The independent auditor whose report Cause of Action obtained and included in our original report, “A Bus Tour of Chicago-Style Fraud,” has decided to come forward and make his name public.
Mr. Thomas Rubin is an outside auditor who was retained by the Illinois Auditor General in 2007.
See our updated report incorporating Mr. Rubin’s name, below.
Read the full story here: Chicago Sun-Times
Cause of Action’s report “A bus tour of Chicago-style fraud” alleges the CTA inflated the annual number of miles reported to the Federal Transit Administration for its in-service buses.
The group based its allegation on a 2007 audit in which it says the CTA overreported the miles, allowing it to receive between $1 million and $5 million in extra funding from the U.S. Department of Transportation that year.
Read the full story here. Chicago Tribune
“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…”
FOR IMMEDIATE RELEASE: October 18, 2012
CONTACT: Mary Beth Hutchins, 202-507-5887
Were Taxpayer Dollars Improperly Granted to Chicago’s Bus System?
WASHINGTON – Federal government accountability group Cause of Action (CoA) today released a report based on insider audit information that reveals the Chicago Transit Authority (CTA) may have improperly received up to $150 million in taxpayer funds, dating as far back as 1982.
Documented in “A Bus Tour of Chicago-Style Fraud,” a 2007 audit report of the CTA obtained by Cause of Action reveals that the transit agency was found to have overreported the city’s bus Vehicle Revenue Miles (VRM). This misrepresentation of data could have led to the disbursement of a larger share of available federal U.S. Department of Transportation (DOT) formula grant funds than the CTA was entitled to receive. In fiscal year 2006 alone, CTA may have received from $1 million to potentially over $5 million in excess grant funding.
“For thirty years, the CTA may have been defrauding US taxpayers of millions of dollars and investigators at the Department of Transportation, though aware of this potential fraud, have seemingly taken no steps to investigate or report on the matter,” said Dan Epstein, executive director of Cause of Action. “Our own investigation revealed a web of connections and influence among the CTA, the U.S. Department of Transportation, and the White House where investigating potential fraud may be mired in politics. In 2011, when notified of the audit we recently obtained, the DOT and its IG acknowledged that while they would look into the matter, a conflict of interest with current staff and CTA existed. To our knowledge no investigation has taken place.”
As CoA’s report highlights, those potential conflicts of interest could include Robert S. Rivkin, the current General Counsel of the U.S. Department of Transportation who was General Counsel of the Chicago Transit Authority from 2001 to 2004, during the time CTA was likely overreporting its VRM. Additionally, Valerie Jarrett, Senior Advisor to the President, was Chair of CTA from 1995 to 2003. As of April of 2009, Jarrett was still receiving deferred compensation from the Chicago Transit Authority.
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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Cause of Action reveals its investigative report, uncovering potentially up to $150 million in taxpayer dollars that improperly went to the Chicago Transit Authority.
See our full report, followed by our exhibits below:
Federal Agency Spending on Commemorative and Promotional Items Accurately Represented
WASHINGTON —Government accountability group, Cause of Action, released on Friday a report that outlines its own internal review following statements made by the Department of Homeland Security Office of the Inspector General.
Analysis of the internal review found that the original report, “Coin for Coins,” remained an accurate and true picture of federal spending on promotional and commemorative items at the nine federal agencies that are highlighted. This analysis was reached based on two findings:
Despite attempts to the contrary, the fact remains that the DHS OIG did indeed purchase promotional and commemorative items during the time period in question.
“The DHS OIG accused Cause of Action of misrepresentation, claimed our report was misleading and erroneous, and stated our reporting was shoddy – in addition to attacking the credibility of Fox News and Government Executive,” said Dan Epstein, executive director of Cause of Action.
“Not only has DHS OIG failed to show any factual inaccuracies in Cause of Action’s work product, DHS OIG has been deceptive in its statements – failing to publicly disclose that DHS OIG spent tax dollars on trinkets, including paperweights, plaques, shadow boxes, mugs, Nike crush ball sleeves, zippered leather portfolios, rollerball pens, curved tumblers, and clocks. Furthermore, our review revealed DHS OIG gave commemorative items given to U.S. Attorneys, Assistant U.S. Attorneys, the U.S. Department of Justice, federal special agents, the FBI, a staffer at the U.S. House of Representatives, and to the Committee on Oversight and Government Reform. One wonders why the IG is providing tokens to federal investigators when top officials within the inspector general’s headquarters have been placed on administrative leave or transferred outside the agency as a result of a grand jury probe. Among those on leave are the inspector general’s top criminal investigator, Thomas M. Frost and a deputy, John Ryan. Instead of investigating the processes and procedures of the OIG FOIA office or disclosing DHS OIG’s commemorative item spending – or actually fully producing the documents owed to Cause of Action under FOIA, the taxpayer-funded IG decided to spend his time going after a taxpayer watchdog group.”
Highlights of the 95-page report include:
As always, Cause of Action remains committed to informing the public on issues of government accountability and transparency, which is why CoA conducted a thorough internal audit to ensure that no wrong had been done by the organization or its staff.
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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