By Stacy St. Clair and Richard Wronski
8:29 AM EDT, July 18, 2013
Former Metra CEO Alex Clifford offered an insider's look at Illinois' culture of political back-scratching yesterday as he provided the most detailed accounting yet of patronage allegations that he says led to his departure from the commuter rail agency.
In his first public comments since leaving, Clifford accused three state lawmakers of interfering with personnel decisions and blasted two key Metra board members for allegedly pushing contracts that benefited their own business associates.
Clifford took repeated swipes at Illinois House Speaker Michael Madigan, the all-powerful legislator who holds great sway over transit funding and who asked the agency to give one of his political foot soldiers a raise.
The legislative inspector general's office confirmed Wednesday that it was investigating the claims for any legal or ethical violations, though Clifford said he does not believe Madigan broke any laws by making the request. He did, however, offer a rare public — and personal — slap at the speaker.
"I thought it was an ethical and moral character flaw," he said.
Metra board Chairman Brad O'Halloran has forwarded Clifford's allegations to the state's executive inspector general. O'Halloran has denied Clifford's claims, including a suggestion that he tried to secure a banking contract for an institution to which he has significant ties.
"What we heard ... was a whole lot of hooey," O'Halloran said.
Clifford appeared Wednesday before the Regional Transportation Authority to discuss the reasons behind his departure. Constrained by a confidentiality clause in his severance package, Clifford largely restricted his comments to the patronage accusations he raised in a stinging April 3 memorandum to the Metra board. He resigned from the agency June 21.
After sending the memo, he threatened to file a whistle-blower lawsuit against Metra over the allegations. The move prompted the agency to negotiate with him a $718,000 severance package containing a nondisclosure clause meant to keep his patronage claims secret.
Metra eventually released the memo to state lawmakers amid harsh criticism about the deal, paving the way for Clifford to answer questions from the RTA. The agency has oversight authority over the nation's second-largest commuter rail system.
Often speaking in a clipped tone in keeping with his Marine background, Clifford went beyond the memo's scope at the RTA board's urging, as he accused former acting Metra Chairman Larry Huggins of granting a no-bid contract to a business associate without the board's approval. The allegation is not in the memorandum, but agency lawyers are aware of his claim, Clifford said.
He relayed that Huggins worked with former Metra Executive Director Phil Pagano and U.S. Rep. Bobby Rush, D-Chicago, to award a $200,000 consulting contract to Target Group to help recruit minority bidders for the Englewood Flyover, a $93 million railroad bridge on the South Side. Target Group is owned by Joe Williams, a longtime Huggins business associate.
Public records show Huggins and Williams own a real estate development company together. That company shares an office suite with Target Group in the South Loop, according to documents filed with the Illinois secretary of state's office.
Huggins denied any involvement in Target Group's business and said Williams' contracts with Metra predated his 1997 appointment to the agency's board.
"Have I committed a crime or a sin because I know Joe Williams? No," Huggins said.
Metra records show the agency began talking with Target about the Englewood project in April 2010, a month before Pagano killed himself as he was about to be fired for stealing money.
Clifford criticized Target Group's work, which he said did not meet expectations and ran $70,000 over budget. While grappling with the company's performance, Clifford said he received a phone call from Huggins asking why Williams' payments were late.
Though Metra met its legal obligation for minority contracts on the Englewood Flyover in 2012, Huggins, then the acting board chairman, insisted Metra hold up the project until $10 million for minority subcontractors was secured, according to the memo.
At the time, Rush was threatening to block it because he said it didn't provide enough jobs for the economically depressed Englewood neighborhood.
The board eventually approved the original contract without agreeing to Huggins' proposal, but it did agree to a "memorandum of understanding" with the construction company to boost the share of African-American construction workers.
Clifford said he began treatment for thyroid cancer a short time later and while he was out on sick leave, Huggins brokered a deal with Rush to pay the National Black Chamber of Commerce $50,000 to monitor the memorandum.
