Against California High Speed Rail by Mark R. Powell

California’s High-Speed Rail Peer Review Group…

…Knowledgeable, accomplished, well-educated and definitely NOT “peers” of the Rail Authority
The Peer Review Group is composed of successful engineers, scientists, and economists with expertise in transportation and large infrastructure projects.  The group notably contains no lawyers or persons who have ever held elective office.  Their backgrounds are in stark contrast with their supposed “peers” on the California High-Speed Rail Authority (the Authority) who’s membership includes four lawyers (three who have served in elective office) and two union organizers in addition to a journalist, a real estate broker, and a banker.

After pages of detailed arguments, the California High-Speed Rail Peer Review Group’s most recent report concluded:

 “…we cannot overemphasize the fact that moving ahead on the HSR project without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and value to the State and without appropriate management resources, represents an immense financial risk on the part of the State of California…and the Peer Review Group cannot at this time recommend that the Legislature approve the appropriation of the bond proceeds for this project.” [Note 1]

Predictably, the Authority reacted immediately slamming the Peer Group’s report as “deeply flawed”, misleading”, and containing many “egregious errors”, “unfounded conclusions”, and “unsupported assertions”.  However, the Authority pointed to no specific miss-statements, flaws, or errors. [Note 2]

After years of advocating for high-speed rail, the members of the Authority, one of whom wrote the Rebuttal to Argument Against Proposition 1A [Note 3] that appeared in the 2008 voter guide, will never admit they were wrong.  Californians, who now disapprove of the Authority’s boondoggle by a 2 to 1 margin [Note 4], can at least be thankful for the work done by the non-biased, non-vested, well-educated, and experienced Peer Group in exposing the sham financing and gross inadequacies of the Authority’s recent Business Plan.  If they have accomplished nothing else, they have surely poured the foundation for a successful lawsuit to prohibit Rail Bonds from being issued at this time. 

With such disagreement between two supposedly credible sources, a closer look at the make-up of the Authority and their Peer Group is warranted.

California High-Speed Rail Peer Review Group
Will Kempton – Chairman [Note 5]
• Chief Executive Officer of Orange County Transportation Authority (OCTA)
• Former Director of California Department of Transpiration (Caltrans)
• 35- years working in the transportation industry
• BA Degree  from University of San Francisco

John Chalker – Vice Chairman [Note 6]
• Co-Founder & Managing Director of LM Capital Group with $4.6 Billion in Assets
• Former member of Technical Advisory Committee to the Calif. Debt Advisory Commission
• BS Degree from US Naval Academy/Carrier Attack Jet Pilot

Walter C. Bell, PE [Note 7]
• Member of Investment Committee of the Infrastructure Asset Management Group of UBS Global
• Former President of Bechtel Infrastructure Corporation
• Former Managing Director with Union Railways Limited charged with construction of Section 2 of the Channel Tunnel HSR Link
• MS Degree, Civil Engineering, Purdue University

Diane Eidam [Note 8]
• Strategic Policy Advisor to San Diego Association of Governments (SANDAG)
• Formerly held  executive positions with Caltrans, SANDAG, and the California Transportation Commission
• 32 years of experience in transportation
• BA Degrees in Economics and in Political Science, UC Davis

Frieder Seible [Note 9]
• Dean of UC San Diego School of Engineering
• Concurrently serves as chair of Caltrans Seismic Advisory Board
• PhD in Civil Engineering, UC Berkeley

Louis S. Thompson [Note 10]
• Principal, Thompson, Galenson and Associates (TGA), LLC; a worldwide transportation consulting firm
• Former Railway Advisor to the World Bank
• Former Federal Railroad Administration Director for Northeast Corridor Improvement Project
• BS  in Chemical Engineering, MIT;  MBA, Harvard University

 
It is noteworthy that the Peer Group includes no lawyers or politicians.  The California High-Speed Rail Authority has a decidedly different makeup; one that is dominated by lawyers, politicians, and union organizers.  Several board members do not even appear to have a college degree.

California High-Speed Rail Authority
Thomas J. Umberg – Chairman [Note 11]
• Litigation Partner at Manatt, Phelps & Phillips, LLP
• Former State Legislator (3 terms ending in 2006)
• JD, University of California, Hastings College of Law

Lynn Schenk – Vice Chairperson [Note 12]
• Attorney in Private Practice
• Serves on the Board of Directors of Cambridge, Mass. based Biogen Idec
• Former Chief of Staff to Governor Gray Davis
• Former Member of the 103rd Congress
• JD, UC San Diego

Thomas Richards – Vice Chairperson [Note 13]
• Chair and CEO of Penstar -  Fresno Based Real Estate Development Company
• Former Chairman of Fresno Planning Council that prepared 10-year plan to end chronic homelessness
• Licensed Real Estate Broker and General Contractor
• Highest Education: Unknown

Russ Burns [Note 14]
• Business Manager of Operating Engineers Local 3
• Past Member of Cal-OSHA Subcommittee for Certifying Crane Operators
• Graduate of the Harvard Trade Union Program – an intensive 6-week executive training program designed for trade union leaders

Matthew Toledo [Note 15]
• Publisher and CEO of the Los Angeles Business Journal
• BA in Business Administration, San Jose State University

Robert Balgenorth [Note 16]
• President of the State Building and Construction Trades Council of California, AFL‐CIO
• Former Business Manager of Local 441 of the International Brotherhood of Electrical Workers
• Entered the construction trades as an apprentice electrician in 1965, and graduated as “apprentice of year” in 1969.

