Pension abuse suspected at agency

Treasurer examining public, private wages

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

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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.

State pension benefits are calculated based in part on the number of years that an individual works for an eligible agency and the individual’s three highest years of annual compensation.

The Globe, in reviewing the activities of the center, also found an instance in which an employee of the collaborative, the public agency, appeared to be working for the private education center.

For instance, state records show that James L. Anderson retired from his job as a senior associate director with the collaborative in September 2002. In his application to the Retirement Board, Anderson listed his three highest years of compensation, which were used to calculate his $70,500 pension, as the last three years he worked for the collaborative, from September 1999 to September 2002.

But a letter written to Anderson in March 2001 by an official with the former commissioner of education indicates that Anderson was working for the center, not the collaborative, developing computer software that was used by school districts seeking state reimbursement for construction costs.

The letter, obtained by the Globe, addresses Anderson as the center’s “associate director of planning and operations.’’

Yet, in his retirement application, Anderson reported being paid more than $93,000 by the collaborative during his last year of work there. The Globe was unable to learn whether he was also paid by the center. But other employees of the collaborative, including Barranco’s former girlfriend, Mary Clisbee, were paid a salary by the collaborative while receiving bonuses from the center.

Attempts to reach Anderson and Jeffers yesterday were unsuccessful.

Nancy Sterling - a spokeswoman for ML Strategies, which represents the center’s board of directors - did not return messages.

Clisbee declined to comment.

And Thomas E. Lent, an attorney representing the collaborative, did not respond to a request for comment on allegations that the collaborative had allowed employees of the center to be placed on its payroll to enhance their pensions.

The Merrimack collaborative is a government agency of 10 public school districts that pool resources to lower the cost of educating students with mental, physical, medical, and behavioral disabilities.

Under exclusive agreements with the center that Sullivan has said were illegally negotiated, the collaborative rents space and pays for a variety of other administrative services from the center.

The center, for its part, is a private, nonprofit organization set up to provide support for education. In addition to its agreements with the collaborative, it provides high technology services to school districts and to other public and private organizations for a fee.

Sullivan found that Barranco, who once held the jobs of executive director of the collaborative and the center simultaneously, used deception to enhance his own $157,000 annual teacher’s pension, while collecting salary and benefits exceeding $500,000 from the center.

Barranco’s pension should be reduced, Sullivan said, for two reasons: First, he did not work full time as the collaborative’s executive director before officially retiring in 2005. And second, he continued to work for the collaborative after his retirement while working at the center.

Last November, before Sullivan released his finding, the Massachusetts Teachers Retirement System found Barranco had collected more than $50,000 in pension funds over a four-year period that he was not entitled to receive, said Sean Neilon, the system’s assistant director.

Barranco appealed to the Division of Administrative Law Appeals but a hearing has not been set.

In the meantime, the teachers retirement system docked Barranco for the $50,000 in excess pension money he received and has restored his full $157,000 annual pension.

Michael Rezendes can be reached at