NICK'S VIEW - California’s high-speed rail (HSR)project has become so complex, unstable, and financially off track that what was once presented as a viable path to completion now stands as a symbol of dysfunction.
A damning clue to this dysfunction is the blatant misuse of public funds by consultants, raising serious questions about whether those entrusted with safeguarding resources can fulfil that responsibility.
The recent report by the Inspector General for California’s High-Speed Rail Authority found hundreds of thousands of dollars in travel expenses that it said shouldn’t have been approved.
According to the Los Angeles Times, the Authority approved more than half a million dollars in wasteful and unexplained travel spending that included first-class and premium flights, international travel and rideshare trips to an escape room, a night club and a cigar lounge in Washington, D.C., according to a new report.
The inspector general report found four consulting firms — KMPG, Nossaman, AECOM-Fluor Joint Venture and SYSTRA/TYPSA Joint Venture — expensed travel with vague or no explanation.
As per the report: “The Authority improperly reimbursed consultants for travel expenses that appeared unallowable under regulations intended to ensure economy to the State.” It specifically noted that paying for travel when it is not necessary or when it exceeds what is allowed by state regulations or the contract terms is a waste of public funds and is inconsistent with the Authority’s role as the steward of public resources.
Sadly, the findings show that the high‑speed rail’s large funding pool, combined with failed oversight, made it easier for consultants to misuse funds through improper and unallowable billing. Consultants operated with inadequate oversight, submitting charges that violated state rules and contract terms.
This distressing disclosure was, unfortunately, to be expected. From the very start, consultants were given a free hand on the largest public works effort in the state’s history.
The high-speed rail was once touted as a job creator, but the project saw emerging jobs snatched up by consultant groups, contractors, and manipulators—indicative of elements who had contributed heavily to campaign finances, expressly for the bond initiative that funded the project.
In my prior analysis of this issue, as I reported in this space, how startling the examples were. One consulting firm alone had some 470 employees and hired many other consultants. They were spread across offices in Sacramenta, Fresno, and San Francisco. Not surprisingly, imposing contracts for engineers averaged $427,000, compared to rail authority and in-house costs of $131,000 per engineer, according to state documents.
It is all because the project began with a flawed structure only to quickly become a bureaucratic nightmare. At the very beginning, the state had only ten employees to manage and oversee this gigantic endeavor. Instead of building in-house engineering and rail expertise, the California High-Speed Rail Authority was persuaded to hand this enormous responsibility to consultants. And as I had earlier expected, based on my experience, consultants soon overwhelmed the project, creating the unusual situation in which government employees reported to consultants, who in turn managed other consultants.
Unquestionably, it is an unusual and improper development in government when consultants overrule staff decisions. The LA Times wrote that the inspector general said a consultant pushed back against staff’s questioning of an expense and said that he didn’t need to justify in-person travel since the high-speed rail authority’s chief executive had made the request. He said it would be inappropriate to second-guess the CEO’s direction “as other consultants in other Authority offices are learning the hard way.” The expense was approved.
It is no wonder that the high‑speed rail today exists as a vast construction zone without a railroad—an immense public undertaking trapped in complexity, drifting further from completion, and steadily eroding the public trust it was meant to honor.
In Madera County, the northern end of the construction zone, work is underway on guideway grading, viaducts, and the San Joaquin River crossing. The largest cluster of completed structures are in Fresno County with downtown viaducts, grade separations, bridges, and major earthworks. Kings / Tulare Counties are the mid-valley construction zone with work on overpasses, underpasses, and long stretches of graded right‑of‑way. In Kern County (north of Bakersfield), the southern end of the active construction zone, the work includes viaducts, grade separations, and the approach into metropolitan Bakersfield.
So far, it is a half‑built system with no trains, no track, and no credible path to service.
After nearly two decades, only the costs have achieved high-speed performance. California has spent more than $18 billion without laying a single mile of high‑speed track. Meanwhile, the project’s cost estimate has ballooned from the original $33 billion promise to $231.3 billion, based on figures from the latest 2025–2026 reports.
Is high-speed rail possible? I believe it is, but only if reforms confront the project’s central weaknesses: unstable funding, legal delays, and governance failures. That path exists, but it is narrow, steep, and strewn with the same obstacles that have slowed the project for nearly two decades.
I have written that, realistically, three steps are necessary. First, long-term funding must be stabilized, possibly through additional state appropriations, expanded cap‑and‑invest commitments, or revenue-backed bonds. Second, governance and transparency gaps must be fixed, or new money will simply feed the same structural problems. Third, legal and permitting bottlenecks must be cleared to reduce delays involving utilities, cities, businesses, and rail-property access.
I have long maintained that government projects must have government leadership. A professional with strong skills and the ability to motivate, influence, negotiate, and manage experts and consultants must lead. Most certainly, the bullet-train rail must update agreements with all major players, modify charters with municipal hierarchies, identifying individuals in charge of each primary function.
Obviously, everything must be done to avoid compliance failures, miscalculation risks, delivery problems, and the loss of institutional knowledge. That is why replacing internal staff with consultants is dangerous.
Above all, in all projects—and most especially in public projects—stewardship is mandatory. Safeguards must be set and carefully followed to avoid such things as improper reimbursement for consultants.
There are three more factors, in addition to those described above, that had led to a failed project.
1) The revolving door practice. The transit industry is an incestuous industry that essentially operates within a system whereby "the fox guarding the henhouse ". A disgraceful practice.
2) The HSR Authority has approved overhead rates for the aforementioned companies that are the highest in the world.
3) A critical issue with this project was the decision to manage it out of Sacramento, which is a transit engineering desert. Because of the lack of local talent, the aforementioned companies have to import all kinds of personnel and pay their Sacramento living costs, enjoying huge income with the outrageous overhead rates. The project should have been managed out of Los Angeles.
It is imperative that the next governor reevaluate how the project is managed and act urgently.
The ancient voice of Aristotle rings so true today when we speak of ethical work in government. He insisted that governance is not merely administration but applied ethics.
(Nick Patsaouras is an electrical engineer, civic leader, and a longtime public advocate. He ran for Mayor in 1993 with a focus on rebuilding L.A. through transportation after the 1992 civil unrest. He has served on major public boards, including the Los Angeles Department of Water and Power, Metro, and the Board of Zoning Appeals, helping guide infrastructure and planning policy in Los Angeles. He is the author of the book "The Making of Modern Los Angeles.")
