Story Summary

Resignations amid Metra patronage allegations

Former Metra chief Alex Clifford claims he was forced out of his position because he resisted political pressure from House Speaker Mike Madigan and others to hand out patronage jobs or give raises to politically-connected Metra employees.

Clifford got a $718,000 buyout last month after he threatened to sue over his firing.

Since Clifford’s buyout, Metra Chairman Brad O’Halloran and three board members have resigned.

Metra’s vice chairman Jack Partelow of Will County will assume O’Halloran’s duties.

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A 30-year Metra veteran and former engineer was named executive director of the commuter rail agency Friday.

Don Orseno, 59, was chosen from a field of four candidates interviewed today by the transit agency’s 11-member board.  The vote was unanimous.

He has been Metra’s interim executive director since August.

After thirty years, Orseno knows Metra’s operations inside-out and he’s the first to admit that that institutional knowledge will come in handy.

Former CEO Alex Clifford left amid controversy and with a huge severance package last spring.

More recently, riders we’re left facing delays, some even stranded in the cold earlier this month- by mechanical problems and poor decision-making.

“The last three years have been pretty tough on us. There’s no question about that. We’ve had a couple of things that were huge for this organization.” Orseno said “But one thing I’m very proud of is that even though we’ve had some issues at the top, our employees never faltered a bit.”

Orseno’s already talking about restoring rider confidence– and when we say he’s done it all, thats no exaggeration, he’s been in the railroad industry for 40 years.

He started out punching tickets and running trains.

A former alderman who made his reputation campaigning for ethics reform and openness in city budgeting is Mayor Emanuel’s pick to replace outgoing Metra board member Larry Huggins.

Marty Oberman once told Alderman Bernie Stone to shut up during a heated debate at the City Council.  That’s the kind of outspokenness Emanuel wants from a Metra board member.

If the City Council approves the former 43rd Ward Alderman, he’ll start in October.

Oberman says winning back the public trust is the first order of business.

The 68-year-old attorney will not take the $15,000 stipend for the position. Oberman is currently a civil litigation attorney.

 

A former Chicago Alderman is expected to become the newest member of the Metra board.

Mayor Emanuel is expected to appoint Martin Oberman to replace Larry Huggins, who resigned last month.

Oberman represented Chicago’s 43rd Ward.

He has a track record as an independent, and a man who campaigned for openness in city budgeting.

Oberman is currently a civil litigation attorney.

Metra has a new boss but only a temporary one.

The Metra board met Tuesday morning and named Don Orseno interim executive director. Orseno had been running Metra’s Engineering, Transportation and Mechanical Divisions. He takes the place of Alex Cifford who was fired as CEO in June.

The board currently doesn’t have enough members to appoint a permanent chief.

Hours after an embattled Metra board named an interim executive director, the board’s three Cook County representatives were asked to resign by the officials who appointed them.

 

The commissioners say the resignations could help restore the public’s faith in Metra

Metra’s acting chairman has called a special meeting for Tuesday, to consider naming an interim executive director for the troubled agency.

The board released its agenda Friday.

The remaining 6 members could decide on putting a single administrator in charge of day-to-day operations on a temporary basis.

Two deputy executive directors have been running the agency since board members ousted CEO Alex Clifford in June.

But, Metra’s acting chairman wants a new set-up.

In a sharply-worded report  the Regional Transit Authority auditors blasted Metra for the way it handled the controversial dismissal of former CEO Alex Clifford.

Metra board members paid Clifford an $871,000 departure settlement after Clifford said he’d been pressured to make political appointments.

Critics say the Metra board cut a deal to silence outgoing CEO Alex Clifford  who complained about pressure to make political appointments.  One of the most astonishing revelations to emerge is that Metra Board members could have saved taxpayers hundreds of thousands of dollars – but didn’t – for reasons that are not yet clear.

 

Regional Transit Authority directors say it doesn’t make sense why Metra Board members, fearing a lawsuit, argued publically that in the long run an $871-thousand dollar severance deal would save taxpayer money.

According to a new audit report, they had a much better option.  A Metra insurance policy that would have helped defray the costs of litigation.

 

At a Regional Transit Authority hearing today board members questioned the curious actions of the Metra Board, a board that’s suffered five resignations in the wake of a growing scandal that began with the abrupt departure of Metra CEO Alex Clifford.

