Pension abuse suspected at agency

Treasurer examining public, private wages

July 12, 2011|By Michael Rezendes, Globe Staff
  • John B. Barranco held dual posts.
John B. Barranco held dual posts.

State Treasurer Steven Grossman is investigating whether a troubled Merrimack Valley government agency that educates special needs students has become a haven for pension abuse by listing numerous people as employees in order to help them boost their state pensions, when in fact they did little or no work.

Investigators want to know whether people who reported working for the Merrimack Special Education Collaborative, whose executive director took a leave of absence last month amid allegations of excessive salaries and perks to insiders, were genuine state employees.

The state inspector general has already said that State House lobbyist Richard W. McDonough obtained a $31,000 state pension after years of being listed as an employee of the collaborative while holding a no-show job. But Grossman wants to know whether such practices were widespread.

“Any abuse of the pension system is unacceptable and will be fully investigated and acted upon,’’ said Jon Carlisle, the spokesman for Grossman, who oversees the state retirement system.

“The Retirement Board staff is reviewing past and present work histories of those in the state pension system who have been associated with the Merrimack Special Education Collaborative to ensure that creditable employment service is accurately calculated.’’

The Retirement Board’s action stems from a yearlong investigation by Inspector General Gregory W. Sullivan, who said last month that the payrolls of the collaborative and the nonprofit Merrimack Education Center were manipulated by educator John B. Barranco in an effort to award himself, a former girlfriend, and top staff excessive salaries and pension benefits.

For example, Sullivan said that Barranco’s longtime administrative assistant, Clarice Jeffers, worked for Barranco at the Education Center, which is private, while maintaining a position on the payroll of the collaborative, a government agency, “accruing years of service toward her public pension.’’

Sullivan also said that McDonough, who was recently convicted along with former House speaker Salvatore F. DiMasi on political corruption charges, was put on the collaborative’s payroll when he was, in reality, working for the center.

“Other than his biweekly paychecks, there is virtually no trace of Mr. McDonough working for’’ the collaborative, Sullivan said.

Sullivan said that a former employee of the center told his investigators that any staff member working at the center who had accrued time in a Massachusetts public pension plan was given the option of being paid through the collaborative to increase future pension benefits.

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