It’s a great time to rob a bank. Pick a new head of the MBTA who has no public transit experience and is touted as a turnaround king, even though his last place of employment may face bankruptcy. Or hire an ex-MBTA manager as a $30,000 a month consultant to the state’s commuter rail, despite a series of rocky endings to his previous transit gigs.
Governor Charlie Baker isn’t a bank-raiding Willie Sutton. But with Massachusetts Democrats diverted by the daily horrors of President Trump, the most popular governor in America is making some curious and potentially costly personnel moves for an operation he pledged to rejuvenate.
Consider Luis Manuel Ramirez, Baker’s choice to run the MBTA, at a base salary of $320,000 and an additional $60,000 for moving expenses. His claim to fame involves jobs held at General Electric Co. and Siemens, two industrial giants that have nothing to do with the business of moving masses of people by bus, subway, or commuter rail. Even if you accept Baker’s dubious argument that managing the T doesn’t require any special transportation expertise, the last corporate leadership job Ramirez held raises significant questions about his management skills.
As first reported by WBUR, Ramirez led a company called Global Power Equipment Group from 2012 to 2015. Two months after he left, the firm notified the Securities and Exchange Commission that the company’s financial statements for 2014 “should not be relied upon because of accounting errors.” An internal review subsequently disclosed that Global Power overstated its 2014 net income by 524 percent, transforming the net income of $11 million that was originally reported to a net loss of $47 million. Additional accounting errors covering the years Ramirez served as CEO were also discovered. A group of investors is now suing the company, and the SEC has opened its own investigation.
According to the Globe, court documents filed by lawyers for Global Power contend there’s no evidence of wrongdoing by Ramirez. But that’s hardly an endorsement of the T’s new chief as a hands-on, number-crunching turnaround king who can resurrect an aging, cash-hungry public transit system. He and Baker should both pray the Farmer’s Almanac prediction of a snowier-than-normal winter is wrong.
Meanwhile, the MBTA also put out word last week that Dan Grabauskas, who served for four years as general manager of the T, is coming back as an “executive director” of the commuter rail service, at a salary of $30,000 a month. Back in 2014, Keolis Commuter Services, the Boston subsidiary of an international company that’s backed by the French national railroad, won an eight-year, $2.68 billion contract to operate the commuter rail service. Since then, it has been nothing but trouble, with the MBTA deciding to pay Keolis $66 million more than planned, even after the company lost more than $30 million.
So Keolis needs a baby sitter. Why Grabauskas? He’s credited with overseeing the switch from tokens to the current CharlieCard system and implementing post-Sept. 11 security measures. However, when he was pushed out as GM by then-Governor Deval Patrick, three T board members issued a scathing letter, which questioned his “focus and commitment,” described him as “out of touch” and said they “lost confidence” in him after two serious trolley crashes and a system-wide power failure. After that, Grabauskas worked as executive director and CEO of the Honolulu Authority for Rapid Transportation. He resigned from that a job a year ago, following a city audit that found that the transit authority’s plans were not reliable, cost projections lacked supporting documentation, and there were no provisions for operating and maintenance costs. According to Hawaii News Now, Grabauskas called the audit a “joke.”
Still to be determined: whether the joke’s on Massachusetts. Governor Fix-It has a lot riding on the punch line. Or maybe he’s just banking on the thought that outrage over Trump will trounce outrage over an investment-starved transit system.