IL: Will Metra Ever Recoup Pagano Cash?

The bankruptcy case involving former Metra Executive Director Phil Pagano's widow is wrapping up even as questions remain about money he owed and wrongfully obtained from the agency.

Pagano killed himself in May 2010 by stepping in front of a commuter train amid an investigation into financial wrongdoing. It was later revealed he took $475,000 in improper vacation payouts among other irregularities. These included a suspect $64,500 in sick day and additional vacation time payments.

Despite a salary of $269,000, Pagano borrowed $838,816 from a secondary life insurance policy and a generous incentive plan, designed to encourage top executives to stay at the agency.

At his death, he owed Metra $127,000. That debt is still being

negotiated between the agency and Pagano's estate.

Pagano's widow, Barbara, filed for bankruptcy last year. Her husband had incurred about $200,000 in debts, including some hefty credit card bills, without her knowledge, attorneys said.

Adding to the mystery behind his suicide, it was revealed in bankruptcy court last year that Pagano had kept two households one in Chicago and another in Palatine in addition to his family home in Crystal Lake, according to a transcript.

So far, Barbara Pagano has received a life insurance policy for about $500,000 through Metra and is paid $6,538 a month, or $78,463 a year, in pension benefits. The pension benefits do not reflect the dubious vacation or sick day payouts, officials said.

Metra did have insurance against crimes, and so far that has netted the agency $70,000, spokeswoman Judy Pardonnet said.

But that amount is a pittance compared to what the scandal has cost the agency. Freedom of Information Act requests to the agency indicate it has spent about $2 million on consultants to investigate what went wrong and suggest safeguards, while misspending on Pagano's watch comes to around $1 million.

Metra Director and Arlington Heights Mayor Arlene Mulder said the agency had paid the estate what it was required to by law. "As a board member, I'm not engaged in particulars. We did what we were supposed to do, no more and no less," Mulder said.

"You learn a lot when something goes wrong. Sometimes you have to think about the unthinkable."

Metra Director Jim LaBelle of Zion said the agency could recoup another $40,000 in tax-related funds.

"Our legal folks are pursuing whatever avenues they think are possible, and hopefully it will get wrapped up soon. Sometimes it takes a while to get through the legal processes. We're recovering what we can."


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