Under the 2021 Bipartisan Infrastructure Law (BIL), the US federal government plans to allocate upwards of $550 billion to giving America’s infrastructure a much-needed facelift. About one-fifth of these funds have been pledged for public transportation improvements. Few agencies stand to receive more money than Amtrak, which has heralded its $66 billion cash infusion as ushering in “a new era of rail.” The BIL promises to provide sufficient capital to guarantee faster and more reliable rail service in the nation’s congested Northeast Corridor. Amtrak’s track record of project mismanagement, however, raises serious questions as to whether it can execute its vision. Poor financial planning has undoubtedly contributed to Amtrak’s inability to provide service on par with its Asian and Western European counterparts. Yet there is another factor that has that has been overlooked in discussions about Amtrak’s middling quality. In recent years, the agency has been rocked by multiple bribery scandals that have inflated costs and delayed projects. For example, this past March, federal prosecutors charged a contractor with bribing an Amtrak employee to inflate the costs of repairs to Philadelphia’s 30th Street Station—a project whose costs nearly doubled before its completion. A similar corruption scheme resulted in the conviction of a Delaware-based contractor in 2021. More generally, a 2023 report from Amtrak’s internal watchdog, the Office of Inspector General (OIG), estimated that nearly 10% of all infrastructure spending by the railroad could be lost to corruption.

Given the huge infusion of federal grant money under the BIL, it is especially important that the US government gets serious right now about rooting out what appears to be an alarming culture of corruption at Amtrak:

• First, Amtrak needs to be given additional resources to combat corruption. The OIG is woefully underfunded: Despite the dramatic expansion of funding planned for the railroad, the OIG’s $30 million budget request for FY2024 represented an increase of just 10% from the previous year. Doubling funding for OIG would go a long way toward safeguarding taxpayer money by deterring corruption. Hiring dozens of additional OIG auditors would allow for more careful analysis of projects funded by the BIL. Increasing compensation for OIG auditors in an effort to recruit individuals with extensive anticorruption experience would bolster audit quality at OIG. OIG’s enhanced efficacy would pay for itself––and then some––given that its budget represents a small fraction of the total amount of money that may be lost to corruption. A significant increase in funding to OIG would allow the railroad’s watchdog to fund essential IT upgrades to streamline project auditing and prevent graft.
• Second, Congress ought to exercise greater oversight of federal grant money by capping costs for individual projects covered by the BIL. Granting Amtrak autonomy to determine the budget for federally-supported capital improvement projects has proven unworkable. Capping the amount of money that can be spent on individual projects would deter Amtrak officials from taking bribes of the sort that have inflated project costs in the past. Although there may be some benefits to allowing flexible administration of the funds, Amtrak has shown that when it is given wide discretion to disperse federal funds, procurement employees often act on self-interest. It may be too late to meaningfully amend the BIL, but Congress should consider revisiting its block grant system in future legislation that supports Amtrak given the immense corruption present at the railroad. Specifying more stringent price limits for individual projects would be a valuable safeguard on the proliferation of graft.
• Third, companies that have been convicted of bribery or related offenses should be debarred from contracting with Amtrak for a period of time. Many of Amtrak’s procurement deals are simply too expensive and too consequential to be made with parties that have run afoul of anticorruption laws in the recent past. One case study is instructive. Amtrak continues to await fulfillment of a $2 billion order of 28 new trains that will replace the aging rolling stock on the railroad’s flagship Acela line. Delivery was originally slated for 2021, but the project has faced delay upon delay, costing Amtrak over $140 million. The new trains are now due in service by the end of this year. The contractor responsible for the holdup is Alstom, S.A., a French manufacturer that pleaded guilty to multiple violations of the Foreign Corrupt Practices Act (FCPA) in 2014. The conviction came just two years before Amtrak signed the deal with the company. To be clear, there is no evidence or allegation that the delays on the Amtrak project are due to corruption rather than mismanagement. But Alstom has proven itself to be an untrustworthy partner, and Amtrak would have been better off refraining from entering into a lucrative contract with the firm so soon after its admission of corrupt practices. Debarment need not be categorical or permanent. But as Amtrak navigates billions of dollars of procurement contracts, it should take pains to avoid making deals with entities manifesting a clear and recent track record of bribery.