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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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10/22/2012

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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10/20/2012

WGN TV: CTA made millions by inflating mileage

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10/19/2012

Chicago Sun-Times: Watchdog Group: CTA overstated bus mileage reports for decades

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.

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10/19/2012

Chicago Tribune: Report: CTA reaped millions by over-reporting bus mileage

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…”

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