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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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