By Richard Wronski
7:23 AM CDT, April 3, 2014
The FBI conducted a 22-month investigation of former Metra Executive Director Phil Pagano, concluding that he did not embezzle any money other than the $475,000 he was accused of taking from Metra, newly released records show.
The documents shed light on Pagano's possible motives for taking the money and forging memos to cover up the fraud, apparently including a need to finance extramarital affairs with “multiple” women and to pay for hospice care for his ailing father.
The information was in more than 180 pages of files the FBI generated in investigating Pagano, 60, who committed suicide May 7, 2010, just as Metra's board was about to fire him.
The FBI files also said no evidence was found that Pagano used money to bribe anyone to cover up his embezzlement.
Previous investigations found that Pagano took the $475,000 in unapproved vacation pay and forged memos to cover his tracks. Those investigations never made his reasons clear other than his admission that he needed the money for reasons not related to drugs, alcohol or gambling.
“I made a mistake ... I failed,” Pagano told Metra's board in a closed meeting, the files show.
Previously released Metra records showed that Pagano was paid more than $1 million in 2010 after taking the vacation pay and a one-time payout from a deferred compensation plan and Metra-funded insurance program on top of his salary.
The FBI documents show agents interviewed three woman who had relationships with Pagano. Pagano met them through an Internet dating website and took them on dates and trips, according to the files.
One woman interviewed by the FBI suspected, but offered no proof, that Pagano was being blackmailed by one of his girlfriends, who reportedly threatened to tell his wife of their affair.
Another woman denied to investigators that she threatened to blackmail Pagano but reportedly admitted that he was “lucky that she was nice because she could have ruined his life by telling the Metra board … about the affair.”
One woman told investigators that she and Pagano had broken up but reunited several times, and that Pagano used a post office box to get correspondence.
The documents also show a deeply remorseful Pagano who admitted making a terrible mistake, offered to make restitution and feared that his family would “find out things about him that would make them hate him.”
The documents were first obtained by the Better Government Association and posted on the group's website, bettergov.org.
The files were heavily redacted and did not identify any individuals by name. They show how the FBI opened its probe on the day of Pagano's suicide and concluded it Feb. 28, 2012. The agency was concerned about the potential theft of federal money.
The FBI documents add details to investigations that Metra launched into Pagano's actions, including the inquiry by special counsel James Sotos.
Sotos determined that Pagano violated Metra's policies, and “very likely” state and federal laws, by taking the unapproved vacation pay over the years, and forging former Metra Chairwoman Carole Doris' name to cover his tracks.
Asked for comment Wednesday, Doris said she had not read the FBI files but was confident that they confirmed what previous investigations had already determined.
“At the time I was with Metra, the board was trying to adhere to highest ethical standards,” Doris said. “That's who I am and was. I was devastated by Mr. Pagano's tragedy and everything after that.”
Copyright © 2014 Chicago Tribune Company, LLC