Southwest Light Rail whistleblower sues Met Council over alleged retaliation

The man who oversaw Southwest Light Rail Transit project controls and flagged potential illegal cost manipulation by the Metropolitan Council is now accusing his employer of retaliation, according to a lawsuit filed in federal court.

The plaintiff, Michael Janish, worked as an engineer on contract administration, project management and coordination in the public and private sectors for more than two decades and was the SWLRT project controls manager for seven years.

As part of his job with SWLRT, Janish was charged, in part, with ensuring the 14.5-mile Green Line extension complied with Federal Transit Administration requirements for a full funding grant — including a stipulation that the application for federal funding accurately reflects the timetable and cost of the project.

In his lawsuit, Janish claims he was transferred away from his role in SWLRT and suffered an effective demotion after he repeatedly raised concerns that the agency was artificially inflating costs on the project and was breaking its agreement with the federal government by doing so.

He alleges Met Council leadership — including SWLRT Project Director Jim Alexander, SWLRT Deputy Project Director Joan Hollick and Director of Construction Brian Runzel — “did not want to push for compliance” from the outset and went ahead with the federal grant application without establishing a full baseline schedule for the project.

The FTA ultimately awarded the Met Council $1 billion to help pay for the project which had an initial estimated cost of $2 billion, a price tag that has since ballooned to $2.75 billion.

Accusations of change order manipulation

Planning on the SWLRT began in 2015, and construction did not start until 2019.

For $140 million, the Met Council hired AECOM Technical Services to design the project and provide independent cost estimates for any change orders that came up during construction.

Each time the civil contractor, Lunda/C.S. McCrossan Joint Venture, submitted a request for change order proposal, Lunda-McCrossan and AECOM would formulate their own estimates for how much the change would cost. Janish alleged Lunda-McCrossan’s estimates consistently “dwarfed” AECOM’s figures.

“But rather than use the large deltas to negotiate fair and reasonable change orders, Met Council leaders conspired to keep the government’s money flowing by subverting its own project controls,” the lawsuit states.

The filing goes on to accuse the Met Council of going around established procedures to inflate change order costs and directing AECOM to bake automatic markups into its change order estimates.

Janish alleges he raised concerns about these practices to Hollick but was told “to pretend as if the manipulated cost estimate was the ‘only’ number.”

After the FTA approved the Met Council’s full funding grant agreement in September 2020, Janish reached out to federal officials to report his misgivings about Met Council’s alleged price manipulation.

By late April 2022, Janish states Met Council had approved 622 change orders totaling hundreds of millions of dollars. In a response to the lawsuit, Met Council’s defense attorneys acknowledged the change orders at that point had totaled approximately $225 million.

The lawsuit alleges Janish pointed out several instances where the contractor overbilled for the work completed, but rather than investigate his claims, the Met Council converted the change orders into a lump sum for approval. Met Council attorneys allege any of Janish’s objections “typically reflected a fundamental lack of understanding of the change order process.”

Janish claims he even notified the Met Council it could be entitled to $130 million in liquidated damages from the civil contractor for failing to reach critical milestones. Instead of assessing damages, Met Council leaders entered a settlement agreement to extend the completion deadline to 2025 and promised to pay another $40 to $210 million, the lawsuit states.

The Met Council denies its contract would have entitled it to any damages.

Whistleblowing and alleged retaliation

Janish says he corresponded with the federal government over the course of several months from September 2020 to May 2021, providing officials with documentation of suspected illicit activities and sitting down for interviews.

In July 2021, Minnesota State Sen. Scott Dibble, DFL-Minneapolis, and Rep. Frank Hornstein, DFL-Minneapolis, asked the State Legislative Auditor for an expedited review of the SWLRT. Janish noted that shortly after, Hollick began assigning him additional job duties, including reviewing SWLRT change orders and writing analyses about whether the changes fell within government guidelines.

Janish claims these change order reviews were outside of his job description, something the Met Council refutes.

When reviewing the change orders, Janish claims he saw two totals for each change order, one that assumed maximum allowable markups and another that had been “augmented and manipulated by arbitrary markups.” Janish allegedly consulted AECOM about the discrepancies and learned the lower number was AECOM’s actual cost estimate and the higher number was the result of “offline manipulation” by construction contractors.

In September 2021, Hollick sent Janish a memo concerning his job performance, and the next month she told him he was being investigated for failing to complete a change order by “approving it as fair and reasonable,” the filing states.

Twice in fall 2021, Hollick notified Janish he was being investigated for failing to complete change orders. In each case, Janish claimed he could not approve them because the change orders did not comport with federal requirements of being fair and reasonable.

During this time, the Office of the Legislative Auditor released a memo in response to the letter by Dibble and Hornstein that outlined a discrepancy between AECOM and Met Council on how change order price estimates should be prepared.

On Nov. 1, 2021, when Janish was notified of a second investigation for not completing a change order, he wrote to Hollick, Alexander and Met Council Regional Administrator Mary Bogie to again raise concerns about signing off on what he believed was illegal activity. The next day, Hollick allegedly told Janish to ignore any markups and “get the change orders to be fair and reasonable.”

The Met Council maintains in its response to the lawsuit that its change orders approval practice complies with the law.

In 2023, the Legislative Auditor released a report that determined the Met Council did not adequately enforce its contract by holding contractors “accountable for change order requirements.”

On Nov. 10, 2021, Janish was informed he was being temporarily reassigned and that he would no longer review change orders or report to Hollick. Janish alleges the Met Council told him the decision was made partly because he had flagged concerns about the SWLRT; the agency’s rebuttal denies any mention of SWLRT in the decision and claims the reassignment was because Janish “refused to perform his current job duties” and the Met Council wanted to find him a job he “would agree to perform.”

In December 2021, Alexander told Janish he would no longer be involved in any SWLRT project controls meetings, and he was soon taken off his role on SWLRT, and Met Council “reduced his job duties to menial tasks like archiving emails and data entry,” a move he calls a “material promotion.”

In early 2022, Met Council approached Janish about transferring to a non-managerial position performing site inspections on a bus depot that was under construction. Janish claims in his lawsuit that he would lose his union representation and would have to commute twice as far. He rejected the transfer.

In April 2022, Janish was approached about joining the Blue Line Extension team, and while he had expressed interest, he said he needed to consider the offer further. The same evening, he received an email with a “confirmation of transfer” attached. He lost access to all SWLRT-related materials the next day.

Met Council’s human resources director emailed Janish a day later informing him the transfer was final and that the job was “the same work on a different project under the direction of a different manager.”

But Janish contends his Blue Line Extension position is not the same at all. His position with SWLRT oversaw an entire department, but he didn’t supervise anyone in his new job until several months in. Met Council’s attorneys claim the difference is largely because the Blue Line Extension is still in its early stages and the project only had 10 team members total when Janish joined.

Janish claims Hollick and the Met Council violated state and federal law by retaliating against him and is asking for a jury to award him damages for an alleged loss of income and other harms, including emotional distress and loss of reputation.

Attorneys for Met Council claim Janish suffered no adverse action or loss of pay and deny the agency retaliated against him in any way.

“The Metropolitan Council believes the allegations are wholly without merit and will vigorously defend this lawsuit,” a spokesperson wrote in a statement.

The lawsuit was originally filed in Hennepin County, but the matter has since been moved to a federal jurisdiction.