Boondoggle Alert! Taxpayer Ripoff! Sen. Feinstein’s husband’s firm gets California high-speed rail contract

In our most recent book, Fool Me Twice, Aaron Klein and I reported on the $8 billion high-speed rail funds in the 2009 Porkulus bill. As bad as the following excerpt painted the picture, it gets much much worse. Read on.

We wrote in the section “Bullet Trains to Bankruptcy”:

    In the original “stimulus” bill, Obama included $8 billion for high-speed rail and called for $1 billion per year for five years in his proposed budget to get his projects “off the ground.” Grant awards were designated to lay the “groundwork for 13 new, large-scale high-speed rail corridors across the country . . . part of a total of 31 states receiving investments, including smaller projects and planning work that will help lay the groundwork for future high-speed intercity rail service,” as the White House claimed in April 2009.

    Grant awards were not announced until nine months later (January 28, 2010). Almost two years after that, in November 2011, the U.S. Department of Transportation announced that 2012 was “shaping up to be the year of significant high-speed activity.” Contracts had been let by states for design work, planning work, construction materials, and supplies.

    A closer look at one of these high-speed rail projects is instructive. Stanford University economist Thomas Sowell wrote at the end of January 2012 about California’s prospective “Bridge to Nowhere.” Sowell pointed to Japan’s famous high-speed rail system between Tokyo and Osaka, in “one of the most densely populated countries in the world.” The “bullet train” carries 130 million riders a year. He compares this to the proposed first leg of California’s system, the route between Fresno and Bakersfield Tokyo has a population three times that of San Francisco and Los Angeles combined. Fresno and Bakersfield are much smaller communities in the agricultural San Joaquin Valley. The 2010 population for all of San Joaquin County was 685,306. “You can bet the rent money that high-speed rail traffic between Fresno and Bakersfield will never come within shouting distance of covering the operating costs,” Sowell wrote. “Some people have analogized putting such a rail line between these two towns to the infamous ‘bridge to nowhere’ in Alaska.”

    Why is the project in the sparsely populated Valley? Politics. It’s about politics. If the high-speed train started where California’s governor, Jerry Brown, and Obama wanted it to go—between the mega coastal cities—environmentalists, and politicians connected with environmentalists, would lie down on the tracks to stop the trains, Sowell wrote. Instead, California gets federal taxpayer dollars, and Brown and Obama look like heroes.

Now we learn, via Wynton Hall at, that a construction firm deeply-connected to Richard Blum, Sen. Dianne Feinstein’s husband, has won a contract for a California high-speed project:

    Sen. Diane Feinstein’s husband Richard Blum won a construction contract for California’s high-speed rail project, reports the California Political Review.

    Author Laer Pearce says Perini-Zachary-Parsons, a construction group partially owned by Blum’s investment firm, Blum Capital, and their investors, bagged the nearly billion dollar contract:

    “The Perini-Zachary-Parsons bid was the lowest received from the five consortia participating in the bidding process, but ‘low’ is a relative term. The firms bid $985,142,530 to build the wildly anticipated first section of high speed rail track that will tie the megopolis of Madera to the global finance center of Fresno. Do the division, and you find that the low bid came in at a mere $35 million per mile.”

    This is not the first time Feinstein has come under scrutiny for cronyism using taxpayer dollars.

    A recent study by the Reason Foundation found that the California High-Speed Rail System will lose between $124 million to $373 million a year.

By the way, Hall’s calculation is a bit off. Do the math: divide that $985 million by 25 miles.

Fact Check

chsra_mapthumb_fresnobakerHere is the Fresno to Bakersfield leg of the system, a distance of 114 miles:

    The section travels south through the center of the southern portion of the San Joaquin Valley. Stations will be in the cities of Fresno, where it will connect with the Merced to Fresno section, and Bakersfield, where it will connect with the Bakersfield to Palmdale section.

Recall that the 2010 population for all of San Joaquin County was 685,306. The population of Madera County, for which the city of Madera serves as county seat, was 150,865 in 2010. The city of Madera had a population of 61,416.

As of 2012, Fresno, the county seat for Fresno County and the fifth largest city in California, claimed a population of 509,039, with less than one million (930,450) in the whole county.

The distance from Madera to Fresno is a mere 25 miles, less than 25% of the Fresno to Bakersfield leg.

Note that as the pieces of the project become smaller and smaller, the cost continues to rise disproportionately. Out of a proposed 800-mile high-speed rail system, a mere 25 miles has been funded — and that singular piece to a senator’s spouse’s firm.

Also ask yourself why the population of a county with approximately 150,000 (and about 60,000 living in its county seat) needs high-speed passenger rail to transport a small percentage of its residents 25 miles distant to another county seat, where less than half its nearly one million residents reside. It is highly unlikely that the people residing in the fifth largest city in the state have a burning need to travel to a less significant city.

Can we explain it by ethnicity? What makes Madera, with its low median income community, so important? Could it be that Madera’s ethnic population is more than 76% “Hispanic” and about 17% “white” (and Fresno is less than 50% “Hispanic” and 30% “white”) — with more than 30% born in Latin America (and only 11% of the same in Fresno)? Is it about Democrat voters?

