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By Yue Stella Yu, CalMatters

The auditor of California’s High-Speed Rail Authority wants the power to keep certain records confidential, drawing concerns from transparency advocates that the agency could shield vital information about a controversial and costly public infrastructure project from the public.

Assembly Bill 1608, authored by Assembly Transportation Committee Chair Lori Wilson, would allow the inspector general overseeing the high-speed rail authority to withhold records that the official believes would “reveal weaknesses” that could harm the state or benefit someone inappropriately. 

The bill would also prevent the release of internal discussions and “personal papers and correspondence” if the person involved submits a written request to keep their records private.  

The legislation appears to have the blessing of Gov. Gavin Newsom, whose administration released a nearly identical budget trailer bill — a vehicle for the governor and legislative leaders to adopt major reforms swiftly with minimal public input — on Monday. The language for both proposals came from the inspector general’s office, said H.D. Palmer, spokesperson of the state Department of Finance.

The Office of the Inspector General of High-Speed Rail Authority, which audits, monitors and makes policy recommendations to the authority, was formed in 2022 after Assembly Democrats held bullet train funding hostage in exchange for increased oversight. 

The rail line, designed to connect San Francisco and Los Angeles, was approved by voters in 2008. At the time, it was estimated to cost $33 billion and be completed by 2020. It is now estimated to cost more than $100 billion, with only a 171-mile segment connecting Merced and Bakersfield planned for completion by 2033.

The project delays and ever-increasing price tag have frustrated both Democrats and Republicans. Former Assembly Speaker Anthony Rendon, a Los Angeles Democrat who held up the funding in 2022, said at the time there was “no confidence” in the project. U.S. Rep. Kevin Kiley, a Rocklin Republican, has fiercely criticized it as a waste of money and introduced legislation to gut federal funding for it. 

Wilson, a Suisun City Democrat and a former county auditor, said her bill would empower the inspector general’s office and shield it from public records requests for sensitive data, such as whistleblowers’ identities, details of fraud, documents regarding pending litigation and records about security risks. High-speed rail authority officials often will not turn over sensitive records to the oversight agency out of fear that the office would be compelled to release them, forcing the inspector general’s office to jump through hoops to obtain information for audits, she argued. 

“The only way we’ll get the level of transparency and the accountability that the Legislature requires is to make sure that our (inspector general’s office), who are technically the eyes and ears of the public … have every protection they need to be able to take the full deep dive without hindrance,” Wilson told CalMatters in an interview last week.

Palmer echoed Wilson’s point, arguing that the governor’s proposal aims to allow the inspector general’s office to “communicate sensitive findings to external bodies in position to take corrective action.”

But some good government groups see the measure as offering the inspector general’s office blanket authority to withhold anything it doesn’t want to disclose. 

“This is a wholesale atom bomb on disclosure,” said Chuck Champion, president of the California News Publishers Association.

And the measure is drawing opposition from Republicans who already consider the project a failure. Assemblymember Alexandra Macedo, a Visalia Republican, said it is “insulting” that the project began when she was in middle school and remains far from complete. She called the empty concrete high-speed rail structures throughout her district a “modern day Stonehenge.”

“As far as I’m concerned, every ounce of this project should be available for public consumption and should be presented factually and in entirety to the entire legislative body,” she said.

Officials from the High-Speed Rail Authority and the inspector general that oversees it declined CalMatters’ request for comment. Newsom’s office also did not respond to CalMatters’ questions.

The bill is the latest in a series of legislative attempts to shield records and agencies from the public. Last year, lawmakers passed laws that loosened public meeting requirements for various groups, from local governments to research review organizations, and exempted insurers from having to disclose information they report to the Legislature. State Treasurer Fiona Ma sponsored a measure to establish a new infrastructure agency within her office while exempting much of its operations from public disclosure, a bill that was ultimately watered down and killed last year. 

The California Public Records Act, which applies to all state and local agencies except the state Legislature and judicial offices, already exempts disclosure of various types of sensitive information Wilson’s measure aims to protect, said Ginny LaRoe, advocacy director at the First Amendment Coalition, which champions press freedom and transparency. 

For example, state law broadly allows agencies to withhold records when they believe it serves the public interest. There are also specific protections for preliminary drafts and internal discussions, trade secrets and documents related to pending litigation involving a public agency, which are disclosable once a lawsuit is resolved.

But interpreting the public records law would take up a lot of the inspector general’s capacity, said Wilson’s chief of staff Taylor Woolfork.

“The bill’s objective is for this small oversight body to concentrate on generating meaningful reports that strengthen the high speed rail program, not to divert limited resources toward interpreting complex CPRA questions or defending disclosure decisions in court,” he said in an email.

While Woolfork acknowledged the existing exemptions for the agency in the public records law, he said it does not go far enough to protect the inspector general’s office. Under current law, if the high-speed rail authority is being sued, the inspector general’s office could be required to release information because the agency itself isn’t being sued, he said.  

