dChan - Q Origins Project Archive

California’s top bullet train consultant is suspended amid a state ethics probe

[excerpt]

A state watchdog agency is investigating the top consultant on the California bullet train project for modifying a multimillion-dollar contract involving a company in which he had heavily invested, and the consultant’s company has suspended him because of the probe, The Times has learned.

Roy Hill, deputy chief operating officer for the California High-Speed Rail Authority and a senior executive at the lead consulting firm WSP, signed a $51-million change order for the construction team led by the Spanish firm Dragados. It happened in the same year he may have owned more than $100,000 of stock in Jacobs Engineering, which is part of the Dragados team, records show.

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The investigation could be another setback to the rail system, coming soon after Gov. Gavin Newsom pledged greater transparency for the project and installed his political ally Lenny Mendonca as chairman of the rail authority board.

“The authority takes conflict-of-interest concerns very seriously and will work closely with the FPPC on the allegations in question,” agency spokeswoman Annie Parker said.

Denise Turner Roth, chief development officer for WSP USA, said in a statement: “We hold ourselves to the highest ethical standards. We take these allegations seriously, and will cooperate fully with the investigation. Mr. Hill has been temporarily suspended while this matter is reviewed.”

Patterson, who requested the probe, requested financial disclosure forms of consultants working on the project after The Times published a story about the project’s overreliance on consultants.

“This calls into question just how deep and just how corrupt this project has become,” Patterson said. “My office has heard from former High-Speed Rail Authority employees and even former contractors who are disgusted by what they believe is corrupt behavior. Unfortunately, the High-Speed Rail Authority doesn’t do the right thing until they’re caught red-handed.”

Dragados and its subsidiary Flatiron won the contract to build 65 miles of rail bed, viaducts and bridges in Kings County for a bid of $1.2 billion in December 2014. The work has encountered substantial delays since then.

The change order was signed Dec. 20, 2017, by Hill, along with chief engineer Scott Jarvis and then acting Chief Executive Thomas Fellenz. It compensated the Dragados team for delays involving delivery of land, permits, utility relocations and other factors through Aug. 31, 2017. It left open the possibility of further delay claims from that point.

Hill came onto the project in June 2017, a month after the former Parsons Brinckerhoff engineering firm became known as WSP. On March 18 of this year, he filed a financial disclosure statement, known as a California Form 700, that showed he held between $100,000 and $1 million of stock in Jacobs Engineering, the Texas-based firm that is provided engineering and design services to the Dragados joint venture. Hill did not fill in sections of the form that indicated when he acquired or may have disposed of the stock.

Hill may have acquired the Jacobs shares through a merger, in which Jacobs acquired engineering and environmental management firm CH2M, based in Colorado. Hill was previously involved with CH2M, though it is unclear from his disclosure form whether he owned the Jacobs stock before the merger.

The acquisition was announced Aug. 2, 2017, and completed Dec. 18, 2017. If Hill held CH2M stock, he probably knew he would own the Jacobs shares before he signed the contract modification but did not actually own them until months after he signed the document. The acquisition terms were extremely favorable to CH2M shareholders and media accounts at the time said executives at the company would benefit substantially.

Ethics experts say such issues are often not black and white. An ethics issue begins if there is a “conflict producing interest” but requires that the conflict was foreseeable and that it is material or significant, according to Delaney Marsco, ethics counsel at Campaign Legal Center, a nonpartisan watchdog with a large legal staff that aims to hold public officials accountable.

Marsco, who has been involved in California ethics issues, said consultants are treated the same as any state employee in ethics compliance. A conflict producing interest could be a piece of property or ownership of stock. Whether a conflict is foreseeable depends on whether a decision will affect a person’s financial interests and material whether it is valuable enough to influence a decision.

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https://www.latimes.com/local/california/la-me-bullet-train-investigation-20190604-story.html