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Denham requests review of high speed rail spending

POSTED November 27, 2013 9:11 p.m.

On Tuesday, Congressman Jeff Denham (R-Turlock) penned a letter requesting that the U.S. Government Accountability Office review the funding agreements between the California High Speed Rail Authority and the federal government.

Denham, who has been a strong advocate for fiscal responsibility, sent the letter to Comptroller General Gene Dodaro noting that the Federal Railroad Administration and the Authority’s existing grant agreement requires that federal funding is matched with 50 percent state funding.

As the Chairman of the Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials, Denham pointed out that on Monday, the California Superior Court denied the Authority’s request to issue more than $8 billion in California Proposition 1A state bonds to finance construction of the project.

This ruling, Denham noted, has eliminated the only identified source for the state match.

“Without these bonds, California will have to find other funding sources to comply with the 50-percent match required in FRA’s grant agreement,” said Denham. “My top priority is to ensure that taxpayer dollars are being spent responsibly.  The Authority has already spent hundreds of millions of federal taxpayer dollars, and now has no identified state matching funds. I am requesting that the GAO review the Authority’s grant agreement with the FRA to ensure that taxpayer dollars are not wasted.”

In the letter, Denham asked for the GAO to examine if the Authority is violating, or on the verge of violating, its grant agreements with the federal government. Denham also believes that the state court ruling on Monday may put the FRA in violation of federal laws, including the Anti-Deficiency Act – a law passed in 1870 which prohibits the government from acquiring monetary obligations for which Congress has not made appropriations or funds.

Also signing on to the Denham’s letter was U.S. Representative Tom Latham (R-Iowa), chairman of the appropriations subcommittee on transportation, housing and urban development and related agencies.

“Given the magnitude of the project, we are concerned about FRA’s stewardship of Federal funds in California and elsewhere,” wrote Denham in the letter. “As a result, taxpayer funds may be at significant risk with questionable likelihood of recovery if the Authority fails to comply with the terms of the agreement.”

 

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