Metra starts to clean house

Metra officials hired a firm led by a former Chicago police superintendent to act as interim inspector general and advise them on finding a permanent watchdog Wednesday.

The agency is trying to figure out what went wrong after former Executive Director Phil Pagano received at least $475,000 in unauthorized vacation advances. Pagano committed suicide by walking in front of a Metra train May 7.

Chicago-based Hillard Heintze will be paid $358 an hour to investigate complaints of criminal activity and produce a blueprint for an inspector general's office, which Metra does not have. Terry Hillard is a former Chicago police superintendent and Arnette Heintze a former Secret Service special agent in charge for Chicago.

Hillard and Heintze has assisted Metra previously with security issues but did not work with Pagano. The firm focuses on security issues and investigations.

"They're poised to step up to the plate to meet our needs and ensure the public we take these matters of fraud seriously," Metra Chairman Carole Doris said.

Metra chief internal auditor Eric Fernandez also gave board members a recap of previous audits at the agency, which included Federal Transit Administration reviews.

Questioned why Pagano's illegal activities never cropped up in the audits, Doris said "it's important to recognize there was a process in place. The person at the top of the organization bypassed policies and procedures."

Metra delayed hiring an independent auditor to go through the books. Instead officials are expected to take action at a June meeting on an expanded role for a consultant to look at the agency's weaknesses, its financial controls and possibly do a forensic audit.

Directors also asked for a full accounting of the salaries and benefits of its top executives.

Part of the problem involving Pagano's unapproved vacation pay stemmed from the fact he had broad executive powers including hiring and firing staff.

Pagano received a $269,000 salary, plus two retirement plans and $1 million in a combined executive incentive plan and life insurance program. He owes Metra about $127,000, which he borrowed out of the $1 million.

Board Director Caryl Van Overmeiren also asked for an accounting of credit card policies and perks such as cell phones, computers and cars.

"I have served on boards where this stuff gets extremely expensive," she said.

Acting Executive Director Bill Tupper said he'd met with about 80 percent of staff to squelch rumors and offer reassurances. He told them to "stay focused and keep running the trains."

"The worst thing would be if an employee caused another employee or customer to be hurt because they're distracted with all the turmoil at Metra," Tupper said.

A confidential inspector general hotline for people to call about suspected improprieties has been established at (877) 482-4962 plus an e-mail at MetraIG@hillardheintze.com.

Meanwhile, after keeping silent on the issue, the Regional Transportation Authority Wednesday issued a statement that it was auditing Metra and had found several irregularities regarding senior staff pay in 2008.

The U.S. Department of Transportation's inspector general, U.S. attorney and Illinois attorney general are also looking into the scandal.