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The Metra mess continues

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Illinois

* Ugh…

Metra officials repeatedly misled the public when they insisted that an unusually large severance package for former CEO Alex Clifford saved taxpayers millions of dollars in potential litigation costs, a bruising report from the Regional Transportation Authority suggests.

The transit agency offered Clifford a $718,000 departure deal in June after he threatened to file a whistle-blower lawsuit alleging political back-scratching and questionable contracts at the nation’s second-largest commuter service. Metra attorneys and board members have defended the settlement for weeks, saying the move thwarted a costly legal battle.

A preliminary RTA audit, however, found that Metra has an insurance policy that would have covered litigation costs if Clifford actually had sued, according to documents obtained by the Tribune. The agency’s deductible is $150,000 — a fraction of the cost of Clifford’s severance package.

* However…

Another Metra source says that it wasn’t nearly that simple, given that Mr. Clifford was threatening a whistleblower action that might have been difficult to cover insurance wise.

* But…

The acting chairman of the Metra board says he’s going to take a look to see if it’s legally and financially possible to undo the agency’s $718,000 “departure settlement” with ex-CEO and Executive Director Alex Clifford and instead shift the costs of his severance settlement to an insurance policy.

Responding to a storm of controversy, Jack Partelow told me he will spend much of the day talking to attorneys and others in an effort to determine if the agency can backtrack on the severance deal.

posted by Rich Miller
Wednesday, Aug 21, 13 @ 11:45 am

Comments

The fact that you made a bad deal isn’t grounds for reversing a pre-litigation settlement — it’s just like any other contract.

Comment by Keyrock Wednesday, Aug 21, 13 @ 11:51 am
If I was the insurance company, I’d be waving the signed agreement in their face. If the insurance company does settle, it’ll be for pennies on the dollar, with Metra still bearing the brunt of the deal.

Comment by Six Degrees of Separation Wednesday, Aug 21, 13 @ 11:51 am
This pretty much confirms the large severance was given for political/PR reasons, not fiduciary reasons.

Time for FBI and U.S. Attorney to take the case, if they aren’t too busy prosecuting LaShawn Ford and Derek Smith.

Comment by Carl Nyberg Wednesday, Aug 21, 13 @ 11:57 am
business as usual…..

Taxpayer gets it in the shorts and the players continue to milk the system for personal benefit.

Comment by plutocrat03 Wednesday, Aug 21, 13 @ 12:06 pm
Are they trying to undo the payment completely or just shift who is responsible for making the payment?

Comment by Demoralized Wednesday, Aug 21, 13 @ 12:10 pm
This didn’t seem like much of a story at first.

It came off as a fairly minor “scandal” occurring at a comparably small public agency in relation to, say, DHS. Plus, the agency was supposedly cleaned up after the recent, untimely passing of Mr. Pagano in 2010.

Boy, was that wrong.

Imagine if we took a closer look at so many of the other agencies and behaviors we typically dismiss as part and parcel of Illinois politics?

Comment by Keep Calm and Carry On Wednesday, Aug 21, 13 @ 12:12 pm
btw, when does Speaker Madigan’s requested “investigation” of his actions in this matter begin? Any time soon?

Comment by Keep Calm and Carry On Wednesday, Aug 21, 13 @ 12:16 pm
Maybe the board (whose members all but one signed off on the deal, right?) was just stupid? Stupid boards of all sorts abound in Illinois, the land of govt boards for this and that. I’m all for sending in the feds to investigate the board members (be good for them) but a board conspiracy to cover up political misdeeds seems a bit much.

Comment by Cassandra Wednesday, Aug 21, 13 @ 12:20 pm
County Officials that are responsible for the appointments of the Metra Board are all up for election next year. The next level of reporting should examine the relationships between Metra Board members and their appointing pals.

Comment by overcooked Wednesday, Aug 21, 13 @ 12:23 pm
This guy really got them over a barrel—the board thought were protecting themselves by offering a large pay-off/severence, the Press got wind of the scheme, 5 board members are gone, and it seems to be the story of the Summer.

Comment by Belle Wednesday, Aug 21, 13 @ 12:23 pm
I am hesitant to believe anything that comes out of the RTA in regards to this mess.

To begin with, the Speaker’s son-in-law is a top exec at the agency and the Metra mess involves the Speaker. Secondly, the RTA was thoroughly taken to the wood shed after the Pagano mess, so they may be trying to over compensate this time around. Third, the Chairman of the Board has publicly said he wants more power and is using this episode to get it at the same time others are saying we should eliminate his agency.

Comment by Just Me Wednesday, Aug 21, 13 @ 12:43 pm
==he will spend much of the day talking to attorneys==

Well, there goes any savings we might have hoped for.

Comment by Anon. Wednesday, Aug 21, 13 @ 1:08 pm
$718,000 and 5 Board members who approved the contract are off the Board. When does the ‘I can’t help what they did. I am here to get things operational again.’ statement come out.

Comment by zatoichi Wednesday, Aug 21, 13 @ 2:04 pm
When does the ‘I can’t help what they did. I am here to get things operational again.’ statement come out.
Just recycle the post-Pagano statement, I guess.

Comment by Six Degrees of Separation Wednesday, Aug 21, 13 @ 5:55 pm
Well, there goes any savings we might have hoped for.

ROFL

Comment by Six Degrees of Separation Wednesday, Aug 21, 13 @ 5:56 pm
I would immediately see if I could initiate civil litigation for incompetent legal representation against the Metra attorneys who failed to adequately notify the Metra Board members as to the existence and limitations of any existing Metra insurance policies for just such an event. These guys on the Metra Board can’t check out every single thing that their Chairman or that their Metra attorney told them or failed to tell them. Metra has to be run like a large business which it is. The CEO of a large corporation has to rely on the totality and integrity of what his corporate legal counsel tells him or else the corporation could not function on a day-to-day basis. Otherwise, “gridlock” would take place (kind of like we have in Congress). These Metra Board members are decent individuals that took their appointments to Metra not for the small token amount of money that they get for going to their meetings but rather to give back to their community. And—what did it get them so far? Nothing but grief. Sue the “allegedly” inept and incompetent Metra legal attorneys for what they have cost Illinois taxpayers so far. Have the FBI get involved in it to see if there is far more to the story than we have been told so far. My guess is that this case may turn out exposing other larger and more extensive abuses of political power. The FBI may have stumbled on a trail of breadcrumbs with this incident. My guess is that there are probably more than a few Cook County politicians wishing that this Metra thing was all over with. I am not about to “tar & feather” those remaining decent Metra board members that chose not to abandon the ship as it hit the iceberg and started taking on water. Personally, I say “Thank you, guys.” We appreciate those of you who chose not to turn tail and run. You can help the citizens of Illinois to “fix it” so it never happens again.

Comment by A Casual Observer Wednesday, Aug 21, 13 @ 7:41 pm