Allegations in a new lawsuit by a former top watchdog at Southern California's Metrolink commuter railroad paint an alarming picture of the operation's management problems and internal politics.
Former Chief Auditor Barbara Manning, 64, who was fired late last year, asserts that contracts were mishandled, accounting irregularities were rampant, ticket revenue was poorly tracked and that she was defamed and terminated for bringing some of the problems to light.
Scott Johnson, a Metrolink spokesman, said railroad officials do not comment on pending litigation as a matter of policy.
In her lawsuit filed Monday in Los Angeles County Superior Court, Manning names the Southern California Regional Rail Authority — Metrolink's operator — and singles out three high-profile board members. They are former state legislator Richard Katz of Los Angeles, Moorpark City Councilman Keith Millhouse and Larry McCallon, the mayor of Highland in San Bernardino County.
Katz declined to discuss the lawsuit, and McCallon could not be reached for comment.
Millhouse said the lawsuit is completely baseless and predicted that any allegations against him would be promptly dismissed. "At that point," he added, "I will seek my redress for malicious prosecution."
The lawsuit comes amid an ongoing effort by Metrolink to assess and correct a variety of management and accounting irregularities, which one internal agency report described as "a morass."
That scathing report found poor management, inadequate cash reserves and shoddy record-keeping and concluded that it was difficult for officials to assess the railroad's financial standing. Metrolink's chief financial officer at the time resigned in light of the findings.
Manning was hired by Metrolink in June 2013 to help correct the problems. The lawsuit states that she was fired by the board in December for allegedly lying to investigators and trying to impede an investigation into her conduct.
Her attorney, William M. Crosby, said Manning was a consummate professional who has worked in a variety of high-level positions. "It has never been suggested that she had performance issues," he said. "It's outrageous what they did to her."
According to the lawsuit, Manning and her audit team discovered financial irregularities, possible fraud and a failure by Metrolink officials to respond properly to negative federal audit findings. At the time, the Federal Transit Administration was threatening to withhold funding from Metrolink, her court papers state.
Manning's legal complaint asserts that her reviews found a lack of accountability and transparency, unapproved wire transfers of funds, and bank records that were inaccessible because no one on staff, including the chief executive officer, had signature authority to access them.
Accounts that contained fare revenue weren't properly reconciled and were short of funds, she alleged. Manning also says that she found discrepancies between cash collected and reported, as well as ticket sales that could not be accounted for — both matters she described in the lawsuit as "high fraud indicators."
Her lawsuit also says that her difficulties began after she uncovered irregularities in a security guard contract. She purportedly found unauthorized salary increases for security guards and an overextended budget that resulted in job cutbacks and reduced safety for passengers. The lawsuit says that the cutbacks coincided with an increase in assaults on riders.
The lawsuit states that after Manning disclosed the findings of her work to board members over McCallon's objections, she was falsely accused by the defendants of causing safety problems for the railroad, not following audit procedures and intending to issue an inaccurate report.
She alleges that Katz accused her of "creating an atmosphere of hostility and fear" and led the effort to fire her.
The lawsuit says that Manning experienced depression, extreme anxiety and insomnia because of her treatment by agency officials and charges that she will have difficulty finding comparable employment because of the stigma of her firing. She is seeking punitive and compensatory damages.
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