06/29/2010 05:12 am ET | Updated May 25, 2011

Metra Chief Phil Pagano Suspended During Bonus Probe

After weeks of media needling, Metra has publicly confirmed that its executive director, Phil Pagano, is being investigated over "potential financial irregularities."

Greg Hinz of Crain's Chicago Business has been following up on a tip for some time that Pagano paid himself an unauthorized bonus of $56,000 on top of his nearly $270,000-a-year salary. And it now appears that Metra is taking that information seriously.

Pagano has been the head of Metra for more than 20 years. Now, he "has been temporarily relieved of his duties," according to theDaily Herald reports, as the commuter rail service investigates the bonus allegations.

A spokeswoman at Metra told Hinz that, if true, the allegations would be serious:

"Metra does not pay bonuses. Metra pays (only) annual salaries. We are looking into the matter you asked about," she said. "We are thoroughly investigating the matter."

The reported bonus comes at a time of financial hardship for Metra, along with so many other public agencies. Although its 2010 budget would not call for any layoffs, thanks to a federal stimulus grant, it would institute a staff-wide pay freeze and possible fare hikes.

The Herald reports:

Any questions of financial impropriety come at a bad time for Metra, which recently raised fares on one-way tickets and weekend fares to cover revenue shortfalls.

Along with other transit agencies in the region, Metra has cried poverty as unemployment cuts into its ridership and the state is lagging in payments of sales tax.

"It's a tight year," Metra board member James LaBelle said. "We're just trying to keep operations running as well as they have been. It's not a growth year; it's an austerity year."

Metra was rocked by scandal a few years ago when Donald Udstuen, a former board member, pleaded guilty to taking kickbacks from Metra contractors. He received an eight-month prison sentence in exchange for his testimony against corrupt ex-governor George Ryan.

While Metra continues to investigate Pagano, Hinz points out that he's been "effectively suspended from his job, with pay."