State gags rail contractors

JULY 29, 2010

By ANTHONY PIGNATARO

All contractors hired by the California High-Speed Rail Authority to prepare environmental reports on the project are contractually prohibited from discussing their agreements with the media, a CalWatchdog examination of the authority’s current contracts shows.

The gag order clause appears in 10 of the 18 contracts: Parson Brinckerhoff Quade & Douglas (program management), URS (Fresno-Palmdale and Los Angeles-Palmdale corridors), STV (Los Angeles-Orange County corridor), HNTB (Los Angeles-San Diego and San Francisco-San Jose corridors), AECOM (Sacramento-Fresno and Central Valley-San Francisco corridors), Parsons (San Jose-Merced corridor) and T.Y. Lin (program manager oversight). These contracts represent roughly $777 million of the total $798 million currently spent by the authority on outside contractors. The estimated final cost for  bullet train system that will run 800 miles across the state ranges from $45 billion to more than $80 billion.

The clause is the same in each contract: “The Consultant shall not comment publicly to the press or any other media regarding this Agreement or the Authority’s actions on the same, except to the Authority’s staff, Consultant’s own personnel involved in the performance of this agreement, at public hearings, or in response to questions from a Legislative committee.”

Another clause in the contracts add, “The Consultant shall not issue any news release or public relations item of any nature whatsoever regarding work performed or to be performed under this Agreement without prior review of the contents thereof by the Authority and receipt of the Authority’s written permission.”

Though Terry Francke of Californians Aware, a free speech advocacy group, said he didn’t usually examine government contracts, he said the clause did surprise him. “My guess is that it traces to the sensitivity of those proposing the project to the environmental concerns of the public,” he said. “The process of ‘massaging’ drafts could be undermined if a reporter calls a consultant. Maybe all this has to be kept under wraps until those paying for the product are happy with it. But that’s just speculation.”

According to High-Speed Rail Authority officials, the clause is basically there to save money.

“The Authority wants keen oversight of the scopes for each contract,” said HSR press secretary Rachel Wall in an e-mail. “[I]t is counterproductive to the project to allow consultants to bill the Authority for time spent talking to the media when there are positions within the Authority for that very task.”

This reasoning raises a number of troubling questions. Most notably,  why it only pertains to consultants doing either project management work or environmental impact report preparation.

“The clause began being included in contracts when the Authority hired a new contracts manager nearly a year and a half ago,” Wall e-mailed. “At that time that manager began including/updating the standard contract language (aka ‘boilerplate’) in the Authority’s service contracts.”

Then there’s the issue of the authority’s “lax contract management” that was the subject of a recent (and scathing) California State Auditor report. The April 2010 report found numerous instances where authority personnel weren’t monitoring contractor spending:

  • The Authority paid invoices from regional contractors without gaining assurance that the invoices reflected work performed;
  • Authority staff did not keep a record of their own review of the regional contractors’ and Program Manager’s invoices;
  • In several instances, the Authority paid for items or work not included in contracts or work plans.

Any reporter following up on such charges would have to call the various contractors for some sort of comment. And the contractors would, at a minimum, want to say something, even if only to clear their name – an action seemingly banned by the gag order clause. Yet in response to the auditor’s report, the high-speed rail authority cloaked itself in, ironically, the necessity of “transparency.”

“The Authority is committed to transparency and believes strongly that additional spotlight on our operations will ultimately make for a better high-speed train project for the state,” authority Chairman Curt Pringle wrote in an April 19, 2010 letter to Auditor Elaine Howle.

Spurred on by Pringle’s eloquent wording, CalWatchdog contacted all the contractors bound by the gag order clause. Surprisingly, it was not a completely fruitless endeavor.

For the most part, the contractor’s work on the bullet trains has been very low-key. Few of the companies have more than cursory information about their high-speed rail work on their Web sites, and none of the contractors sent out press releases announcing their initial winning of the contracts (the companies usually released all sorts of statements to the media after winning their various contracts).

Officials from Parson Brinckerhoff, URS, STV and AECOM did not respond to general requests for comment about the work they were doing for the High Speed Rail Authority. Public relations people at HNTB and T.Y. Lin responded, but only to say that we should direct all inquiries to the authority itself.

Parsons was a different story. Within minutes of our e-mailed inquiry we received a phone call and a follow-up e-mail making sure we had received the phone call. Mo Hayes, Parsons’ market development manager for California readily answered all of our very general, very innocuous questions about her company’s work on the bullet train project, though she did get somewhat vague when the conversation turned to the gag order clause.

“That is pretty common,” she said. “They don’t want us to tell you the terms and conditions and prices unless they clear them.”

Hayes explained that creating an environmental impact report has more to do with following the California Environmental Quality Act (CEQA) process than it does the actual project. “Things happen sequentially,” she said, meaning that the gag order prohibited her company from releasing information about the project development before it had a chance to get proper CEQA approval.

Then a dark thought came over us. “This conversation isn’t going to get you in trouble?” we suddenly asked.

“I don’t know,” Hayes said, laughing. “Maybe…”

Photo courtesy California High-Speed Rail Authority.

1 comment

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  1. John Seiler
    John Seiler 30 July, 2010, 23:46

    Great story, Anthony. The High-Speed Rail Boondoggle is another Arnold scam foisted on taxpayers. We’ll be paying for it many years after he’s become Environmental Czar at the U.N.

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