More excesses under former Metra CEO detailed

Curbing the Metra CEO's authority and recouping pension funds expended through abuses of power by former Executive Director Phil Pagano are among the redress options Regional Transportation Authority directors may seek in the near future.

RTA auditors gave details of misuse of $375,000 in funds at Metra during Pagano's tenure Thursday. The agency chief committed suicide May 7 in the wake of a misconduct investigation.

Metra subsequently announced Pagano had received at least $475,000 in unauthorized vacation payouts and forged the Metra chairman's signature on several documents related to the extra pay.

Focusing on 2008 when the $375,000 was spent, RTA auditor Joe Evans of McGladrey & Pullen stated seven senior executives including Pagano received generous perks unknown to the board that also enriched the pensions of four who are retired now.

The recipients should have known better, he said. While not illegal, "these transactions - although the executive director approved them - meet the criteria of abuse," Evans said. "They involved senior officials, they deviated from standard policy and they involve substantive amounts."

This led Director William Coulson of Glenview to ask "are there legal remedies to get the money back?" RTA Executive Director Steve Schlickman later said the agency would look into recovering any misspent money. The RTA has authority over Metra, Pace and the CTA.

The audit noted in 2008 Pagano received $111,000 for unused vacation time that year and for 2009, against Metra policy. It also found Pagano approved agreements giving former Deputy Executive Director Rick Tidwell and former labor relations chief Mike Nielsen $89,000 and $42,000 respectively - comprised of unused vacation and sick days payouts - for staying past their retirement dates.

In addition, Pagano, Tidwell and four other employees received a combined $133,000 for retroactive vacation pay they were supposedly shorted. The six were given five weeks of vacation in 1993 although the maximum was four. The maximum was raised to five weeks in 1997 and in 2008 it was rationalized that the six employees should have received six weeks of vacation and had been shortchanged.

"It seems odd," Evans said. "It doesn't explain itself."

Evans' conclusions were based on reviewing the RTA pension plan that Metra employees received. Pensions are calculated using the top salary years, meaning that unmerited perks would be included, he said.

Under the RTA Act, Pagano had strong executive powers to hire, fire and set compensation. That authority "appears to have been interpreted by the executive director to approve his own salaries issues and others," Director Jan Carlson of Elburn said, adding that the statute should be revisited by the Illinois legislature.

The audit findings came as RTA officials announced a $17 billion capital funding shortfall for rail cars, buses, stations and infrastructure. They also authorized borrowing $140 million to pay expenses in light of being owed about $300 million by the state.