California Gov. Gavin Newsom (D-CA) vetoed legislation this week that would have strengthened oversight of the state’s troubled high-speed rail project.
The decision comes less than a month after the project’s inspector general issued a scathing audit detailing hundreds of thousands of dollars in questionable spending by rail consultants.
A banner reading “Fast Track to California’s Future” is displayed at the California High-Speed Rail Authority’s 150-acre Southern Railhead site in the Wasco/Shafter area for the announcement of the next phase of construction, bringing the state closer to passenger service by starting track installation between Merced and Bakersfield, in Wasco, Calif., Tuesday, Feb. 3, 2026. (AP Photo/Damian Dovarganes)
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A banner reading “Fast Track to California’s Future” is displayed at the California High-Speed Rail Authority’s 150-acre Southern Railhead site in Wasco/Shafter, Calif., Feb. 3, 2026. (AP Photo/Damian Dovarganes)
The timing puts renewed scrutiny on Newsom, who is eyeing a 2028 White House run, over his decision to reject additional powers for the watchdog his administration created to police what has been described as California’s biggest boondoggle.
Assembly Bill 1608 would have allowed the High-Speed Rail Office of Inspector General to hire more experienced auditors and enter into contracts of up to $1 million without additional approval from other state agencies.
Newsom said no to both.
“The Office should continue working with the appropriate state agencies to address its operational needs through existing processes,” the outgoing governor wrote in his veto message.
But the inspector general says those existing processes are precisely the problem.
Ben Belnap, whom Newsom appointed to lead the independent watchdog, said his office cannot fully staff its auditing operation because the state’s job classifications make it difficult to recruit qualified auditors. Three of its eight full-time audit and review positions were vacant as of last month, CalMatters reported.
That shortage has already delayed an examination of the rail authority’s change-order process, including a settlement worth more than $500 million.
“This project needs timely oversight right now,” Belnap said.
The need for that oversight became particularly apparent in September after the inspector general’s office reviewed $1.15 million in travel reimbursements submitted by four outside consulting firms. It found that the rail authority had approved at least $685,000 in expenses without first approving the trips. In some cases, agency officials did not learn about the travel until they received invoices.
The audit also found first-class airfare, luxury transportation, and trips to a nightclub and other entertainment venues. Auditors said the authority frequently approved expenses with vague explanations, or at random times in the middle of the night, and failed to document why the trips were necessary.
The rail authority disagreed with some of the inspector general’s findings, including the need to justify individual consultant trips. The inspector general responded that the authority’s interpretation was “fundamentally incorrect.”
Two weeks later, Newsom, who is term-limited, vetoed the bill that would have given the watchdog more tools.
That decision comes against the backdrop of one of California’s most expensive and controversial infrastructure projects.
Voters approved high-speed rail in 2008 with a plan to connect Los Angeles and San Francisco by 2020 at an estimated cost of $33 billion.
Nearly two decades later, California is still working on its first operating segment.
Not only has the statewide system voters envisioned been repeatedly delayed, redesigned, and repriced, the project has also racked up a long list of questions over management and spending. That led the state to establish an independent inspector general in 2022 to audit contracts, root out potential fraud, and examine problems within the rail authority.
But now the watchdog says it needs even more authority.
Belnap has said his office spent roughly $1.15 million navigating the state’s procurement process to obtain software expected to cost about $300,000. The systems are intended to allow confidential whistleblower complaints and manage investigative files.
CBS’s California Investigates reported that the state’s procurement requirements could ultimately push the software project’s total cost above $2.5 million.
AB 1608 would have allowed the inspector general to bypass some of those administrative hurdles for contracts below $1 million.
It would also have allowed Belnap to hire employees at higher classifications, potentially addressing the staffing shortage he says is preventing his office from conducting some audits.
NEWSOM SIGNS LAW BANNING ICE SHOCK GLOVES IN CALIFORNIA
Newsom’s administration has supported other portions of the legislation. Provisions concerning the inspector general’s reporting and confidentiality powers were incorporated into a separate state budget measure and are already law.
The veto now leaves the inspector general with expanded authority over some investigative information, but without the staffing and purchasing changes he says are necessary to conduct those investigations efficiently.
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[ H/T Washington Examiner ]
