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updated: 4/3/2014 8:12 PM

FBI report details Pagano's affairs, 'lies'

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  • Phil Pagano

      Phil Pagano

 
 

Phil Pagano's lies caught him in a professional, financial and moral spiral that contributed to his downfall, one former girlfriend told the FBI.

"As the lies got bigger ... (Pagano) thought he could get away with everything," an FBI report quotes the girlfriend regarding the late Metra executive director who killed himself by stepping in front of a train May 7, 2010.

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Prior to his suicide, Pagano had been suspended for misuse of more than $475,000 in Metra funds, mainly unauthorized vacation pay. The 60-year-old was married with adult children at the time of his death.

The FBI report, released Wednesday on the Better Government Association's website, indicates that Pagano had multiple girlfriends, which could explain his need for extra cash. The FBI concluded that Pagano did not embezzle other Metra funds, steal federal funds or bribe officials to hide his misdeeds.

"He was always generous," another former girlfriend told FBI agents, adding that Pagano "had a rule" he would pay for everything when they were together but not for living expenses. The perks included meals, hotels and airplane tickets.

The FBI file also includes Pagano's statement at a Metra board directors meeting in executive session April 30, 2010, a week before his death.

"The mistake that was made was not for illegal purposes ... it was not drugs, alcohol, gambling, whatever. It's a personal reason," he said. "It was never my intent to put this agency through what it has been put through."

But Pagano also reminded directors of his history at the agency: "When the freight guys went on strike and Amtrak went on strike ... I didn't stay at a hotel. I stayed on the couch," he said.

Despite being caught forging the former chairman's signature on a document, he appeared to think his job was safe. "I'll sign a promissory note on the money I owe back," he said. "I never cheated this agency out of time."

"That was a sad meeting," Metra director and former Arlington Heights Mayor Arlene Mulder said Thursday, adding that despite his flaws Pagano knew the railroad industry inside and out.

Metra employees in the report recounted a dramatic fall from grace with Pagano weeping privately in the bathroom adjoining his office, his shock when the locks were changed -- calling it "overkill" -- and that after being dismissed from the April 30 meeting, "Pagano appeared angry and was rambling about how he 'knew things.'"

Although names were redacted from the FBI files, it appeared agents spoke to at least five women whom Pagano dated, including several he met on Internet dating sites.

The evidence provided by the women explains how Pagano, whose annual salary was $269,000, could have burned away so much in cash. Several girlfriends described how Pagano would purchase items for them or help them financially. He also told one he needed money to care for his father, who had Alzheimer's disease.

One girlfriend thought Pagano killed himself because he "carried a lot of guilt about their relationship and his deception ... (he) felt that he let everyone down at Metra and that he let his family down."

Another girlfriend described a tempestuous relationship where they broke up several times and she told him "he was lucky she was nice because she could have ruined his life by telling the Metra board ... about the affair." The woman denied blackmailing Pagano.

After Pagano's death, Metra board members admitted he had exercised free rein in a climate of limited checks and balances.

In addition to the vacation pay, the former Crystal Lake resident also owed Metra $127,000 after he took out more than $800,000 in pretax loans from an executive incentive program and a life insurance plan,

In 1990, Pagano started obtaining cash payouts for unused vacation time, which was contrary to Metra policy. His demands gradually became more aggressive, officials said in a 2010 investigation. In summer 2009, he forged Chairman Carole Doris' signature on vacation payout requests after an administrator questioned his actions.

Since then, the agency has experienced significant board and staff turnover with a new executive director appointed in February.

"We have turned the corner," Mulder said. "Our main goal is to regain that credibility of a first-class railroad operation that moves people."

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