Yesterday, the Boston Globe reported that State Auditor Suzanne M. Bump called Tuesday for the appointment of an outside receiver to take control of an embattled public agency. The problem: an audit of the organization found such serious lapses in “governance, management, accountability and transparency’’ that an immediate state takeover is called for.
Can BCI readers identify any other Boston-based organization that has serious lapses in governance, management, accountability and transparency?
As reported earlier in the summer by the Globe, among the problems at the state agency are allegations the former director, John Barranco, paid “himself, a former girlfriend, and a handful of top staff extravagant salaries and bonuses.”
To help pay for the exorbitant salaries, Barranco siphoned tax dollars from the 10 school districts in northern Massachusetts…
Attorney General Martha Coakley, who has jurisdiction over public corruption cases and nonprofit organizations, is reviewing Sullivan’s findings and has the authority to launch a criminal investigation…
“Our office takes allegations of the misappropriation of funds very seriously,’’ said Brad Puffer, Coakley’s spokesman…
The inflated salaries and bonuses paid to Barranco’s former girlfriend, Mary Clisbee, began shortly after she started working for the collaborative, in 1997, Sullivan said.
About a year later, after Barranco moved in with Clisbee, she was promoted to senior associate director of special education and awarded a 21 percent raise, boosting her salary to $100,000.
Annual salary increases and bonuses continued until 2006, when her total compensation topped $300,000, including a $164,000 salary paid by the collaborative and a bonus of nearly $140,000 paid by the center. In 2007, after Clisbee and Barranco ended their relationship, Clisbee left the organization and Barranco replaced her with two individuals whose combined salaries were less than half what Clisbee had been paid, Sullivan said.
It is good to see that the Commonwealth of Massachusetts takes such matters seriously and is concerned enough about ethics, use of public funds and breaches of fiduciary responsibility to the citizens of the state that they are taking serious action to try and address the problem.
In contrast, when confronted with evidence of excessive six figure salaries paid by the Archdiocese of Boston to certain lay executives, after months of public prodding, the solution was that the Finance Council would form a compensation committee. Then it took another 6 months to release a roster of who would be on the committee, and then we found the committee to review excessive compensation of lay executives is being led by a highly compensated multi-millionaire executive. They are also hiring an expensive consultant to help them, and their results will not be released until the 2011 annual report is issued in 2012. In the current economic climate, BCI thinks someone at 66 Brooks Drive needs to relearn how to spell the words “URGENCY” and “FISCAL RESPONSIBILITY.”
For newer readers, among the excessive Boston Archdiocesan salaries we have reported on in the past are the following:
- Superintendent of Schools: is paid $320K/year in salary, plus $29K in “other compensation not on W2″, on top of her $75K+ per year state pension. BCI asked other dioceses and found no one else is paying nearly at this level. Boston public schools with 56,000 students pay their superintendent 275,000. Much larger public school systems in Boston, New York, Chicago, and Los Angeles that serve as much as 10X to 25X the number of students and where the operational responsibility is greater–they have management responsibility for budgets, hiring/firing, curriculum, transportation, and labor negotiations–pay their top administrators $250K/year. In her last superintendent job running the Milton Public Schools, her annual compensation was $138,000.
- Chancellor: is a retired multimillionaire banker whose total compensation is over $250K/year and whose 5-year compensation is $1.2M in salary. The former CEO of Abington Bank, he held 244,665 shares or 6.28% of the stock when it was sold to Seacoast for $139.4 million in June of 2004, making his stock at the time worth nearly $9 million. When he took the Chancellor job in 2006, he said he was “very blessed and didn’t need a job.” If he didn’t need a job, why is the cash-poor archdiocese paying him about $2.5 million in total compensation over his two 5-year terms?
- Communications Secretary. Currently makes $162.5K in W2 salary, plus $30K in other compensation not on the W-2. By means of comparison, the lay communications secretary who preceded him started at about $100K and was making $115K when she left. As another comparison, according to this ”Your Tax Dollars at Work” listing, Gov. Deval Patrick’s former communications director and press secretary, Kyle Sullivan was paid $97,850/year in 2009 to communicate information for the Governor of a state with an estimated population of 6.6 million people and a budget of about $27 billion. The Boston archdiocesan communications secretary reactively communicates information–largely as damage control when negative press is hitting–for an archdiocese of about 300,000 Church-going Catholics and 1.8 million total Catholics with a $34M Central Ministries budget. Regardless of how you do the math, the person in his role should be making no more than $115K.
- Pension/Medical Plan Trust Administrator: in Boston makes nearly double what other dioceses pay for someone doing this same function
- Associate Superintendent of Schools: has seen his salary increase 32% in 4 years, from $137K in 2006 to $181K plus $32K in “other compensation” in 2010.
Other examples can be found in our March blog posts, Reducing Salaries and Finance Council Top Ethical Concerns: #4: Compensation–Six Figure Salaries.
As of the 2006 Fiscal Year, the 4 highest paid lay employees (above $137K) were paid a total of about $689K. If we compare apples and apples in the 2010 Fiscal Year, we find 9 highest paid lay employees whose salaries were disclosed in the 2010 report were paid salaries of almost $1.9M–3X what it was four years ago. And if we add in just 5 more key employees whose six-figure salaries were not disclosed in the 2010 report–Development/Institutional Advancement Secretary and Vice President, Executive Director of Finance and Operations, Professional Oversight Director, Pension Trust Administrator–we find about 13-14 highest paid lay employees making around $2.8M in salaries–about 4X what was being paid four years ago. This all has happened in one of the worst recessions most readers can remember.
An archdiocese whose Code of Conduct policy says they want to be “responsible stewards” of the financial resources of the archdiocese and use resources in a way that reflects Catholic social teaching might do well to revisit the story of the prodigal son in Luke 15:
“When he had freely spent everything, a severe famine struck that country, and he found himself in dire need.”
The ongoing economic crisis in the U.S. and the world is severe. A salary cap of even $150K/year on 10 highest employees would save the Boston Archdiocese more than $1 million annually, as described in our post How to Save $2 Million Annually Without Really Trying.
In view of the worsening financial crisis likely to affect donations to parishes and to the Catholic Appeal, and considering the need for greater accountability to the people of God in Boston of how limited donor resources are used, perhaps yet another item on the agenda for the new Vicar General when he arrives in September should be addressing this matter of excessive six-figure salaries at a more urgent pace than is currently happening. What do you think?