The CEO of the California High-Speed Rail Authority has resigned, officials confirm to Rail and Runway.
CEO Ian Choudri put in his resignation late Wednesday via email, citing the need to focus on “important personal and family priorities,” according to reporting from CalMatters.
His resignation was later announced Thursday during a regularly scheduled meeting of the Authority’s Board of Directors, which was originally expected to be a somewhat celebratory event for the embattled project but was instead overshadowed by Choudri’s sudden departure.
Board Chair Steve Kawa thanked Choudri for his service and contributions to the project, but noted that the Board has been empowered by Gov. Gavin Newsom to bring “stronger accountability, oversight, and transparency to the project.”
In the wake of Choudri’s resignation, the Authority has appointed Joe Stephenshaw to the position on an interim basis. Stephenshaw has served as the Director of the California Department of Finance under Gov. Newsom for the past four years.
Ian Choudri’s scandal-ridden tenure
Choudri’s ouster comes after increased scrutiny about his time at the wheel of the nation’s largest infrastructure project, and questions about his job security with a new California governor assuming office next year.
Scandals have dogged Choudri for the last several months, particularly the revelation that consultants for the Authority misused nearly $600,000 in taxpayer money for various trips and expenses that were deemed “questionable.” Among them, consultants booked first-class flights, went to gyms, bars and a nightclub on the taxpayers’ dime, an investigation from the Office of the Inspector General revealed.
The misuse of those funds led to the CAHSR Board voting to limit Choudri’s authority over contracts, prohibiting him from signing or approving new contracts or modifying existing ones.
The Board was also weighing whether to approve a possible $25,000 bonus on top of his salary of more than $534,000.
Outside of office hours, Choudri also made headlines earlier this year after being briefly arrested after an alleged domestic dispute at his home in Sacramento County. He was placed on leave and returned to work several weeks later.
Controversy also surrounded the CEO’s romantic relationship, which sparked concerns about potential conflicts of interest.
Choudri’s fiancée, Lyudmyla Starostyuk, who was also arrested during that February domestic incident, was hired by corporate accounting firm KPMG as a managing advisor.
KPMG was awarded a four-year, $24 million financial advisory contract by the Authority, which some have described as a “low-ball” bid, and was later identified as one of the consulting firms accused of misusing taxpayer funds on questionable expenses.
Even if Choudri had been able to shake off the stench of these mounting controversies, his future as CEO would still be on shaky ground heading into the new year.
Earlier this week, the presumptive next governor of California, Xavier Becerra, hinted that he planned to shake up the leadership structure of the California High-Speed Rail Authority if the project were to continue—which he said he supported.
“I need the faith of the public in order for these big projects to go,” Becerra told KCRA’s Ashley Zavala. “I think the public is quickly losing faith if they haven’t already.”
What happened behind the scenes with Ian Choudri?
While the public scrutiny continued to mount during Choudri’s brief tenure, sources within the Authority say he failed to endear himself to many staffers who had been at the agency during previous regimes.
Leaks from within his own organization led to increasing stories about the dysfunction behind the scenes.
CBS News in particular ran story after story about Choudri’s growing list of scandals and errors, including the Authority missing multiple deadlines to select a manufacturer for its trainsets, which the Trump Administration said led to the canceling of $4 billion in federal funding promised by President Joe Biden.
- For what it’s worth, supporters of the project have called the missed deadlines a convenient pretext for the Trump Administration pulling federal funding, which they theorize would’ve happened eventually regardless of the circumstances.
Ironically, Thursday’s board meeting included the final vote to approve an $836 million contract to Siemens Mobility for three trainsets, spare parts and a decade of service and maintenance.
Choudri was not present to see the vote, which will likely be remembered as the top accomplishment of his embattled two-year reign as CEO.
Additionally, the meeting also included a major environmental milestone. The Board voted to adopt the final environmental clearance for the last remaining section of the project’s Phase 1: the section between Los Angeles and Anaheim.
Trains have been ordered. The project has full environmental clearance from San Francisco to Anaheim. The business plan put into place has been well-received and the project seems closer than ever to becoming a reality.
But Ian Choudri won’t be around to see any of it come to fruition.
As one source at the Authority told me Thursday, his resignation was a “long time coming.”
Click here to read the full comments from CAHSR Board Chair Steve Kawa during Thursday’s board meeting.
“Last night, the Board received Ian Choudri’s resignation as CEO of the High-Speed Rail Authority, effective immediately. We thank Mr. Choudri for his service and contributions to the high-speed rail program, and we wish him and his family well.
The Governor appointed new members of the Board this year to bring stronger accountability, oversight, and transparency to the project. Today’s news reflects the Board’s commitment to accountability and transparency, consistent with the Governor’s mandate under new Board leadership at the Authority.
Californians deserve a project they can trust, and the Governor will continue to insist on that from everyone working on it.
In that spirit, and consistent with that mandate, the Board met in closed session and has unanimously voted to appoint Joe Stephenshaw as the new Interim Chief Executive Officer of the California High Speed Rail Authority. His credentials speak for themselves, both as a steward of public funds and a proven leader.
Joe has served the people of the State of California for over 20 years in budget roles across the Legislature and Administration. Most recently, he has served as Governor Newsom’s budget director for the past four years.
His experience as the Director of the Department of Finance, combined with his commitment to transparency and accountability, make him the perfect person to carry us forward into the next exciting chapters of building this project.
At this meeting, we authorized the purchase of the first three trainsets. In a few short moments, we will consider adopting the final environmental clearance for the LA-to-Anaheim segment. And in a few months, we will begin to lay track. High Speed Rail is happening, and we have full confidence in Joe to continue moving us towards our goals.”
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