House Oversight Committee Opens Examination of California High Speed Rail Authority

April 10, 2012

“Before more taxpayer money is sent to the rail authority, questions must be answered about mismanagement, conflicts of interest, route selection, ridership and other risks,” Chairman Issa said.
 
WASHINGTON. D.C. —The House Committee on Oversight and Government Reform is examining California High Speed Rail Authority (CHSRA) operations and use of federal funds.  Chairman Darrell Issa (R-CA) wrote April 9 to all current and former board members as well as current and former executive leadership asking them to preserve documents, records and communications so that CHSRA and other entities can comply with future document requests from the Committee.
 
Chairman Issa’s letter informed CHSRA that the Committee is focused on questions regarding the appropriate use of federal funds; allegations concerning possible conflicts of interest and mismanagement; and how these factors might impact taxpayers.  The Committee is also seeking to understand how the obligation of federal funds to CHSRA might prohibit use of federal funds for other ongoing transportation infrastructure projects.
 
Of particular concern to the Committee is how CHSRA has already spent or plans to spend the nearly $4 billion in federal taxpayer money already authorized for its high-speed rail project.  Questions remain about the ridership model used by CHSRA to determine the number of passengers that will actually use the high speed rail system.  Questions have also arisen regarding the project’s route, as well as compliance with the ballot initiative language originally authorizing the project and its publicly backed finances.  Understanding these factors as well as assessing the potential risk CHSRA activities might pose for overall federal transportation investments is essential for Congress as it works to manage competing budget interests and spending needs, Chairman Issa’s letter said.
 
Chairman Issa also noted that since 2010, allegations of conflicts of interest have surfaced regarding the board members of CHSRA at a time when the authority had received and was spending federal taxpayer money.  “I understand that these conflicts may have contributed to a pattern of weak oversight and mismanagement of the project,” he wrote.
 
“California high-speed rail was sold to voters as a grand vision for tomorrow but in practice appears to be no different than countless other pork-barrel projects—driven more by political interests and consultant spending than valid cost-benefit analysis,” Issa said.  “Before more taxpayer money is sent to the rail authority, questions must be answered about mismanagement, conflicts of interest, route selection, ridership and other risks.”
 
The letter from Chairman Issa was sent to the following authority leaders and staff:  Roelof Van Ark, Curt Pringle, Matthew Toledo, Rod Diridon, Quentin Kopp, David Crane, Richard Katz, Fran Florez, Dan Richard, Lynn Schenk, Thomas Richards, Thomas Umberg, Russ Burns, Robert Balgenorth, Jim Hartnett, Michael Rossi, Chris Ryan and Thomas Fellenz.
 
A copy of one version of the letter is available here.
 

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