A state watchdog report has found that California’s High-Speed Rail Authority paid $592,900 in improper travel expenses for consultants, including premium flights, rides to gyms, nightclubs, and other non-business destinations, during fiscal years 2024-25 and 2025-26.
The Office of the Inspector General for High-Speed Rail reviewed approximately $1.15 million of the $2 million in travel-related costs paid to four consulting firms—KPMG, Nossaman LLP, AECOM-Fluor, and SYSTRA/TYPSA—and determined that $680,500 (60%) lacked documented approval as required by state law. Of the reviewed expenses, $81,000 violated state travel regulations, while $543,400 violated contract terms, with some expenses falling into both categories.
Improper Expenses Identified
The report detailed multiple instances of unallowable reimbursements, including:
- First-class and premium flights without justification for necessity.
- Private plane travel from Washington, D.C., to California.
- Rides to Planet Fitness gyms in Sacramento, as well as trips to a nightclub, escape room, tiki bar, sushi restaurant in Denver, cigar lounge in D.C., and multiple restaurants.
- Luxury Uber rides, including a $40 short-distance trip in Sacramento and upgraded rides from home to the airport.
The inspector general concluded that many of these trips “clearly appear to be for personal enjoyment rather than for the benefit of the State.”
Authority Responds with Corrective Measures
A spokesperson for the California High-Speed Rail Authority stated that the agency “appreciates the Office of the Inspector General’s oversight” and is committed to transparency and improvements. The authority outlined plans to:
- Strengthen internal controls around consultant travel.
- Implement more rigorous documentation and approval requirements.
- Recover any improper costs identified.
- Work closely with the OIG to ensure corrective action is “accurate and fair.”
The watchdog report did not specify whether criminal or disciplinary actions would follow, but it emphasized that the findings substantiated allegations of inappropriate travel reimbursements.
Background on the High-Speed Rail Project
California’s high-speed rail system, the first of its kind in the nation, has faced years of delays, cost overruns, and scrutiny over its management. The project, which aims to connect San Francisco to Los Angeles, has relied heavily on private consultants for financial, legal, and engineering support. The latest findings add to concerns about accountability and fiscal responsibility in the project’s administration.
The Central Valley stations in Merced, Fresno, Tulare County, and Bakersfield remain key components of the planned route, though construction timelines continue to evolve amid funding challenges and regulatory hurdles.