Investigation Uncovers Extravagant Spending By Metro Construction Authority

LOS ANGELES (CBS) — In traffic-laden L.A. County Metro train routes are being extended and sales-tax dollars are helping to pay for the project. But our investigation uncovered how the construction group in charge of one project is spending your money.

The Metro Gold Line links Downtown L.A. to the San Gabriel Valley. Billions of dollars in taxpayer money is being spent to build this line eventually to Ontario Airport.

But we found some Gold Line construction officials spending money on expensive hotels, questionable meals and fancy business-class travel.

No matter if you ride the rails or not, if you live in L.A. County, you are footing the bill. That is because when Measure R was passed two years ago, the sales tax was increased a half cent to pay for these rail lines and other transportation.

We wanted to find out how that money is being spent.

We obtained credit card statements and salary records for the top officials of the Metro Gold Line Construction Authority — the public agency in charge of supervising construction of the Foothill Extension in the San Gabriel Valley.

Only 14 people work in the office, but we uncovered tens of thousands of dollars in credit card charges over the past 20 months — paid for by taxpayers.

We found more than $800 in Starbucks charges, including $3 juices and $2 cheese Danishes. Beyond food we found iPads and an expensive Macbook Air, a $61 car wash and even late fees and interest charges because of unpaid credit card bills.

Authority CEO Habib Balian charged the most, including four trips to Washington, D.C., flying not coach — like most taxpayers — but expensive business class, paid for by taxpayers. That cost more than $7,300 coming from your sales-tax money.

I asked Balian why taxpayers should pay for his business-class travel.

“These are grueling flights. I go for 24 hours, 30 hours at a time. I’m doing work the whole way there, the whole way back. I need to be refreshed,” he answered.

Balian is paid handsomely for it. He made more than $430,000 last year, including a $27,000 bonus and $90,000 for unused leave time, making him one of the highest paid public officials in L.A. County.

“There are a lot of people who would say, ‘I fly all the time too but, I can’t afford business class. Yet you are flying on taxpayer money,” I asked him?

“Well it’s business travel and I’m attending business meetings and that’s how I’ve flown,” Balian said.

But some of Balian’s bosses on the Authority, which is made up of elected officials from the San Gabriel Valley, disagree even though there is no policy against business class.

“Should the taxpayers pay for business class travel on domestic flights,” I asked Doug Tessitor, Chairman of the Gold Line’s Board of Directors?

“I don’t think so,” he answered.

On the ground in D.C. we found that Balian stays at a luxury hotel for $380 a night. He orders room service and charges $180 to taxpayers for a car service to get to and from the airport.

It is not just out of town travel, we found more than $3,800 in restaurant charges for meals, mostly in and around the San Gabriel Valley.

But none of the receipts listed, who Balian met with or why taxpayers should foot the bill, even though Authority policy clearly states, “requests for business meal reimbursements must include documentation of attendees, subject discussed, and the purpose and benefit to the authority.”

“How do you know those meals were legitimate,” I asked Tessitor.

“Well I guess because we work very closely. I mean this is not a large organization,” he replied.

But taxpayers who ride the rails say it seems like their tax money is being wasted.

“You’ve just found another example of how money, that American citizens pay thinking that they’re paying for something of value, is being squandered,” said Metro Gold Line rider Ellen Riordan.

The Authority only found out after our public records request. Because of it, they have now prohibited business-class flights and will only allow business hotels, such as Hyatts or Hiltons, and tightened requirements for documentation of meals.

It is good news for commuters, who ride the rails every day and do not want their hard-earned money taken for a ride.

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  • Joey

    THANK YOU for taking the time and liberty to report on this HUGE waste of public funds.
    Joey B.

    • PJ

      David Goldstein, investigavitive reportor, you should be ashamed of yourself. Habib Balian has dedicated many years to the most important public transportation system the San Gabriel Valley has initiated siince the building of the 210 freeway. His salary is well deserved and you are ethically remiss not to understand and report on his tireless efforts on the behalf of this community critical project. Business class or a moderately priced hotel, seriously!? Habib has done more for the San Gabriel Valley than anyone in the past decade. Storeies like yours are exactly the reason why the highest quality talent runs from public service. If I were Habib, i would say, “F You” and return to the private sector and make a ton more money. Shame on you. Only hope Habib overlooks your niave reporting and continues to contribute at the highest level. Our loss and your fault if he decides enough of the nonesense.

