High-stakes rail: Trump de-obligates nearly $1b in HSR funds for CA; Newsom objects

High-stakes rail: Trump de-obligates nearly $1b in HSR funds for CA; Newsom objects
Credit: California High-Speed Rail Authority

[Ed. – Trump reportedly plans to recover the $2.5 billion in federal money already spent by California. now that the project is canceled.  But it’s not clear there’s a way to do that.]

The Los Angeles Times quoted Stanford law professor David Freeman Engstrom, a Stanford law professor, describing Trump’s effort as a “nuclear option.”

The practice of recovering money after a breach of contract, while common in the private sector, was virtually unheard of in government, he explained.

“There is a reluctance to penalize misspending by local government agencies. … Almost never do those violations result in terminations, in part because federal agencies are set up to distribute money, not take it back, and they also lack funding for strict grant enforcement,” the Times added. …

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On Tuesday, the Federal Railroad Administration of the U.S. Department of Transportation wrote to California’s High-Speed Rail Authority, informing it that it had breached the terms of its contract with the federal government and that $928,620,000 would therefore no longer be available to the project.

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