A bill to restrict public records was filed on January 20, 2026. The next day, $537 million was approved in a closed session. The FBI has been asked to investigate fraud. California sued to recover $4 billion — was winning — then quietly dropped the case. These are the most explosive recent developments from California's high-speed rail disaster.
After a 315-page compliance review, the Trump administration's Federal Railroad Administration formally terminated $4 billion in federal grant commitments to CAHSR — the project's second federal funding clawback (the first was in 2019 under Trump's first term, later restored by Biden).
"It's time for this boondoggle to die. After over a decade of failures, CHSRA's mismanagement and incompetence has proven it cannot build its train to nowhere on time or on budget."
The CAHSR board voted unanimously to approve a $537.3 million settlement with Dragados Flatiron Joint Venture — the largest single change order payment in the project's history — to resolve the contractor's long-running delay disputes on CP2-3.
The $537M settlement was approved the same week new legislation (AB 1608) was introduced that would allow the Inspector General to withhold records if their release could "expose vulnerabilities." Lawmakers publicly accused the Authority of a quid-pro-quo: approve the settlement, restrict the oversight. Rail officials rejected the claim. The legislation passed.
On February 3, 2026, CEO Ian Choudri appeared with Governor Newsom at a public ceremony celebrating the completion of a railhead facility in Kern County. Hours later, just after midnight on February 4, Folsom police arrested Choudri at his home on suspicion of misdemeanor domestic battery. His fiancée was also arrested — on suspicion of both domestic battery and "cruel or inhuman corporal punishment" of a child (a minor, identified in dispatch recordings as Choudri's daughter).
Choudri came directly from HNTB Corporation — a major infrastructure consulting firm that competes in the same market as CAHSR vendors. He was Newsom's board's choice. He earns $563K per year to oversee a project that has spent $13.8B, carried zero passengers, and just lost its federal funding partner.
CAHSR's own Office of Inspector General issued a report in February 2025 finding the project faces a $6.5 billion funding gap just for the 171-mile Merced–Bakersfield initial segment, and that completing it by the 2033 target is "increasingly unlikely." This report directly triggered the Trump administration's compliance review that led to the $4B termination.
With federal funding gone, CAHSR launched a formal procurement process on December 19, 2025 to attract private investors and developers by summer 2026. The strategy would require California to guarantee investors against ridership shortfalls — meaning taxpayers would underwrite private profit while absorbing all downside risk.
Prop 1A explicitly promised that private investment would help cover funding gaps, eliminating the need for taxpayer operating subsidies. 17 years later, zero private investment has materialized. The new plan would guarantee private investors a return using public money — the opposite of what was promised to voters.
CAHSR leadership compensation from California State Controller's payroll records. The project has carried zero passengers, lost its federal funding, and faces a $6.5B+ funding gap — while executive pay ranks among the highest in California state government.
| Name | Title | Salary (2025) | Note |
|---|---|---|---|
| Ian Choudri | CEO | $563,000 | Among highest-paid state employees in CA · Arrested Feb. 4, 2026 · No charges filed · Returned to work March 2026 |
| Brian Kelly | Former CEO (2018–2024) | ~$400,000 | Came from CalSTA (Newsom political appointment) · Left after 6 years citing "stabilization" complete |
| Mark Tollefson | Chief of Staff (Acting CEO during leave) | ~$280,000 | Assumed day-to-day responsibility during Choudri's leave |
| Senior Directors | Engineering, Operations, Delivery | $170,000–$207,000 | Per Salary.com ranges from public pay databases |
| Benjamin Belnap | Inspector General | ~$180,000 | Newsom appointee. Reports to board. Issued Feb. 2025 report that triggered federal investigation. |
Source: California State Controller's payroll records · salary.com public compensation database · CAHSR public disclosures