Conflict-of-interest violations by employees-turned-contractors. A BART employee who faked their working hours for more than a year. A homeless outreach program that only got one person into a residential treatment facility after two years and $350,000 spent.
Those were three of the six investigations presented by BART’s Office of the Inspector General (OIG) at a meeting of an agency audit committee on Tuesday, which also included probes into sidelining of diverse subcontractors and a lack of public disclosures on spending for the Link21 initiative to connect transit services across Northern California.
Among the most contentious issues at Tuesday’s meeting were fixes meant to address conflict-of-interest violations. The OIG described a “revolving door” of BART employees who later bid for contracts after leaving the agency.
The OIG was able to substantiate three violations of the Government Code Section 1090, which prohibits employees from making contracts in which they have a financial interest. The office said it is currently investigating two other allegations that appear to support violations as well.
Questionable Contracts
In response to the findings, BART management adopted recommendations to void the contracts and add additional safeguards, including proactive education for contractors and employees about ethics requirements.
However, the agency chose not to claw back the $1.25 million in payments that have already gone out. Audit committee member Debora Allen argued for stronger punitive measures for scofflaws.
“When we start to see multiple instances of this, I think that's when we, as a BART board, have to really start to think about 'How do we stop this trend?'” Allen said.
Allen put forward a motion to discuss potential penalties for noncompliance to the full BART board, but was voted down.
Robert Powers, BART’s general manager, argued against the motion and said he was confident that the procedures put in place would stop future similar violations from recurring.
The OIG also found that a two-year homeless outreach program in BART’s Downtown San Francisco stations, which was operated by the Salvation Army, resulted in only one person receiving residential treatment services despite more than 3,200 contacts.
Committee chair and BART board member Bevan Dufty said the agency contracted with the Salvation Army because a previous agreement to work with the San Francisco Homeless Outreach Team was ended for “reasons that defy my ability to understand.”
But Dufty also highlighted other types of assistance that were not measured in the report—for example, linkage to nonresidential services, emergency overdose prevention and providing food. He underscored an OIG finding that the Salvation Army’s abstinence-based approach is known to be less appealing than other models for the homeless population.
“I'm certain that more was done than was documented for the inspector general, but that's not relevant. And I do believe that in the role of government in this era, transparency and independently validated metrics are essential for the public's trust,” Dufty said.
‘Pattern of Obstruction’
Committee members also discussed an investigation into a BART employee engaging in time theft for at least a year, getting paid for 12-hour shifts while spending most of their time at home or at non-work locations. The employee later resigned when they learned they were under investigation.
BART management is determining options for recovering wages and is working to adjust the employee’s retirement benefits in line with the violations.
But committee members also raised concerns about labor unions stymying the OIG investigation. A 2022 Alameda County Civil Grand Jury report found that BART’s board, management and unions engaged in a “pattern of obstruction” against the office.
Harriet Richardson, BART's inspector general, said labor leaders have requested that they be notified before her office interviews employees or conducts any investigations involving any of their union members.
“If they had stopped that behavior at that point, the investigation would not have been able to gather the evidence needed to verify that this was going on and the employee would have gotten away with it and basically been rewarded for not showing up to work,” Richardson said.
The conversations about the OIG investigations, which are meant to target fraud, waste and abuse, are taking place amid a dire fiscal situation for BART, which faces a lower-than-expected return in ridership and dwindling federal aid that helped sustain the agency through the pandemic.
According to financial reports for the first quarter of fiscal year 2023, ridership was down 3% compared with projections and down 62% compared with the same period two years ago. Operating revenue was down 15.4% compared with budget although BART officials attributed much of the difference to the 50% off fare promotion in September.
As of its last public financial statement, the agency has used around half of the $1.6 billion it has received from federal emergency funding. The runway for the roughly $800 million remainder was previously slated to run through August 2025, but recent numbers mean the deadline is moving closer.
“We are in the process of moving our ridership expectations a little bit lower and that will have a bigger impact on our modeling,” said Pamela Herhold, BART’s assistant general manager for performance and budget.