State widens Merrimack Valley agency probe

According to the commission’s enforcement division, John B. Barranco, the former head of the Merrimack Special Education Collaborative, gave lobbyist Richard W. McDonough a job as the agency’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 there.

“McDonough did almost no work for the collaborative and did not have an office or designated workspace at the collaborative’s offices nor did he have a telephone extension,’’ the commission said.

Barranco and McDonough each face possible sanctions, including fines and restitution, according to the commission. Neither returned telephone messages left by the Globe yesterday.

Because the collaborative is a public agency, McDonough, who previously held a variety of state jobs, was able to use the five years he reported working there, along with his salary, to raise his annual pension to the approximately $30,000 he is receiving today. Without the time he reported working at the collaborative and the salary he received, his annual pension would be about $6,000, the commission said. The commission also alleged that McDonough is receiving enhanced medical and dental benefits that he is not entitled to receive.

The Globe reported that the Ethics Commission was investigating last week.

McDonough has been in legal trouble before. He was convicted in June on federal conspiracy and fraud charges with his friend, former House Speaker Salvatore F. DiMasi, for his efforts in helping a computer company gain a state contract.

The commission’s allegations mirror the findings issued in June by State Inspector General Gregory W. Sullivan, who said McDonough’s position at the collaborative “was literally a no-show job.’’

In a letter to the State Board of Retirement, urging the board to review McDonough’s pension, Sullivan said that McDonough’s pension “defrauds the state retirement system.’’

In addition, Sullivan accused Barranco of siphoning $11.5 million from the collaborative, which provides academic instruction and therapy to special needs children, and funneling it to a related nonprofit organization that he controlled. Sullivan said that Barranco used the money to award excessive salaries to himself, a former girlfriend, and a group of associates.

A federal grand jury and six state agencies, including the Ethics Commission, have been investigating Barranco and his financial dealings as executive director of the collaborative and the Merrimack Education Center, the related nonprofit that he controlled until taking an unpaid leave of absence in June.

McDonough, during the years he professes to have worked at the collaborative, was a lobbyist for the center, which sells high technology services to local school districts.

It also provides classroom space, transportation, and administrative services to the collaborative under an agreement that Sullivan says violates the state’s open bidding law.

The agencies investigating Barranco also include the office of state Treasurer Steven Grossman, which oversees the state retirement system and is seeking to determine whether Barranco allowed other individuals, in addition to McDonough, to claim no-show jobs at the collaborative in order to enhance their pensions.

Sullivan, in his June findings, said that a former employee of the center told his investigators that any staff member working at the center who had accrued time in a state public pension plan was given the option of being paid through the collaborative to increase future pension benefits.

The Ethics Commission said it will schedule a hearing on allegations against Barranco and McDonough within 90 days.

Michael Rezendes can be reached at rezendes@globe.com.