Both proposals would allow people who communicate with the inspector general’s office to stay confidential as long as they make a written request, a practice in laws that govern the state auditor’s office and inspectors general at other agencies, such as the state departments of transportation and corrections and rehabilitation. 

But the decision to withhold that information should be based on a set of “objective legitimate criteria … independent of someone’s personal wishes,” LaRoe said.

“A whistleblower … understandably may have fear of coming forward with important information about waste, fraud or abuse, but that doesn’t mean that they should unilaterally be able to control what the public has access to.”

LaRoe also took issue with allowing the inspector general to shield information due to potential “weaknesses” such as “information security, physical security, fraud detection controls, or pending litigation” — language that CalMatters could not find anywhere else in state public records access laws.

“On its face, I could see an agency refusing to disclose information because it’s embarrassing, because it shows a weakness,” LaRoe said. “Too often, we see agencies interpreting words in ways that ultimately protect people or decisions that maybe look embarrassing or are uncomfortable or create controversy.”

When asked about the language, Wilson said she expects the proposal will be  “honed in” on through the legislative process. “This was, we felt, a good starting point,” she said.

But it is troubling whenever lawmakers seek to further shield public agencies from disclosure requirements — especially a watchdog agency overseeing such a controversial project, LaRoe and Champion said.

“If any project should have intense transparency and scrutiny, it’s the high-speed rail,” Champion said. “This project has been a disaster from jump street. And what else is in there that we have not yet found that they could tuck into this loophole?”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

With the Trump administration reportedly in talks to create an anti-fraud task force for California, state Atty. Gen. Rob Bonta on Thursday vehemently denounced what he described as the administration’s “reckless” and “false” rhetoric about fraud plaguing the state.

At a news conference at the Ronald Reagan State Building in downtown Los Angeles, Bonta said the Trump administration’s claims that state programs are overrun by fraud and that its government was itself perpetrating or facilitating this fraud was “outrageous and ridiculous and without basis.”

Bonta said most states struggle with some fraud from outside actors, saying that “anywhere there’s money flowing there’s a risk” and that the state’s Department of Justice has thrown immense resources into cracking down on illicit activities and recovering funds for taxpayers.

As a politicized national fight over waste, fraud and abuse led by Republicans have targeted California and its Democratic leadership, Bonta and other state officials have moved swiftly to combat the claims.

In California, Bonta said, authorities have recovered nearly $2.7 billion through criminal and civil prosecutions since 2016, including some $740 million through Medi-Cal fraud related prosecutions, about $2 billion under the state’s False Claims Act, and an additional $108 million from a task force focused on rooting out tax fraud in the underground economy.

State authorities have frequently partnered with the federal government in the past on such investigations and welcome a good-faith partnership in the future, Bonta said.

CBS News reported on the creation of a California-focused fraud task force earlier this week, citing multiple unnamed sources familiar with the plans. The outlet, whose new editor in chief, Bari Weiss, has been aligned with Trump and spearheaded a major overhaul of the news organization, reported that the president plans to soon sign an executive order naming Vice President JD Vance as head of a group that would also include the head of the Federal Trade Commission as vice chairman.

Trump’s rhetoric fueled doubts about California programs and Gov. Gavin Newsom’s leadership at the start of the year, when he declared that “the fraud investigation of California [had] begun.”

On the president’s social media platform, in formal letters and in recent news conferences, officials in the Trump administration have alleged fraud in child care, hospice funding and unemployment benefits.

Last week, the topic took center stage again when Mehmet Oz, the administrator for the Centers for Medicare and Medicaid Services, posted a video accusing Armenian crime groups of carrying out widespread hospice fraud in Los Angeles.

That viral video received more than 4.5 million views on X.

Oz’s video received fierce backlash from California politicians and the local Armenian community, who collectively alleged that it contained baseless and racially charged attacks on Armenians.

The video shows Oz being driven around a section of Van Nuys where he says that about $3.5-billion worth of medicare fraud has been perpetrated by hospice and home-care businesses, claiming that “it’s run, quite a bit of it, by the Russian Armenian mafia.”

He also points to Armenian language signs, incorrectly referring to them as written in a cerulean script, and saying “you notice that the lettering and language behind me is of that dialect and it also highlights the fact that this is an organized crime mafia deal.”

Newsom filed a civil rights complaint against Oz on Jan. 29, asking the Department of Health and Human Services to investigate the “racially charged and false public statements” made in the video.

On Monday, California Sen. Adam Schiff followed suit, demanding an independent review of Oz’s alleged targeting of Armenian American communities.

“To suggest markers of Armenian culture, language, and identity are indicative of criminality underscores a discriminatory motive that could taint any investigation into fraud and incite the further demonization of the community,” Schiff said in a statement.

Glendale City Councilmember Ardy Kassakhian said in an interview that Oz’s statements feed into the Trump administration’s playbook of using allegations of fraud to sow racial divisions.

“This time the focus just happens to be the Armenians,” he said. “In places like Minnesota, it’s the Somali community.”

California has been investigating healthcare fraud since a 2020 Los Angeles Times investigation uncovered widespread Medicare fraud in the state’s booming but loosely regulated hospice industry.

