Chairman of troubled bullet train project resigns

The man former Gov. Jerry Brown tapped to rescue the California bullet train in 2011, Dan Richard, resigned Tuesday as chairman of the troubled project.

Richard’s departure, along with the exit of former Bank of America executive Mike Rossi, marks the end of the Brown era of governance for the high speed rail authority after years of cost growth, schedule slippage and failed efforts to attract private investors.

Lenny Mendonca, a former McKinsey & Co. partner and now co-owner of a Half Moon Bay brewery, was selected by Gov. Gavin Newsom last week to replace Richard and was installed by a unanimous vote of the rail board as the new chairman.

The leadership change comes just a week after Newsom ignited an uproar with tough remarks that the project lacked a plan to complete the statewide train system. He also ordered “new transparency measures.”

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Richard had long been the face of the rail project, involved in almost every political and operational detail, though he was an unpaid board member. Richard, a former PG&E executive and a leader in projects that extended the BART transit system in San Francisco, had been a confidant of Brown since his early days as governor in the 1980s. Rossi, meanwhile, exerted his own hard-nosed influence over the project, attempting to improve controls and data reporting through an audit committee that he chaired.

Richard, an attorney by training, was lauded for his political savvy, helping to hold together the political coalition backing the rail line and meeting tirelessly with local officials, union leaders, legislators, critics, opponents, farmers and federal officials. Under his tenure, the project launched construction of 119 miles of rail in the Central Valley and obtained approval for a 25% share of the state’s greenhouse gas fees, amounting to about $750 million annually.

But Richard presided over a decision to issue construction contracts when the state lacked land to actually build anything, a move that later cost millions of dollars in claims and delays. And Richard denied reports for years that the program was going over budget and slipping behind schedule, including a 2016 risk assessment by the Federal Railroad Administration that warned of a $3.6 billion cost increase for construction in the Central Valley. By 2018, the rail authority admitted that costs had grown by more than that — to $10.6 billion.

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In a statement, Mendonca said, “Today, I want to recognize Dan Richard and Mike Rossi for their unyielding commitment to this project and for their exemplary public service. I’m looking forward to rolling up my sleeves and getting to work to make high-speed rail a reality in California.”

In remarks to the board, Richard said it had been an honor to serve as board chairman over the last seven years. He thanked fellow board members, staff, Brown and his late wife Jackie.

Both Richard and Rossi played roles more extensive roles than typical of government board members, and acted as de facto executives and managers. Richard was nearly always present at legislative and congressional hearings, ribbon-cutting ceremonies and key behind-the-scenes meetings with federal officials.

But Richard had come under growing criticism, both publicly and privately, as the project’s fortunes dimmed. Assembly Transportation Committee Chairman Jim Frazier (D-Discovery Bay) called on Richard to resign in November after the state auditor released a scathing audit that found mismanagement had caused billions of dollars in cost growth and long schedule delays.

“After being assured multiple times that these ongoing issues were being addressed, it is apparent to me that the authority has been less than forthcoming,” Frazier said. “They have continually lied to us about performance. Richard has had every opportunity since 2012 to correct these problems and has failed. Richard owes it to California taxpayers to step aside and let new leadership take over.”

At the time, Richard dismissed the criticism, saying he had no need to respond to “errant and uninformed attacks.”

In his state of the state address last week, Newsom simply announced that Mendonca would be his selection as the new chairman, though there is no legal mechanism to remove a rail authority board member. Mendonca formally took Rossi’s slot on the board, so Newsom has the opportunity to appoint another representative to Richard’s slot.

Richard’s exit is one of the few times over the last decade that any official has been held accountable for the performance of the project.

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