California’s beleaguered high-speed rail project is facing fresh scrutiny after state investigators found the agency overseeing it paid nearly $600,000 in questionable travel reimbursements to outside consultants, including charges for visits to a nightclub, a tiki bar, a cigar lounge and an escape room.
The findings, released Tuesday by the California High-Speed Rail Authority’s Office of the Inspector General, describe a pattern of lax oversight in which consultants were reimbursed for trips with little or no documentation showing the travel was necessary for state business. Investigators reviewed roughly $1.15 million in travel costs billed by four consulting firms between 2024 and 2026 and determined that more than half of that spending either violated state policy or lacked adequate justification.
For residents across the Inland Empire and Southern California, where the rail line’s long-term route remains a subject of debate and skepticism, the report adds another layer of frustration to a project that has already ballooned from an original $33 billion price tag to more than $126 billion — without a single mile of track laid.
According to the inspector general’s report, the authority approved at least $685,000 in travel costs without reviewing them beforehand, with some staffers saying they only learned of certain trips after invoices arrived. Investigators also found that some consultants flew first-class in violation of contract terms, and in one instance, a consultant was reimbursed at a premium rate after flying a private plane from Washington, D.C.
The four firms involved — KPMG LLP, Nossaman LLP, the AECOM-Fluor joint venture and the SYSTRA/TYPSA joint venture — provide financial, legal, project management and engineering services to the rail authority. None of the companies responded to requests for comment from CalMatters, which first reported the findings.
Investigators said the authority frequently signed off on vague travel justifications, such as descriptions calling a trip a “typical M-F week,” and rarely questioned requests made at the direction of agency executives. In one case, a consultant flew from Denver to California 20 times over two years to attend meetings with the authority’s executive team, without any explanation for why those meetings could not be held remotely.
Another consultant collected $40,800 in travel reimbursements and an additional $86,500 in billed “travel time” for 30 trips between Denver and Sacramento within a single year — often booking flights the same day travel occurred. When asked whether in-person attendance was truly necessary, the consultant said he had been personally directed to attend by the authority’s chief executive, Ian Choudri, and felt it wasn’t his place to question that directive, noting that “other consultants in other Authority offices are learning the hard way” not to push back.
Among the expenses investigators flagged as improper: pricey rideshare trips to a restaurant, bar and nightclub in the late evening and early morning hours; repeated reimbursed rides to Planet Fitness locations near Sacramento, even after a supervisor had specifically noted that gym rideshares weren’t covered; numerous meals charged in Folsom, where Choudri owns a home; more than $118,000 in international travel despite contract language explicitly prohibiting it; and a nearly $40 luxury rideshare charge for a trip of less than one mile in downtown Sacramento.
A deputy inspector general, Amanda Millen, said financial consulting firm KPMG was responsible for the charges tied to the nightclub, tiki bar and cigar lounge visits. She emphasized that the real issue wasn’t why consultants visited those establishments, but why the rail authority agreed to cover the transportation costs without ever questioning whether the trips served any legitimate state purpose.
The revelations drew swift condemnation from Assembly Republican Leader Alexandra Macedo of Visalia — a city that lies along the rail’s planned corridor — who blasted the spending as wasteful and improper. Macedo has long been a vocal critic of the high-speed rail effort.
Rail authority spokesperson Matt Rocco said the agency takes the findings seriously and will strengthen internal controls, tighten documentation and approval requirements, and pursue recovery of any improperly reimbursed costs.
This latest controversy comes on the heels of another troubling assessment from the inspector general’s office in July, which warned that the authority could run out of money by December 2027 — a scenario that would jeopardize completion of its currently planned segment linking Merced and Bakersfield.
Separately, state lawmakers this year passed Assembly Bill 1608, legislation intended to give the inspector general greater authority to oversee the rail project. Gov. Gavin Newsom has until Sept. 30 to decide whether to sign it into law.
In its report, the inspector general’s office recommended that the authority tighten its travel policies going forward, including requiring that all trips be cost-effective, capped at standard state employee reimbursement rates, and clearly tied to state business. Investigators also called for a formal memo from the agency’s chief executive reaffirming that all travel — even trips requested directly by top officials — must receive advance approval.
Authority officials agreed to adopt some of the recommendations, though only partially in some cases. They said a memo clarifying travel expectations would be issued by February 2027, but indicated it might come from another “appropriate executive level” rather than directly from the CEO.
The authority also pushed back on the idea that every consultant trip required individual justification — an assertion the inspector general’s office flatly rejected, telling the agency that its interpretation of the policy was “fundamentally incorrect.”
Investigators say they plan to conduct a follow-up review of the authority’s practices after March 2027.
Original source: CalMatters
