California High-Speed Rail Authority Chief Executive Ian Choudri abruptly resigned late Wednesday amid an ongoing scandal involving nearly $600,000 in questionable consultant travel spending. State Finance Director Joe Stephenshaw was swiftly appointed to take over the troubled project as the agency faces severe financial and political pressure.
The board moved quickly during a closed session on Thursday morning, naming state Finance Director Joe Stephenshaw to replace Choudri. Stephenshaw brings fiscal experience to the rail authority, having led the state Department of Finance since Gov. Gavin Newsom appointed him in July 2022. Prior to taking on that leadership position, Stephenshaw accumulated more than ten years of experience in the Legislature—which featured a tenure leading the Senate Budget and Fiscal Review Committee as staff director—and also worked for Newsom’s administration as a senior counselor focusing on fiscal affairs and infrastructure.
Auditors Find Unallowable Travel Spending by Consultants
State auditors uncovered that employees across four consulting firms billed the authority for nearly $600,000 in unallowable travel between 2024 and 2026. Choudri’s exit follows intense fallout from that state inspector general investigation released in September. The disputed tabs included first-class flights, premium car rides, and visits to a nightclub, a cigar lounge, an escape room, and a Tiki bar.
Many of those trips lacked proper justification yet received routine agency reimbursement without sufficient vetting. An authority source noted that some of the travel occurred at Choudri’s request, and board members had been weighing additional disciplinary measures, including possible termination.
Earlier in the month, the governing board took action to diminish Choudri’s authority over procurement, voting to mandate that any contracts valued under $25 million must receive approval from the agency’s internal legal counsel.
Despite the scandal, authority staff reported that the consulting firms have paid nearly $1.3 million in reimbursements back to the agency. During a presentation detailing Choudri’s tenure, rail authority chief of staff Mark Tollefson credited the departing executive with working to cut consultant contract costs, attract private investments, and speed up contracting.
Costs Mount As Political Pressures Grow
The leadership shuffle hits the high-speed rail project as financial and political headwinds mount. Today, the authority’s latest business plan pegs the total cost between $126 billion and $231 billion.
Voters initially approved a $10 billion bond for the initiative in 2008, when planners projected a San Francisco-to-Los Angeles bullet train would cost $45 billion and open by 2020.
Board Approves Siemens Trainset Contract
The board members voted unanimously to authorize a $772.1 million agreement with Siemens Mobility, Inc., a firm based in Germany, tasked with the creation, construction, and testing of three high-speed bullet trains composed of seven cars each by the year 2030. The board pushed forward with major operational decisions despite the leadership turmoil.
Because the trains will be manufactured in Germany, the agency will pay up to $63.7 million in import duties and tariffs.
The board also approved environmental clearance for the final 33-mile leg stretching from Anaheim to Los Angeles Union Station. While this action clears the entire route from Anaheim to San Francisco for future construction, most of the nearly 500-mile corridor remains unfunded, and work is currently isolated to a 119-mile portion of the Central Valley.