California High-Speed Rail Paid Consultants for Trips to Tiki Bar, Gym, Audit Reveals

The California High-Speed Rail Authority paid over $680,000 in questionable travel expenses to consultants, including rideshare trips to gyms, a tiki bar, a nightclub, and an "escape room," according to a new audit. The total amount paid to four consulting firms for travel over the last two fiscal years was $2 million, but the inspector general found numerous expenses that were not allowable under state travel regulations or contract rules.

The report, released by the inspector general of the California High-Speed Rail Agency, detailed how consultants billed the state for premium flight upgrades, international travel despite contractual prohibitions, and rideshare trips to various recreational and dining establishments. The inspector general noted that the authority often approved expenses with little to no explanation of their necessity.

"We often found little or no explanation of the need for consultants to travel, and when we did find stated purposes for travel those purposes frequently raised doubts about its necessity," the report stated. The authority's approval process was described as sloppy, often operating on the assumption that travel was requested by executives without sufficient justification.

Of the $1.15 million in travel expenses reviewed, approximately 60% lacked advance approval. The audit specifically identified $592,900 in expenses that were deemed unallowable. These included numerous Uber rides to Planet Fitness gym locations, a tiki bar, and restaurants in the Sacramento area. The audit also cited trips to an out-of-state sushi restaurant in Denver and a cigar lounge in Washington, D.C.

"These trips clearly appear to be for personal enjoyment rather than for the benefit of the State, and the Authority should have questioned the necessity of those costs rather than paying them outright," the report concluded.

Premium and first-class flights were also reimbursed without adequate justification, and over $118,000 was spent on travel-related costs for individuals traveling from other countries, contrary to contractual agreements.

These findings come as California's high-speed rail project faces significant financial challenges. The projected cost has ballooned, with estimates ranging up to $231 billion, though the authority reassessed the cost to $126.3 billion. The project, which began construction in 2015, is now targeted for completion around 2039, with a segment between Merced and Bakersfield having recently entered the "track-laying phase."

Critics, including Republican lawmakers, have pointed to the audit's findings as further evidence that the project should be halted. Assembly GOP Leader Alexandra Macedo stated, "Californians are already paying some of the highest costs in the country. They should not be forced to subsidize consultant lifestyles for a rail project that still has not laid a single mile of track."

Sen. Tony Strickland echoed these sentiments, urging an end to the project to redirect funds towards more immediate Californian needs.

A spokesperson for the rail authority stated that the agency takes the findings seriously and is committed to transparency. "We will strengthen internal controls around consultant travel, implement more rigorous documentation and approval requirements, and recover any improper costs identified," the spokesperson said, adding that the authority is working with the Office of the Inspector General to ensure corrective actions are taken.

In response to the audit, the inspector general recommended that the rail authority enforce its travel regulations and establish approved office locations for all consultants to prevent future occurrences.