California High-Speed Rail Authority reimbursed consultants for trips to nightclubs, wasteful expenses, watchdog finds
By Carlos E. Castañeda
The California High-Speed Rail Authority has paid out more than half a million dollars in wasteful travel expenses to consultants, such as first-class flights, trips to the gym, nightclubs, and other unallowable expenses, according to a state watchdog.
A report issued Tuesday by the authority’s Office of the Inspector General said allegations that the CHSRA failed to comply with state regulations and contract requirements when reimbursing consultants’ travel expenses were substantiated. Out of the more than $1 million of travel expenses reviewed between 2024 and 2026, the report states, 60%, or $680,500, did not comply with state regulations requiring advance approval, “indicating there was little to no upfront consideration of the need for or cost of the travel.”
Unallowable expenses
Of the unapproved expenses, $592,000 were deemed to be unallowable, according to the report, under state travel regulations or under the contract with the consultants. The reimbursements included expenses for premium airfares, Uber Black and Lyft Black upgrades, trips to gyms, escape rooms, cigar lounges, tiki bars, and private residences with no documentation of a state business purpose.
Also not allowed, the report says, were reimbursement expenditures for international and out-of-state travel, or travel from locations other than the consultants’ approved office locations.
Other questionable practices, the report states, included reimbursement for rideshare cancellation fees, same-day flight booking, which typically means higher costs, and travel claims which lacked receipts or supporting documentation.
“Only in California could a project that is years late and billions over budget somehow find money for consultant rides to a cigar lounge,” said Assembly Minority Leader Alexandra Macedo (R-Tulare) in a prepared statement.
Macedo added that Governor Gavin Newsom “should make taxpayers whole and claw back every improper dollar.”
“Californians are already paying some of the highest costs in the country,” Macedo said. “They should not be forced to subsidize consultant lifestyles for a rail project that still has not laid a single mile of track.”
CHRSA responds to report
A list of recommended corrective actions was included in the report, among them enforcing state regulations regarding allowable travel expenses, obtaining written advance approvals from management, maintaining a list of approved office locations from which travel can be reimbursed, and requiring specific reasons why remote technology does not suffice.
The CHSRA, the report states, only committed to implementing some of the corrective actions and disagreed with the need for detailed justifications for each consultant trip. The authority also disagreed with the need to explain why consultant work must be in-person versus remotely, and cited a recent executive order requiring applicable state employees to work in office four days a week — an order the OIG said does not address consultant travel or negate state travel regulations.
A California High-Speed Rail Authority spokesperson said Wednesday it appreciates the OIG’s oversight and remains committed to transparency and continuous improvements. CBS News Bay Area reached out to the CHRSA and were emailed a statement.
“We take these findings seriously. In response, the Authority will strengthen internal controls around consultant travel, implement more rigorous documentation and approval requirements, and recover any improper costs identified,” a spokesperson wrote. “We are also working closely with the OIG to ensure corrective action that is both accurate and fair.”
High-speed rail delays
California’s high-speed rail project has been beset by years-long delays and cost overruns since construction began in 2015. The CHSRA currently projects the initial Central Valley segment to open between 2030 and 2033, while the full Phase 1 link between San Francisco and Los Angeles is not expected until 2040. Phase 2 would extend the system south to San Diego and north to Sacramento.
When voters approved the initial bond funding for the project in 2008, the entire system was expected to cost between $33 billion and $45 billion. The CHSRA’s 2026 Business Plan showed it would take $126 billion to complete Phase 1 of the project.
In July, the OIG warned that the state’s high-speed rail project could run out of money as soon as December 2027 unless the state borrows billions to keep construction on schedule. A recent CBS California Investigation also showed that the CHSRA repeatedly missed deadlines to buy the trains at the center of a federal funding fight, and dropped its lawsuit against the Trump administration weeks after missing its own revised deadline.
