Em­ployee’s warn­ing over ‘fi­nan­cial cri­sis’ with 2013 budget cost him his job, law­suit al­leges

Chicago Sun-Times - - FRONT PAGE - BY ROS­ALIND ROSSI Trans­porta­tion Re­porter Email: rrossi@sun­ Twit­ter: @ros­alin­drossi

Casey Loop was an Iraq war vet­eran in­tent on pub­lic-sec­tor work when he landed his first full-time job out of grad­u­ate busi­ness school crunch­ing budget fig­ures at the Chicago Tran­sit Author­ity.

But in less than 1½ years, af­ter a raise and then a pro­mo­tion, Loop says he was warn­ing CTA of­fi­cials about huge red flags in the num­bers he was an­a­lyz­ing.

In a whistle­blower law­suit filed this week, Loop al­leged that his job was axed af­ter he fi­nally urged the CTA’s fi­nan­cial over­seer — the Re­gional Tran­sit Author­ity — to in­ves­ti­gate a “fi­nan­cial cri­sis” in­volv­ing a $56 mil­lion la­bor “un­der­state­ment” and other “as­ton­ish­ing” as­sump­tions packed into the CTA’s 2013 budget.

Within 15 min­utes of “con­fi­den­tially” telling the CTA’s au­di­tor that he had con­tacted the RTA, the CTA’s chief fi­nan­cial of­fi­cer called and ac­cused him of be­ing “disin­gen­u­ous,” the suit con­tends. Two days later, crit­i­cal com­puter ac­cess was yanked, it charges. Within 1½ months, he was told he was be­ing laid off.

“As soon as I sent that re­port [to the RTA], I was an out­cast, and they looked for the first op­por­tu­nity to get rid of me . . . Loop, 33, told the Chicago Sun-Times.

“The phi­los­o­phy was to sweep prob­lems un­der the rug. The ver­biage they liked to use at the CTA was ‘kick the can down the road,’ ” he said.

CTA spokes­woman Lam­brini Lukidis said she could not com­ment on specifics of the suit, but said, “We be­lieve the suit is com­pletely with­out merit and the ac­cu­sa­tions are base­less. The CTA pro­posed a bal­anced budget for 2013 and fin­ished the year with a bal­anced budget. Both the RTA Board and CTA Board ap­proved the 2013 budget.’’

“Most of what was said — prac­ti­cally all of what was said — was not true,” said Ron De­Nard, CTA chief fi­nan­cial of­fi­cer. CTA au­di­tor An­drell Hol­loway’s as­sis­tant re­ferred calls to CTA me­dia re­la­tions, and an RTA spokes­woman de­clined com­ment be­cause of “pend­ing lit­i­ga­tion.’’

Loop’s suit con­tends the CTA “ig­nored his re­port of ir­reg­u­lar­i­ties,” so Loop be­lieved he had a duty to alert the RTA. He later also no­ti­fied the state in­spec­tor gen­eral.

“He’s a guy who just re­ally is look­ing to do the right thing,” said Loop’s at­tor­ney, Betty Tsamis. “He is reem­ployed. He’s not hang­ing out, try­ing to make money off this case.’’

The suit seeks re­in­state­ment with back pay and un­spec­i­fied dam­ages.

A na­tive of San Diego, Loop said he came to Chicago af­ter four years in the Army, in­clud­ing 15 months in Iraq, to get an MBA in fi­nance and a mas­ter of fi­nance in risk man­age­ment from Loy­ola Univer­sity, known for its busi­ness ethics train­ing.

Ea­ger to put his fi­nance skills to work in the pub­lic sec­tor, Loop landed his first full-time job out of grad school in Fe­bru­ary 2013 as a CTA budget project con­sul­tant. By June 2013 he was pro­moted to man­ager of per­for­mance anal­y­sis, ac­cord­ing to his suit.

Months into the 2013 budget year, Loop said, he dis­cov­ered the CTA had plugged a 2013 budget hole by as­sum­ing that 347 bud­geted va­can­cies would not be filled that year. On paper, this was buried as a $56 mil­lion la­bor credit in “Depart­ment 9000,” he said. Nor­mally, Loop said, only 25 per­cent of va­can­cies would be pro­jected as not filled.

“To say we are not go­ing to fill a sin­gle po­si­tion in 2013 is un­re­al­is­tic,” Loop said.

In a let­ter to the RTA, Loop also called the budget’s rev­enue and rid­er­ship as­sump­tions so “as­ton­ish­ing” that by July, they were $32 mil­lion off.

By then, the CTA’s fi­nance team was cre­at­ing a budget “re­fore­cast” that Loop told the RTA was “fa­vor­ably over­stated and not im­ple­mentable.”

Among the ideas dis­cussed was to re­count in­ven­tory, Loop said. “They did a re­count and found over $9 mil­lion in parts just ly­ing around.”

By Au­gust, the CTA was pub­licly con­ced­ing a $10 mil­lion deficit and blam­ing it mainly on overly op­ti­mistic fare and pass collection projections.

Loop said he was pro­moted to find ef­fi­cien­cies and job cuts for the 2014 budget. Iron­i­cally, on Sept. 11, 2013, he was told his job was among 149 be­ing cut.


Casey Loop filed a whistle­blower law­suit this week against the Chicago Tran­sit Author­ity, al­leg­ing that he lost his job af­ter urg­ing the Re­gional Tran­sit Author­ity to in­ves­ti­gate a “fi­nan­cial cri­sis” with the CTA’s 2013 budget.

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