Chicago Transit Authority Overcharged Feds $150M Over 30 Years

♦ 10/25/2012 ♦ Leave a comment

In Chicago, as the saying goes, give them an inch, and they will take a mile, is true, where for decades the Transit Authority has been misreporting the mileage for  its bus routes, thereby boosting the amount of federal taxpayer subsidies by as  much as $150 million — and now, it seems, with Uncle Sam’s blessing.


Typical Chicago politics.  Cause of Action, the taxpayer advocate group, aid a practice by the nation’s third-largest transit authority of counting  “deadhead,” or empty bus travel, when it reports mileage to the federal agency  that doles out subsidies continued from 1982 to earlier this year, despite a  2007 state audit that uncovered the irregularity. Although that audit put the  “impact” of the misreporting as high as $5 million a year, the Federal Transit  Administration, which ordered the CTA to stop the practice earlier this year,  believes the amount is much lower — between $21 million and $24 million — and  is not planning to recoup the money.

“The Federal Transit Administration’s review of the Chicago Transit Authority  concluded that CTA had not properly reported vehicle revenue miles – just one of  21 factors in determining formula funding,” FTA spokesman Brian Farber told  FoxNews.com. “The FTA demanded that the CTA correct its reporting methodology  going forward.”

But there will be no penalty, Farber said, because “FTA has no indication  that the CTA used any of the formula funds for anything other than eligible  purposes to provide needed transit services to the public.”

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Cause of Action, after learning of the FTA directive made a FOIA request for results of the 5-year-old, state-ordered audit, which indicated the practice  had been going on long before the FTA put a stop to it.   The auditor who was commissioned by the state to conduct that probe, Thomas Rubin, said the  full amount of money the CTA overcharged cannot be precisely determined.

“It is likely that impact is between well over $1 million to more than $5  million in excess grant funding allocation to this region in FY06, with  generally similar or slightly smaller amounts each preceding year since the  introduction of VRM as a formula grant “driver” following the passage of the  Federal Surface Transportation Assistance Act of 1982,” Rubin wrote in his  report to the state in 2007.

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Cause of Action Executive Director Dan Epstein said the rules for reporting  mileage are clear, and even if they weren’t prior to Rubin’s audit, the agency  should have known not to count “deadhead” miles after that.

But the review of the mileage records only included those from 2011, which ignored the audit as well as the fact that the CTA acknowledged it has long used what the federal  authorities now say is an improper mileage count.

And the federal agency doesn’t even care about the figures in the report.  But the House Committee on Transportation and Infrastructure is aware of the situation.

“The committee is looking into this issue to make sure that Chicago and all  communities are playing by the same rules under this program,” said Justin  Harclerode, spokesman for committee chairman and U.S. Rep. John Mica, R-Fla.,  chairman of the committee.

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And on the other hand the CTA has had some heavyweights at its helm during the years the questionable billing  occurred, including current U.S. Transportation Department General Counsel  Robert Rivkin, from 2001-04, and Valerie Jarrett, now a senior adviser to  President Obama, who was chairman of the agency’s board from 1995 to 2003.

More of Obama’s cronyism.

As usual whenever someone is cornered, the FTA maintains that it wasn’t aware of the overbilling, which it said likely  amounted to far less than Rubin’s audit stated. An FTA official said improper  payments likely amounted to between $700,000 and $800,000 per year, which would,  over 30 years, add up to $21 million to $24 million.

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