News

Criticism greets new high-speed rail CEO

Jeff Morales to lead state High-Speed Rail Authority after serving as executive of agency's top contractor

Jeff Morales, the newly hired CEO of the California High-Speed Rail Authority, is in many ways the polar opposite of his predecessor, Roelof van Ark.

While van Ark, a former president of international transportation giants Alstom Transportation and Siemens Transportation System, brought international experience and an engineer's perspective to the table, Morales is a policy insider who knows his way around Sacramento and Washington, D.C. Morales, whose hiring the rail authority announced Tuesday, has headed the California Department of Transportation and the Chicago Transit Authority. He was part of President Barack Obama's presidential transition team, and served on the staff at the U.S. Department of Transportation and the U.S. Senate.

But what worries some critics of the project is Morales' latest job as senior vice president and director of strategic initiatives and government relations at Parsons Brinckerhoff, the firm that has been spearheading the beleaguered project. While the rail authority has been getting by with a core staff of about 20 people, Parsons Brinckerhoff had devoted 100 employees to day-to-day management of the colossal project and had been instrumental in putting together the environmental studies and business plans for the San Francisco-to-Los Angeles rail system.

So while Dan Richards, chair of the rail authority's board of directors, praised Morales as "exactly the right person to take the helm at this pivotal time," others expressed disappointment that after an "extensive international search," the rail authority decided to go with the ultimate insider for the top staff position.

State Sen. Doug LaMalfa is among the latter. As soon as Morales' hiring was announced, the Republican senator released a statement noting the rail authority's $200 million contract with Parsons Brinckerhoff and criticizing the rail authority's choice for the top post.

"The Rail Authority claims it conducted a nation-wide search just to end up with an executive from its biggest contractor?" LaMalfa asked in a statement. "How can we expect this insider to provide an independent review of the project, when he helped write the plan that's already doubled the cost to taxpayers?

"Moving forward, how are we to know where the Authority stops and Parsons Brinckerhoff begins?" he added.

Elizabeth Alexis, co-founder of the Palo Alto-based rail-watchdog group Californians Advocating Responsible Rail Design, voiced a similar concern. Her group was among the first to criticize the rail authority's ridership projections and cost estimates (the price tag for the system increased from about $43 billion two years ago to $98.1 billion earlier this year before coming down to the current level of $68 billion). Parsons Brinckerhoff, she said, was the primary agency responsible for the initial low-balling of the cost estimate. The fact that Morales served as a high-level executive for the rail authority's highest-paid contractor should disqualify him from the position, she said.

"It's always been a major concern with this relationship. Who is running the show? Is it PB or is it the state of California?" Alexis told the Weekly. "Now, that's an even more difficult question to answer."

Parsons Brinckerhoff's management of the rail project also faced scrutiny from State Auditor Elaine Howle, who released an audit in April 2010 criticizing the high-speed-rail project for "lax contract management" and "weak oversight." The report doesn't name Parsons Brinckerhoff, but refers to the firm as "program manager." It notes that the rail authority "is significantly understaffed" and "has delegated significant control to its contractors -- especially the entity that manages the program." The audit uncovered many instances in which the program manager provided inaccurate information to state officials.

In her January follow-up to the 2010 report, Howle noted that the authority "relies on the Program Manager to provide accurate, consistent, and useful information in its monthly progress report."

"However, we found that these reports were often inaccurate and that at times the Program Manager appeared to misinform the Authority about the speed with which contractors for each region performed tasks."

Howle's office first flagged these problems in 2010. In its follow-up this year, it learned that these problems still persist. Her audit uncovered more than "50 errors and inconsistencies of various types in three of the Program Manager's monthly reports," which were submitted in December 2010, June 2011 and July 2011. In some cases, Howle wrote, the program manager "altered dates to make it appear that the regional contractors would perform work either more or less quickly than they estimated they could in their progress reports." The program manager also changed the regional contractors' estimated milestones and "percentage-of-progress" data. Of the 12 percentage-of-progress changes, Howle wrote, "three made it appear that the regional contractor had completed more than it reported and nine made it appear that the regional contractor completed less than it reported in its progress report."

Howle wrote in the January report that while there are some valid reasons for the discrepancies, "the number and frequency of the changes we noted suggest that the Program Manager misinformed the Authority about the actual status and progress of the construction section."

Her follow-up report states that because the authority has delegated so much control of the project to its contractors, "it may not have the information necessary to make critical decisions about the program's future."

The rail authority's vacancy problem persists to this day. Of the 11 positions listed on the rail authority website's "Executive Staff" directory, seven are vacant (the list does not include the CEO position).

In announcing Morales' hiring, Richard called the move "a giant step forward" for the rail project, for which voters approved a $9.95 billion bond in 2008.

"This Board was deeply impressed by his extensive experience in large and complex transportation issues and projects on the local, state, federal and international levels," Richard said in a statement. "He has a solid track record of creativity and innovation in the delivery of on-time, on-budget infrastructure projects."

Comments

 +   Like this comment
Posted by morris brown
a resident of Menlo Park: Park Forest
on May 31, 2012 at 9:48 pm

Outstanding article here by Gennady Sheyner. There are dozens of articles on this appointment, but only very vew have bothered to dig out some real facts about this "outrageous appointment".

