California High-Speed Rail CEO Loses Contracting Power Amid Spending Scandal

The Chief Executive Officer of California's high-speed rail project has been stripped of his sole contracting authority following a vote by the High-Speed Rail Board. The board voted 7-2 to limit CEO Ian Choudri's power, requiring agency attorneys to approve or modify any new or existing contracts.

This decision comes in the wake of a critical audit that uncovered over $680,000 in questionable travel expenses paid by the High-Speed Rail Authority to consultants. These expenses reportedly included premium flight upgrades and rideshare trips to various entertainment venues and personal residences.

Board Chair Steve Kawa stated at the meeting that the board would not ignore issues impacting the organization and the state's residents. "We don’t need another special meeting because we know if there are issues there, we have to address them now," Kawa said. "But if they’re not addressed by the staff, they will be addressed by this board."

Board member Lynn Schenk expressed outrage, saying, "I am outraged that we would be treated like a piggy bank for these kinds of expenditures."

Choudri reportedly acknowledged at the meeting that the agency is "committed" and takes "full responsibility and accountability to fix if there was something broken in the system." He also mentioned that disciplinary actions were being taken.

Following the board meeting, Choudri declined to answer questions from reporters, walking away as they attempted to question him about the expenses and calls for resignation. Matt Rocco, the rail authority's acting head of external affairs, intervened, engaging with reporters and directing them to his office for later inquiries.

In a statement, Choudri asserted that the authority has focused on reducing consultant costs over the past two years, claiming savings of over $68 million on consultant contracts. He added that these improvements position the authority to pursue innovative financing and diversified funding strategies.

The scandal emerges as California's high-speed rail project faces significant financial challenges, with warnings that the project could run out of money by the end of 2027 without additional funding. Estimates for the project's total cost have varied widely, with some projecting it could reach $231 billion, while the authority's reassessment placed it at $126.3 billion. The project, which broke ground in 2015, is currently in its track-laying phase, with completion targeted for 2032, though the Inspector General's office views this timeline as potentially optimistic.