Senator skeptical of $2.5 million deal for Metra consultants

A state senator is questioning a decision by Metra board directors to hire a law firm to advise them in the wake of a financial scandal.

Sen. Susan Garrett, a Lake Forest Democrat who led a recent Senate hearing on Metra, said a $2.5 million, five-year contract with attorneys Johnston Greene seems exorbitant and counterproductive in terms of efforts to increase transparency.

Metra directors hired Johnston Greene Aug. 13 to advise the board following the suicide of former Executive Director Phil Pagano. The longtime CEO killed himself amid an investigation into misuse of funds, that included unauthorized vacation payouts of $475,000.

"Because of the situation that occurred with the unfortunate abuse of power, there was a consensus it was necessary for the board to have their own legal counsel," Metra spokeswoman Judy Pardonnet said.

Metra has its own law department but Johnston Greene will advise directors on reforms and changes it is pursuing plus legal matters related to board members, Pardonnet said.

"An important part of our role is to provide an independent point of view," partner Andy Greene said. He added that costs "won't even come close" to the $2.5 million figure. Pardonnet noted the contract is for "up to" $2.5 million.

"Then why have that number in there?" asked Garrett. "It's an incredible amount of money to spend on legal counsel for a board of directors - it's unprecedented. They've hired at a high rate a law firm that will protect them - I don't see this as transparency."

Garrett also criticized the fact Johnston Greene hired auditors Blackman Kallick on behalf of Metra. Greene said the law firm contracted with the auditors at the direction of the board. The law firm will pay Blackman Kallick and be reimbursed by Metra. The auditors are reviewing Metra's financial practices, looking for flaws and recommending improvements.

"What we're doing and what they're doing go hand-in-hand as they evaluate risk and controls," Greene said.

Garrett asked, "who are they beholden to? This is unprecedented with any public agency for their legal counsel to pay an outside auditing firm."

Garrett also noted there was no mention the law firm would be handling the auditors when board directors approved the Blackman Kallick contract in June. She said she feared the arrangement could lead to audit findings being held back because of attorney-client privilege.

Greene said that wouldn't happen. "They do report to us but all reports have been public and discussed in public session," he said.

The board's former general counsel Michael Noland, who signed off on unauthorized requests for vacation payouts by Pagano, was demoted from his $175,000 position recently and made director of labor relations at a salary of $132,000.