Above: The Inspector General’s Office issued a report on the findings from its investigation of the former CEO of the pension system for many town employees. (image cropped from report)
Last week, retired members of the Southborough Fire Department received an email from the Professional Fire Fighters of Massachusetts (PFFM). The letter alerted members that the Mass Office of the Inspector General has issued a damning report on the former CEO of their pension system.
That system, WRRS (The Worcester Regional Retirement System) is responsible most municipal pensions in our region, including for Southborough Town employees and some NSBORO Schools employees (those that aren’t part of the teachers unions).1
The OIG’s report issued on March 11th accuses former CEO Michael Sacco of abusing public funds. According to the OIG, Sacco neglected his job duties in order to prioritize private work he was doing on the side. The report paints a picture of Sacco deceiving the board into believing he was working full time, while using paid WRRS work hours for private work and vacation time.
The OIG’s release also highlights a bill filed last year on behalf of Sacco to cap the amount of “excess earnings” that could be clawed back. The report calls on the legislature to vote that request down.
The new report was issued over three years after Sacco was forced to resign from his role by WRRS’ board.
In January and February of 2023, board members made clear their upset at the perception that Sacco hadn’t wound down his private practice as he purportedly stated he would when he discussed taking the job in 2019. (Sacco denied having made that claim.) Minutes show that the WRRS’ Chair declared Sacco had “betrayed the Board’s trust and took advantage of the Board.”
The board debated the merits of dismissing Sacco. Instead they voted to allow transition time by accepting his resignation dated effective March 30th. MassLive covered the incident in June 2023. (It was the only media coverage I can find of the incident prior to last week’s announcement by the state.)
A press release on the OIG report summarizes the investigation findings:
“Mr. Sacco severely undermined the trust placed in him as the CEO of a public retirement system with 14,000 members,” Inspector General Jeffrey Shapiro said. “Beginning in his first week on the job, Sacco attended meetings on behalf of his private clients during business hours, without using leave time. This was not only a direct contradiction of the assurances he gave the Board prior to his hiring that he would confine his outside work to non-business hours, but also suggests that he was improperly paid a full-time salary.”
Through its investigation, the OIG found that Sacco, by his own admission, only worked 20 to 30 hours a week for WRRS, attended 350 outside board meetings, court hearings, and other engagements on behalf of private clients nearly all during WRRS business hours, and did not use leave time while traveling to and vacationing in Florida. At the same time, he neglected or underperformed in his duties as CEO, including failing to produce a single newsletter, ceasing regular staff meetings, failing to attend investment management committee meetings, and severely curtailing public outreach activities for members.
The OIG has 15 findings and made 28 recommendations including that the WRRS Board pursue recovery of funds paid to Sacco for allegedly unused vacation time, which is contradicted by the findings in the report. In addition, WRRS should report to the Public Employee Retirement Administration Commission (PERAC) a recalculated length of service to reflect the number of days he was working for private clients.
Finally, the Inspector General called on the Legislature to prevent passage of House Bill 2931 that would exempt Sacco for the post retiree earnings cap, which then would require him to pay back improper post-retirement earnings, and to consider steps to provide strong oversight of the state’s 104 retirement systems.
Bill 2931 was filed by Representative Pease of Westfield and referred to the joint committee on Public Service. A hearing was scheduled for last May. No report has been issued, and it looks like it may have died in committee. But, you can find info on the bill here.
The letter from PFFM stated:
The PFFM and its legal counsel are reviewing Inspector Shapiro’s report and will continue to monitor this issue as it moves forward. We are deeply troubled by the contents of this report, and most importantly, that contributions made by our members and retirees belonging to the WRRS or one of the 53 retirement boards represented by Attorney Sacco may have been used to directly pay him for work that he was performing while possibly defrauding the WRRS at the same time. We are also concerned about our members and retirees belonging to the WRRS or one of the 53 retirement boards represented by Attorney Sacco, to the extent that, as Inspector Shapiro put it, his “ambition overshadowed his responsibilities,” leaving these employees at risk.
You can read the full press release from the OIG here and the report here.
Two public meetings were scheduled by the WRRS to discuss the findings. One was at 2:00 pm today. The other is scheduled for tomorrow morning, March 17th, at 8:00 am and allows zoom participation.
