Consultants working on California's high-speed rail project charged taxpayers for rides to nightclubs, gym trips, escape rooms, and a private plane flight, and the state agency approved the bills without question, a new inspector general audit found.
The California Office of the Inspector General released the audit this week, documenting more than $2 million in travel-related costs the California High-Speed Rail Authority paid to outside consultants across fiscal years 2024, 25 and 2025, 26. Roughly 60 percent of the reviewed payments, $680,500, had never received advance authorization. Another $543,400 was deemed flat-out "not allowable." Agency staff, the audit found, sometimes did not even know a trip had taken place until the invoice landed on their desks.
The inspector general's office did not hold back. The spending pattern, it said, was "inconsistent with the Authority's role as the steward of public resources."
The line items read less like a government project ledger and more like a corporate expense-account binge. Fox Business reported that consulting giant KPMG LLP billed the Authority for ride-hailing trips to a nightclub, a tiki bar, and a cigar lounge in Washington, D.C. One consultant charged $40 for a luxury "Uber Black" ride that covered less than a single mile in downtown Sacramento.
Another consultant took a 25-mile "Uber Comfort" ride to a steakhouse in Folsom, California. Someone billed for a trip to a Denver sushi restaurant. Someone else billed for an escape room outing. None of these destinations had an obvious connection to building a railroad.
Then there were the gym rides. The agency repeatedly reimbursed ride-hailing trips to Planet Fitness locations in and around Sacramento, and kept paying them even after a supervisor put it in writing that the state does not cover rideshares to gyms. The written directive made no difference. The invoices kept coming, and the Authority kept approving them.
Among the most striking entries: one consultant flew a private aircraft from Washington, D.C., to California, then self-calculated a "premium" commercial airfare rate of $4,182 each way. The Authority paid it without pushback.
A legal consultant based in Denver billed $40,800 in travel reimbursements plus an additional $86,500 in "travel time" charges after making 30 round trips between Denver and Sacramento in a single year. That is roughly one trip every twelve days, at a combined cost to taxpayers exceeding $127,000 from one consultant alone.
Meanwhile, the agency shelled out $118,000 in international travel expenses despite the fact that the consultants' contracts explicitly barred international trips. The audit did not name the specific countries visited.
When invoices came in, agency staff approved them with vague justifications. A common notation, the audit found, was simply "typical M-F week", as though billing for a cigar lounge or an escape room were just another Tuesday at the office.
The spending revelations land on a project already defined by cost overruns and broken promises. California voters approved the high-speed rail initiative in 2008 on a pledge of $33 billion and a completion date of 2020 for service between Los Angeles and San Francisco. Neither target came close. The current estimated price tag sits at $126 billion, nearly four times the original figure, and the most optimistic projected completion date has slipped to 2039.
Not a single commercial passenger mile has been operated in the 16-plus years since voters gave the project the green light. A recent assessment warned that project funds could dry up entirely by the end of 2027.
The trajectory has been grim for years. Fox News previously reported that the first 119-mile segment through the Central Valley alone ballooned to $10.6 billion, a 77 percent increase from initial estimates and 36 percent higher than forecasts from just one year earlier. Roy Hill, the lead consultant on the project, offered a blunt assessment at the time: "The worst-case scenario has happened." James Moore, director of transportation engineering at USC, was even more direct: "The money is already wasted. There's no way to unwaste it."
The inspector general's report went beyond flagging dollar amounts. As the New York Post reported, the audit stated plainly that many of the flagged expenses looked like personal outings billed to the public:
"These trips clearly appear to be for personal enjoyment rather than for the benefit of the State, and the Authority should have questioned the necessity of those costs rather than paying them outright."
KPMG, the only firm identified by name in connection with the nightclub and tiki bar charges, declined to comment. Fox Business reached out to the three other firms reviewed in the audit, Nossaman LLP, AECOM-Fluor Joint Venture, and SYSTRA/TYPSA Joint Venture, but no responses were reported.
The California High-Speed Rail Authority said it "takes these findings seriously" and pledged to work with the inspector general's office to fix its oversight failures. The statement did not mention any disciplinary actions, any effort to recover the misspent funds, or any consequences for the consultants who submitted the charges.
State Sen. Tony Strickland, a Republican from Huntington Beach who chairs the state Senate Transportation Committee, called for accountability. In a statement responding to the audit, Strickland tied the spending directly to the burden on ordinary Californians:
"More than $600,000 in consultant travel expenses were flagged as questionable, while California families are struggling with the high cost of living and deserve answers and accountability."
Strickland added that consultants who travel without authorization should bear the cost themselves:
"Consultants should expect that when they make an executive decision to travel without authorization, that they're taking on the expense themselves."
The New York Post reported that Strickland went further, saying outright that it is "time to pull the plug" on the project, a position that has gained traction among Republican lawmakers as costs mount and timelines stretch toward the 2040s.
What the audit describes is not a few rogue receipts. It is a system where consultants submitted whatever they wanted, agency staff rubber-stamped the invoices, written policies were ignored after being put on paper, and contract prohibitions, like the ban on international travel, carried no apparent weight. Sixty percent of the payments reviewed lacked prior approval. The agency's own supervisor told staff in writing to stop reimbursing gym rides, and the reimbursements continued anyway.
The open questions are significant. The audit does not identify which firms were responsible for each flagged expense beyond KPMG's nightclub and tiki bar charges. It does not name the consultant who flew private or the legal consultant who billed $127,000 from Denver. It does not explain how $118,000 in contractually prohibited international travel was approved. And the Authority's response, a pledge to "work collaboratively" with the inspector general, offers no specifics on recovery, discipline, or structural reform.
Californians voted for a bullet train in 2008. Nearly two decades later, they have no train, a price tag approaching four times the original promise, a funding cliff looming in 2027, and an agency that paid consultants to ride Ubers to the gym and bill taxpayers for cigar lounges. The Authority says it takes the findings seriously. The record suggests otherwise.