Tags: chicago | bus | fraud | mileage

Report: Chicago Transit Authority Overcharged Feds $150 Million

Thursday, 25 Oct 2012 12:58 PM

By Bill Hoffmann

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The Chicago Transit Authority has been taking American taxpayers for a ride by inflating its mileage figures to milk tens of millions more in federal funding out of the government, a new report charges.

Cause of Action, a taxpayer watchdog group, alleges the CTA unfairly pumped up its bus mileage over three decades in order to rake in as much as $150 million extra from the feds, reports Fox News.

The group said it has traced the inappropriately awarded money as far back as 1982 and as recently as 2007.

In 2006 alone, the CTA received between $1 million and $5 million more than it was entitled to from U.S. Department of Transportation funds in 2006, its report charged.

Cause of Action labeled its conclusions "Chicago-style fraud’’ and alleged that the DOT's inspector general and the U.S. House of Representatives were informed of the fraud in 2009 and slow to move on it.

The lackluster response, the watchdog agency alleges, was because Valerie Jarrett, one of President Barack Obama’s senior advisors, was chairman of the CTA’s board from 1995 to 2003, and Transportation Department General Counsel Robert Rivkin held that same position at the CTA from 2001 to 2004.

A spokesperson for the CTA denied the agency had cheated the government, insisting it has always followed federal guidelines in reporting bus mileage.

The way the alleged mileage inflation worked was that the CTA counted the distance between a bus garage and the beginning or conclusion of the scheduled route as part of its mileage count, Cause to Action said.

Those “deadhead miles’’ added up to millions in extra funding over the years, until last April, the DOT told the CTA to stop counting them.

“What the FTA did not do was investigate whether there was wrongdoing in previous years,” Cause of Action’s executive director Dan Epstein said told Bloomberg.

“Their job is to refer these kinds of things to Inspector General Cal Scovel to investigate whether fraud occurred, and if fraud occurred, justice needs to be done.”

The CTA said it clocked in the extra miles because Chicago’s bus garages are close to its routes and the agency’s policy was to pick up any passengers who flagged down buses on their way to their routes.

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