Metro Messy

Transit chief Larry Salci knows he has his critics. Ask him if he cares.

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Larry Salci steps onto MetroLink's Emerson Park platform in East St. Louis and pats the silk handkerchief in his chest pocket. With his shimmering navy-blue suit, bulky gold ring and auburn mane, the six-foot-two Salci stands out in any crowd. But here on the edge of this dilapidated neighborhood, he's a stranger in a strange land.

Salci, Metro's chief executive officer and president, has agreed to ride MetroLink this sweltering June morning. When Adella Jones, Metro's vice president of government and community relations, told Salci a reporter wanted to take the train with him, he replied, "Now why do I have to do that for?"

Salci's critics accuse him of being inaccessible and, at times, downright testy with people who question him. Jones, a savvy handler whose previous employers include former U.S. Congressman Dick Gephardt, might have Metro's toughest job: getting Salci to show his face to elected officials and citizens a bit more often, at more than just monthly Metro board meetings.

In Jones' presence, Salci congratulates himself for hiring her last year and thanks her for keeping his sharp tongue in check.

"Adella knows I'm a pussycat," he says.

The feline routine comes off flawlessly when, as Salci sets his briefcase on the platform, a short, African-American gentleman clad in stained work clothes approaches.

"You must be an attorney," the man teases, leaning toward Salci.

Salci crosses his arms. "Been called a lot of things," he replies, "but not a lawyer."

"How 'bout this," the man goes on. "How 'bout a Republican businessman?"

"Not a Republican either. You're 0 for 2."

"But you are in management, right?"

"I am in management. That's one out of three. Hit 33 percent and you can lead the American League in batting," Salci answers cheerily.

His interrogator lets out a laugh. "You're a crook! What businessman isn't?"

Salci stops smiling. "I wouldn't agree with you, but you're entitled to your opinion, sir."

The exchange could end here, but Salci takes note of the man's navy baseball cap and ribs: "You're not a Yankees fan, are you, living in St. Louis?"

"It's just a hat," the man mumbles.

Larry Salci has turned many heads in his three and a half years at Metro's helm. The cash-strapped outfit, formerly known as the Bi-State Development Agency, had long been run by local politicos lacking extensive transit or managerial experience.

When the director's position opened in 2001, the board of commissioners cast its line for a strong manager to streamline operations. They believed they found their magic bullet in Salci, who applied on January 3, 2002, and signed a $170,000 contract less than two weeks later.

"Larry hadn't had much public-sector experience," notes a former board member. "But he dazzled us."

Most commissioners considered Salci's private-sector past and non-St. Louis heritage assets. An outsider, they reasoned, might have better luck overhauling the beleaguered agency. Today, Metro still has no long-term financing plan to speak of, but Salci has proven himself an intrepid decision maker.

In August 2004, in a move transit officials call unprecedented, he fired and sued the Cross County Collaborative, a group of four firms charged with designing the 8.2-mile MetroLink extension that will connect Forest Park and Shrewsbury by way of Clayton. The CCC countersued Metro three months later.

Then, earlier this year, Salci raised eyebrows by recommending that Metro refuse an audit requested by state auditor Claire McCaskill. Salci said it would jeopardize the agency's lawsuit. Salci lost the skirmish, and Missouri auditors are expected this week to begin a year-long financial audit to determine why cost overruns on the $550 million MetroLink project might total $126 million. The completion date for the new line was scheduled for May but has been pushed back to the fall of 2006.

Just last week, Salci went even further by amending Metro's lawsuit against the CCC -- for the third time -- by alleging a prima facie tort, a claim similar to libel. The lawsuit now claims CCC representatives have made harassing statements to political figures and the media, including the Riverfront Times and the St. Louis Post-Dispatch, causing the agency to suffer "a loss of credibility, damages to its reputation and damages to its business relationships."

Underscoring those controversial moves is what those who work closely with Salci call his "abrasive" leadership style.

