Metra defends costly buyout of ex-CEO
CHICAGO – The chairman of Metra, one of the largest commuter rail agencies in the country, on Wednesday defended a costly buyout of its former executive director against criticism that it represents a shocking misuse of taxpayer money.
Threats of a lawsuit by former CEO Alex Clifford if his contract were not renewed forced the agency into months of negotiations and finally mediation that produced a deal under which Clifford could reap as much as $718,000, Metra Chairman Brad O'Halloran said. The expense is far less than the millions needed to go to court, he said in an appearance before the Regional Transportation Authority, which has financial oversight of transit networks in northeastern Illinois.
"Neither I nor any of our directors who voted for this deal liked it," O'Halloran said. "But we liked the alternatives less. ... We have more important things to do than fight a lawsuit."
The costly internal battle between Metra's board and its former CEO has added to the woes of a transit agency that, like others across the country, is struggling to make improvements and keep its vast network in working order. Tough economic times, high borrowing costs and a divided Congress have forced public transit agencies around the country into a scramble for cash.
In the midst of that crunch, the large severance package for Clifford announced on June 21 angered state lawmakers who decried the blow to taxpayers from an agency still trying to move forward after Clifford's predecessor was accused of defrauding Metra out of about $475,000. Lawmakers will hold their own session Thursday to question O'Halloran, and perhaps Clifford.
O'Halloran's remarks Wednesday were the first public comments on the severance negotiations and the falling out with Clifford, who was hired a little over two years ago to help turn the agency around after the scandal involving its former director. A confidentially clause in the deal keeps the parties from discussing it, except when called to do so by public oversight bodies like legislative committees or the RTA, which is conducting a detailed audit of the severance deal.
O'Halloran said Clifford bristled at the board's efforts to assert greater oversight of major infrastructure projects and hiring decisions, and that there were major areas of disagreement with Clifford on the agency's direction and the pace of improvements.
Before the severance deal, Clifford suggested in a newspaper interview that he was being pushed out in retaliation for resisting pressure to hand out patronage jobs.
O'Halloran said Metra took those allegations to Chicago's inspector general and had a former U.S. attorney investigate them. So far, nothing has been found to substantiate Clifford's claims, O'Halloran said Wednesday.
He said Clifford only raised the allegations after a board member informed him that his contract might not be renewed.
The claims have nonetheless led some to characterize the large settlement as "hush money."
"There have been a lot of aspersions cast at me and at the board. ... Most of the critics have been flat-out wrong," O'Halloran said. "The most reckless charge has been that we paid Clifford hush money."
Seeking to justify the buyout, O'Halloran said a protracted legal battle would also have been a major distraction from planned improvements like on-board Wi-Fi and allowing riders to pay with credit cards on trains.
For the final year of Clifford's 26-month severance deal, Metra will pay only the difference between what he earns in any lower paying job he might take and his Metra salary, which will reach more than $284,000.
Metra attorney Joseph Gagliardo said in a best-case scenario the deal would cost Metra a couple of hundred thousand dollars. Court costs that could have stretched into the millions would have left Metra with a much tougher explanation for taxpayers, he told the RTA board.
Efforts to reach Clifford through his attorney were unsuccessful Wednesday.