FOR IMMEDIATE RELEASE: October 18, 2012
CONTACT: Mary Beth Hutchins, 202-507-5887
Cause of Action Reveals As Much As $150 Million in Potential Fraud by the Chicago Transit Authority
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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