 in expenses plus $86,500 for travel time. Only three trips had documented advance approval, it said.
The report also said descriptions of travel purposes were often vague or failed to show why travel was needed, including “project management,” “typical trip” and attendance at a rail board meeting. It cautioned that the investigation was not an audit of every expense and instead documented problems found in selected claims.
The authority said that between January and March 2027 it would enforce travel-expense requirements, maintain a list of consultants’ approved office locations and review claims to identify and seek reimbursement for unallowable expenses.
The inspector general said it would assess the authority’s response after that implementation period.
Contact Newsweek editors on this story: Ben Kelly and Gray R. Thomas
View 0 Comments
Submit Correction
View Editorial & AI Guidelines