Metra chair: Ex-CEO threatened to sue, wanted more than $700,000
BY ROSALIND ROSSI Transporation Reporter firstname.lastname@example.org July 10, 2013 9:19AM
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Ex-Metra CEO Alex Clifford threatened a whistleblower lawsuit against Metra and initially wanted far more than the maximum $718,00 deal he finally accepted to resign instead, Metra officials and attorneys indicated Wednesday.
Metra Chairman Brad O’Halloran said Clifford and his attorney had argued that if Clifford’s contract was not renewed, it would be in retaliation for Clifford reporting “alleged illegal conduct” to the Metra Board — supposedly political pressure involving hiring and contract awards.
The legal underpinning of that action would have been a “whistleblower” complaint, one of Clifford’s attorneys, Michael Shakman, told the Chicago Sun-Times.
But a former Downstate U.S. attorney whom Metra hired to investigate the allegations found “no legal violations,” O’Halloran told a special meeting of the Regional Transit Authority Board on Wednesday.
And although the matter was turned over to the state executive inspector general, O’Halloran said, before Clifford’s June 21 resignation the specter of litigation had started “seeping into every facet of the organization.”
“We believe that Mr. Clifford was checking with his personal attorneys on operational and administrative issues,” O’Halloran said. “In other words, things had degenerated to the point where Metra’s executive director was communicating with his board only after consulting with his personal attorney. “That’s no way to run a railroad.”
As a result, O’Halloran said, Metra board members agreed to a 26-month, maximum $718,000 separation agreement to avoid a lawsuit that O’Halloran said would have cost far more to defend, even if Metra ultimately won it. The settlement, he said, was “substantially less than what Mr. Clifford initially demanded.”
O’Halloran and Metra attorney Joe Gagliardo spent nearly two hours Wednesday explaining Clifford’s deal to the RTA board. RTA Chairman John Gates Jr. had called O’Halloran on the carpet to explain a deal that even O’Halloran has conceded was “generous.”
The entire Metra board has been invited to answer yet more questions from the House Mass Transit Committee on Thursday, when Clifford also had been scheduled to make his first appearance in public on the matter. Because the RTA oversees Metra’s finances, confidentiality provisions in Clifford’s separation agreement were waived Wednesday, as they are expected to be at Thursday’s House Committee hearing.
But it appeared doubtful late Wednesday that Clifford would appear at Thursday’s hearing.
Clifford’s attorneys, in letters to the House Committee shared with the Sun-Times late Wednesday, charged that Metra officials have been spouting “inaccurate and misleading public statements” while trying to “muzzle” Clifford from clearing the air at Thursday’s hearing.
Edward Feldman, an attorney with Shakman’s firm, Miller Shakman & Beem, charged that Metra has claimed that if Clifford were to “respond fully” to the House committee’s questions, he would violate the confidentiality terms of his separation agreement.
As a result, Feldmen wrote, Clifford would not attend the committee hearing but was asking to submit an April 2, 2013, memorandum to Metra board members as evidence instead.
That memo, Feldman wrote, “provides extensive detail regarding the circumstances that led to the Separation Agreement and would give the Committee relevant information that it is seeking.”
In an email to the Sun-Times late Wednesday, Clifford said Metra had refused to consent to let him give the memo to the committee. He said Metra was contending that to release it would be a violation of its interpretation of the confidentiality portion of his settlement.
Feldman’s letter disputes O’Halloran’s public descriptions of two of the examples O’Halloran claimed taht Clifford had provided of alleged political pressure. One involved complaints from African-American congressmen about lack of black contractor participation in Metra’s Englewood flyover project. The other involved Clifford’s alleged refusal to consider resumes provided by the Illinois General Assembly’s Latino Caucus for openings in top Metra management.
O’Halloran told a special meeting of the RTA board Wednesday that that technically, it didn’t matter if the conduct Clifford reported was illegal or not.
“Under the law in Illinois, Clifford could bring a case in court arguing that because of his mere reporting, he had a legal right to have his contract renewed,” O’Halloran said.
And, Gagliardo said, Clifford argued that he was entitled to be compensated for far more than the eight months left on his contract. Clifford noted that his predecessor had his post for about 20 years.
After rounds of mediation, both sides finally agreed to a deal that neither side really liked but both sides took, Metra officials said.
“While we think we could have won a lawsuit, it would have taken years and cost millions of dollars in attorneys’ fees and time on the part of our employees,” O’Halloran said. “We had to make a tough call.”