CHICAGO – The Metra Board of Directors placed Executive Director Phil Pagano on paid administrative leave Friday pending an investigation into a $56,000 bonus that he allegedly received without board approval.
That investigation, headed by an outside law firm, is expected to be completed by the board’s May 14 meeting, if not sooner. Until then, Pagano, of Crystal Lake, will continue to be paid; he makes $269,625 a year after 20 years at Metra’s helm. Board members tapped Deputy Executive Director William Tupper to fill in for Pagano until further notice.
Board Chairwoman Carole Doris called the recent turn of events “a sad occasion for all of us on the Metra board.” Besides the outside probe of Pagano, Doris said the board at its next meeting would create a Compensation Review Committee to conduct a “top to bottom review” of Metra’s salary structure and procedures.
“The issues that have been raised are very serious and are bigger than any one of us,” Doris said.
Doris had asked Pagano on Tuesday not to come to work or conduct Metra business after following up on news media inquiries into the alleged extra money paid to Pagano last year.
Board members hired James G. Sotos & Associates, an Itasca law firm with experience investigating government matters, to conduct the investigation.
“The investigation will be fair, it will be thorough, it will be expedient, and it will be completely independent,” Sotos said.
Sotos said that the Metra board had placed no restrictions on what he could examine. Neither Sotos nor Doris would comment on whether Pagano was suspected of other alleged infractions or whether other Metra employees were being investigated. But Sotos hinted that the probe would examine “more serious possible allegations of official misconduct” against Pagano.
Board members convened the special meeting shortly after 9 a.m., immediately entered closed session, and adjourned to a conference room for almost two hours.
Pagano, who was not present in the main board room when the board convened in open session, met with the board behind closed doors, Metra spokeswoman Judy Pardonnet said.
Pagano did not make himself available to journalists attending the meeting, and he did not return calls seeking comment. He did not have legal counsel with him when he met with the board, Pardonnet said.
Board members reconvened at 11 a.m. and voted, 10-0, to hire Sotos to investigate. They then adjourned and reconvened an emergency meeting about an hour later in which they voted to suspend Pagano and appoint Tupper as acting director, also by a 10-0 vote. Because the sole item on the original agenda was to hire Sotos, they had to hold a separate emergency meeting with a new agenda to comply with the Illinois Open Meetings Act.
Jack Schaffer, who represents McHenry County on the Metra board, said that members agreed not to discuss details of the investigation until its release. Schaffer said that the Metra board would call another special meeting before May 14 if Sotos’ investigation is ready sooner.
“Obviously, we wouldn’t have taken these steps for a parking ticket, but I’m going to withhold judgment until we get the complete report,” Schaffer said.
However, Schaffer did confirm that the board’s discussion never included Pagano’s involvement in facilitating Metra’s intent to buy land in Ridgefield for a third Crystal Lake station. The land is half owned by McHenry County Board Chairman Ken Koehler, R-Crystal Lake.
“That, I’m totally comfortable with saying. It was never mentioned in any of this. Not a thing,” Schaffer said.
The plans call for a new station and an 875-space parking lot to be built on 17½ acres at Country Club Road at Prairie Drive. The purchase of the land is contingent upon it being annexed into the city of Crystal Lake.
The allegations of “potential financial irregularities” against Pagano come at a time that Metra, like most state agencies, is facing lean budgetary times. Metra raised ticket prices and froze wages this fiscal year.