Baker’s choice to review T quits amid money woes
Paul Barrett owes nearly $200,000 in federal taxes
Paul L. Barrett, who was Governor Charlie Baker's point man to lead a high-profile review of the beleaguered MBTA, abruptly resigned Friday after the Globe raised questions about the adviser's personal financial troubles, including unpaid federal income taxes of nearly $200,000.
Baker only a week ago named Barrett, a former director of the Boston Redevelopment Authority, to chair the panel of experts charged with examining the operations of the T, including precarious finances that have hindered efforts to modernize the transit agency.
But Barrett has had financial woes of his own for at least the last decade, according to public records examined by the Globe. They include multiple state and federal tax liens, several foreclosure notices on his Cohasset home, and a $1 million legal judgment stemming from a Cape Cod real estate development deal that went sour.
"I regret that my personal financial issues have become a distraction and have voluntarily offered my resignation to the governor," Barrett said in a statement released by Baker's office. "Like other individuals dealing through periods of economic recession I have encountered financial difficulty, which I am now working in good faith to resolve."
Barrett's resignation marked the second time a high-level volunteer adviser to Baker has had to resign after failing to disclose personal financial difficulties.
On Friday, Baker's office said that "the governor is disappointed that these issues were not disclosed" in Barrett's case.
Baker immediately named two current members of the panel to cochair what is now a six-member group: Brian McMorrow, the chief financial officer for the aviation division of the Massachusetts Port Authority, and Katherine Lapp, the former chief executive officer of New York's Metropolitan Transportation Authority and now a top administrator at Harvard University.
Baker's office said the governor "now looks forward to the MBTA panel continuing their important charge under new leadership." The group is supposed to deliver recommendations to Baker in late March.
Barrett's financial troubles date to his purchase of a home on Cohasset's Jerusalem Road for $1.8 million in 2004 and continued over the following decade.
In December 2004, court records show that he wrote an apologetic e-mail to his partner in the Cape Cod real estate development deal in which he said he was "really pressed for cash."
As recently as a year ago, he avoided foreclosure by JPMorgan Chase Bank after pleading "financial hardship" and renegotiating his loan, agreeing to pay off $1.5 million of debt in monthly installments of more than $5,000, according to real estate records.
During an interview Friday evening, Barrett said he was under financial strain at the time because he was balancing his mortgage payments with monthly payments to the IRS of nearly $6,500. He said he made repayment of his back taxes a priority.
He also said he is now "current" on mortgage payments, discounting an online announcement on the Massachusetts Auctioneers Association website that creditors are scheduled to auction his home in March. He also said he has resolved his $1 million debt to his former development partners in the failed Cape Cod real estate deal through a confidential settlement.
"Almost all of these matters were settled a while ago," Barrett said.
Nevertheless, Barrett said he regrets failing to disclose his financial difficulties to the governor. "I should have told him about it or declined the appointment," he said.
Publicly available records show Barrett failed to pay either state or federal income taxes on time for five years, from 2006 through 2011. In four of those years, he failed to make timely state income tax payments ranging from about $6,000 to more than $30,000, according to real estate records.
By 2012, real estate records show, Barrett paid off all his state income taxes.
But Barrett acknowledged in an interview that he still owes about $200,000 in federal income taxes from four different years and said he is making regular monthly payments.
The Globe's discovery of the problems in Barrett's financial life comes three months after the resignation of another adviser from a key post in Baker's volunteer transition team. The adviser stepped down after the Globe revealed unpaid federal and state taxes of more than $500,000 and separate business judgments approaching that amount.
At the time, an aide to Baker said the transition team was assembled quickly and the administration had "no process for vetting the all-volunteer transition advisory committees" that were set up to help Baker take the reins of state government.
Barrett's appointment also happened swiftly, as Baker struggled to come to grips with a creaking mass transit system that had failed to deliver reliable service following the recent snowstorms that have battered the region. Baker at one point called the T's performance "unacceptable."
Despite Baker's sense of urgency, Barrett went on a long-planned trip to Jamaica right after he was named to lead the review.
On Friday, Barrett said he had promised the trip to his three young children and had spent much of the last few days on panel business.
"I have the obligation to my kids," he said. "If the same thing happened tomorrow, I'd do the same thing."