Aware of the criticism, Salci addresses it this way:

"[Someone has] a problem and thinks they have to take five minutes warming me up to tell me the problem. I don't need the build-up. Think about it before you come in here, and tell me what the issue is. Then tell me what you're going to do about it. Don't try to transfer it to my back, 'cause if you're one of my managers, I expect you to have [the solution] figured out before you come in. And if you haven't got it figured out, tell me, because that's what I'm here for: to say, 'Let's put our heads together, and we'll figure it out.'"

Later, he adds: "I'm not into this 'glass half-full of water' stuff. If it's a liter bottle, it's either 0.4 liters or 0.6. It ain't half-full or half-empty. It's 0.4 or 0.6. There's no gray area. That's me, OK? That's Larry Salci in a nutshell."

Without question, Salci has numerous detractors -- including citizens, elected officials, former Metro employees and board members -- who perceive him as being aloof and demonstrating a callous disregard for local politics. Though some are reluctant to elaborate publicly, none are shy about offering such not-for-attribution observations as "duplicitous," "manipulative," "ego-driven" and "confrontational."

Notes board commissioner Dave Tanzyus: "There's a huge line of people ready to throw Larry over the boat."

"If I had to classify Larry, I'd say he was an asshole," sums up Ken McKoy, executive director of the advocacy group Association of Community Organizations for Reform Now, or ACORN.

Still, Salci has managed to amass a fervent camp of supporters.

"When he first came to town, I wasn't sure I was going to like him," says Tom Shrout, executive director of the advocacy group Citizens for Modern Transit, citing Salci's characteristically caustic demeanor. "I remember thinking, 'Is he going to make it? Is he going to survive here?'" Three years later, Shrout concedes, "[Salci] has made some huge improvements over there."

Says John Baricevic, former St. Clair County board chairman: "I think Salci is the best director we've ever had."

Metro's 58-year-old CEO today sports the accoutrements of an affluent baby-boomer: a turbo Audi A6, a Missouri Athletic Club membership and homes in Caseyville, Illinois, and Hilton Head, South Carolina. His beginnings were much humbler.

A second-generation Italian, Salci was the eldest child of a working-class couple in the Detroit suburb of Warren, Michigan. His father was a machinist, his mother a homemaker.

Four years of high-school hoops and All-American honors earned Salci a full scholarship to the University of Detroit. Shortly after graduating, he married his college sweetheart and departed for U.S. Army bases in Kentucky and Missouri, where he held down desk jobs during the Vietnam War. Never one to squander a second, Salci then worked full-time for Chrysler Corporation while studying for his master's in business administration.

To hear Salci tell it, his glory days came in the late 1980s and early '90s, globetrotting as a transit executive and pressing the flesh of dignitaries. He hastens to rattle off the dozens of nations he's journeyed to and the five former U.S. presidents he has known -- "three, at least, on a first-name basis."

Salci's St. Louis lifestyle is decidedly more sedate, with his wife Karen's rheumatoid arthritis keeping the couple off the local social circuit. In fact, on the night of their 35th wedding anniversary in March, they celebrated at their Far Oaks Golf Club home with grilled cheese sandwiches and tomato soup.

If Metro's president does manage to steal away, he heads for a fairway. Along with photos of railcars, prints depicting some of the nation's most illustrious golf courses occupy prominent space in his spacious sixth-floor office at Metro headquarters on Laclede's Landing. Just outside it hangs an unlikely tribute given to Salci by his staff last Christmas: a framed Post-Dispatch editorial labeling him "The Terminator." Staff members superimposed Salci's headshot atop Arnold Schwarzenegger's body.

Salci eschews local newspapers for the Wall Street Journal and Investor's Business Daily. "I'm really not interested in what I'll call the human-interest stuff. You know: the fires and accidents."

As for the occasional media criticism he's received during his tenure, Salci says it doesn't faze him in the slightest. "The only people I really care about that have any influence with me are my ten commissioners who hired me. And I care what Wall Street thinks about me. And I care what my headhunters think about me, in case I've got to go someplace [else]. Other than that, I just don't care."