Rush reiterated the deal in a letter to the commuter rail service, Clifford said. A Metra spokesman said the agency was unable to locate the letter Wednesday.
The check — which the CEO could sign without board consent — was never sent because Clifford required Huggins get the entire board to approve, Clifford said. Huggins did not want that, he said.
"He just wanted me to call Congressman Rush's office and ask who we should write the check to," Clifford said.
Rush spokeswoman Debra Johnson confirmed the congressman suggested that the chamber monitor the flyover situation, but she denied he asked the NBCC to be paid for it.
"The congressman did not do anything outside the normal recommendation," she said.
Huggins said he was "highly insulted" by Clifford's comments and called his allegations "totally false."
Huggins was not the only board member criticized at the hearing. Clifford also alleged that O'Halloran tried to secure a lucrative banking contract for Wintrust Corp., even though the chairman serves on the board of one its subsidiaries.
Clifford also related how Metra's procurement chief Paul Kisielius had questioned whether a conflict existed and his concerns were forwarded to the agency's ethics officer. O'Halloran tried to have Kisielius removed from his position several months earlier, Clifford said.
Metra spokesman Michael Gillis could not confirm Wednesday whether Wintrust actually pursued business with the agency.
O'Halloran denied the allegation.
Clifford also suggested he repeatedly resisted patronage pressure and that no refusal was more damaging to his career than his Madigan rebuke.
The speaker twice asked that Patrick Ward, a longtime Madigan foot soldier, be given a raise on his $57,000-a-year salary, Clifford said. The speaker also asked that another employee be promoted from a customer service post to train conductor, Clifford said.
Clifford says he denied both requests and, in doing so, upset Huggins, who had personally lobbied for him to capitulate.
"Mr. Huggins argued on and on with me that it wasn't illegal," Clifford said.
Madigan has confirmed he made an inquiry about Ward's salary in March 2012 but said he withdrew it after Clifford raised concerns.
Clifford said Madigan never threatened to withhold funding if the raise wasn't granted. However, some board members considered it bad business to rebuff the speaker, he said.
"Both Mr. Huggins and Mr. O'Halloran seemed to feel my refusal to accede to the request could damage our ability for funding," he said.
Gov. Pat Quinn defended Madigan on Wednesday when asked about Clifford's criticism of the speaker.
"Well, I've known Mike Madigan for a long time. I don't think it's any secret that he and I don't always agree on public policy issues. But I think he is a man of character," Quinn said.
Madigan's office has acknowledged the speaker asked Quinn's administration to hire Ward.
The administration ultimately approved the speaker's request for Ward, who was hired as an assistant deputy director of labor relations in Chicago, a job that pays $70,000 a year.
Clifford also detailed a tense meeting with Latino lawmakers in March 2012, which he says ended when state Rep. Luis Arroyo, D-Chicago, asked if Metra would hire his candidate for an open deputy director position.
Clifford said he refused to take the name.
Arroyo has denied that he recommended people for Metra jobs or pressured Clifford. He told the Tribune that Clifford invented the patronage allegations as an excuse after the agency lost faith in him.
At the same meeting, Clifford said, Rep. Elizabeth Hernandez, D-Cicero, complained that her husband — who has a security job at Metra — was being mistreated at work by his supervisor.
Clifford said he was taken aback by her comments.
"I indicated to her that it was inappropriate," Clifford told the RTA. "We don't discuss personnel matters in public."
Hernandez did not return calls seeking comment.
Clifford said he later looked into Hernandez's complaint and discovered that the person she accused of mistreating her husband, Charles, wasn't his supervisor at all.
Charles Hernandez was supervised at Metra by Arroyo's daughter, Denise, Clifford said.
Tribune reporters Jeff Coen, John Chase, David Heinzmann, Bob Secter, Rick Pearson and Ray Long contributed.
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