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Two Reports Conclude Metra’s Pagano Acted Alone

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Phil Pagano (AP Photo)

Phil Pagano (AP Photo)

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CHICAGO (WBBM) – Two newly-completed reports to Metra’s board of directors concluded that the commuter rail agency’s late executive director was secretive, managed in an inconsistent style, used his authority to circumvent controls and benefit himself and chosen subordinates — but was an autocratic lone wolf.

An audit by the accounting firm of Blackman-Kallick, ordered by the Metra board after Philip Pagano committed suicide in May, and the first annual report of Metra’s interim inspector general both reached conclusions that there was no widespread corruption at Metra outside of Pagano’s office.

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“The secretive Pagano documented very little and released information only when he had no other choice,” wrote Arnette Heintze, of the firm Hillard-Heintze, which the Metra board hired in the wake of Pagano’s death.

Heintze said he found that Pagano’s autocratic style “undermined” the Metra organization in “pervasive and destructive ways,” and found that interpretations of vaguely-defined policies varied by manager and department.

“The harmful impact of Pagano’s legacy lingers — resulting in an atmosphere of deep mistrust and disillusionment among many employees and a corrosive lack of transparency that is only just beginning to life,” Heintze wrote in his report.

The Blackman-Kallick audit concurred.

“The former executive director used his authority to circumvent controls to approve certain transactions which benefited himself and other employees,” the audit found, saying that there was no comprehensive fraud risk assessment pr management controls put in place so long as Pagano was in charge.

The audit found instances of overtime theft, pay increases made without justification and instances in which Pagano filled high-level jobs without posting the positions.

“I see an organization that’s done well in a number of dimensions, but I also see an organization that, in many ways, had the imprint of the former executive director and this represents, I think, a compelling diagnostic,” said board member James Dodge.

“He had either manipulated the information, didn’t give it or suppressed it,” said board member Carol van Overmeiren. “Any of the three would have been a horrid thing to happen before this board.”

Heintze indicated that his office forwarded information on its findings to federal authorities.

Metra is moving to set up a permanent inspector general’s office, which will report under a new state law to the state of Illinois’ executive inspector general. Hillard-Heintze, whose other principal is former Chicago Police Supt. Terry Hillard, is serving on an interim basis and is helping set up policies and procedures for the office.

New Executive Director Alex Clifford, who was hired Feb. 1, said he intends to make changes in Metra’s executive culture.

“The board has sent a strong message of accountability, responsibility and ethics to our organization,” he said. “I intend to expand on these items and push these reforms and others down through the organization.”

Metra has posted both reports on its website.

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