 

In the preliminary report, which accuses Metra Board members of misleading the public, auditors  say the board’s deliberations on whether or not to to pay out the massive settlement were inadequate and “not fiscally prudent.”   In a written statement, RTA board chairman John S. Gates said, “RTA’s discovery of Metra`s insurance policy calls into question the reasons behind Metra’s decision to pay Clifford without notifying its insurance carrier.”

And that’s the unanswered question that appears to lay beyond the reach of the RTA auditers.  It may

not be until the State Inspector General completes his report that we understand why the Metra Board didn’t report the settlement to their insurance company.

The Regional Transportation Authority board today will receive a new auditor’s report that concludes there was no good reason for the Metra board to give its ousted CEO three years worth of severance pay.

Alex Clifford was given more than $700,000 when he was fired earlier this year.

Metra officials argued, they paid him off to avoid the cost of a lawsuit; but the auditor says Metra has insurance that would have limited its losses to just $150,000, even if it lost the lawsuit.

The RTA is even suggesting that Metra should try to get back some of the Clifford settlement.

 

Regional Transportation Authority released a report today blasting Metra officials regarding the severance package for former CEO Alex Clifford

This draft report from the RTA  is scathing. It doesn’t just slam the $718,000 dollar severance package paid to Metra’s former CEO it recommends that, if it’s still possible, the payment should be canceled.

The auditor’s report finds that officials at the transit agency repeatedly failed to come clean about the reason for the unusually large settlement claiming they faced the threat of litigation and millions in legal fees if there was a lawsuit.

What wasn’t revealed is that Metra carries insurance for exactly that kind of litigation which would also cover any settlement.

The deductible for that policy is about one-fifth of the cost of the severance package, 150,000 dollars.

Metra lawyers and board members have defended the settlement saying outgoing CEO Alex Clifford threatened to file a whistle-blower lawsuit alleging patronage in the awarding of contracts and that paying him off was the best way out.

In fact, the audit finds, it was the worst way out.

In a statement, RTA chairman John Gates says “The RTA’s audit staff has determined that the Metra Board’s deliberative process was flawed and their decision to give Mr. Clifford a generous severance package was not financially prudent. All costs related to the Clifford contract dispute should have been claimed under Metra’s existing insurance policy instead of being paid from tax payer funds.”

The auditor’s report says that insurance policy is capped at 10 million dollars and specifically covers whisteblower lawsuits.

Critics have been claiming for weeks that Metra paid Clifford one of the largest settlements in Illinois history to shut him up. The RTA report does nothing to dispute that.

Auditors looked at thousands of pages of documents and listened to hours of testimony to come up with this. The final report is still being compiled.

 

Read a copy of the full RTA Audit (pdf)

Local News
08/16/13

Metra Board meets with barely a quorum

The Metra Board met Friday for the time since dumping the agency’s CEO.

But with several other board members resigning in the fallout, the board barely has enough members to function.

The six remaining members attended, but the board needs eight to name a new chairman or CEO.

Former CEO Alex Clifford was let go and given a six-figure severance after saying he refused a patronage request by IL. House Speaker Michael Madigan.

Five other members subsequently resigned.

Gov. Pat Quinn named a 15-member commission Thursday to review oversight at the Regional Transportation Authority and recommend ways to prevent fraud and abuse after the recent accusations of political patronage at Metra.

The panel includes former U.S. Attorney Patrick Fitzgerald

Governor Quinn appointed a 15 member panel of transit heavyweights, educators and advocates to make recommendations to improve the area’s transportation system including the RTA, CTA, Pace and Metra.

The governor says Metra needs a fundamental overhaul after its former CEO Alex Clifford’s $718,000 separation deal and his accusations that House Speaker Mike Madigan wanted favors from him which he was not willing to give.

 

Since Clifford’s bombshell, five Metra board members have resigned.  The latest casualty is Stan Rakestraw who was appointed by the Cook County Board President.  He resigned today amid questions over his residency.

In his letter to Tony Preckwinkle, Rakestraw said in part…”  my overriding concern is and has always been doing the right thing for Metra… That includes eliminating any potential controversy which distracts the board from its business.”

Among those on the panel is former U.S. attorney Patrick Fitzgerald who rooted out crime and put away two Illinois governors.  Fitzgerald and 14 others are supposed to come up with recommendations  by the fall legislative session.

But the timing could not be worse for mass transit which needs money for upgrades and expansion.  Ridership is at a record high but instead of going to Springfield on a positive note, transit leaders now have to defend their organizations.  Better Government Association CEO Andy Shaw would like to see a clearly defined code of ethics be implemented at all four agencies.  So there is no gray area moving forward.

 

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