This is just another indication of how corrupt the HSR project has become.


 +   Like this comment
Posted by Michael G. Stogner
a resident of another community
on Jun 1, 2012 at 7:49 am

This says it well.

"The Rail Authority claims it conducted a nation-wide search just to end up with an executive from its biggest contractor?"


This happened locally.
Mike Nevin was on a 12 member search committee to find a Director for Service League of San Mateo County.....results he found himself.

This happens nationally.
Dick Cheney found himself when he was looking for the best person to be Vice President.


 +   Like this comment
Posted by I want some money off this train also!
a resident of Menlo Park: Stanford Hills
on Jun 1, 2012 at 8:20 am

The Boston Big Dig was finished about 7 times over budget. So, take the "current" CAHSRA estimate of $68 billion, times it by 7, and this Train to Nowhere Boondoggle will end up costing about $500 billion if it doesn't implode from the fraud, corruption, greed, and investigations that will inevitably occur.

Just remember, the San Francisco Bay Bridge is not even completed yet and it's already 6-7 times over budget, meaning the "transportation experts" who estimated "originally" that it would cost only $1.2 to build, but so far the "experts" in California have already spent (not
hypothetical, actually spent) $7.2 billion already. By the time it is done, it is likely it will actually cost 10 times over
budget.

And, the $500 billion to construct the train by the CAHSR is only the bond costs to build. Bonds are paid back at $2 for every $1 borrowed, so borrowing $500 billion to build this stinker will actually cost - yes get this - cost $1 trillion dollars from California's General Fund to pay off the principal and interest on HSR bonds.

$1 trillion dollars, for a train that only uber rich 1%'ers will be able to afford to ride, and business people too lazy to take a $60 Southwest/Jetblue/Virgin plane ride from SFO to LAX! Why do blue collar workers keep subsidizing the uber rich 1%'ers?! How is that fair?!

I think it is fair to say that taking $1 trillion dollars from CA's already depleted General Fund will bankrupt California, so there won't even be money to pay California state worker's overbloated and unfunded (by about $500 billion) pensions, or the $12-15 billion that California spends every year to subsidize the illegal immigrants
staying in California. So, by then the illegal immigrants will probably move out since the nonprofits will have no more money to dole out anymore.

They should call this the "Money Train" or the "Gravy Train" because those are more fitting than the Train to Nowhere Except Bankruptcy nickname.


 +   Like this comment
Posted by POGO
a resident of Woodside: other
on Jun 1, 2012 at 8:31 am

I got news for you, the "uber-rich" aren't going to be taking a train - fast or slow (and it's definitely a slow train now).

It'll be cheaper, faster and far more convenient to fly first class from Oakland, San Francisco or San Jose to Los Angeles, Burbank, Ontario, Long Beach, San Diego, Orange County, Palm Springs.

In case you didn't notice, very few people want to arrive in downtown Los Angeles at the train station.


 +   Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Jun 1, 2012 at 6:18 pm

why do blue collar workers keep supporting the 1%ers? Because they keep drinking the union Koolaid. The union tells them they MUST have these jobs or there will be none. It's nonsense, but hey, they have to believe the people they're paying their dues to, right?

This project and the fact it is still being pushed is due to the fact the unions have far too much influence over politicians. They have lots of money to throw at them and it buys them influence. If it didn't they wouldn't do it. The union leadership thinks they "need" these jobs, so the California taxpayer be damned. Mortgage our great, great, great grand childrens' future to build a train that won't do what it was advertised to do when it was sold to a gullible electorate. What do they care? They'll be dead and gone when the real impact of this boondoggle becomes clear.


 +   Like this comment
Posted by POGO
a resident of Woodside: other
on Jun 4, 2012 at 8:27 am

A recent CBS News poll shows that 59% of California voters would now vote AGAINST high speed rail (or more appropriately termed "standard" speed rail).

The tide has turned... at least with the public.

Web Link


 +   Like this comment
Posted by Menlo Voter
a resident of Menlo Park: other
on Jun 4, 2012 at 10:06 am

POGO:

you think that will make any difference with our labor union, bought and sold legislators? You need to look no further than Rich Gordon for your answer.


 +   Like this comment
Posted by Michael G. Stogner
a resident of another community
on Jun 4, 2012 at 10:12 am

We are making some slow progress.....59% opposed to HSR.

Web Link


 +   Like this comment
Posted by Bill Hough
a resident of another community
on Jun 6, 2012 at 3:19 pm

We need to kill high speed rail project, which numerous impartial observers like the state auditor, the LAO and UC Berkeley's ITS have faulted. At the very least it needs to go back to voters because CHSRA is pulling a blatant "bait and switch.' The California High Speed Rail Authority is mismanaged and in bed with the consultants and unions.

Money wasted on high speed rail could be better spent on deficit reduction. We should be given another chance to vote on high speed rail because the project now under discussion is not the project voters approved in 2008. Since HSR is not on the ballot, I plan to send a message of Governor Moonbeam by voting "NO" on his tax increases.


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