Nonprofit Leader Is Alleged to Have Diverted more than $10M
June 27, 2011 Massachusetts Attorney General Martha Coakley is reviewing findings by the states inspector general that the former director of the Merrimack Special Education Collaborative allegedly siphoned off more than $10 million and paid himself and others extravagant compensation, starting in the late 1990s.
Noting that the case is one of the most outrageous abuses this office has ever seen, Inspector General Gregory W. Sullivan, last week said that John B. Barranco paid himself, an ex-girlfriend, and several senior staffers outsized salaries and bonuses, according to a report in The Boston Globe.
Sullivan alleged, according to the Globe, that Barranco siphoned tax dollars from 10 Massachusetts school districts that belonged to the collaborative through the Merrimack Education Center
(MEC), where he was executive director.
According to the most recent Form 990, Barranco received $525,198 in total compensation in 2009.
The report noted that Barranco also racked up more than $50,000 in personal expenses on a credit card issued by a related nonprofit organization, including tickets to the Kentucky Derby, improvements to vacation homes in New Hampshire and Florida, Christmas gifts for a daughter, luxury clothes, and nearly $16,000 in gasoline, purchased from 2003 through 2010.
The Merrimack Special Education Collaborative
, a state funded nonprofit, provides academic, therapeutic, and vocational services to school children from more than 90 districts in Massachusetts and New Hampshire.
Sullivan has recommended that the collaborative sever its financial ties with the nonprofit and demand $11.5 million in repayment, the Globe reported.
The inflated salaries and bonuses paid to Barrancos former girlfriend, Mary Clisbee, began shortly after she started working for the collaborative, in 1997, according to the Globe report.
In addition to the attorney generals office, federal authorities, including the Internal Revenue Service, may investigate the allegations.
Sullivan said that Barranco also enabled lobbyist Richard W. McDonough to get a no-show job at the collaborative in order to qualify for medical benefits and a pension he was not entitled to receive, according to the Globe story.
On June 15, McDonough, along with former House speaker Salvatore F. DiMasi, was convicted by a federal jury in Boston of corruption charges relating to contracts between the state and software company Cognos.