From 2010 to 2020, the county’s hospices multiplied sixfold, accounting for more than half of the state’s roughly 1,200 Medicare-certified providers, according to a Times analysis of federal healthcare data.

Scores of providers sprang up along a corridor stretching west from the San Gabriel Valley through the San Fernando Valley, which now has the highest concentration of hospices in the nation.

The state Department of Justice has charged more than 100 people with hospice-related fraud since 2021 and shuttered around 280 hospices in the last two years, according to data from the California Department of Public Health.

But those shuttered hospices barely represent a dent in the massive hospice home healthcare industry. There are 468 hospice facilities in the Van Nuys area alone, according to the state database of medical facilities.

There are 197 licensed medical practices, including 89 licensed hospices, in a single two-story building located at 14545 Friar St. in Van Nuys — suggesting a concentration of fraudulent businesses.

When asked why the number of licensed medical practices in Van Nuys and at that address are so high, a spokesperson for the California Department of Public Health said that the department is committed to fighting fraud and unable to comment on pending investigation.

Recent turmoil in Minnesota has demonstrated the potential ripple effects of allegations levied by the Trump administration.

Ahead of sending in thousands of immigration enforcement agents into the Midwest state, Trump had repeatedly cited a fraud case involving funds for a child nutrition program involving COVID-19 pandemic relief funds.

He used the case, which involved a nonprofit where several Somali Americans worked, to vilify the immigrant community, even though the organization was run by a white woman. After the state became a lightning rod, Gov. Tim Walz dropped his reelection plans.

At Thursday’s news conference, Bonta described major cases in other states, such as $11.4 million healthcare fraud and wire fraud conspiracy involving a nursing assistant in Florida and a $88.3 million Medicaid fraud case in in Ohio involving over billing by a pharmacy benefit manager — to show abuse of state programs is not unique to California — or to blue states.

“We know Vance hails from Ohio, so maybe he should take a look in his own backyard before leading an unnecessary political stunt focused on California,” Bonta said. “We thought we should set the record straight.”

Times staff writers Melody Gutierrez and Dakota Smith contributed to this report.

Officials in California criticized the federal response to a bio lab found in a Fresno County suburb after a similar setup was found at a home in Las Vegas over the weekend. 

The California lab was found in a Reedley home in late 2023. Police said the illegal facility contained “pathogen-labeled containers” with labels that included dengue fever, HIV, and malaria, as well as about 1,000 mice that officials believe were used as test subjects. 

Jia Bei Zhu, a Chinese citizen, was arrested in October 2023 and indicted in November. He was charged with distributing adulterated and misbranded medical items, including coronavirus tests, and remains behind bars. He is set to appear in court in April. 

Authorities raided a home in Las Vegas early Saturday morning and found a similar set-up inside. Las Vegas Metropolitan Police Department sheriff Kevin McMahill said that officials found “multiple refrigerators,  a freezer,  and  other laboratory-type equipment, along with numerous bottles and jugs containing unknown liquid substances” inside a locked garage.

“These items, importantly, were consistent in appearance to the items found and described in the Reedley, California lab investigation,” McMahill  said. 

FBI Special Agent in Charge for Las Vegas Christoper Delzotto said agents found items including a centrifuge, biosafety tools and “unknown liquids in gallon-sized containers and refrigerated vials with unknown liquids.” More than 1,000 samples were collected from the scene and transported to the National Bioforensic Analysis Center in Maryland, Delzotto said. 

McMahill said that the police department “received limited information that laboratory equipment and  potentially hazardous materials” were being stored at the Vegas house before the raid. 

The investigation revealed that Zhu also owned the Vegas residence and “raised significant concern for what” officers might encounter, McMahill said. A robot was used to clear the house before police entered, and hazmat teams helped move items from the home.  

Nicole Zieba, the city manager of Reedley said she was “not surprised about the discovery.” Fresno County supervisor Nathan Magsig said items discovered in the Reedley lab “pointed to the fact that there may be additional laboratories in other parts” of the U.S.  Zieba said that Reedley officials had tried to warn the federal government. 

“I hope they are paying attention because when we tried to raise the flag, we received just such a poor response from the CDC,” Zieba said. “It’s almost as if they didn’t want anything to do with it.” 

Las Vegas authorities also searched a second home, but found no suspicious materials there. McMahill said police had arrested Ori Solomon, a man believed to be the property manager of both Vegas properties, on an initial charge of disposing and discharging hazardous waste. 

Anthony Capozzi, Zhu’s attorney, told the Associated Press that his client “is not involved in any kind of a biolab being conducted in a home in Las Vegas.” Capozzi said Zhu has been in federal custody for three years. 

“What went on in that residence, we are unaware of,” Capozzi said. 

Federal agents were seen entering the Reedley lab again in the past days. McMahill said the Las Vegas police department still has “a lot of work” ahead of them. 

“Vegas is in for a long road,” Zieba said. “If it’s anything like the Reedley case, there was no manual to pull off the shelves.”