The high-speed rail project in California, already under scrutiny, recently made headlines for spending over $680,000 on questionable travel expenses associated with consultants. These expenses included expensive plane tickets and rideshare trips to locations like gyms, nightclubs, and even an “escape room,” according to a troubling new audit.
This report, issued by the inspector general of the California High Speed Rail Agency, reveals that around $2 million was allocated for travel payments to four consulting firms involved in various capacities—financial, legal, and engineering. However, many of these reimbursements raised eyebrows for their questionable nature.
Consultants charged the state for various expenses, including pricey flight upgrades, unauthorized international trips, and rideshare services to fitness centers, restaurants, and even a cigar lounge, as highlighted in the report accessed by The California Post.
“Often, there was little to no justification for the consultants’ travel, and when explanations were provided, they often seemed to question the necessity,” the report stated.
The ambitious high-speed rail initiative in California is grappling with significant financial challenges, with warnings suggesting it may run out of funding by the end of 2027. The Inspector General for the California High-Speed Rail Authority has indicated that funds could be depleted as soon as next year.
Estimates for the entire rail project have skyrocketed to an eye-watering $231 billion, with anticipated completion pushed back to around 2039. In contrast, the rail authority claims the cost after a recent assessment stands at approximately $126.3 billion.
Despite these financial struggles, the audit found that consultants exhibited a reckless approach to travel expenses, often providing vague reasons such as “meetings with HSR executives.”
The report criticized the rail authority for carelessly approving these expenses based simply on the assumption that travel was desired or requested by the CEO or executive team—without seeking adequate justification or considering the costs involved.
In the last two fiscal years, contractor payments totaled $2 million, but many travel expenses lacked prior approvals. About 60% of the $1.15 million in travel examined showed no recorded approval in advance.
From the total, the inspector general identified $680,000 in expenses that had not been pre-approved, which included nearly $593,000 deemed unallowable under state travel policies or contract regulations.
Numerous questionable charges included Uber rides to leisure destinations. For instance, one consultant frequently received reimbursement for premium rides to Planet Fitness locations within Sacramento. Other expenses included trips to tiki bars, nightclubs, and various restaurants in the area.
The inspector general also flagged trips to an out-of-state sushi restaurant in Denver and a cigar lounge in Washington, D.C. “These trips appear primarily for personal enjoyment rather than any real benefit to the state, and the authority should have scrutinized these costs instead of approving them outright,” the report indicated.
Additionally, premium and first-class flights were acquired without justification, and over $118,000 was spent on travel related to individuals from international locations—despite contractual prohibitions against such travel.
In response to these findings, the inspector general recommended that the rail authority enforce stricter travel policies and clearly define approved office locations for consultants.
Critics, particularly Republicans long opposed to the expensive high-speed rail project, seized upon the report as further justification for halting the initiative. “These are wasteful and unallowable travel expenses,” remarked Assembly GOP Leader Alexandra Macedo. “Californians shouldn’t be subsidizing the lifestyles of consultants for a project that hasn’t even laid a mile of track.”
Senator Tony Strickland (R) echoed these sentiments, stating it was no surprise given the context. “California families are dealing with a high cost of living and deserve transparency and accountability regarding taxpayer funds spent on this project,” he emphasized. “It’s high time to reconsider how those taxpayer dollars are being used.”
A spokesperson for the rail authority acknowledged the inspector general’s oversight and affirmed a commitment to transparency and improvement as they work on what they envision as the nation’s first high-speed rail system. “We’re taking these findings seriously and will bolster internal controls around consultant travel, introduce stricter documentation and approval processes, and recover any improper costs,” the spokesperson stated.
Since breaking ground on the project in 2015, progress has been slow. Officials mentioned that this year marked the onset of what they dubbed the “track-laying phase.”
Governor Gavin Newsom has previously noted the challenges with connecting San Francisco and Los Angeles, advocating instead for focusing on a 171-mile stretch between Merced and Bakersfield. Currently, about 119 miles are under active construction, with a completion goal set for 2032, although recent insights from the Inspector General suggest this timeline may be overly optimistic.
