U.S. Rail Regulator Deceived Congress, California’s Denham Says

The top U.S. railroad regulator was accused by a House member from California of misleading Congress to promote the state’s proposed high-speed train network, which President Barack Obama’s administration supports as cost estimates escalate.

Representative Jeff Denham, a Republican, yesterday released a letter from California’s top legislative analyst to Federal Railroad Administrator Joseph Szabo saying the regulator “egregiously misstated the facts” in telling a House committee hearing Dec. 15 that his agency had “not one conversation” with analysts reviewing the rail project.

A panel sponsored by the California legislature on Jan. 3 recommended the state not proceed with the sale of $2.7 billion in bonds to start building the 800-mile network, now projected to cost $98.5 billion.

“This is one more example of how the administration wants this project at any cost,” Denham said in a news release on his website. “What else does the FRA know that they are hiding from taxpayers?”

The House Transportation and Infrastructure Committee on Jan. 3 asked the railroad administration to turn over all records of its communications with the California Legislative Analyst’s Office, a nonpartisan group that provides fiscal and policy advice to state lawmakers. In May, the office criticized the California High-Speed Rail Authority’s management of the project and raised concerns that the state hadn’t secured most of the needed money.

‘Staff-Level Conversations’

Szabo voiced concerns that legislative analysts didn’t consult with agency leaders as they worked on their report about the rail project, Michael Murray, a spokesman for the U.S. Department of Transportation, said in an e-mail yesterday.

While there were “staff-level conversations” regarding program guidance and environmental rules, the California analysts “never contacted federal FRA leadership for input on the project as a whole,” Murray said.

California’s proposed 220-mile-per-hour service connecting the San Francisco Bay area and Los Angeles is the only U.S. project that proposes to operate trains at speeds comparable to those in Europe and Asia.

The project is flawed by a lack of long-term funding commitments, the Jan. 3 report by the California High-Speed Rail Peer Review Group said. Demand forecasts haven’t been subjected to external review and management resources are inadequate, the report said. California’s legislature created the independent group to evaluate the rail plan’s feasibility.

Cost Estimates

The state’s rail authority in November more than doubled the project’s estimated cost, to $98.5 billion from $43 billion, and said construction would take 13 years longer than initial projections to finish.

U.S. Representative Kevin McCarthy, a California Republican, and 11 other Republican House members wrote to the U.S. Government Accountability Office last month requesting a study of the project’s cost, ridership projections and viability. Eleven Democratic representatives from California on Jan. 3 also requested a GAO study.

To contact the reporter on this story: Lisa Caruso in Washington at lcaruso7@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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