      • The other 99 percent

        He makes over $400K a year. He can pay for the upgrade to Business class himself if he needs it.

      • Denis

        He makes half a million dollars! He can afford to pay for it!!!

  • Catherine McCallum

    Your ‘expose’ about travel expenses at the Gold Line Extension Construction Authority is nothing but a cheap hit piece. Did your reporter do any sort of comparison with other agencies and businesses to determine what reasonable business travel expenses are? Did he present a per diem allowance? Does he know if anyone was exceeding the per diem? And if they were, did they reimburse the overages? Were the trips and meals legitimate business expenses? Were the computer purchases approved? We don’t know, because your reporter was too busy stirring up taxpayer discontent to perform more than a cursory investigation.

    Your reporter neglected to say how many tens of thousand of dollars were spent, but we can do a little exercise. Let’s say the ‘tens of thousands of dollars’ translates to $50,000. Divide by 20 (months) and again by 14 (individuals) and you have a monthly expense of $178.57 per person. Since much of the Construction Authority’s work probably involves traveling both locally to interface with city governments and to Washington D.C. to deal with the agencies funding the work, it appears to me that the taxpayers might just be getting a pretty good deal.

    I can’t begin to tell you how disgusted I am by the editorial failure evidenced by allowing a piece like this to air. This broadcast represents everything that’s wrong with the press today – a non-story short on details and long on innuendo, hyped for no other reason than to create a sense of outrage among viewers who won’t take the time to think the thing through. I really hope that $2 cheese danish will come back to haunt you. Two dollars isn’t an extravagant price for a cheese danish. Your reporter sounded like a fool tossing in that breathless tidbit.

    This was offensive. You should fire whoever is responsible, apologize to your viewers, and present a report based on a true investigation.

    • Whisky…Tango… Foxtrot

      Catherine…. I travel extensively throughout the country and my company would never pay for a $380 a night hotel. Leaches like you is what is wrong with our government.

    • Transit Curmudgeon

      The flat rate for a taxi from Dulles Airport to downtown Washington, D.C. is $64

      He paid $180?

      Employees of local public transportation agencies are required to fly economy even when going on short trips to Asia or Europe where most suppliers are based. If they want to upgrade to Business class it is at their own expense.

    • Down with big brother

      Are you the same Catherine McCallum who gave $100 against gay marriage, are you the same who knows James, Linda, and Patrick.? If you are, we know who you are. We are the 99%! Freedom for us down will you fall! ANARCY NOW

    • robert

      woman, give me a break. you sound like one of those dirty bureacrats. ihave no doubt you work for the same agency or the criminal that was profiled in this story. your pretty adept at trying to legitimize the abuses in this story. im an attorney with 20 years of experience and three degrees and I even dont make that kind of money and yet i buy my own coffee and danishes. GMAGDMFB you snake!

    • anon anon

      david goldstein is the reporter

    • Angry Taxpayer

      Oh puhleeze woman, if you want to pay thousands of dollars in business class airfare (yes, what’s wrong with coach?), hundreds in a car service (what’s wrong with a taxi cab), hundreds in luxury hotel stays (what’s wrong with an Embassy Suites), then by all means YOU pay for them, not us. This is NOT a private corporation where they can spend whatever they desire. These projects are funded by taxpayers monies, and the funds should not be so recklessly spent.

