By Jon Hilkevitch
The CTA has potentially inflated by up to $150 million the federal taxpayer money it received since as far back as 1982 by “fraudulently over-reporting” the number of miles CTA buses travel while in service, according to a new report by a little-known watchdog group.
In its report, titled “A bus tour of Chicago-style fraud,” Washington-based Cause of Action alleged that CTA officials reaped millions in extra federal money that the agency was not entitled to by improperly including “deadhead,” or out-of-service bus miles, along with funding-eligible revenue bus miles when applying for money from the Federal Transit Administration.
The CTA has followed the FTA’s guidelines related to reporting mileage data, and it used the same methodology for almost 30 years, up through last year when the rules were changed, a CTA spokesman said Wednesday.
But Cause of Action, which said it based its findings on “insider audit information” from six years ago, said the CTA likely continues to get away with its inaccurate mileage reporting, with the knowledge of the U.S. government, because of the transit agency’s political connections stretching from Chicago to Washington.
It cited the clout of Valerie Jarrett, who is senior adviser to President Barack Obama and also a former chairwoman of the CTA (1995 to 2003), and Robert Rivkin, general counsel at the U.S. Department of Transportation. From 2001 to 2004, Rivkin was general counsel at the CTA.
Officials at Cause of Action said they brought the matter to the attention of the U.S. Department of Transportation inspector general, the U.S. attorney general and Congress, but no action was taken.
“We think there is a high risk of fraud by the CTA,” Dan Epstein, executive director of Cause of Action, told the Tribune on Wednesday. “The question is why, given credible evidence, hasn’t there been an investigation?”
Cause of Action began in August 2011 and describes itself as a nonprofit, nonpartisan group that advocates government accountability. Epstein previously worked at the Koch Foundation, a conservative group founded by billionaire brothers David and Charles Koch.
The Cause of Action report cited the help of an “anonymous insider” who contributed to a 2007 Illinois auditor general performance report on the CTA.
The auditor general’s published report said, “Our review raised questions about the accuracy of CTA’s reporting of revenue vehicle hours and miles. CTA may be incorrectly reporting some deadhead hours/miles as revenue hours/miles.”
The transit industry’s average vehicle revenue hours as a proportion of vehicle hours is 87 percent, versus 99 percent for CTA, the state auditor general found.
The CTA percentage is higher because up until 2011 the transit agency counted the miles that buses traveled from garages on service routes to the start of routes, because bus drivers are required to pick up passengers at bus stops who flag down buses along the way, CTA spokesman Brian Steele said.
Last year, the Federal Transit Administration revised its definition of revenue service and recommended that the CTA change its reporting to no longer include mileage for buses traveling from garages to the start of routes, Steele said. The FTA said the CTA is not required to revise its reporting for previous years, he said.