<p class="wp-block-paragraph">California Governor Gavin Newsom (D-CA) vetoed legislation this week that would have strengthened oversight of the state’s high-speed rail project.</p>
<p class="wp-block-paragraph">The veto follows an audit from the project’s inspector general that detailed questionable spending by rail consultants, amounting to hundreds of thousands of dollars.</p>
<p class="wp-block-paragraph">The timing of the veto has drawn scrutiny towards Newsom, particularly as he considers a potential run for the White House in 2028, regarding his decision to deny additional powers to the watchdog created by his administration to oversee the rail project.</p>
<p class="wp-block-paragraph"><a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB1608" rel="noopener noreferrer" target="_blank">Assembly Bill 1608</a> aimed to allow the High-Speed Rail Office of Inspector General to hire more experienced auditors and enter into contracts of up to $1 million without needing approval from other state agencies.</p>
<p class="wp-block-paragraph">In his veto message, Newsom stated, “The Office should continue working with the appropriate state agencies to address its operational needs through existing processes.”</p>
<p class="wp-block-paragraph">However, the inspector general, Ben Belnap, indicated that those existing processes hinder the office's ability to recruit qualified auditors, with three of its eight full-time positions vacant as of last month, according to reports.</p>
<p class="wp-block-paragraph">This staffing shortage has delayed an examination of the rail authority’s change-order process, which includes a settlement exceeding $500 million.</p>
<p class="wp-block-paragraph">Belnap remarked, “This project needs timely oversight right now.”</p>
<p class="wp-block-paragraph">The need for oversight was highlighted in September when the inspector general reviewed $1.15 million in travel reimbursements from four consulting firms, finding that the rail authority approved at least $685,000 in expenses without prior approval.</p>
<p class="wp-block-paragraph">The audit revealed instances of first-class airfare and luxury transportation, as well as trips to entertainment venues, with vague explanations provided for the expenses.</p>
<p class="wp-block-paragraph">The rail authority disagreed with some findings of the audit, particularly regarding the necessity of justifying individual consultant trips.</p>
<p class="wp-block-paragraph">Two weeks later, Newsom vetoed the bill that would have equipped the watchdog with more resources.</p>
<p class="wp-block-paragraph">This decision occurs amid ongoing concerns regarding California’s high-speed rail project, which was approved by voters 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.</p>
<p class="wp-block-paragraph">The project has faced repeated delays, redesigns, and cost increases, leading to the establishment of an independent inspector general in 2022 to audit contracts and address potential fraud.</p>
<p class="wp-block-paragraph">Belnap noted that his office incurred approximately $1.15 million navigating the state’s procurement process for software expected to cost around $300,000, intended for managing whistleblower complaints and investigative files.</p>
<p class="wp-block-paragraph">The state’s procurement requirements could ultimately increase the software project’s total cost to over $2.5 million.</p>
<p class="wp-block-paragraph">AB 1608 would have allowed the inspector general to bypass some administrative hurdles for contracts below $1 million and hire employees at higher classifications to address staffing shortages.</p>
<p class="wp-block-paragraph">While Newsom's administration has supported other aspects of the legislation, the veto leaves the inspector general with limited authority to conduct investigations effectively.</p>