Uproar over former Metra CEO’s ticket out of town
BY ROSALIND ROSSI Transportation Reporterfirstname.lastname@example.org June 25, 2013 12:53PM
Updated: July 27, 2013 6:27AM
The head of the RTA said Tuesday that he has ordered a review of whether a controversial 26-month severance agreement that could reap former Metra CEO Alex Clifford up to $750,000 is “fiscally prudent.’’
Meanwhile, a key lawmaker said he wants to haul the entire Metra board in front of two legislative committees to explain why it gave Clifford such a lucrative golden parachute when he wasn’t entitled to any severance under his contract.
State representatives Jack Franks (D-Marengo) and Deborah Mell (D-Chicago) sent out notices Tuesday, requesting a July hearing of their joint committees about the severance Metra Board members granted Clifford upon his resignation Friday.
“I’ll bring the whole board down [to the hearing]. Let’s bring Mr. Clifford, too,’’ Franks told the Chicago Sun-Times on Tuesday.
“I think the taxpayers have a right to know what happened and why, and whether there’s an opportunity to stop it if it’s not a good deal for the taxpayers.’’
The announcement of an RTA review of the deal, as well as the call for a joint legislative hearing of Franks’ State Government Administration Committee and Mell’s Mass Transit Committee, came a day after an exclusive Sun-Times report quoted experts as saying that, under Clifford’s contract, Clifford was not entitled to severance if he resigned. He had less than 8 months left on his original employment agreement.
John S. Gates Jr., chairman of the RTA board that oversees Metra’s finances, announced in a news release Tuesday that this week he directed RTA staff to “immediately begin a detailed review” of Clifford’s separation agreement.
“I want our staff to determine whether the agreement is financially prudent,’’ Gates is quoted as saying in the news release. “While Metra is responsible for decisions regarding the staffing of its agency, the RTA has a duty and obligation to ensure that taxpayer dollars are being expended properly.’’
Citing “differences of opinion” about “how Metra moves forward” and “who we need leading this organization,’’ Metra Board Chairman Brad O’Halloran announced Friday that Clifford had “agreed to tender his resignation.’’
O’Halloran noted that there were also “differences of opinion’’ about Clifford’s “legal rights under his contract” and to “avoid wasting time and money on attorneys’’ the board was offering Clifford a “generous” separation package.
O’Halloran could not be reached for comment Tuesday and Metra spokesman Michael Gillis had no comment on the day’s developments.
Under the severance deal, Clifford has the potential to be paid up to $750,000 over the next nearly 26 months, even though if he resigned, his hiring agreement said he was not entitled to any severance.
Jack Schaffer, the only board member who voted against the severance (he actually voted “hell no”), told the Sun-Times previously that Clifford’s resignation followed a tug of war between Clifford and O’Halloran over “who’s in charge.’’ With Clifford’s resignation, Schaffer said, O’Halloran was now clearly “calling the shots.”
Franks said if the board members or the board chair had a difference of opinion with Clifford, they could have let him serve the remaining eight months on his contract, or put him on eight months administrative leave. Instead, Franks said, board members agreed to pay Clifford:
◆ $442,237 for the eight months left on his contract, with benefits, and for the six months after that.
◆ additionally up to $307,390 for the next 12 months to cover any difference between what he would be making at Metra and any new, lesser-paying job, creating a “disincentive for him to find work.”
◆ additionally up to $78,000 in reimbursable moving fees, “more than some homes in my district.’’
◆ additionally up to $75,000 in attorney fees, enough “to hire a full-time lawyer’’ for a year.
Franks called the deal “insanity” and “shocking.’’
“It’s contemptuous of our taxpayers, and that’s the problem when you get politically appointed people on boards. There’s no real accountability for this board,’’ Franks said.
Mell said she wants to know why Board members didn’t just agree to an eight-month buyout rather than create a 26-month deal worth up to $750,000.
“I was alarmed with the severance agreement. It didn’t coincide with what was going on in the contract,’’ Mell said.
As part of the “separation agreement,’’ Clifford and Metra and its board members all agree not to make “any adverse or disparaging” comments about each other. And the parties agreed not to disclose the terms of the separation or “any other circumstances relating to the negotiation of this agreement.’’
But just because the agreement says discussions about negotiations are confidential, doesn’t necessarily mean they are, said Franks, an attorney.
“They can claim they can’t talk about it. So what? They have to be accountable to someone. Here’s the problem with the way this board is set up. They don’t have to answer to anyone,’’ Franks said.
Clifford himself cited the “confidentiality provisions” of his separation agreement in declining to answer Sun-Times questions about it Tuesday.
However, Clifford pointed to a section of the deal that may allow him and Board members to discuss the deal with legislative committees and Metra.
Clifford noted that “exceptions to the confidentiality agreement” include responding to “entities with oversight, legislative or other authority over Metra.’’
Rep. David Harris (R-Arlington Heights) joined Franks Tuesday in a news release calling on Metra to ensure that Illinois taxpayers are not forced to cover Clifford’s hefty parting costs.
“It would have been a lot less expensive for Clifford to have been allowed to ride out the remainder of his contract,” Harris said in the statement, “even if day-to-day responsibility for the control of Metra’s operations were given to another executive.”
Contributing: Tina Sfondeles