Transit Chief in Mass. Placed on Leave as Insurance Probe Continues

By | February 26, 2006

The director of one of Masachusetts’ largest regional transit authorities has been placed on paid administrative leave as federal agents investigate his handling of contracts and bids, including ones for insurance.

Gary Shepard, whose leadership role at the Pioneer Valley Transit Authority in Springfield, came under federal scrutiny late last year, has not been charged with any crimes.

But federal authorities have said they are probing insurance contracts and deals the PVTA has with Hulmes Transportation Services of Belchertown, which provides transportation for disabled and elderly riders. Investigators have not commented on their specific concerns, but they have singled out decisions made by Shepard.

The government is also investigating a $115 million project the PVTA was involved in to redevelop Springfield’s empty Union Station into a major transportation hub. A federal audit claims the PVTA inappropriately spent $3.3 million on the project.

The PVTA’s board hired an independent counsel to review the agency’s management practices. But the report, submitted earlier this month by attorney Jeffrey Kinder, has not been publicly released.

The PVTA’s governing board, which is made up of mayors and other representatives from the 24 western Massachusetts communities served by the agency, voted 8-7 in a closed session to place Shepard on leave.

They appointed Keith Henry, PVTA’s chief financial officer, as acting interim director until a more permanent replacement is picked in the next few weeks. Henry declined to comment.

“We need to clear the air and appoint an acting administrator until the FBI gets done with its job, which hopefully will be done sooner rather than later,” said James St. Amand, the board’s administrator.

St. Amand, who voted against placing Shepard on leave, said Shepard has “done a fine job” as PVTA’s administrator.

“Hopefully he’ll be back,” St. Amand said.

Shepard declined to comment, and his lawyer did not immediately return a telephone call.

Shepard’s five-year-old contract says that he is entitled to $228,000 severance if he is fired without cause, with cause defined as a felony conviction or insubordination.

Some board members have challenged the validity of Shepard’s contract, and federal prosecutors have said they want to freeze any severance that Shepard would otherwise receive.

Gregory Angelini, a lawyer hired by the board to review Shepard’s contract, said the agency would have a hard time contesting the pact in court.

“I would advise against challenging it,” Angelini said. “You’re going to spend a lot of money and resources and the fight would take longer than the other options you have available to you.”

While he didn’t suggest suspending Shepard with pay, he said the board could easily do so.

The PVTA is the state’s second largest regional transit authority. It oversees public transportation throughout Pioneer Valley and owns 190 buses and 120 vans. It contracts with outside companies to provide the drivers.

St. Amand said the federal probe and the agency’s administrative shake-up will have no impact on busing services.

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