Met Council engineer sues his employer, saying it illegally inflated cost of Southwest LRT

An engineer who worked on the troubled $2.9 billion Southwest light-rail line claims in a federal lawsuit he was demoted and his career sabotaged by the Metropolitan Council because he called out “unlawful activity” responsible for massive cost overruns.

Michael Janish, a University of Minnesota-trained civil engineer, worked as the project controls manager on the 14.5-mile line linking Minneapolis and Eden Prairie between 2015 and 2022. It was his job to prevent waste, fraud and abuse on the taxpayer-financed light rail line — the largest public works project in Minnesota history.

But when Janish reported “unlawful activity” to his supervisors, they opted to “line the pockets” of the construction company building the line instead of complying with the law, according to a 57-page lawsuit filed in U.S. District Court in Minneapolis last November.

The Metropolitan Council, the regional planning body building the project, said the allegations are “wholly without merit” and vowed to “vigorously” defend itself in court. It filed a 50-page response disputing many of Janish’s allegations.

The lawsuit is the latest blow to a project already $1 billion over budget and delayed by nearly a decade. The state’s watchdog, the Office of the Legislative Auditor, has already released four scathing reports in its multi-year probe of the project. A final missive on its finances is expected this spring.

Because the Federal Transit Administration (FTA) is paying nearly $1 billion to construct Southwest, the council must ensure federal laws and regulations are followed. Janish’s suit largely focuses on the way the Met Council reviewed and approved change orders, a routine part of transportation megaprojects like Southwest, which are rarely built as originally designed.

Unforeseen circumstances, such as rocky, watery soil in Minneapolis’ Kenilworth corridor where a tunnel is planned for the light-rail line, often require change orders to the original contract. That can lead to higher costs paid to the contractor and an extension of the project’s timeline.

The Green Line, which began light-rail service between Minneapolis and St. Paul in 2014, racked up some 1,800 change orders. As of Wednesday, some 1,118 change orders have been negotiated for the Southwest line. Janish also worked on the original Green Line from 2010 to 2014, and other construction projects for Metro Transit.

In the lawsuit, Janish alleges that top officials in the Southwest project office routinely ignored independent cost analyses for change orders performed by their consultant, AECOM Technical Services Inc. (ATS). “An independent cost estimate is critical to protect the government from overpaying for work,” the suit notes.

As construction progressed, council staff learned that cost estimates for changes to the work received from its general contractor, Lunda/C.S. McCrossan Joint Venture (LMJV), “routinely dwarfed” those provided by its independent consultant.

Instead of trying to negotiate a better deal by leveraging both estimates, “Met Council leaders conspired to keep the government’s money flowing by subverting its own project controls,” the suit claims. Janish alleges that he was ordered by his bosses to approve “unlawful” change orders, but he refused.

Janish also charges that construction staff was accessing ATS’s cost estimate work before it was completed. “My concern has been, and still remains, that the construction staff are influencing the development of cost estimates being made and removing the independence of the estimators,” Janish wrote in an April 8, 2020, email to Joan Hollick, Southwest’s deputy project director.

Hollick, who is named as a defendant in the suit in addition to the council, did not respond to a Star Tribune request for comment. For its part, LMJV has said that the project’s poor design led to an unprecedented level of changes. The firm, which was granted the $799 million contract to build Southwest in November 2018, declined to comment on the lawsuit, which it is not a party to.

Janish further contends Southwest project leaders pressured ATS to apply “additional, across-the-board upward adjustments for change orders” — arbitrary markups that violate federal law. ATS “soon disavowed the manipulated cost estimates as their own and proposed adding disclaimers to the estimates,” the suit says. ATS could not be reached for comment.

Council employees were told to never discuss the gap between ATS’ original cost estimates and new, manipulated figures, according to the suit. Janish claims he was told the higher cost estimate was the “only” number in play when negotiating the cost of a change order with the general contractor.

The scenario Janish outlines in his lawsuit is similar to findings by the Legislative Auditor in a report released last June. About 70% of the independent estimates prepared for change orders through the fall of 2022 were adjusted at the behest of the council, the report noted. Most of the change orders were marked 10% to 50% higher than the original estimate, according to the auditor’s findings.

The lawsuit highlights two change orders related to a crash wall required by BNSF Railway to separate freight and light-rail trains just west of Target Field, an addition the council often cites for the project’s ballooning cost. ATS said the wall would cost $23 million, but the “manipulated” cost was $35 million, the complaint alleges. However, the general contractor said the wall would cost about $100 million.

In the end, the cost of the mile-long wall was $93 million. In its legal response, the council says the markups from the original estimate were “allowable” because ATS “failed to consider a wide range of necessary factors impacting the cost of work.”

Janish maintains the crash wall change orders were the “tip of the iceberg.” In another instance, he alleges that the general contractor was being paid for work that hadn’t been done.

Janish says in the suit that he contacted the federal government about the Met Council violating federal law. The complaint mentions an investigation by the U.S. Department of Transportation’s Office of the Inspector General, which declined to comment. Met Council spokesperson Terri Dresen said the council has not been formally contacted by the Inspector General’s office “related to an investigation.”

Once he raised objections about the project, Janish alleges his supervisors tried to force him to quit because they didn’t want a “high-level, knowledgeable and steadfast whistleblower to remain in his position in the midst of government investigations.” The council retorts in its response that Janish worked on a relatively small number of change orders, and characterized his work as “incomplete and untimely.”

Ultimately, Janish was reassigned against his will to work on the Blue Line light-rail extension project, earning the same salary. Through his attorney, Janish declined to comment.

The lawsuit charges that the council violated the state’s whistleblower act, which prohibits employers from punishing employees for reporting workplace violations. Janish claims his First Amendment and free speech rights under the U.S. and Minnesota constitutions were violated, as well.

He has requested a jury trial and unspecifiedmonetary damages.