The second California high-speed rail official has walked out following a protracted investigation into possible misuse of funds as he seeks $4.2 billion in funds from state lawmakers and more from the Biden administration to support ever-increasing construction costs.
Joe Hedges, chief operating officer of the California High-Speed Rail Authority, abruptly left the agency responsible for building the Merced-Bakersfield rail line on Monday, the agency said.
The Los Angeles Times first reported Hedges’ exit, which was prompted by an anonymous letter to railroad board members from a state employee who claimed Hedges had reversed the decisions. employees and made “unearned payouts” to project contractors.
The payments were related to the change in order and the delays in the claims made by the contractors. In some cases, the pub reported, agency staff argued claims lacked merit and should have been dismissed, but were reversed and paid to Hedges.
“Until a permanent replacement is appointed by the Governor, CEO Brian Kelly is making the necessary staff movements internally to ensure continued construction progress in the Central Valley,” the spokeswoman said Tuesday. from the Melissa Figueroa agency to the newspaper.
A special committee of the high-speed rail council was set up to secretly investigate the matter. The board also retained the services of white shoe firm O’Melveny & Myers, LLP to review financial records.
Tom Richards, the Fresno developer and chairman of the agency’s board, said the agency also hired an accounting firm. He found no fraud in the authority’s business transactions.
Financial records reviewed by The Times also identified that the agency was the subject of a federal subpoena, though it had no additional background information — such as that from a grand jury — or what she was trying to reveal.
Hedges – a former Washington Department of Transportation, Navy Corps of Engineers and authority chief executive Kelly, joined the agency around the same time after his appointment by Governor Jerry Brown in 2018.
Hedges came from the Washington Department of Transportation with 35 years of construction experience. In Washington, he led the program to build a tunnel in downtown Seattle, known as the Alaskan Way Viaduct Replacement Program. It was one of the country’s most ambitious urban tunnel projects, but it also gained notoriety for a tunnel boring machine failure that caused a long delay.
Hedges retired as a captain in the Navy Corps of Civil Engineers. His military background has given him a bold management style, according to agency employees who declined to be named.
The COO’s departure comes at a critical time for Kelly and his tenure at the agency, which is seeking a $4.2 billion appropriation from the legislature and also hoping for support from the Biden administration.
Kelly took credit for hiring Hedges in 2018, saying at the time, “I am committed…to bringing in highly skilled professionals to continue transforming the authority of a planning organization into a solid project supervision and implementation organization. Jo [has] the qualifications needed to help us achieve this.
In addition to hiring O’Melveny and Meyers to lead the investigation, the rail authority’s board also hired an executive search firm to replace two senior executives, according to financial records obtained by The Times. The records do not mention who the two leaders were.