(The following story by Richard Wronski appeared on the Chicago Tribune website on May 19, 2010.)
CHICAGO — Longtime Metra chief Phil Pagano was paid more than $1 million this year as a result of taking vacation pay and a one-time payout from a deferred compensation plan and Metra-funded insurance program, records show.
Documents obtained by the Tribune show Pagano receiving ever-more generous salary and benefits over the course of his 20 years as head of the nation’s second-largest commuter rail agency. They also show a liberal use of his Metra expense account.
Pagano used a Metra credit card to pay tabs at a variety of hotels and restaurants throughout the Chicago area and Springfield, including a $3,500 charge on Feb. 28, 2007, at the Sangamo Club, a private club near the Capitol frequented by politicians, records show.
Pagano committed suicide May 7, less than two hours before Metra’s directors were to act on a recommendation that he be fired.
Pagano became “more and more aggressive” in the past two years at seeking vacation pay on top of his salary at Metra, said special counsel James Sotos, who investigated the matter at the request of Metra directors.
Pagano forged Metra Chairwoman Carole Doris’ name on two memos authorizing him to receive two $57,000 vacation payments because he was “badly in need of money for personal reasons,” Sotos said in a report on his findings.
Sotos said Pagano violated Metra’s policies and “very likely” state and federal laws by taking a total of $475,000 in unapproved vacation pay over the years and creating the forgeries in attempt to cover up the most recent payments.
The pay records shed no light, however, on why Pagano may have needed the money or what he did with it. When questioned, Pagano was tight-lipped, Sotos said.
“The only thing he told me was that he very much needed the money and he didn’t want to bring anyone else into it,” Sotos said. “(He said) the money was not for anything that was illegal (and) the money was not for anything that was immoral. He declined to further elaborate.”
Pagano’s base pay rose steadily through his years as Metra’s executive director, reaching almost $270,000 last year, up more than 10 percent from 2005.
But non-salary compensation, such as money for sick days and up to 11 weeks of vacation a year, drove his total pay up more than 16 percent in those years, hitting $441,230 in 2008, records indicate.
Because of heavy borrowing against the deferred compensation and life insurance programs, Pagano ended up owing Metra about $127,000, officials said.
Metra officials are studying whether the money will be repaid from Pagano’s 401(k) or IRA accounts.
The deferred compensation and insurance packages were set up in 1989 for Pagano and recently retired deputy executive director Richard Tidwell. Both became eligible for the money at age 60, which Pagano reached this year.
Records show Pagano claiming expense account charges totaling $14,158 in 2007 and $16,628 from mid-2008 to this year.
Metra spokeswoman Judy Pardonnet on Tuesday did not have specific information on the expenses and whether they were appropriate.
Pardonnet said Metra’s auditor routinely reviewed Pagano’s expense account and requested that Pagano pay for any personal expenses.