 
Jim Hartnett [Note 17]
• Partner in the Redwood City law firm of Hartnett, Smith & Paetkau
• Former Redwood City Mayor
• Former Chairman San Mateo County Transit Board of Directors
• JD, Santa Clara Law School

Dan Richard [Note 18]
• Principal of Dan Richard Advisors
• Former Managing Partner and Co-Founder of Heritage Oak Capital Partners
• Former Sr. VP Public Policy and Governmental Relations at Pacific Gas and Electric
• Former Elected Member of  San Francisco BART District
• JD, McGeorge School of Law

Michael Rossi [Note 19]
• Senior Advisor for Jobs and Business Development in the Office of the Governor
• Former Advisor and Senior Member of Operations Team at Cerberus Capital Mgmt., L.P.
• Former Chief Risk Officer for Bank of America
• Bachelor’s Degree, UC Berkeley
 
Clearly, the members of the Authority are no match for the California High-Speed Rail Peer Review Group when it comes to evaluating the current state of disrepair and the dimming prospects for the California High-Speed Rail Project. 

It’s time to derail the train.  Write to your elected representatives and tell them you want to stop spending money badly needed for essential state services on a high-speed fantasy.  Then consider joining the Facebook organization Citizens for California High Speed Rail Accountability [Note 20] and helping in their legal fight in support of the Peer Group’s recommendation to prevent billions in rail bonds from being issued. 

Statements of fact made in this article are supported by the footnotes shown below:

Footnotes:

Note 1:  California High-Speed Rail Peer Review Group Report dated January 3, 2011 http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&ved=0CDkQFjAC&url=http%3A%2F%2Fwww.paloaltoonline.com%2Fmedia%2Freports%2F1325642700.pdf&ei=4IsMT5b-HazMiQLt_a2kBA&usg=AFQjCNGxDboKcf1QdvIzrWzYt1lmiNzW-Q&sig2=1waaoEpk5vU8fGFdQl-ung

Note 2:  Response of the California High Speed Rail Authority to the Report of the Legislative Peer Review Group, January 3, 2011
http://www.cahighspeedrail.ca.gov/pr_01032012.aspx

Note 3:  Text of Proposed Law: Proposition 1A as shown on the Official Supplemental Voter Information Guide for the November 4, 2008 Ballot, page 7, Rebuttal to Argument Against Proposition 1A
 http://www.voterguide.sos.ca.gov/past/2008/general/pdf-guide/suppl-complete-guide.pdf#prop1a

Note 4:  Field Poll conducted November 15-27, 2011
http://media.sacbee.com/smedia/2011/12/05/17/52/1o6o1v.So.4.pdf

Note 5: Will Kempton Bio
http://www.cahsrprg.com/kempton.html

Note 6:  John Chalker Bio
http://www.cahsrprg.com/chalker.html

Note 7:  Walter C. Bell Bio
http://www.cahsrprg.com/bell.html

Note 8:  Diane Eidam Bio
http://www.cahsrprg.com/eidam.html

Note 9:  Frieder Seible Bio
http://www.cahsrprg.com/seible.html

Note 10: Louis S. Thompson Bio
http://www.cahsrprg.com/thompson.html

Note 11: Thomas J. Umberg Bio
http://www.cahighspeedrail.ca.gov/thomas_umberg.aspx

Note 12:  Lynn Schenk Bio
http://www.cahighspeedrail.ca.gov/Lynn_Schenk.aspx

Note 13:  Thomas Richards Bio
http://www.cahighspeedrail.ca.gov/Thomas_Richards.aspx

Note 14:  Russ Burns Bio
http://www.cahighspeedrail.ca.gov/Russ_Burns.aspx

Note 15:  Matthew Toledo Bio [Removed from list of Authority Board Jan 10 without explanation as of the date of this posting]
http://www.cahighspeedrail.ca.gov/Matthew_Toledo.aspx

Note 16: Robert Balgenorth Bio
 http://www.cahighspeedrail.ca.gov/Robert_Balgenorth.aspx

Note 17:  Jim Hartnett Bio
http://www.cahighspeedrail.ca.gov/Jim_Hartnett.aspx

Note 18:  Dan Richard Bio
http://www.cahighspeedrail.ca.gov/Dan_Richard.aspx

Note 19:  Michael Rossi
http://gov.ca.gov/news.php?id=17173

Note 20:  Facebook Organization – Citizens for California High Speed Rail Accountability
http://www.facebook.com/#!/groups/CAAHSR/

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