As revelations about a San Diego County agency’s failed oversight of the toll road on State Route 125 continue to emerge, new information has come to light that former San Diego Mayor Kevin Faulconer may have had an insider’s view of the problems.
Faulconer, who is a candidate for the District 3 supervisor seat, worked as a consultant for the HNTB infrastructure design firm that supervised the work of ETAN Tolling Technology. The two companies were paid $12.7 million for their work on the problematic toll system. Public records show Faulconer received in excess of a $100,000 to represent HNTB.
Email messages and calendar entries from the San Diego Association of Governments, obtained through a Public Records Act request, indicate that Faulconer met frequently last year with then SANDAG CEO Hasan Ikhrata, and arranged dinners and meetings with HNTB and top SANDAG officials.
The former mayor’s access was documented before and after the public would learn of a series of costly mistakes by ETAN Tolling, described in detailed internal audits that found “consistently poor system performance.”
In addition, it was revealed this was a long running problem that SANDAG board members said they should have known about sooner than last October when they were first advised by staff about the toll system’s failures. Audit records show the agency knew about shortcomings as early as 2013.
Faulconer did not respond to repeated requests for comment about his consulting work with SANDAG on behalf of HNTB.
According to investigations by SANDAG’s Office of the Independent Performance Auditor, ETAN Tolling Technology was “headed for trouble since the very beginning.” An early internal report worried about the potential loss of $50 million in revenue and the potential for jeopardizing the bonds issued by SANDAG to buy the toll road.
The agency’s business practices are currently under investigation by the U.S. Department of Justice, although it’s not clear whether the probe is focusing on SANDAG’s well publicized troubles with the toll road, the section of state Route 125 that was privately owned before being acquired by SANDAG in 2011.
The toll road’s accounting system problems were also detailed in a lawsuit filed against SANDAG last November by former finance director Lauren Warrem, who said she was fired after raising questions about inaccuracies in the contractor’s data.
HNTB, Faulconer’s client, had nine different projects they were consulting on for SANDAG. The bugs in the toll system were just one.
The Kansas City-based company’s role was to oversee ETAN’s work in installing, training and testing the new tolling system. In 2022 HTNB said ETAN had made “good progress” in wrestling with the toll collection system. A year later, they were questioning the accuracy of ETAN’s reporting of revenue, which the agency and HNTB both relied on.
While it’s unclear if Faulconer was representing HTNB before 2023, publicly released documents show he was arranging meetings with SANDAG staff prior to 2023.
Given his access, the former mayor could have seen a staff report from early 2022 saying ETAN “can’t be relied on.” And the report describes how the agency’s auditors “attempted to gather evidence” but were told that information was not available because “SR 125 Fund and other SANDAG revenue sources is a SANDAG management decision.”
Faulconer’s work for HNTB is detailed in his Form 700, a statement of economic interests that he filed because he is running for public office.
His Dec. 7, 2023, Form 700 filing shows that his consultant company, FCG, provided “strategic consulting” to HNTB and paid him over $100,000. If he had a prior arrangement with HNTB before 2023, it wasn’t reportable, as he wasn’t yet a candidate for office. But information acquired under the public records act shows he was setting up a series of appointments with SANDAG management as early as December of 2022.
Eventually revelations about the bugs in the toll road stem would expose the $1.3 billion agency to a series of damning reports by its own auditors, encompassing a wide range of problems. These included over 48,000 driver accounts with wrong balances for toll charges, SANDAG losing a million dollars because ETAN didn’t turn a system on, and SANDAG management approving 44 change orders of more than $100,000 without getting its board’s approval.
Responses to a public records request show how Faulconer and his team met with Ikhrata and his staff several times during 2023, starting in January, the last time at the CEO’s goodbye party in December. During this period, according to the auditor’s report, “SANDAG executive management was aware of the (toll) system’s inability to produce reliable financial reports.”
Ikhrata would eventually resign weeks after the first audit report was released, after he had initially tried to downplay the problems, saying they were “not material”.
But that changed when Warrem began examining the toll road. She is a former SANDAG employee who left to become chief deputy treasurer for San Diego County, then rejoined the agency in June 2023 to oversee its accounting operations.
It didn’t take her long to discover the serious problems with the accuracy of customers’ balances and the toll accounting system. According to a lawsuit filed on Warrem’s behalf, her efforts to expose the problems were met with hostility. Soon after, she was cut “out of the loop” and then fired on Nov. 7. She is suing for retaliation and wrongful termination. Her case is set for next April.
The public records detail the close working relationship between the former mayor and now candidate for county supervisor and Ikhrata.
The records show a SANDAG employee scheduled a “strategy session” twice a month on Wednesdays at 10:30 a.m., involving Faulconer staffers, Ikhrata and Victoria Stackwick, his chief of staff. The meetings were scheduled to begin in January 2023.
Faulconer arranged a final goodbye for Ikhrata on Dec. 18 at Sadaf’s on 5th Avenue. It included a long list of invitees to “Please join in saying goodbye to Hasan after five years of amazing work in the San Diego Region!!”
