A transportation expert hired by California bullet train officials to ensure the accuracy of critical ridership forecasts worked for the company that prepared the estimates and maintains a close relationship with one of the firm's top executives.
The consultant, Frank S. Koppelman, a professor emeritus of civil engineering at Northwestern University, has chaired the California High-Speed Rail Authority's ridership review panel since December 2010, assessing the projections of Cambridge Systematics Inc., a Massachusetts-based research company.
Authority officials have relied heavily on Koppelman and his five-member panel to bolster the credibility of passenger and revenue forecasts that are crucial for the project. Together, they form the basis for projecting revenue, determining ticket prices and guaranteeing that trains can operate without government subsidies.
The estimates have come under fire from a variety of critics, including UC Berkeley's acclaimed Institute of Transportation Studies. It asserted almost two years ago that the company's optimistic projections were too unreliable for policymaking.
Before the authority hired him at $400 an hour, Koppelman worked for Cambridge on two projects advising transit agencies in Chicago and Minneapolis-St. Paul. He also has a long-standing professional and personal relationship with Kimon Proussaloglou, a Cambridge executive vice president in charge of forecasting services.
In an interview, Koppelman said the relationships have not compromised his ability to judge Cambridge's work. He added that he avoids discussing rail authority business privately with Proussaloglou, who usually speaks on behalf of his firm during meetings with Koppelman's panel.
"In my mind, there is no conflict of interest," he said. "I have no doubt in my ability to do a clear-cut job for the authority."
Koppelman's panel concluded last fall that shortcomings in Cambridge's work have been corrected and that the company's latest ridership projections are reasonable and provide a solid foundation for project planning.
His work for Cambridge was "modest" and ended in 2009, Koppelman said, although he received one payment the year he joined the state review panel because of a late billing. He estimated he was paid $5,000 for one project, but could not recall how much he received on the other.
Koppelman acknowledged a close relationship with Proussaloglou. At Northwestern, he said, he was Proussaloglou's graduate advisor. Since then, they have co-authored several academic papers and, in November, they made a joint presentation about high-speed rail at a Northwestern transportation symposium.
Socially, Koppelman's and Proussaloglou's families get together every few months for lunch or dinner. Koppelman added that he is "very fond" of Proussaloglou's wife and children.
The association with Proussaloglou, Koppelman said, is like the friendly and professional relationships he has developed over the years with many graduate students at Northwestern. He recalled that when he joined the rail panel, he told Proussaloglou that this was going to be "just like your doctoral dissertation. I'm going to be a real hard-ass about it."
But critics of the rail project and ethicists who specialize in government questioned Koppelman's ties to Cambridge and the executive in charge of forecasting.
"Given the critical importance of the ridership numbers and the public issues raised around them, it is troublesome that neither Cambridge Systematics, professor Koppelman nor the authority ever disclosed this publicly. How is this not a conflict of interest?" said Nadia Naik of the Bay Area group Californians Advocating Responsible Rail Design.
Judy Nadler, a former mayor of Santa Clara and senior fellow at the Markkula Center for Applied Ethics at Santa Clara University, said the independence and objectivity of private consultants are critical because elected officials, board members, commissioners and other policymakers make important decisions based on their advice.
"Any time you have these cross-connections that appear to create conflicts of interest, you can get into trouble," Nadler said. "You need a certain distance that will allow you to do what you are supposed to do — be an impartial gatherer of the facts, assess the facts without bias, and make a recommendation to the governing body. Less than that, you are getting into a danger zone."
Concerned about preventing conflicts of interest, the state auditor noted in a January report that the high-speed rail authority does not require subcontractors to file statements of economic interests, a public document that lists business relationships and sources of income. The auditor gave Cambridge Systematics as an example.
Before he was hired, Koppelman said he disclosed his associations with Cambridge and Proussaloglou to Roelof van Ark, the rail authority's chief executive at the time.