Rampant corruption plagues local transit authorities

NYC Metropolitan Transit Authority is likely the worst, but corruption extends to Los Angeles and almost everywhere. Where to start?

Try a web search on Transit Agency Corruption. The number of hits is 110,000.

Try looking onto some of the contracts let out for the NYC MTA. For example, I found that adding GPS and digital communications to rail stock has a budget of a quarter billion for a rolling stock of 10,000 cars. That comes to $25,000 to add GPS and digital radio per car when the equivalent for police vehicles is $3500.

I suspect that an audit of MTA infrastructure and technology upgrades will show this pattern repeated. Arrests and indictments in the NYC MTA keep the local DA quite busy.

The USA even has a annual convention on transit fraud and corruption.
This report estimates the cost of Transit Fraud in NYC at $1 billion over a five year period.

"Preliminary analysis of reports of corruption and malfeasance in the two MTAs yields cost estimates of over $US200 million in the Los Angeles County Metropolitan Transportation Authority and over $US1 billion in the New York State Metropolitan Transportation Authority across roughly five-year periods (periods of analysis not being exactly the same for the two agencies)."

This is typical of New York Transit crooks:

The bill of particulars is appalling - and nowhere more so than in the entry involving Brooklyn Assemblyman and Democratic boss Vito Lopez.

Well-placed sources told Daily News reporter Pete Donohue that in 2007 Lopez attempted to bully Metropolitan Transportation Authority Chief Executive Lee Sander into promoting Lopez's son-in-law, who works for the MTA.

From Cleavland:

"Greater Cleveland Regional Transit Authority Project Superintendent Indicted on Charges of Extortion, Fraud, Bribery, and False Statements

William J. Edwards, United States Attorney for the Northern District of Ohio, and C. Frank Figliuzzi, Special Agent in Charge of the Cleveland Division of the FBI, today announced that an Indictment was unsealed charging Faisal M. Alatrash, 48, of Westlake, Ohio, with one count Conspiracy to Commit Bribery in Federally Funded Programs; four counts of Bribery in Federally Funded Programs; four counts of Extortion Under Color of Official Right; three counts of Mail Fraud; six counts of Honest Services Mail Fraud, and one count of False Statements. Faisal M. Alatrash’s wife, Gada A. Alatrash, 39, also of Westlake, Ohio, was also charged with one count of False Statements.

The Indictment states that Faisal Alatrash, a Project Superintendent/Construction Manager for the Greater Cleveland Regional Transit Authority (“RTA”), supervised contracts and repairs for RTA facilities."

And another from New York:

"Manhattan District Attorney Robert M. Morgenthau announced today the indictment of a concrete lab director and a building materials testing laboratory for defrauding numerous state agencies and scores of private clients in connection with construction material testing.

The defendants, WILLIAM BAYER, 69, and STALLONE TESTING LABS INC., which employs BAYER as Lab Director, were indicted on charges of scheme to defraud and offering a false instrument for filing. The crimes charged in the indictment occurred from January 1, 1998 through November 18, 2008 and January 30, 2009, respectively."

Chicago, naturally:

"A Cook County grand jury today indicted a politically connected businessman and his construction company on fraud charges, saying they falsely represented how much work minority subcontractors would receive on government contracts for a North Side fire station and several Chicago Transit Authority facilities."


We have already seen the moral hazards of the financial bailouts, expect more of the same. Expect HSR to have the same problem in spades, and it may be impossible to get the transportation problems solved until severe auditing of all transit projects takes place on a continual basis.