For Immediate Release - August 18, 2011

Enforcement Division Alleges Violations By Former Merrimack Special Education Collaborative Executive Director John Barranco and By Former Collaborative Director of Public Affairs Richard McDonough

Barranco put lobbyist McDonough on the Collaborative payroll allowing him to improperly secure public compensation, medical and dental benefits and public pension benefits

The Ethics Commission's Enforcement Division issued two Orders to Show Cause ("OTSCs") alleging that former Merrimack Special Education Collaborative ("Collaborative") Executive Director John Barranco ("Barranco") and former Collaborative Director of Public Affairs and Governmental Relations ("Public Affairs Director") Richard McDonough ("McDonough") each violated G.L. c. 268A, the conflict of interest law, in connection with Barranco's putting lobbyist McDonough on the Collaborative payroll as the Collaborative's Public Affairs Director, resulting in McDonough receiving public compensation, medical and dental benefits, and public pension benefits to which he was not entitled.

According to the OTSCs, from 1993 until 2005, Barranco was the Collaborative's Executive Director. The Collaborative is a public agency that provides member municipalities with educational, vocational, and therapeutic programs for persons with special needs. From 1993 to the present, Barranco has also been the Executive Director of the Merrimack Education Center, Inc. ("Center"), a private, non-profit corporation that, among other things, provides administrative and transportation services to the Collaborative. From September 1, 2005 through at least December 31, 2008, as the Center's Executive Director, Barranco continued to exercise substantial control over the Collaborative's activities.

The OTSCs allege that in or about November 2003, Barranco, as the Collaborative's Executive Director, hired McDonough as the Collaborative's Public Affairs Director. In July 2005, Barranco renewed McDonough's employment contract. In July 2007 and July 2008, as the Center's Executive Director exercising control over the Collaborative's activities, Barranco renewed McDonough's employment contracts with the Collaborative. At no time during the period from 2003 through 2008 did McDonough work full-time as a Collaborative employee; McDonough did almost no work for the Collaborative, and did not have an office or designated workspace at the Collaborative's offices nor did he have a telephone extension. McDonough remained on the Collaborative's payroll until about December 31, 2008. In filings with the Secretary of State's Office, McDonough listed himself as the Center's outside lobbyist from about 2001 until December 2008. McDonough worked in various state jobs between 1964 and 1983 and earned approximately 11 years of creditable public pension service. In 1984, he withdrew his retirement contributions and lost those years of creditable service. McDonough has been a registered lobbyist in Massachusetts since the late 1980s.

According to the OTSCs, while on the Collaborative's payroll, McDonough received an annual salary from the Collaborative ranging from $80,000 in 2003 to $109,999 in 2008; the medical and dental benefits provided to full-time Collaborative employees; and approximately five years of creditable service towards his public pension.

The OTSCs allege that McDonough used his position with the Collaborative to enable him to buy back approximately 11 years of creditable service. McDonough claimed an additional five years of creditable service based on his time on the Collaborative payroll. As a result of being on the Collaborative payroll, McDonough received an annual public pension of approximately $30,000, an amount which was greatly enhanced by the additional five years of service and by the average of his highest three years' salary, which was $95,000. Without the Collaborative time and salary, McDonough's pension, had he otherwise qualified to buy back his prior time, would only have been approximately $6,000 a year.

Section 23(b)(2) of the conflict of interest law prohibits a municipal employee from knowingly, or with reason to know, using or attempting to use his official position to secure for himself or others unwarranted privileges or exemptions which are of substantial value and which was not properly available to similarly situated individuals. Section 23(b)(3) prohibits a municipal employee from, knowingly or with reason to know, acting in a manner which would cause a reasonable person, knowing all of the facts, to conclude that anyone can improperly influence or unduly enjoy that person's favor in the performance of his official duties or that he is likely to act or fail to act as a result of kinship, rank, position or undue influence of any party or person. This subsection goes on to provide that it is unreasonable to draw such a conclusion if the municipal employee discloses in writing to his appointing authority all of the relevant circumstances which would otherwise create the appearance of a conflict of interest. Section 19 prohibits a municipal employee from participating as such an employee in a particular matter in which, to his knowledge, a business organization by which he is employed has a financial interest.

According to the OTSCs, Barranco violated section 23(b)(2) by improperly using his Collaborative and Center Executive Director positions to put and keep McDonough on the Collaborative payroll to secure public compensation and benefits for McDonough. McDonough violated section 23(b)(2) by improperly using his Public Affairs Director position to secure compensation, medical and dental benefits and pension benefits. Barranco violated section 23(b)(3) by taking the actions described above while having a significant social relationship with McDonough and failing to disclose this relationship to either the Collaborative's or the Center's Board of Directors. Barranco also violated section 19 by hiring McDonough and renewing McDonough's employment contracts as the Collaborative's Public Affairs Director while Barranco was also an employee of the Center, and while the Center had a financial interest in those decisions. The Center had a financial interest in these matters because they shifted the costs related to McDonough from the Center to the Collaborative.

The Commission will schedule the matter for a public hearing within 90 days.
 

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