image from Pacific Imperial Railroad

Ties between Metropolitan Transit System and the operator of the binational railroad continue to come undone.

The latest derailment for Pacific Imperial Railroad, the company that leases the 70-mile stretch of track from Campo to Plaster City, is news that the California Franchise Tax Board has forfeited any rights to conduct business in California.

According to the Secretary of State's website, the company failed to pay taxes and file paperwork for one or more years. As reported by the Reader, Pacific Imperial Railroad owed over $240,000 in back taxes, according to records obtained from the State of Delaware, where the company was registered.

Allegations of fraud and other wrongdoing against Pacific Imperial's top executives and shareholders surfaced early last year after former employees claimed they were fired after discovering millions of dollars in investments — some of which were personal investments — were missing from company coffers. Controversy remained throughout the year. In September 2014, the Reader discovered the railroad company had been fined $1.6 million for smuggling 202 pounds of marijuana into the United States.

Yet, top executives at Metropolitan Transit System, the owner of the line, and high-ranking boardmembers — including county supervisor Ron Roberts — stood with Pacific Imperial Railroad and the 99-year lease it entered into with the transit agency.

According to emails obtained by the Reader, Roberts and MTS CEO Paul Jablonski went as far as setting up mediation meetings with Mexican officials and businessmen in an effort to link Pacific Imperial with the operator on the Mexican side of the line. Weeks later, Baja Rail entered into a "haulage agreement" with a different railroad company.

Then, earlier this month, Pacific Imperial failed to pay the $500,000 lease payment to Metropolitan Transit agency. The agency informed the company it had ten business days to pay the fine or risk losing the lease.

Representatives from Metropolitan Transit System declined to respond when asked if the contract has since been terminated.

For more information, see the following stories:

April 21, 2014

July 16, 2014

November 1, 2014

November 11, 2014