The Trump administration’s decision to cancel a $929-million grant to California’s troubled high-speed rail project and claw back $2.5 billion in funds already spent has thrust the federal government into uncharted legal territory and poses an existential threat to the state’s largest investment ever.
Never before, experts say, has the federal government attempted to take back such a large sum of money from California, particularly after it was spent under federal supervision.
“I have never seen anything this large,” said Ron Flavin, a San Francisco consultant who advises state agencies and local governments on grants. “I have never seen anything where they said we are going to cancel a grant because of issues in the administrative or bureaucratic process.”
The Federal Railroad Administration this week sent a letter to state officials asserting that the project is out of compliance with major provisions of the grant agreement’s schedule, scope and payment terms.
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