By Rick Sobey
BOSTON -- Former North Middlesex Regional School District Superintendent James McCormick has admitted to violating the conflict-of-interest law and agreed to pay a $2,000 civil penalty for his role in the Merrimack Special Education Collaborative scandal, the state Ethics Commission reported Tuesday.
From 1993 through 2006, McCormick served on the board of directors of MSEC, a municipal agency based in Billerica that provides services and programs to people with special needs.
On June 5, 2006, McCormick, as an MSEC board member, voted to approve a $5.5 million settlement agreement between MSEC and the Merrimack Education Center, a private, nonprofit organization on whose board of directors McCormick also served.
MEC provided administrative and transportation services to MSEC as a vendor, and allowed MSEC to use MEC property under a license agreement that also saw MSEC pay for programs, services and property rentals. That specific settlement agreement authorized MSEC to pay $4 million immediately, followed by six additional annual payments of $250,000.
At the time he voted to approve the settlement, McCormick, a Leominster resident, was also negotiating an employee position (or already had a future job arrangement) with MEC. McCormick became a MEC employee less than a month later, on July 1, 2006.
The Ethics Commission determined that McCormick violated section 19 of the conflict-of-interest law "by voting to approve the payment of $5.5 million by MSEC to MEC while he was a member of MEC's board of directors and while he was also negotiating or had an arrangement with MEC for prospective employment."
The commission imposed the maximum civil penalty of $2,000 for violations of the conflict-of-interest law occurring before September 2009, when the Ethics Reform Law became effective.
Today, the commission can impose civil penalties of up to $10,000 for a violation of most sections of the conflict-of-interest law, including section 19, that have taken place since September 2009.
A telephone listing for McCormick could not be located.
John Barranco, the former executive director of both MEC and MSEC, was fired in September 2011 after he was accused of misusing at least $37 million in taxpayer funds while leading both agencies.
A report by the state Inspector General's Office accused Barranco of misusing the MSEC funds, spending some of the money on parties, bar tabs and golf outings. The IG also accused Barranco of misusing nearly $57,000 of MEC funds by charging shoes, dinners, furniture and a trip to the Kentucky Derby on MEC's American Express card.
Attorney General Martha Coakley's office has been investigating Barranco's activities for more than two years, but has yet to close the investigation or file charges.
In December, an indictment issued against MEC's former chief financial officer was the first known criminal case stemming from the scandal that enveloped the two agencies in 2011.
Carl Nystrom, of Pelham, N.H., was indicted on allegations that he defrauded the state of Massachusetts by making it appear that MEC employees actually worked for the state. Nystrom faces up to 20 years in prison and fines of up to $250,000 for each count in the indictment that charges him with both mail fraud and wire fraud.
Prosecutors accuse Nystrom of "engaging in a scheme to defraud the state" by putting himself and four other ineligible MEC employees into the payroll computer system as MSEC employees, which enabled them to fraudulently enroll in the state's pension plan.
"The indictment alleges that the purpose of the scheme was for Nystrom and the others who were fraudulently enrolled in the pension to obtain pension payments that they were not entitled to receive," U.S. Attorney Carmen Ortiz wrote in a prepared statement.
The indictment also alleges that Nystrom, as well as an unidentified lobbyist and three other unidentified MEC employees, were also fraudulently enrolled in the state's retirement system.
Ortiz said in a prepared statement that the lobbyist and one of the unidentified former employees have already collected nearly $300,000 in pension payments.