How about cheap labor? Major industries in Madera are “Agriculture, forestry, fishing and hunting” (28%) and manufacturing (14%), as compared to only 5% agriculturual workers (and no manufacturing) in Fresno.

Are we to believe that the residents of 76+% “Hispanic” Madera are just busting to invest their big agricultural earnings in the “global finance center” of Fresno?


The first week of March, Madera County Supervisor David Rogers proposed a money-saving alternative for the route between Merced and Fresno:

    Supervisor David Rogers, who represents the Chowchilla area, wants to convince the California High-Speed Rail Authority to use about 30 miles of partially abandoned freight railroad right of way between Merced and Mendota and to enter Fresno from the west along a short-line freight railroad. Doing so, he suggested Thursday, would enable the rail authority to almost entirely bypass Madera County — which is suing to stop the high-speed train project — and save the state a pile of money.

    Rogers presented his idea at the San Joaquin Valley Rail Committee meeting in Fresno. The committee advises the California Department of Transportation on its operation of Amtrak’s San Joaquin passenger trains, but has no jurisdiction on the state’s high-speed rail plans.

    Rogers said he has no detailed analysis of potential savings, but said he believed the state could save huge sums by using an existing rail corridor and not having to fight with property owners to buy the needed right of way. Additionally, he said, it would eliminate the need to disrupt or relocate roads, utilities and other infrastructure through the city of Fresno along the rail authority’s chosen route along the Union Pacific Railroad tracks near Highway 99.

    Rogers, who opposes the high-speed rail project, said he would prefer an upgraded Amtrak San Joaquin service with trains running at 125 mph instead of a separate high-speed line with trains capable of 220 mph through the Valley. “But if they insist on building a brand-new system … they have to look at the cost of doing it efficiently,” he said.

    “There are literally millions to billions to be saved,” Rogers said.

    But Diana Gomez, Central Valley project manager for the California High-Speed Rail Authority, said Rogers’ proposal comes at least two years too late for serious consideration because the state is only weeks away from choosing a contractor to build the first sections of the line from Madera through Fresno.

    The authority finalized its choice of a Merced-Fresno route last May, selecting a “hybrid” route that follows the Union Pacific Railroad freight tracks near Highway 99 between Merced and Chowchilla, wanders east to follow the BNSF Railway tracks east of Madera, and then returns to the UP/Highway 99 corridor from the San Joaquin River to downtown Fresno.

Although not being familiar with the locale, my “gut” tells me that there’s a pile of money to be made with all that property acquisition and road, utilities, and other infrastructure relocation. It’s always about the Benjamins. How likely is it that Blum Capital and its investors stand to gain a tidy sum? Right.

Well, somebody twisted some arms because on April 2 it was announced that Madera County had dropped its suit against the California High-Speed Rail Authority:

    A divided Madera County Board of Supervisors voted Tuesday to drop the county’s lawsuit against the California High-Speed Rail Authority.

    The county was one of several parties that sued the state agency last year over its environmental approval of the Merced-Fresno portion of the proposed statewide rail system.

    Manuel Nevarez, appointed to the board last month by Gov. Jerry Brown and a vocal supporter of high-speed rail, tipped the supervisors’ scales.

You read that correctly. Gov. Brown pulled an Obama by rigging the vote.

All other lawsuits against the 60-mile stretch of the “proposed rail route between Merced and Fresno” were reported as settled on April 18.

Tutor Perini, Zachry, Parsons

Robert Cruickshank described the firm’s credentials on his California High-Speed Rail blog:

    Tutor Perini is based in Sylmar and were the lead contractors on the BART to SFO project and the Alameda Corridor rail project. Parsons was also in on BART to SFO, is a “general engineering consultant” for Caltrain, and worked on the Channel Tunnel, Taiwan HSR, and the Northeast Corridor. The website indicates the consortium is Tutor Perini and Parsons, so I’m not quite sure where Zachry fits in. They’re based in Texas and have done a lot of highway projects there. They were also a partner with Cintra in the proposed Trans-Texas Corridor.

Hmmmm. Wonder how many of these projects were funded with taxpayer dollars — voted into existence with the aid of Sen. Feinstein?

4 comments on “Boondoggle Alert! Taxpayer Ripoff! Sen. Feinstein’s husband’s firm gets California high-speed rail contract

  1. geo says:

    As the article said, Perini-Zachary-Parsons won this contract based on putting forth the lowest (sealed) bid. The selection process for the train project was totally transparent. There were other companies that also won contracts for this project – Perini-Zachary-Parsons, being just one of them. They all were subject to the same selection process. I’m not defending Blum, and gawd knows I would never defend Feinstein, but it does seem pushing it a bit to imply that just because Blum’s investment group owns a portion of this company that the bidding process was tweaked in his favor.

  2. […] sooner did I post on the award of a multi-million dollar contract for a California high-speed rail project to Tutor Perini, Zachry, Parsons, a firm connected with the spouse of Sen. Dianne Feintstein, than […]

  3. […] They sure did not find it where they were sent. But essentially people like DiFi are rich and want to get richer, on funds extorted from taxpayers. Here’s where DiFi and her loving hubby will pick up a few more millions. […]

  4. […] Boondoggle Alert! Taxpayer Ripoff! Sen. Feinstein’s husband’s firm gets California high-speed ra… […]

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