The California High Speed Rail Authority was just about to finalize a $9 million dollar public relations contract with Mercury Public Affairs, an agency with close ties to the Schwarzenegger administration. (Schwarzenegger’s former top political strategist as well as his 2006 campaign manager are partners at the agency.) In addition, two out of three members of a staff panel arranged to award the contract have ties to Mercury.

Local media reported the story and the contract awarding process will now be opened up to include a five person selection committee. Mercury Public Affairs partner Adam Mendelsohn denied that there was any conflict of interest. “We have full confidence that the extensive campaign plan that we developed was superior to any other plans put before the committee,” he told the LA Times.