California Rail Board Strips CEO of Contract Power After Audit Reveals $600K in Improper Travel

Key points

• The board voted to require in-house attorneys to approve or modify any new or existing contracts, ending Choudri’s unilateral control over agreements under $25 million.
• An inspector general audit found that consultants billed the agency for unauthorized trips, including first-class flights, luxury rideshares, and visits to a nightclub, cigar lounge, and various restaurants.
• One legal consultant from Nossaman LLP was reimbursed $40,800 for travel and $86,500 for 'travel time' for 30 trips between Denver and Sacramento in a single year.
• The authority paused all travel payments to the four firms involved—KPMG, Nossaman LLP, AECOM-Fluor, and SYSTRA/TYPSA—and is seeking to recoup the misused funds.
• Assembly Minority Leader Alexandra Macedo called for Choudri’s firing, citing a 'pattern of misuse of taxpayer dollars,' while Choudri declined to comment to reporters after the meeting.

Background

The California High-Speed Rail project, approved by voters in 2008 with an estimated cost of $45 billion, is now projected to cost between $126 billion and $231 billion, with a full buildout expected by 2040. The project has faced years of delays and budget overruns, with the first leg currently linking Merced to Bakersfield. This latest scandal adds to a series of oversight concerns, including a previous audit that criticized the agency for failing to disclose risks of running out of money by 2027. Choudri also faced scrutiny earlier this year after being placed on leave following a domestic incident, though he returned to the agency after an internal investigation.

How outlets are covering it

CalMatters and the Sacramento Bee emphasize the board’s decision to strip Choudri of contract authority as a direct response to the audit’s findings of improper travel expenses, with the Bee noting that the total improper spending may reach $700,000. KCRA highlights the broader context of the project’s financial mismanagement, noting that taxpayers spent over $250 million on the four consulting firms between 2024 and 2026, while the audit only analyzed less than $2 million of that spending. CNN provides a broader national perspective, framing the California project as part of a larger struggle for high-speed rail in the US, citing Brightline’s recent bankruptcy and the lack of government support for such infrastructure. All sources agree on the board’s vote and the audit’s findings, but differ in emphasis: CalMatters and the Bee focus on the immediate political fallout and Choudri’s role, while KCRA and CNN contextualize the issue within the broader challenges of public and private high-speed rail in America.

Why it matters

The scandal underscores ongoing concerns about oversight and accountability in California’s largest infrastructure project, which has already faced significant delays and budget overruns. The board’s decision to tighten contract approval processes and recoup misused funds signals a shift toward stricter financial controls, but questions remain about whether these measures will prevent future mismanagement. The incident also highlights the tension between public expectations for transparency and the operational needs of a complex, long-delayed project, with some board members warning that terminating contracts could further delay the rail’s completion.

What to watch

The authority is expected to implement new travel approval forms and a uniform process for advance travel approvals by the end of March 2027, along with training staff and using AI to flag policy violations. The board is also considering a deeper review of all consultant spending, as suggested by Board Chair Steve Kawa. Choudri’s future at the agency remains uncertain, with calls for his resignation from state legislators and ongoing scrutiny from the public and media.