Big Trouble in the Merrimack Valley

No one is happier with the Whitey Bulger arrest than John Barrenco. It’s knocked the problems with the Merrimack Special Education Collaborative off the front pages, but there’s a big problem up in the Merrimack Valley area, and it appears that a lot of people are going to be in trouble by the time it’s all sorted out.

First, a disclaimer: All items below are based on allegations and all the accused are innocent until proven guilty in court of law.

With that out of the way, a quick synopsis of the allegations against Barrenco — he served, for a number of years, as the head (or was effectively in control) of both the Merrimack Special Education Collaborative (a public entity that provides special ed services to a number of school districts) and the Merrimack Education Center (a non-profit that contracted with the Collaborative).

In a series of publicly released letters (here, here, and here) the state’s Inspector General details a number of shocking allegations — no-bid contracts between the two entities, massive personal expenditures for each entities’ accounts, widespread conflict of interest, and on and on.

This is going to be a big story for a number of reasons.

First, special education funding is an increasingly pressing issues for cities and towns. State and local spending on special education has grown from $1.25 billion in 2001 to over $2 billion by 2009, a growth rate of 6.2 percent. That growth rate is faster than total state and local education spending, so over that period special ed has grown from 17-20 percent of that spending. The Merrimack-Barrenco case raises the concern that we have very little oversight of this spending and that some material portion of it is being wasted state-wide.

Next, there are oversight issues across several entities. The boards of each entity, which overlapped at many points in question, appear to have exercised poor fiduciary oversight. In addition, most of the board members were superintendents in region served by the two entities — so they have failed miserably (at best) to protect their communities’ interests and may have engaged in even more severe conflict of interest. (Also, I wonder how those towns feel about voting on education-related overrides knowing that millions were wasted.) Lastly, the accounting firms that audited and signed off on the books of each entity seem to have missed material related party transactions, blatant conflicts of interest, and a variety of other red flags that should not have been signed off on.

And lastly, there is the blatant disregard for the public trust by John Barrenco — signing conflicted related party contracts, putting phantom employees on the payroll, and breathtakingly wasteful spending.

Read the IG’s letters for all the sordid details. This story is not going away and, if the allegations are true, a lot of people have a lot of explaining to do.

Crossposted at Pioneer Institute’s blog.