Nick Shirley Exposes Government Fraud

In California's Central Valley there is a stretch of concrete pillars that locals have started calling a modern-day Stonehenge (02:05). It rises out of farmland, connects to nothing, and cost taxpayers real money to build. That slab is what $15 billion and eighteen years of work on the California High-Speed Rail project have produced so far (00:05). The state promised in 2008 to link Los Angeles and San Francisco. It has not connected a single town (00:57). In the same stretch of time, China built more than 30,000 miles of high-speed rail and tied its whole country together (00:36).

Independent investigator Nick Shirley walks through the math with the flat affect of someone who has said it too many times to still be shocked. The original estimate for the California project was $33 billion. It rose to $126 billion, and now sits at $236 billion (01:14). That makes it, Shirley says, on track to be the third most expensive infrastructure project in world history, behind only the interstate highway system of the 1950s and the International Space Station (01:41). The difference, as he puts it, is that people will actually use the other two. Nobody will ever ride this train in their lifetime, a fact Governor Gavin Newsom himself admitted in a private 2016 video (02:31).

A third of the entire project's cost has gone to something called change order delays, which is what happens when a contractor is paid extra because the state changed the plan or didn't know where existing infrastructure was buried (03:01). Contractors owed money for days they cannot work have collected up to $170,000 a day, or roughly $5 million a month, per parcel (03:01). In February, the state settled one of these delay disputes for more than half a billion dollars (03:38). Later in the episode, cohost Chamath Palihapitiya traces that half-billion payout to its final destination: an Italian billionaire who owns the contracting entity, for work that was never performed (31:36).

"One third of the entire cost of California High-Speed Rail has gone to this part called change order delays." — Nick Shirley [03:01]

The absurdity compounds when Shirley runs the numbers a different way. At current ridership between San Francisco and Los Angeles, the state could subsidize free one-way flights on that route for the next 300 years using the new $236 billion estimate, and it would still be cheaper than finishing the train (04:41). Meanwhile, because California never bought the land along the rail's path up front, developers are now building new houses directly on the planned alignment (05:58). A city official tells Shirley on camera that once land like this is developed, it costs ten or eleven times what it would have as bare farmland (06:29), which means the state's own hesitation is inflating the very costs it says it cannot afford.

Shirley eventually corners State Senator Dave Cortese, who chairs the Senate Transportation Committee and recently voted to commit $1 billion a year for the next 20 years to the project (09:27). Cortese does not deny the delays or the cost overruns. He calls the project "the greatest economic development project in the country" and argues that federal and state government need to work together to "build dams, build bridges, build highways, build high-speed rail" (10:46). It is a vision stated with total confidence, delivered next to a field where no track has been laid.

A Law Named After One Man

The rail investigation is only half of what makes Shirley notable. The other half is that California passed a law seemingly written to stop him personally. Shirley's method is to show up, unannounced, at businesses and nonprofits that receive taxpayer money and ask whether they are actually doing what they are funded to do. After he filmed daycare centers in San Diego, the state passed AB 2624, a bill that assemblymembers reportedly nicknamed the "Stop Nick Shirley Act" (15:59). The law targets anyone filming what it calls immigration support service providers, defined broadly enough to cover nonprofits and healthcare facilities that serve immigrants using public funds (12:44). If one of those organizations sends Shirley a written demand, he cannot upload footage of it. Violating the order carries a minimum fine of $4,000 per instance, plus the organization's legal fees if it wins in court (14:47).

"I exposed California for all the fraud that they've enabled here inside the state." — Nick Shirley [12:44]

The nonprofit that co-sponsored the bill, CHIRLA, has received $80 million in government grants for immigrant advocacy work (14:04). And the person who authored the law, Assemblymember Mia Bonta, is married to California's Attorney General, the official whose job includes prosecuting the fraud the law makes harder to expose (16:53). Shirley is suing the state over what he and cohost David Sacks argue is a straightforward First Amendment violation (14:23). Sacks calls the entire situation the strongest evidence yet that Shirley's reporting is working: "the fact that they're creating laws to try to stop you from doing basic journalism means you're kicking fucking ass" (15:10).

The Beat Nobody Else Is Working

Shirley's path here was not a newsroom. He started making YouTube videos at 15, spent time on a church mission trip in Santiago, Chile, where he first heard migrants describe their route north, and began interviewing people at the U.S. southern border once he returned (17:03). For two and a half years he posted a video every week, mostly unnoticed, until one investigation into fraudulent daycare operators in Minnesota changed his reach entirely. Whistleblowers had tipped him off, and the video, once posted, drew 140 million views on X, formerly Twitter (25:40). Shirley says some operators used the resulting riots and protests as cover, timing unrest to distract law enforcement while they moved money and fled (22:31). One of the daycare operators, who had received $4 million in public funds, was caught trying to board a one-way flight to London and later pleaded guilty (23:19). Minnesota Governor Tim Walz, who had cited daycare programs as an achievement during his vice-presidential campaign, later dropped his re-election bid (22:57).

Shirley says no mainstream outlet has reached out to ask how he does the work; instead, some have written pieces investigating him. Chamath argues this is because Shirley represents a threat to journalists who became "captured and politicized" and picked a side, while Shirley never has (20:39). Sacks compares him directly to the investigative television model that used to exist: "This was the job of 60 Minutes and Frontline, and they forgot how to do their job" (21:24). Shirley says the fraud extends well beyond daycares and rail contracts. He points to SNAP benefit cards, the federal food assistance program, being used inside a strip club in Portland, Oregon, as one example of how loosely some social benefit programs have been monitored (28:04).

None of this, Shirley is careful to say, makes the work safe. He has been threatened by the people he films and has had close calls in Rio de Janeiro's favelas and in Cuba, where a two-star communist general questioned why he was there (27:20). Sacks tells him plainly, near the end of the conversation, that the fraud problem and the infrastructure problem are really the same problem wearing different clothes: complacency, weak oversight, and money moving toward whoever asks loudest, whether that is a contractor with a half-billion-dollar settlement or a daycare operator with a fake enrollment list. Shirley's closing line is the simplest summary of his own mission.

"If we can stop fraud, we can literally save the country." — Nick Shirley [31:00]

Whether one train ever reaches Bakersfield or not, the episode's real subject is what happens when nobody is watching the money. Shirley's bet, filmed door to door, is that watching it closely enough, and loudly enough, still changes what happens next.