Press Release  OIG Investigation Finds that City Overpaid Everett Mayor $180,000

Boston, MA — In a public letter issued today, Inspector General Jeffrey S. Shapiro called on the Everett City Council to recover $180,000 in longevity payments improperly paid to Mayor Carlo DeMaria and to conduct an audit of all payments made to the mayor from Fiscal Year 2016 to present and recover any other overpayments discovered through the audit.

The letter to the city council president also provides details of the Office of the Inspector General’s investigation, which was prompted by a hotline tip.  The investigation found that the mayor and his administration misapplied the mayoral longevity ordinance and hid the payments from the city council and the public.

“I am not aware of any elected official in the Commonwealth who receives a $40,000 annual bonus. Through their misapplication of the longevity ordinance and their efforts to conceal all but the first payment, the mayor and members of his administration, including his CFO and budget director, failed to uphold their fiduciary duties and their obligation to the people of Everett,” IG Shapiro said.  “It is imperative that the City Council act to recover these funds from the mayor and return them to the city’s treasury.”

The investigation found that:

• In July 2016, the Mayor asked the Everett City Council to consider a mayoral longevity payment ordinance after he learned that there were other city employees earning more money than him. 
• At its September 26, 2016 meeting, the city council considered an ordinance with slightly different language than the original proposal.
  •  Rather than a payment after each term, it read that the mayor would receive a $10,000 payment for each completed full term. (It is unknown who changed the language.)
  • It also provided for a one-time retroactive payment of $10,000 for each previously completed term to the sitting Mayor at the time of passage of the ordinance.
• On September 28, 2016, the city paid the mayor the $30,000 retroactive payment for the three terms he had served, which was improper because the ordinance had not yet been formally adopted.
• The ordinance was adopted on October 11, 2016.

Going forward, the mayor received payments of $10,000 for each term he served cumulatively and annually. For example, after he was reelected to his fourth term in 2017, he received $40,000 a year from 2018 through 2021. Consequently, between September 2016 and April 2021, the city paid $220,000 in longevity payments to the mayor.  Since he was entitled to the $30,000 retroactive payment and a single $10,000 payment for completing his fourth term, the city overpaid the mayor $180,000. (see chart attached)

Significantly, based on OIG interviews and review of public statements, eight of the eleven members of the 2016 city council believed the intent of the ordinance was to provide the mayor with a $10,000 payment at the conclusion of each term. Indeed, in March 2022 upon learning that the mayor was receiving longevity payments of $40,000 a year, the city council took action to change the ordinance and lowered the mayor’s longevity payments to $1,700 per year.

The mayor’s longevity payment appeared in the mayor’s office budget only once.  After the initial $30,000 retroactive payment, the mayor’s longevity payments were moved to a human resources line item used to pay employees for unused sick and vacation time upon their departure, making it far less transparent and far less likely that the city council would detect it.  Furthermore, evidence suggests that senior members of the mayor’s administration allowed the mayor to circumvent the city’s internal controls by failing to properly document the mayor’s longevity payments.

IG Shapiro also recommended that the city council eliminate longevity payments to elected officials, provide detailed information about the mayor’s longevity payments to the State Ethics Commission, require members of the city council and the mayor’s administration to take specialized training on their fiduciary obligations, and strengthen controls in the city’s finance department.

“Longevity payments are a tool to reward and retain highly sought after, skilled municipal employees. Standing for election is a proactive affirmative decision by an individual and thus does not require a retention bonus. A mayor’s total compensation should be determined by a city council in full view of a city’s voters,” Shapiro said.
 

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