California agency to investigate bullet train board member

Dive Brief:

The California Fair Political Practices Commission (FPPC) is investigating Ernest Camacho, a board member of the California High-Speed Rail Authority, for an alleged conflict of interest, the Los Angeles Times reported.
The commission's action is in response to a complaint made by state Assemblyman Jim Patterson, who, according to the Times, is an opponent of the authority's plan for a high-speed bullet train connecting Northern and Southern California. Patterson claims that Camacho's construction, project and program management company Pacifica Services has contracts with Tutor Perini and Jacobs Engineering, both of which have significant contracts for work on the high-speed rail.
Pacifica is a subcontractor to the firm that is overseeing Tutor Perini's work on the Purple Line subway project in Los Angeles and had a now-canceled contract with Jacobs Engineering for a county jail project. The Times quoted Patterson as saying that even the "appearance of a conflict raises suspicion."

Dive Insight:

This is not the first time that the FPPC has started an investigation against an authority board member. Patterson previously lodged a complaint against Roy Hill, former deputy chief operating officer of the rail authority, for signing off on $51 million of change orders for Jacobs Engineering, according to California Political Review. Hill allegedly owns up to $100,000 in Jacobs stock.

The bullet train project, which California Gov. Gavin Newsom scaled back significantly earlier this year, has never wandered too far from controversy. What started out as a $33 billion, voter-approved project was pushing $80 billion and about 13 years behind schedule when Newsom shelved all but the segment between the two California cities of Merced and Bakersfield. Nevertheless, that 119-mile piece has also had big problems, including with the federal government. The Federal Rail Administration announced earlier this year that it was moving to cancel a $929 million grant for that segment because, according to the agency, there was no way it was going to meet an agreed-upon completion deadline of 2022. President Trump also said he would try to claw back a previous Obama-era grant of $2.5 billion.

Driving many of the budget overruns, according to a recent report, is the authority's alleged inability to manage land acquisitions. This, according to the Times, was the spark for cost escalation, delays and a federal audit. The rail authority has been trying to make deals on the land it needs to complete its planned routes, but still has hundreds of negotiations ahead of it to secure all the necessary property. The authority has said it is putting a new management team together to handle these issues.

However, the authority could be at risk of paying out additional millions in delay-related change orders if the lack of acquisition gets in the way of its contractors' work. Tutor Perini, for instance, secured a $63 million change order to cover demobilization and remobilization costs after the authority failed to obtain the land necessary for the general contractor to begin its work.