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Archives for October 2012

10/26/2012

Get on the Party Bus with CTA

CTA Infographic

Cause of Action’s investigative report, “A Bus Tour of Chicago-Style Fraud,” revealed the Chicago Transit Authority (CTA) may have improperly received up to $150 million in taxpayer funds, dating as far back as 1982. Since our report was published, we now know that the Department of Transportation was aware of over-reporting by CTA, and we’ve seen a letter the Federal Transit Administration sent to CTA on April 27, 2012 instructing them to correct their 2011 data.  And new questions have emerged.

  • Why did FTA not act on Thomas Rubin’s 2007 report of this exact behavior by the CTA?
  • When did DOT Inspector General Calvin Scovel decide to investigate the matter?
  • Is there evidence to suggest that this same type of over-reporting is happening at other transit authorities around the United States?
  • Why hasn’t the FTA reported the CTA to the Department of Justice for a criminal investigation in light of their over-reporting and potential years of defrauding American taxpayers?
  • How does the President explain the Chicago connections of Robert Rivkin, Valerie Jarrett and others in light of this misuse of taxpayer dollars?

This final question highlights several ties between the Chicago Transit Authority and the Obama Administration.

  • Robert Rivkin, the current general counsel for the United States Department of Transportation, previously served as the general counsel for the Chicago Transit Authority, from 2001-2004.
  • Valerie Jarrett, the former Chair of CTA (1995-2003), now serves as a senior advisor for public engagement and intergovernmental affairs in the Obama administration.
  • Forrest Claypool, the current President of the CTA was appointed to the position by Rahm Emanuel, former chief of staff for the 44th president and current mayor of Chicago. Before coming to CTA, Claypool served as a member of Obama’s media team in 2008.
  • Shelia Nix, former CTA board member (and also a former aide to Rod Blagojevich), now serves as Vice President Biden’s chief of staff.

Cause of Action thinks that these connections raise questions about the nature of the relationship between Washington and CTA, especially given how reluctant the FTA was to investigate allegations of over-reporting that were raised as early as 2007.

 

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10/23/2012

Bloomberg story proves Cause of Action’s investigation right on the money

Last week, Cause of Action released a report called, “A Bus Tour of Chicago Style Fraud.” It turns out that our suspicions were correct. As Bloomberg News reports today , the U.S. Transportation Department knew that “…[the] Chicago Transit Authority collected more federal aid than it should have after inflating mileage covered by its bus routes.”

The Federal Transit Administration, part of the U.S. Dept. of Transportation, not only knew of the over-reporting by CTA, but it seemingly ignored evidence of it for years because, as our report outlines, a 2007 audit showed that something was awry with the way CTA was reporting their mileage.

Instead, the USDOT chose to wait until this year to instruct CTA to change its behavior moving forward, as highlighted in an April 27, 2012 letter that FTA sent to CTA.

“FTA’s letter highlights two very important facts,” said Cause of Action’s Executive Director Dan Epstein. “First, CTA was, as Cause of Action suspected, violating the reporting manual used to calculate VRM, thereby improperly receiving federal grant money. But secondly, FTA is revealing that it had knowledge of overreporting occurring, and by conducting a review of only 2011, it ignored the 2007 report presented by auditor Thomas Rubin that showed the same potential actions happening in fiscal year 2006.”

So the question of why an investigation didn’t happen until 2011 despite clear evidence that it should have happened sooner remains unanswered by the FTA.

“It appears an explanation for why FTA limited its review to one year, and failed to disclose its findings to Cause of Action following our expedited FOIA request, is that there is clearly a politically motivated cover-up happening at the Department of Transportation” said Epstein.

Cause of Action’s investigation into the poor stewardship of tax dollars only further raises the spectre of corruption at the same agency where Cause of Action revealed two top officials who violated the Hatch Act, Epstein said.

“Just as no punishment occurred when Kathleen Sebelius violated the Hatch Act, no punishment will occur with a CTA that defrauded the American taxpayers. Cause of Action exists to fight this kind of corruption and show the American taxpayers exactly what is happening to their money in the hands of corrupt politicians,” concludes Epstein.

In the coming days, Cause of Action hopes to be able to answer these questions on behalf of taxpayers of the United States.

  1. When did DOT Inspector General Calvin Scovel decide to investigate the matter?
  2. Is there evidence to suggest that this same type of overreporting is happening at other transit authorities around the United States?
  3. Why hasn’t the FTA reported the CTA to the Department of Justice for a criminal investigation in light of their overreporting and potential years of defrauding American taxpayers?
  4. How does the President explain the Chicago connections of Secretary LaHood, Robert Rivkin, Valerie Jarret and himself in light of this misuse of taxpayer dollars?
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10/23/2012

Bloomberg News: Chicago Agency Overbilling U.S. Told to Change Mileage Claims

Read the full story here. Business Week

“Cause of Action, a Washington-based research organization, in a report last week suggested the federal government was slow to investigate “Chicago-style fraud” at the authority because Transportation Department General Counsel Robert Rivkin held the same post at CTA from 2001 to 2004 and Valerie Jarrett, a senior adviser to President Barack Obama, was chairman of the agency’s board from 1995 to 2003.

