Contractor Capture & the Revolving Door

The capture

How WSP became CHSRA

Parsons Brinckerhoff (later acquired by WSP) had been involved with California HSR since the 1990s. By the time construction ramped up, the firm had achieved a position without clear parallel in American public works:

• WSP held the building lease — CHSRA worked in WSP's offices
• WSP ran the IT systems — CHSRA's digital infrastructure was WSP's
• WSP provided 70% of the workforce at peak — most people doing CHSRA work were WSP employees
• WSP staffed the Contract Management Support Unit — the group tasked with overseeing consultant performance was entirely composed of consultants

The State Auditor found that CHSRA had three full-time contract managers for a program spending billions. The rest of the oversight apparatus was staffed by the firms being overseen.

The 79% false completion rate

This finding alone would be remarkable. Combined with the billing pattern, it paints a picture of systematic self-dealing:

The temporary drop in 2019 — from $142 million to $4.4 million — followed public exposure and an audit. It suggests the billing practices responded to scrutiny rather than reflecting structural change. The return to $288 million by 2025 confirms this.

Six leaders in seven years

WSP cycled through six different project leaders between 2012 and 2019. No single person remained accountable long enough to own the consequences of decisions made on their watch. When problems surfaced, the person responsible had already rotated out.

The revolving door

Jeff Morales: PB → CHSRA → Private sector

The most prominent revolving-door case:

Under Morales's leadership, the consultant-to-staff ratio peaked, PB received its largest contracts, and the 145-of-184 false completion problem accumulated. The AG and FPPC pre-cleared his appointment, concluding no formal conflict existed. The structural arrangement — consultant becomes agency head, awards contracts to former firm, returns to private sector — was never adjudicated.

Roy Hill: The $51M question

Roy Hill held the title of Chief Program Officer at CHSRA while simultaneously serving as a WSP Senior Vice President. He signed at least one $51 million change order for CP2-3 while holding over $100,000 in Jacobs Engineering stock — and Jacobs was a member of the CP2-3 joint venture.

The FPPC investigated for 18 months and cleared Hill in November 2020, finding the change order did not have a "material financial impact" on Jacobs. The narrow legal question was answered. The broader structural question — how did a WSP employee get state signing authority over change orders benefiting WSP's peers? — was never asked.

The embedded seven

The Hill case was not isolated. At least seven WSP/Parsons Brinckerhoff employees held titled positions within CHSRA, exercising functions normally reserved for state employees:

• Tony Daniels (PB Program Director) — signed official CHSRA technical memoranda, including TM 0.5 R1 (May 2008)
• Gary Griggs (PB Program Director, Rail Delivery Partner) — presented cost and risk analysis directly to the CHSRA Board (February 2016)
• Kristina Assouri (WSP) — Director of Real Property, managing ~2,000 parcels and a ~$1.5B land acquisition program
• Hans Van Winkle, Brent Felker, Jim Van Epps — cycled through WSP's senior-most embedded role over seven years; average tenure approximately 14 months
• Daniel Horgan (WSP) — Deputy COO; co-authored the March 2023 Board memo requesting $2.073B in additional expenditure authority for construction packages

These were not advisors sitting in on meetings. They signed official state documents, managed billion-dollar programs, and briefed the governing board as if they were agency staff — while being paid by WSP. The independent Program Manager Oversight consultant (TY Lin International) was eliminated in 2013, the same year CP1 was awarded under changed procurement rules, removing the one entity whose explicit mandate was to check the program manager's work.

The CP4 comparison

The strongest structural evidence is what happened when the oversight model was different.

CP4 performed dramatically better. But this comparison requires honest caveats:

The comparison is suggestive but not dispositive. CP4's 86% growth — still a near-doubling — shows that even the best-performing package with the most experienced contractor overran significantly. The problem is systemic, though the WSP oversight structure made it dramatically worse. For a detailed analysis of the CP1 procurement rule change and change order structuring evidence, see The Change Order Machine.

The $537 million settlement

On January 21, 2026, the CHSRA Board unanimously approved a $537.3 million settlement with Dragados-Flatiron for CP2-3 — the largest single change order in the project's history. The vote was taken in closed session.

The timing of the settlement — one day after the Newsom administration released AB 1608 language that would limit the new Inspector General's disclosure authority — was noted by multiple lawmakers who alleged a connection. The administration called it coincidence.

The fraud standard

The defense

The strongest innocent explanation: CHSRA was a small agency given an enormous mandate and inadequate staffing. It relied on WSP/PB because it had to — the state lacked the in-house expertise to manage a megaproject. The billing disputes represent normal contract friction, not fraud. The $499K in confirmed overbilling found by the HSR 14-66 audit (covering 2015-2018) suggests WSP's billing was largely compliant. The 145/184 false completion finding reflects different definitions of "complete," not deliberate deception. Individual conflicts were investigated by the FPPC and cleared.

This defense is partially valid. CHSRA genuinely lacked staff. The 25:1 ratio was not WSP's choice alone — it reflected chronic state underfunding. The narrow FPPC findings are legitimate as far as they go.

The defense fails on structure. The arrangement where WSP staffed the unit overseeing WSP is not a staffing problem — it's a governance failure. The Board's delegation of unlimited change order authority is not a resource constraint — it's a policy choice. The 79% false completion rate is not a definitional dispute — the State Auditor explicitly concluded the tasks were not finished.

What we don't know

Sources

Tier 1 (Primary documents)

• California State Auditor Report 2018-108
• CHSRA Board delegation policy HSR 11-001
• HSR 14-66 Incurred Cost Audit, October 2022
• CHSRA F&A Contracts Report, January 2026

Tier 2 (Government reports)

• FRA Compliance Review, June 4, 2025
• OIG Supplemental PUR Review, November 2025

Tier 3 (Investigative journalism)

• New Civil Engineer: FPPC clears Hill, November 2020
• NBC Bay Area: $50.6M disputed invoices investigation
• Construction Dive: employees told to keep quiet
• ABC10: $537M settlement reporting
• CalMatters: AB 1608 record exemption
• Mercury News: Morales hired as CHSRA CEO
• ABC30: Hill conflict of interest investigation
• Railway Technology: Dragados-Flatiron $1.23B contract
• SD Union-Tribune: WSP management upheaval