When the Trump administration announced it was investigating California’s long-troubled high-speed rail project, the top official overseeing it pressed back. Though the project has more than tripled in price to $106 billion, the official said that “every dollar is accounted for.”
While the money is indeed accounted for, that accounting does not paint a rosy picture for the Golden State. State audits over the past 15 years, which the Washington Free Beacon reviewed, have found a litany of wasteful and bizarre spending and financial commitments, ranging from $177,000 for PoliticoPro subscriptions to $5 million for graffiti removal. One company received more than $50,000 to head diversity, equity, and inclusion (DEI) initiatives, while active environmental service contracts total $537 million.
The high-speed rail project launched in 2008. It promised to offer 220 mph trains between Los Angeles and San Francisco, with an estimated completion date of 2020 for $33 million. Construction didn’t begin until 2015. Since then, no track has been laid, no stations have been built, and there’s no estimate on when it will be finished. Even the shorter-term goal that Gov. Gavin Newsom (D.) announced in 2019—a 171-mile rail in the Central Valley—will likely miss its 2033 deadline, according to the project’s inspector general.
“This project belongs in the graveyard of boondoggles,” said former San Francisco state senator Quentin Kopp, a liberal who wrote the 1996 law creating the High-Speed Rail Authority, the agency responsible for the project.
For 15 years, audit after audit has identified management issues causing delays and massive cost overruns. President Donald Trump called it “the worst-managed project I think I’ve ever seen, and I’ve seen some of the worst.”
“We’re going to start a big investigation of that, because I’ve never seen anything like it,” Trump said last month. “Nobody’s ever seen anything like it. The worst overruns that there have ever been in the history of our country.”
The Free Beacon reviewed the High-Speed Rail Authority’s spending habits found in California’s contracts database.
In 2021, the authority inked a $10,850 contract with CPS HR Consulting to run meetings for the agency’s DEI task force, though it ultimately spent only $4,725. It signed another $46,000 contract with that firm in 2023 to provide a DEI training. The authority’s DEI page, which was removed sometime in the last five months, named diversity as “one of the six overarching goals that guide our holistic, integrated approach.”
CPS HR Consulting also received five contracts worth some $177,000 to conduct salary surveys.
Another $62,400 went to a political data firm to archive media stories from 2014-16, while the City of Fresno got $5 million in 2023 for graffiti removal. Since 2015, the High-Speed Rail Authority has paid more than $177,000 to Politico for the publication’s paywalled subscription service.
The University of California, Los Angeles, meanwhile, was awarded nearly $291,000 in 2016 for a health impacts study. One researcher on the team worried that noise and traffic problems stemming from the rail would disproportionately affect “low-income populations and people of color.”
Lobbyists and lawyers—some far from California—have also benefited from high-speed rail funding. Kadesh & Associates, a top D.C. beltway firm, received several contracts worth nearly $1.9 million in total for lobbying and “congressional advisory services.” Another D.C. firm, Akin Gump, provided “legal services for Congressional Hearings” for nearly $1.1 million.
The High-Speed Rail Authority has also paid out $537 million for its active contracts for environmental services—but that total doesn’t include closed contracts. California’s environmental regulations are notorious for delaying development projects, including the high-speed rail. It took 14 years to develop the project’s environmental impact statement and 12 years for the national historic preservation review. Separate endangered species and fish impact studies took more than a year each.
An environmental restoration firm, Westervelt Ecological Services, has two contracts worth nearly $95 million and has been paid more than $20 million for “habitat mitigation”—essentially creating new animal habitats to replace any destroyed by the high-speed rail’s development. CivicWell, a Sacramento nonprofit, was paid more than $31,000 for services including “environmental justice and equitable outcomes gap assessment.” HNTB Corporation— High-Speed Rail Authority CEO Ian Choudri’s former employer—holds two contracts for “Environmental and Engineering services” worth nearly $196 million.
The biggest spending commitments have gone to engineering, architecture, and construction firms. AECOM and Fluor Corporation, for example, together hold a $400 million contract with the authority for strategic planning—$117 million of which has already been paid. While that may seem logical for a development project, the High-Speed Rail Authority said it needed more than a week to provide the Free Beacon with those businesses’ top accomplishments while working on the project. After that deadline passed, the agency said it would take an additional two weeks.
The state auditor has also identified wasteful spending and pervasive management issues that cause compounding delays and budget overruns. It repeatedly warned that the High-Speed Rail Authority’s projected costs exceeded its budget—multiple times over—and that its weak oversight of its contractors put taxpayer money at risk. The authority once paid $4 million to contractors without documented evidence the work was completed.
And, perhaps most damningly, the state auditor reported in 2018 that the High-Speed Rail Authority’s decision to begin construction before development plans were complete caused over $2 billion in cost overruns.
An inspector general was appointed in 2023 and maintained the state auditor’s crusade. Even after the deadline for the shorter, 171-mile rail had already been extended from 2030 to 2033, the watchdog warned even that may not be achievable.
“With a smaller remaining schedule envelope and the potential for significant uncertainty and risk during subsequent phases of the project, staying within the 2033 schedule envelope is unlikely,” the inspector general reported February 3.
The Trump administration took notice. At the direction of Transportation Secretary Sean Duffy, the Federal Railroad Administration on February 20 alerted the High-Speed Rail Authority that it was scrutinizing the authority’s spending to determine whether it should claw back $4 billion in federal grant money.
“For too long, taxpayers have subsidized the massively over-budget and delayed California High-Speed Rail project,” Duffy said in a statement. “President Trump is right that this project is in dire need of an investigation. That is why I am directing my staff to review and determine whether the [High-Speed Rail Authority] has followed through on the commitments it made to receive billions of dollars in federal funding. If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere in the United States.”
California officials balked and defended the project.
“With multiple independent federal and state audits completed, every dollar is accounted for, and we stand by the progress and impact of this project,” Choudri said. “California’s high-speed rail is 171 miles under active construction, with over 50 major structures completed, 14,700 jobs created, and more than 880 small businesses engaged. This investment has already generated $22 billion in economic impact, primarily benefiting the Central Valley.”
“At a certain point, you have audit fatigue,” Newsom said.
Still, there haven’t been any serious repercussions for those audits. One columnist said a funding cut-off could be a “mercy killing,” and all but 2 of 13 economists and business executives surveyed by the San Jose Mercury-News said the project should be abandoned altogether.
“If the only consequence of not meeting expectations is to increase funding, more failure will continue. Rather than throwing more money after bad, the entire project should be reengineered if not entirely abandoned. Reviewing the project is not the outrage, misspending performance is,” San Diego Institute for Economic Research economist Kelly Cunningham said.
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