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State ethics panel accuses ex-official

Interest conflict cited in special-needs spending

The State Ethics Commission took action Monday against a former official of a controversial Merrimack Valley agency for special needs children, accusing the former board member of violating the conflict-of-interest law by voting to transfer more than $5 million to a sister organization while he was negotiating for a job there.

It was the commission’s second enforcement action against former Merrimack officials. This one concerns James McCormick, a onetime ­associate of John B. Barranco, the agency’s former executive director. Barranco has been ­accused of seizing control of more than $10 million at the Merrimack Special Education Collaborative and transferring the money to a separate nonprofit called the Merrimack Education Center, using the funds to cover lavish salaries for himself and a former girlfriend.

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State Inspector General Gregory W. Sullivan said Barranco orchestrated the transfer of the money in 2006 with the cooperation of associates on the collaborative’s board, including ­McCormick, who later went to work at the ­Merrimack Education Center, earning nearly $200,000 a year in salary and bonuses over the next three years.

“At the time McCormick voted to approve the payment of $5.5 million from the collaborative to the center, he was negotiating with or had an arrangement concerning prospective employment with the center,” Ethics Commission investigators wrote in their charging document.

If the commission finds the accusation is warranted, ­McCormick could face fines and ­additional civil litigation to force him to pay back collaborative money that he may have ­received illegally.

McCormick’s attorney, ­Michael J. Connolly, said Monday that McCormick will contest the findings of the commission’s enforcement division. He acknowledged that McCormick went to work for the nonprofit Education Center four weeks after he voted to award it $5.5 million in funds from the collaborative, but said McCormick was not negotiating for the job at the time of the vote.

“There is no connection whatsoever,” ­Connolly said.

McCormick’s lawyer said his client will fight the accusation that he violated the conflict-of-interest law.

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The state’s nearly 30 educational collaboratives are consortiums of local school districts that band together to reduce the cost of educating students with mental, physical, medical, and behavioral disabilities.

The Ethics Commission also moved against former officials of the Merrimack collaborative last August, alleging that ­Barranco and a lobbyist now serving a federal prison term on an unrelated conviction each ­violated the conflict-of-interest law when the lobbyist was given a no-show job at the collaborative.

Barranco hired the lobbyist, Richard W. McDonough, as the collaborative’s director of public ­affairs and community relations in 2003 at a salary that climbed from $80,000 to nearly $110,000 over five years, even though McDonough never performed any significant work.

The Ethics Commission ­action against Barranco and McDonough has yet to be ­resolved.

Last August, the Globe ­reported that federal prosecutors had opened a wide-ranging investigation of the Merrimack collaborative, ordering the agency to produce virtually all its financial records for the last decade, including payroll records for Barranco and his former girlfriend, Mary A. Clisbee.

During that time, Sullivan said, Barranco’s salary climbed to more than $500,000 while he paid Clisbee more than $300,000 and awarded high-paying jobs to close associates, including ­McCormick, allowing some to enhance their public pensions through alleged fraud.

Sullivan also accused ­Barranco of using the money he transferred from the collaborative to pay for more than $50,000 in personal expenses, including high-end clothing and improvements to his luxury vacation homes in Florida and New Hampshire.

Several other state agencies are investigating the Merrimack collaborative or have already taken action, includ­ing the offices of Attorney General Martha Coakley and State Auditor Suzanne M. Bump.

Last year, Bump released an audit of collaborative spending in which she questioned the use of millions of dollars in taxpayer money intended for special needs students.

“It is gratifying to see that the work of the office of the state auditor has resulted not only in systematic reforms to Massachusetts education collaboratives, but also in the individuals responsible for the misuse of public dollars being held accountable for their actions,” Bump said Monday.

Connolly said McCormick will fight the accusation that he violated the state’s conflict-of-interest law at a hearing to be scheduled within 90 days.

Michael Rezendes
can be reached at
rezendes@globe.com. Follow him on Twitter @RezGlobe.
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