 

The Cause of Action report cited a 2007 Illinois state audit that said Chicago’s transit system may have received as much as $5 million a year in extra U.S. funding for as long as 30 years. After its investigation, the FTA said the amount was closer to $700,000 to $800,000 a year….”

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10/23/2012

Press Release: FTA Confirms Overreporting by the CTA

FTA Confirms Overreporting by the CTA

Cause of Action’s Investigation Into Potential Fraud With Federal Grant Money Exposes CTA & the Department of Transportation

 

WASHINGTON – In the wake of Cause of Action’s investigation into potential fraud at the Chicago Transit Authority, new facts have emerged confirming not only overreporting by the CTA, but knowledge by the Department of Transportation’s Federal Transit Administration of the overreporting.

FTA Administrator Peter Rogoff sent a letter to CTA on April 27, 2012 stating that FTA had “conducted an in-depth review regarding the way in which Vehicle Revenue Miles (VRM)” were reported. The conclusion of this review was that “CTA should revise its data for the 2011 Report Year to reflect the definition of ‘revenue service’.”

Cause of Action’s Executive Director Dan Epstein issued the following statement in response:

“FTA’s letter highlights two very important facts. First, CTA was, as Cause of Action suspected, violating the reporting manual used to calculate VRM, thereby improperly receiving federal grant money.

But secondly, FTA is revealing that it had knowledge of overreporting occurring, and by conducting a review of only 2011, it ignored the 2007 report presented by auditor Thomas Rubin that showed the same potential actions happening in fiscal year 2006.

It appears an explanation for why FTA limited its review to one year, and failed to disclose its findings to Cause of Action following our expedited FOIA request, is that there is clearly a politically motivated cover-up happening at the Department of Transportation.

Cause of Action’s revealing investigation into opaqueness and poor stewardship of tax dollars only further raises the spectre of corruption at the same agency Cause of Action revealed to have had two officials violate the Hatch Act.  Just as no punishment occured when Kathleen Sebelius violated the Hatch Act, no punishment will occur with a CTA that defrauded the American taxpayers. Cause of Action exists to fight this kind of corruption and show the American taxpayers exactly what is happening to their money in the hands of corrupt politicians.”

This revelation by the FTA raises a number of questions that Cause of Action views as critical to the public interest:

  1. Why did FTA not act on Thomas Rubin’s 2007 report of this exact behavior by the CTA?
  2. When did DOT Inspector General Calvin Scovel decide to investigate the matter?
  3. Is there evidence to suggest that this same type of overreporting is happening at other transit authorities around the United States?
  4. Why hasn’t the FTA reported the CTA to the Department of Justice for a criminal investigation in light of their overreporting and potential years of defrauding American taxpayers?
  5. How does the President explain the Chicago connections of Secretary LaHood, Robert Rivkin, Valerie Jarrett and himself in light of this misuse of taxpayer dollars?

About Cause of Action:

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org

 

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10/23/2012

Letter to CTA Confirms Overreporting of Mileage for Grant Money

As Bloomberg News reports, “The Chicago Transit Authority collected more federal aid than it should have after inflating mileage covered by its bus routes, the U.S. Transportation Department said.”

Confirming the investigation of Cause of Action released last week, the letter from the Federal Transit Administration found below, confirms that the CTA was overreporting its mileage and that DOT had knowledge of this.

 

FTA Letter to CTA

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10/22/2012

Final Administrative Appeal Letter to NPS

Final Administrative Appeal Letter to NPS

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10/22/2012

An update about Drakes Bay Oyster Company

Over the past few months, Cause of Action has been working to make sure the Lunnys, a family who runs Drakes Bay Oyster Company (DBOC), are able to keep their oyster business open. With less than 45 days until the deadline for a decision, there are several updates on this important issue.

Recently, Cause of Action submitted a response to the National Park Service to have the information contained in their reports accurately reflect the situation at the Lunnys’ environmentally responsible, sustainable oyster farm in Point Reyes National Park.

The Lunnys’ struggle against the National Park Service has also caught the attention of the California state Fish and Game commission, who recently sent a letter of support for the Lunnys to the National Park Service.

On November 30, 2012 the Lunnys’ permit to lease land from The National Park Service will expire. Before that date, NPS is required to issue a final report assessing the scientific findings concerning DBOC’s effect on Drakes Bay. We hope that the NPS uses credible data when they make a decision that will affect the livelihood of not just the Lunnys, but their employees, and the community as well.

 

As of May 24, 2013, Cause of Action no longer represents Drakes Bay Oyster Company, the Lunny family, or Dr. Corey Goodman and will be withdrawing as counsel from the litigation.

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