      • Raymond Johnson

        When the President of the United States speaks most people listen, at least I did.
        a new resident of California had been here for 3 months my search for a job was unsuccessful so I decided to take the Presidents advise, I went back to school, when I registered for Cosmetology school, I really just wanted the barbering license, which I was told would be offered at this school,this statement happened to be not true at all. When I signed up for school I was told tuition would be $18,690 for 16oo hours. while im still in school i started recieving bills in the mail stating a payment would be due soon. This sent a red flag to my wife and she began doing research and found several loans and grants that had been takin out by the school without my knowledge under my social security number. When we confronted the school it was denied. I have proof of at least $60,oo0 in loans are out there under my social security number. My wife has a heart condition and im the one who takes care of her, she became ill last year and i had to take a leave of absence from school which was March and most of April, well I requested a read out from the finance office and what i found blew me away, transaction where being conducted even when i wasnt in school over 20 checks and what is so strange none of these checks were signed by me, you can look at the signature line and tell it has been tampered with. I couldn’t get the problem settled with the school so i filed a lawsuit against the school and they are dening everything but i have the proof through my w-2’s, letters from the loan companies, and even the read out i recieved from the school finance department, also they have 3 different loans on my credit report that i just recieved this month. I have been going to court fighting for myself because i cannot afford a lawyer, but at the same time i know this is wrong and i just cant seem to get any response from anyone. It seems to me this is a touchy subject or something. I really need someone to listen to what I have to say and see the proof that I have. The whole time i went to this school i did not recieve any funds, where did all this money go besides on my credit report. From a man that tried to do the right thing to better my life and to provide for my disabled wife. I can’t believe this has happened to me, please tell me someone can help me.

    • the stig

      You must be one of them. That likes to spend taxpayers money

    • Astonished


      Balian and others on that Board make more money than most taxpayers could dream of earning in 5 life times! And yes, since he makes more money than the President of these United States I think he can F-ing well pay for his own air fare, hotels, food and car!!!!

      My husband and I don’t make 1/4 of what he does combined and we pay for all our own expenses out of our own money AND pay taxes as well.

  • mindy

    I hope many more overspending agencies of the government be exposed! What are the auditors doing? thanks to David Goldstein for the report! more power to you!!!!

  • William

    Ms. McCallum,

    One can only assume that you are an employee of the very agency or the persons being profiled here. Your “disgust” is feigned a best. You just got caught with your hands in the cooking jar and you dont like it. I dont know if 1 person that would defend any of this. Except of course a person who has a vested interest in allowing it to continue. I mean really. You’re not fooling anyone so don’t kid yourself.

  • Xen

    Fire all those thieves and sue them for every dollar they had stolen.

  • dave

    Hijo de su chingada madre, inches rateros. this is worst than mexican politicians, when is some one going to control this rateros. and yes I am a USA citizen who works and pays thousands of dollars in taxes, for what? we need a proposition that will regulate all of types of money waste.

  • justice

    This is abusive spending and many should be held accountable.. I’m sure there is someone out there capable of doing this job for a lot less. Half a mill for this position and he can’t buy his own coffee? gmafb

  • Paco Jerte

    Great report. Way to inform all taxpayers. Now can we do an investigation on LA City employees? Let’s take out their dirty rags on camera!

    • Astonished

      Where have you been? L. A. City employees have been investigated to death. It’s time to air the dirty laundry in other agencies.

      I’m glad to see these guys expanding their investigations to the other agencies who spend money like water!

  • Sue Jones

    Thank you for great info that would be hard for the public to find out, great story

  • Randy R

    I’m glad somebody checked into this. One should ask how many more millions of money they are going to waste and how many years it will take before they finally start laying down some track. Getting a rail through the San Gabriel Valley should be a top priority and so far after all this time, only a few signs of future stations (probably overpaid an Add company for that to boot). It doesn’t do any good to pass these propositions as people they just cater to groups that steal most the money for these pet projects.the money from them.

  • Roger Thornhill

    Good work by Goldstein, credit where it’s due. This is the essence of why taxpayers constantly veto tax hikes, because there is no spending accountability, just demands for more money.

  • Transit Curmudgeon

    And remember, this project is being paid for by the raised (0.5%) sales tax which is the most regressive form of taxation.

  • Zilla

    I’m more concerned about this guys salary, bonus and unused leave than scrutinizing his expense reports. Many companies have adopted a policy wherein executives are given a set number of vacation days per year (say 10) and you use it, or lose it. The practice of allowing vacation (aka leave) to accrue is one of the ways employees cash in at employer expense. In this case, at Taxpayer expense. That should be the first thing that goes out the door .. STAT!

