PPH | It's payback time for former MTA director: $155,000

Posted: December 16, 2011 | Government Oversight Committee, News Items, Senator Hill, Transportation

Source: Portland Press Herald, Ann Kim, December 16, 2011

PORTLAND – The Maine Turnpike Authority and Paul Violette have reached a $430,000 settlement to resolve a lawsuit that alleged misconduct by the former executive director of the agency.

Under the agreement, Violette will pay the authority $155,000, a sum that he has indicated under oath represents his present net worth, according to the authority. Violette, a lawyer and a former Democratic state legislator, is now unemployed.

Two bonding companies, Travelers Casualty and CNA Surety, will pay $175,000 and $100,000, respectively.

Turnpike authority officials said the payments totaling $430,000 represent the damages that could have been proven at trial. The authority’s board voted unanimously Thursday to accept the arrangement.

“We have recovered the money to which we are entitled and plan to reinvest it back into turnpike operations,” Daniel Wathen, the authority’s board chairman, said in a prepared statement.

Violette resigned in March after 23 years as executive director of the quasi-state agency that operates the toll highway stretching from Kittery to Augusta.

The accusations against him in the lawsuit included failing to account for more than $160,000 worth of gift cards, lying to collect on about $161,000 worth of vacation and sick time, and making tens of thousands of dollars in improper credit card charges.

The gift- and credit-card accusations involved alleged personal expenses in the period from 2003 to 2010, including the rental of an Italian villa for $3,240, hotel and restaurant services for $2,820 in the French Riviera, 87 gift certificates redeemed for $8,700 Canadian at a Quebec City hotel, a $558 flight to Martha’s Vineyard and a $643 meal, a $1,000 cash advance at a casino in Puerto Rico and $479 in services at a Foxwoods restaurant.

The authority sued Violette in Cumberland County Superior Court in July. The lawsuit followed a report by the Legislature’s Office of Program Evaluation and Government Accountability, which questioned spending by the authority while Violette was in charge.

Peter DeTroy, Violette’s lawyer, said Thursday that his client does not admit to any of the allegations in the lawsuit. DeTroy noted that the accusations included claims about gift cards for which there were no paper trails to determine their use.

“He has an interest in trying to resolve those claims, particularly with other potential matters he may be facing,” DeTroy said.

Violette is the subject of a criminal investigation by the state Attorney General’s Office.

Peter Mills, who replaced Violette as executive director, said that although any payment Violette makes would not be admissible as evidence in a criminal case, he did not agree with DeTroy’s interpretation.

“Obviously,” he said, “no one pays out his entire net worth if he doesn’t feel he owes the money.”

Violette did not return calls to his home in Portland seeking comment Thursday. In April, during a hearing before the Legislature’s Government Oversight Committee, he cited his right against self-incrimination and did not answer questions about purchases.

The turnpike authority’s staff and its auditing firm, Runyon, Kersteen & Ouellette, determined the extent of the loss, said Mills. He described the resolution among the parties as complex.

The lawsuit asked the court to freeze $450,000 worth of Violette’s assets to satisfy the authority’s claims. The lawsuit included questionable expenditures that warranted investigation but the authority may not have been able to prove, said Dan Morin, a spokesman for the authority. That is why the $430,000 from the settlement was deemed a full recovery.

The authority had surety bonds on some employees through Travelers Casualty and CNA Surety, to protect itself from allegations of fraud or losses due to those employees’ failure to meet fiduciary obligations, said Morin.

Sen. Roger Katz, R-Augusta, said he was not surprised that the authority was able to recover the money it did, given the accountability office’s review and the internal audit.

“It’s good news for the authority, but another sad chapter in the saga — another reminder of the staggering lack of oversight by the authority, by its board, under the old regime,” said Katz, Senate chairman of the Government Oversight Committee. Katz said the turnpike authority, under the leadership of Wathen and Mills, is re-establishing its credibility.

Sen. Dawn Hill, D-York, said the recouped funds will help the authority maintain a vital transportation corridor.

“I’m glad the state is getting it back and that MTA is getting it back. I think that’s an important message, going forward, for any of the quasi-governmental agencies: that you need to run a tight ship and you need to be open and transparent, and steps will be taken if that’s not the case,” said Hill, a former co-chair of the Government Oversight Committee.

Turnpike employees sensed the public’s anger over allegations of misconduct by Violette, said Brian Oelberg, field representative for the Maine State Employees Association. He said toll collectors, in particular, bore the brunt of verbal abuse from patrons who didn’t have a way to yell at Violette.

“The mismanagement under Paul Violette is hopefully being put to bed and the turnpike can move forward as an institution,” said Oelberg, chief negotiator for the turnpike employees’ unit. “The employees, they were never the ones handing out gift cards and going on junkets.”