A conceptual rendering of the California high-speed rail project. Photo courtesy California High-Speed Rail Authority
Feb. 19 (UPI) -- The U.S. Department of Transportation said Monday it will cancel $928 million in federal grant funds previously allocated to the California high-speed rail project as the state failed to live up to its agreement.
The transportation department said it will also be "actively exploring every legal option" to seek the return of an additional $2.5 billion it had previously granted the state for the project it now described as "defunct."
In a three-page letter to Brian Kelly of the California High-Speed Rail Authority, Ronald Batory, chief of the grant-dispersing Federal Railroad Administration, said the CHSRA had "materially failed to comply with the terms of the Agreement and has failed to make reasonable progress on the Project."
The move by the Trump administration is just the next round in a long battle with the largely Democratic state over immigration and other issues.
On Monday California filed a 16-state lawsuit against the president's office to block it from declaring a national emergency at the U.S. southern border in order to siphon funds from states to build physical barriers along the U.S.-Mexico boundary.
The letter Tuesday said the CHSRA had failed to meet required state expenditures by a $100 million by the end of last year and that the project will not meet its 2022 completion date as set out in the grant agreement.
Batory also pointed to California Gov. Gavin Newsom's State of the State address last week where he presented a proposal to shorten a large-scale rail project to connect Los Angeles with Anaheim, which the high-speed rail would be a part of, as reason to revoke the funds, calling it "a significant retreat from the State's initial vision and commitment."
He said it "frustrates the purpose for which Federal funding was awarded."
Newsom called the move to withhold the money by the Trump administration retaliation for the state having filed the lawsuit the day before.
"It's no coincidence that the administration's threat comes 24 hours after California led 16 states in challenging the president's farcical 'national emergency,'" Newsom said in a statement.
Newsom then pointed to a tweet by the president in which he connected funding for the bullet train system with the lawsuit as proof that the revoking of funds was politically motivated.
In the tweet, Trump said he predicted that the lawsuit would have been filed by California, "the state that has wasted billions of dollars on their out of control Fast Train, with no hope of completion."
"This is clear political retribution by President Trump," Newsom said "and we won't sit idly by. This is California's money, and we are going to fight for it."