Chicago Agency Overbilling U.S. Told to Change Mileage Claims (Bloomberg News)

October 22, 2012 — The Chicago Transit Authority (Aa3 / 16772PBD7) collected more federal aid than it should have after inflating mileage covered by its bus routes, the U.S. Transportation Department said. The Federal Transit Administration in April ordered the Chicago system to revise its 2011 tally of revenue-producing miles, which helps determine U.S. funding, and to change the way it counts mileage from now on, FTA Administrator Peter Rogoff said in a statement. Chicago’s public-transportation system is the third-largest in the U.S. by bus ridership. “FTA has no indication that the CTA used any of the formula funds for anything other than eligible purposes to provide needed transit services to the public,” Rogoff said. Cause of Action, a Washington-based research organization, in a report last week suggested the federal government was slow to investigate “Chicago-style fraud” at the authority because Transportation Department General Counsel Robert Rivkin held the same post at CTA from 2001 to 2004 and Valerie Jarrett, a senior adviser to President Barack Obama, was chairman of the agency’s board from 1995 to 2003. The Cause of Action report cited a 2007 Illinois state audit that said Chicago’s transit system may have received as much as $5 million a year in extra U.S. funding for as long as 30 years. After its investigation, the FTA said the amount was closer to $700,000 to $800,000 a year.

Link to article: http://www.bloomberg.com/news/2012-10-23/chicago-agency-overbilling-u-s-told-to-change-mileage-claims.html

Link to Cause of Action report: http://causeofaction.org/2012/10/19/unredacted-a-bus-tour-of-chicago-style-fraud/

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