    Regarding the travel expenses .. well .. I’m not too concerned that receipts don’t show details, since the details should be on the actual expense report. I’ve never worked for a company that did not require an explanation that includes the name of the restaurant, city, business purpose, attendees, titles and company information for each entertainment receipt. This report focused on the required information not being on the actual receipts. Was it also not included in the submitted expense report form?

    As for car service charges, well, it depends on where he lives in relation to the airport. A person that lives on the Westside would only need to pay about $20.00 to get to LAX. A person that lives in the San Fernando Valley would pay much more. A car service may be comparable. Also, is that $180 one way, or round trip?

    I mean, you can nit pick the heck out of this report and these charges all you want. I’m still going to be more concerned about the $430k/year salary, $27k bonus and $90k of paid leave. That’s obscene.

  • Big Ed

    As to the SGV Goldline board president, Douglas Tessitor has created several legal problems for his own town of Glendora, California. Such as attacking a senior citizen during a Goldline Construction Authority meeting in Glendora, California – 2011.

    I suggest David Goldstein do a investigation of him, Douglas has created considerable legal damages whie serving on Glendora city council.

    His own sister also works for the Goldline Construction Authority, in the front office.

    See for your self:

  • katlen

    After reading the comments listed I did some ONLINE investigation of my own. It seems that Balian’s job includes lobbying for Federal Funds and that he’s been written up many times for bringing in much more money for the Metro Gold Line than the 0.5% Sales Tax has covered. Lots of people get paid by job performance. He performs, he gets paid.

  • Big Ed

    Habib Balian new all to well he was breaking the law in his tax dollar spending spree’s, since he had worked for so many years in Los Angeles County, Califonria.

    But since he wa protected by Michael Antonovich he was free to spend anything he wished. If you notice no action has been taken against Habib Balian nor has he offered to repay any of the monies back tot he tax payers of Los Angeles County.

    The person in question for over spending in this Channel 2 news investigation, Habib Balin also spent seven years as Los Angeles County Supervisor Michael D. Antonovich’s Transportation Deputy, advising the Supervisor on transportation issues.

    • gimme a break

      Antonovich needed to go ten years ago!

  • Streetsblog Los Angeles » Today’s Headlines

    […] Gold Line Construction Authority Getting Slammed for Extravagant Expenditures (CBS2) […]

  • Julie

    No one deseves to be compensated that much from the tax payers. If it wasn’t for all the top heavy’s we would have money for more jobs. The way Habib justifies his over inflated salary is just pure arrogance… which is another big problem in our system.

  • Big Ed

    Douglas Tessitor’s GADFLIES speech from Glendora city council meeting, October 25, 2011
    Douglas said:

    I was challenged this evening to apologize, so I’m going to do that.

    I want to apologize to each person in the audience and to those watching at home.

    For the comments that have been made this evening and for the last several months by the same individual.

    Public comment is an exercise in one of our most precious rights, freedom of speech.

    Unfortunately these comments neither have to be accurate, truthful or factual, they don’t have to be in good taste, an can be inflammatory as the speaker wishes.

    For those of you who wish to use public comment period as a teaching moment. You may wish to point out, that most cities have GADFLIES and in each case these individuals have their own issues.

  • Big Ed

    Did I forget to mention that Douglas Tessitor is also the president of the Metro Gold LIne Board, that oversee’s the construction etc. .

  • Giovanni Magana

    Oh well, no wonder a monthly buss cost $80. dollars, but since is not his money, I do not think he cares, god forbid you lose your ticket, the sherrif will issue you a $250 dollar fine + community service. in this economy they do not care, they have to meet the daily qouta

  • Big Ed

    Once again, the true inner workings have been exposed, glad we have a justice system in America.

    (Chris Sutton Forces Official To Resign In Gold Line Eminent Domain Case) click here.

    Also of interest is an SGV Tribune article dated 12/20 (Gold Line construction authority to weigh eminent domain for Monrovia land) that can be viewed by clicking here.

    The Gold Line and the City of Monrovia will have a lot to answer for today once this decision gets to the press.

  • Big Ed

    2011 has brought a lot of changes to SGV, this year.

    First the Gold Line crooks in Monrovia get legally decked, and now the CRA, too?

    Have we died and gone to heaven?

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