California’s High-Speed Rail Authority approved more than $500,000 in what an inspector general’s report describes as wasteful and unexplained travel spending by consulting firms. The report, released this week by the agency’s inspector general, details a pattern of expenses that included first-class and premium flights, international travel, and rideshare trips to non-business-related destinations such as an escape room, a nightclub, and a cigar lounge in Washington, D.C.
The authority’s total travel costs for four consulting firms, from June 2024 to April 2026, exceeded $2 million. The report states that the authority failed to comply with state law requiring a business need for travel to be considered before approval. The inspector general's report characterized the findings, stating: “Paying for travel when it is not necessary or when it exceeds what is allowed by state regulations or the contract terms is waste of public funds and is behavior inconsistent with the Authority’s role as the steward of public resources.” The report also noted that the authority improperly reimbursed consultants for expenses that appeared unallowable under state regulations.
After reviewing approximately half of the consultants' travel costs, the inspector general found roughly $680,500 of these expenses lacked prior approval, and $543,000 in travel costs were outright prohibited. The identified consulting firms included financial advisor KMPG, legal services contractor Nossaman, program delivery support AECOM-Fluor Joint Venture, and track and system design group SYSTRA/TYPSA Joint Venture. KMPG and Nossaman declined to comment, with Nossaman referring inquiries to the rail authority. AECOM-Fluor and SYSTRA/TYPSA did not immediately respond to comment requests.
State regulations allow travel reimbursement if there is a reasonable explanation for an in-person appointment. However, the inspector general found that such explanations were often unclear, with approvals sometimes made under the assumption that an executive had requested the travel. In one instance, a consultant reportedly pushed back against staff questioning an expense, stating no justification was needed since the high-speed rail authority’s chief executive had made the request.
Specific examples of questionable spending include the reimbursement for a consultant’s private jet flight from Washington, D.C., to Sacramento, equating to the cost of a premium flight. The report also identified nearly $130,000 paid for 30 trips from Denver to Sacramento for one individual, despite records showing only five travel requests. Additionally, approximately $118,000 was spent on international travel that was deemed unallowable, a claim disputed by the contract manager but upheld by the inspector general.
The authority also approved rideshare trips to private residences, Planet Fitness gyms in Sacramento, a tiki bar, a sushi restaurant in Denver, and a cigar lounge in Washington, D.C., without business purpose explanations.
In response to these findings, the inspector general recommended that the high-speed rail authority update its travel policy to require advance written approval for trips, clarify staff expectations, and seek reimbursement for "unallowable expenses paid" from the consulting firms. An authority spokesperson confirmed that the agency "takes these findings seriously" and plans to take corrective action, stating it “will strengthen internal controls around consultant travel, implement more rigorous documentation and approval requirements, and recover any improper costs identified.”
The inspector general’s office was established in 2022 to oversee the authority following significant budget increases. This investigation was launched after claims of improper travel spending surfaced.
The high-speed rail project itself continues to face immense scrutiny. It is years beyond its proposed deadline to connect Southern and Northern California, and its budget has ballooned to more than $100 billion, exceeding its original $33-billion estimate. Construction remains confined to the Central Valley, with no operational lines. The project has seen leadership changes, with CEO Ian Choudri taking over in 2024 after former CEO Brian Kelly's resignation.
State Sen. Tony Strickland (R-Huntington), who serves as vice chair for the Senate Transportation Committee, commented that the report was not surprising. “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,” Strickland said in a statement. He added, “It’s time to pull the plug and put those taxpayer dollars toward the needs of Californians today.”