Newsom vetoes high-speed rail oversight bill weeks after scathing audit of rail agency

In summary

The measure would have allowed the Office of the Inspector General that oversees the high-speed rail authority to hire more highly trained workers for audits and investigations.

Gov. Gavin Newsom vetoed a bill that aimed to boost oversight of California’s High-Speed Rail Authority. 

Assembly Bill 1608 by Assembly Transportation Committee Chair Lori Wilson, a Suisun City Democrat, would have allowed the Office of Inspector General that oversees the high-speed rail project to hire more skilled workers and given the agency the power to sign contracts under $1 million.

Newsom’s veto comes two weeks after the investigative office released a scathing report in which its auditors found that the high-speed rail authority approved nearly $600,000 in unallowable travel expenses for its consultants. It found they flew first class, took luxury rides and visited a nightclub on taxpayer dollars.

The auditing agency was created in 2022 to conduct independent reviews and investigations of the long-delayed bullet train project. But it has never been fully staffed because it doesn’t have the authority to hire the expert staff necessary for audits, said Inspector General Ben Belnap in recent public hearings. 

As of last month, three of the agency’s eight full-time positions tasked with audits and reviews remained vacant, Belnap told CalMatters. His office planned to dive into how the high-speed rail authority approves change orders — contract adjustments that often come with hefty price tags — in the spring, but had to table it until the fall due to limited staff, Belnap said.

“I just don’t think we can afford any more delays,” he said. “This project needs timely oversight right now.”

Belnap said his office also wants more authority to purchase software or other services without first having to clear the requests with other state agencies that oversee things such as general contracting or tech projects, which he said has taken months to years.

Once, Belnap said, his office wanted to spend $300,000 on a software to allow tipsters to submit complaints confidentially. But going through the state’s contracting process cost his office an additional $1 million and took more than a year, he said.

“I’ve got to figure out how to get around these processes, not because I don’t respect the guardrails, but those guardrails … are expensive and, in this case, completely unnecessary,” he said.

In his veto message Wednesday, Newsom urged the inspector general’s office to work with what it has. He said his office has supported the inspector general “through targeted actions” and noted that his administration approved another measure earlier this year to shield the agency’s sensitive records and whistleblower information from public disclosure.

“The Office should continue working with the appropriate state agencies to address its operational needs through existing processes rather than receive broad, permanent exemptions from generally applicable statewide administrative safeguards,” Newsom wrote.

Belnap said he was disappointed about the veto. But he said the governor’s staff offered to help clear some of the hurdles and he plans to take them up on it.

“If it’s just more of the same, then I’ll have to think outside the box,” Belnap said. “I’m just not going to allow the veto of AB 1608 to affect this office any longer.”

Wilson was not immediately available for an interview Thursday afternoon.