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Article updated: 8/21/2013 6:30 PM

Hire back Clifford at Metra, attorney says

By Marni Pyke

If Metra wants to end controversy over a lavish up-to-$718,000 separation agreement with former CEO Alex Clifford, they should just hire him back, the executive's lawyer said.

"If Metra is serious about wanting to reduce the economic obligations they undertook ... they could rehire Mr. Clifford as CEO and as part of the process we could discuss modifying the terms of the separation agreement (for a new contract)," attorney Michael Shakman said, adding that Clifford would like to return to his former job.

The news comes as Metra leaders said they'll consider rescinding the financial settlement with Clifford, although it could mean a legal fight.

An RTA draft audit released Wednesday showed Metra's insurance company could have paid for litigation even though the agency's former chairman Brad O'Halloran claimed the deal with Clifford was a "business decision" to avoid a lawsuit by Clifford.

RTA officials pounced on Metra at a meeting, charging that closed-door decisions intended to avoid embarrassment misled the public and resulted in costly missteps.

"Metra's penchant for secrecy undermines its position," RTA Director and former federal prosecutor Bill Coulson said in a separate analysis.

Metra has been in turmoil since Clifford left in June after accusing O'Halloran and Director Larry Huggins of driving him out for refusing to go along with political patronage pressure.

Metra Acting Chairman Jack Partelow of Naperville said Metra attorneys are exploring the consequences of canceling the contract with Clifford.

And the RTA in a resolution urged Metra to examine its insurance policy "for potential coverage in a variety of situations" and report back in 30 days.

Not so fast, Shakman said.

Metra has no basis for canceling the agreement given it was made by a government body that had the proper authority to enter into such an agreement, Shakman said. He added that if Metra stopped payments, it would have to go to arbitration, and if the agency lost it would mean paying more legal fees.

Moreover, Shakman thinks the agency's insurance policy would not cover Metra over a breach of contract dispute.

Meanwhile on Wednesday, RTA auditor Michael Zumach testified the severance deal was "not financially prudent," and the RTA board concurred that the Metra board didn't have enough information when they voted on the agreement.

"This was a power struggle between two strong-willed individuals (O'Halloran and Clifford) over who was going to run the agency," Zumach said.

Metra's official line has been that a lawsuit by Clifford could have cost up to $3 million. The RTA audit pointed out that Metra's liability insurance has a $150,000 deductible and $10 million cap.

That was news to rank and file Metra board directors. "Several board members were surprised about the insurance," Zumach said.

RTA officials singled out the former chairman several times, noting that O'Halloran incorrectly informed RTA Director James Buchanan during a July 17 hearing that Metra was "self-insured."

Coulson also questioned O'Halloran's impartiality, noting he'd pushed to place Wintrust Bank on a list of firms Metra dealt with although he sat on the board of a Wintrust subsidiary, according to Clifford. Clifford also accused Huggins of conflict of interest.

O'Halloran could not be reached for comment Wednesday but he and Huggins have denied any misconduct and blamed Clifford for operational problems at Metra.

Metra's staff attorneys and risk management experts who would have known about the insurance were kept out of settlement discussions, Zumach said.

Partelow confirmed Wednesday that the Metra board fired its consulting attorneys, Johnston & Greene, and another firm that advised it on the settlement.

Two state inspectors general are investigating Clifford's claims that Huggins and O'Halloran were angered he rejected requests from Illinois House Speaker Michael Madigan along with other lawmakers over promotions and hiring.

Other findings in the audit bear out concerns from Partelow and other board members that they were shut out of certain high-level decisions as the scandal grew. Among the conclusions:

The evaluation process for the settlement "was not sufficiently robust" and lacked detailed analysis and full participation by all board members.

There are insufficient documents to back decisions, such as copies of a so-called investigation by former Assistant U.S. Attorney Rodger Heaton into Clifford's claims or a mediator's recommendations involving settlement negotiations.

The deal offered Clifford, which included basic severance for his $252,000-a-year job plus extra money if he couldn't find a job in a specified time, wasn't financially prudent.

In an April letter from Shakman, obtained by the Daily Herald Wednesday, he warned Metra it could not retaliate against Clifford for refusing to participate in activities that broke the law under the Whistleblower Act. Political pressure over jobs clearly contravenes state ethics law, Shakman said.

"Clifford will not, however, accede to unlawful conduct in running Metra nor passively accept a review of his performance that is biased and retaliatory," Shakman wrote.

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