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California investigates bullet train agency officials

The inquiry focuses on overseas trips paid for by foreign governments jockeying to help their homeland firms secure state contracts.

November 11, 2010|By Rich Connell, Los Angeles Times

The state's ethics enforcement agency disclosed Wednesday that it is investigating several present and former leaders of California's $43-billion bullet train project to determine if they violated regulations on receipt of gifts.

The investigation follows reports in The Times that officials with the California High-Speed Rail Authority took overseas trips paid for by foreign governments jockeying to help their homeland firms secure state contracts.

Although agency rules prevent him from providing specifics, Fair Political Practices Commission Executive Director Roman Porter said that, based on the paper's reporting, his agency has "undertaken a proactive investigation."

The inquiries are focusing on rail authority Chairman Curt Pringle and board members Quentin Kopp, Lynn Schenk and Tom Umberg, according to the FPPC's website. Former authority executive director Mehdi Morshed, who retired earlier this year, also is being investigated.

The five officials took various European trips last year sponsored by foreign government entities. The trips, some of which were worth thousands of dollars, were donated to the authority and then allotted to board members and executives, according to rail agency officials.

Because of that, officials said most board members did not have to disclose the travel on annual reports of gifts, income and personal investments.

But The Times also found that the rail authority was unable to account for the donated trips, as generally required by state ethics regulations. In addition, the agency failed to post details on the sources, costs and itineraries of the trips on its website, as required by FPPC rules.

Without such records, The Times reported, it is unclear how many officials have taken donated trips in recent years and who paid for them. The authority's new chief executive, Roelof van Ark, acknowledged lapses in record keeping and said the problems have been corrected.

The FPPC investigations come as the authority is pushing to break ground on the massive project but is grappling with critical reports on its financial controls and preparedness to handle about $3 billion in federal stimulus funds. The latest warning was delivered last week by state Auditor Elaine Howe, who told a legislative oversight panel that she was disappointed with the authority's slow progress in addressing a number of shortcomings found in an audit earlier this year.

Umberg, a former federal prosecutor and state legislator, said he followed the advice of the authority's legal counsel in not reporting his trip to Spain. "I did everything possible," he said. "If the authority wasn't in compliance, that makes me angry." The authority board last week instructed staff to ensure that the agency fully complies with state ethics laws, he noted.

Morshed, who traveled to Spain and Germany, said he was reviewing a letter from the FPPC about the investigation. Any mistakes in accounting for the trips were inadvertent, he said, adding that the problems could be attributed to the agency's limited staff and budget over the years.

"It is not having enough people to do it," he said. He added that he repeatedly warned the board, the public and state legislators that "we are not doing nearly all the things we needed to be doing."

Kopp, a former judge and lawmaker, said he relied on the agency to properly document the donated travel. He said he expects the investigation to be resolved by the agency's reconstructing information on past trips and turning it over to the FPPC.

Pringle, who traveled to France and Germany, disclosed his trips because he must meet a more rigorous reporting standard as the elected mayor of Anaheim. Schenk, a former congresswoman, traveled to Spain. Neither could be reached immediately for comment.

The FPPC can levy fines of up to $5,000 per violation of the state Political Reform Act.

Rail officials have defended the overseas trips as a way to gain valuable information on high-speed rail systems at no cost to state taxpayers.

rich.connell@latimes.com

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