'Mr. Inside' cashing in as retiree

McCann retired amid much fanfare in 2005, with Mayor Thomas M. Menino touting his service to the city and calling him "a true friend." He has since been collecting a pension of roughly $97,000 per year.

But a Globe review has found he has never stopped working for the city. Or receiving pay from the BRA.

Last year he earned $162,000 - on top of his pension - for working about 25 hours per week under contract as a consultant at the planning agency.

State retirement officials say McCann, whose combined annual income in public pay and pension benefits tops a quarter million dollars, is violating state pension law, which places strict limits on public sector retirees' income and work schedules.

The law prohibits retirees from working at a government agency - as an employee, independent contractor, or consultant - for more than 960 hours per year and from collecting more in total income than the salary for the position they held at retirement. McCann's salary was $137,000 the year before he retired, payroll records show.

McCann, seated in his City Hall office overlooking Faneuil Hall on Friday afternoon, insisted he has not violated the law because it does not apply to him. He said he believes the BRA is an independent authority and not a government agency covered under the income-limit clause of the law.

"It's like saying the state of New Hampshire should be governed by the Massachusetts statute," McCann said.

But state retirement officials rebut that claim. They say the BRA is a government agency and full-fledged member of the public sector retirement system, which is how McCann qualified for his pension in the first place.

Joseph E. Connarton, executive director of the state Public Employee Retirement Administration Commission, said he plans to ask Boston retirement officials to investigate McCann's pay and pension, and if they don't take action, his agency will.

"The Boston Retirement Board should be suspending his pension benefit, at a minimum," Connarton said.

If found in violation of the law, McCann could be forced to pay back the money he earned beyond the legal limit, plus interest, to the city's pension fund.

After being advised of the results of the Globe review, Menino administration spokeswoman Dot Joyce said late Friday that the city's retirement board will investigate.

"The city and the retirement board will absolutely review this case," Joyce said.

And BRA officials said that, in the meantime, they are suspending McCann's consulting contract.

"On advice of counsel, we're going to be suspending the contract of Paul McCann, pending further review," BRA director John Palmieri said.

McCann, reached by phone at his home in Hull Friday night, hung up after learning the caller was a Globe reporter. Yesterday, he said he stood behind his earlier comments but would abide by whatever decision officials make.

The onus for complying with the law falls on McCann, who was supposed to notify BRA officials that his income and work hours are limited under the statute. McCann said in the Friday afternoon interview that he never notified anyone because he didn't think the law applied to him.

"Why would I, knowing it was not a legal requirement?" he said.

McCann, 68, first began work for the BRA in 1958 as an office boy. He went to Boston College and then attended law school at night while working for the authority during the day. By the 1970s, he was special assistant and counsel to the BRA director. He soon became the go-to guy for developers looking to build in Boston, and posited in 2005 that he had worked on some 1,000 development approvals during his agency tenure. Whenever the agency was without a director - in 1996, 1999, and mostly recently in 2007 - McCann took over until a new one was appointed.

He received an award for outstanding public service as a city employee in 1994. After 36 years on the job, the citation noted that his knowledge of city history and development was invaluable.

But his tenure has not been without controversy. In 1999, an outside legal review found McCann had played a major role in allowing a high-ranking BRA employee to buy a subsidized waterfront condominium that was supposed to go to a low-income family. The BRA director at the time, Thomas N. O'Brien, resigned under pressure, but McCann faced no discipline. In fact, Menino tapped him to fill in as director until he appointed another one.

In December 2005, one month after he announced his retirement, McCann signed the consulting contract with the BRA, which has paid him between $104 and $127 per hour. Save for his one-year stint as acting director in 2007, when he worked full-time hours, McCann has worked between 15 and 25 hours per week. He typically punches in at 7:35 a.m. and leaves at 1:15 p.m., in time to catch the early afternoon commuter boat to Hull.

McCann said Friday that he volunteered earlier this year to take a pay cut, in light of the city's financial situation. He scaled back his hourly rate from $127 to $114 and cut back his schedule from four days a week to three.

When asked if he thought it was appropriate to collect both the pension and the consulting pay, McCann said: "That's not a fair question."

The Boston Finance Commission, a city watchdog agency, said McCann appears to be milking the system.

Executive director Jeffrey Conley said his contract should be cancelled and he should pay back the pension fund immediately.

"The city's in a financial crunch; in addition, he's violating the provisions of the retirement law," Conley said. "The way it is now, he's getting paid more by the taxpayers than he got paid when he was working full time."

Donovan Slack can be reached at dslack@globe.com.