At last week's California High-Speed Rail Authority hearing, Chairman Dan Richard remarked that bond interest would be paid with vehicle weight fees.
His remark was in response to questions from Kevin Dayton, the president and CEO of Labor Issues Solutions LLC.
Dayton tells our investigative producer Heidi Cuda this type of financial maneuvering is little more than a money shell game.
"First of all, most Californians don't even know what a bond is," he says. "It's borrowed money that must be paid back with interest. That money comes from Wall Street, insurance companies, big banks."
Dayton says he was surprised when Dan Richard said the interest on the $8.6 billion dollars in bonds may come from the vehicle weight fees.
"Those are fees paid when trucks are too heavy," Dayton says. "And that money is supposed to go to highway construction projects. This is typical of the entire way the rail authority operates. Things change. You don't know what's going on, there's very little transparency and openness. Essentially, all they're doing is taking the money, transferring it into another fund and pretending the general fund is not paying for it. In reality, California taxpayers are still paying the interest."
The state's budget analyst says that interest could bring the total for the bonds to $19.4 billion by the time the principal and interest are paid off.
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