Salci is used to moving on, having spent a career jumping from one job to the next, taking positions at transit companies in the midst of financial crisis. At least one former Metro commissioner wonders now if the board should have probed more. "In retrospect," the commissioner says, "I don't think any due diligence was done on Larry's past."

In 1975 the 29-year-old Salci left Chrysler to take over Detroit's Southeastern Michigan Transportation Authority (SEMTA) when the agency was developing its downtown People Mover. It's a monorail now considered "the great white elephant of all time in public transportation projects," according to Belleville, Illinois-based consultant Wendell Cox.

Salci was able to secure $600 million in federal funding for the system but abandoned SEMTA before construction began. The monorail subsequently racked up $73 million in cost overruns, and the city of Detroit, citing mismanagement, swiftly dissolved SEMTA.

Why did Salci flee at such a crucial time? His reply is vague: "I didn't want to make the public sector career, mainly because of the politics."

Salci insists he left the monorail project in fine shape, but national transit consultant Tom Rubin of Oakland, California, claims the damage Salci caused was long-lived.

"Over 30 years after SEMTA was formed, the various governments are still trying to figure out how to solve these [People Mover] problems. You can say that [Salci] failed to come up with a stable funding and organizational structure for SEMTA." Then again, Rubin adds, "No one since has really been able to do any better."

After a year in management consulting, Salci became president of the Philadelphia-based Budd Transit Group. Once one of the United States' premier train manufacturers, Budd had just lost a $663 million contract and desperately needed new business. But after three years on the job, Salci still had no new contracts.

"If we don't win a major job in the next fifteen months, our future is in deep question," he told the Associated Press in 1985.

By 1987, the situation remained. Budd gave up train-building, and newspapers nationwide recounted the storied company's demise.

Salci sold the firm's assets to Bombardier Inc. of Montréal, Canada, then became president of the company's Washington-based subsidiary. There he took on special tasks, one of which -- a Texas rail boondoggle -- particularly stands out.

Salci chaired Texas TGV, a French-American consortium that won a controversial 50-year franchise to build a high-speed train between Dallas and Houston by agreeing not to use taxpayer dollars for the project -- a promise that many decried.

"No one in their right mind would finance this kind of project," Southwest Airlines chairman Herbert Kelleher told the Dallas Times Herald in 1990. His prognostication materialized. Texas TGV failed to net $170 million in private funding, which sent Salci lobbying for federal funds. He pleaded with the Federal Railway Administration, then-Vice President Al Gore, and then-Secretary of Transportation Federico Pena. Each time, he left empty-handed.

By the end of 1993, Texas TGV had only $40 million at the ready, and the super-train died. Its downfall was not Texas TGV's fault, Salci says, but a matter of politics.

"The governor of Texas, Ann Richards, simply thought that Bill Agee had lied to her, and she was very close to Bill Clinton, and she told Bill Clinton, 'Don't give them any money.' And that's what happened," Salci grumbles.

Agee, then chairman of Boise, Idaho-based Morrison Knudsen, was a key player and partner of Bombardier's in Texas TGV. But the two firms were also rivals. Salci notes that MK defeated Bombardier on numerous contracts and says he warned fellow Bombardier officials that Agee was winning them through unscrupulous tactics.

And yet when Agee came to Salci in 1994 and offered him the presidency of MK's transit group, Salci took it. He couldn't resist the money -- $500,000, plus company stock and the allure of power.

"[Agee] made it clear to me that in five years he'd retire, and that I'd be one of two to three people in line to be his successor. Running one of America's largest companies was attractive to me. I knew I could never run Bombardier, because it was a family-controlled business, and they were all French-Canadians."

Salci became MK's number-two in March 1994. Later that year the Chicago Tribune quoted him saying the company had a profitable future. How wrong he was.

A few months later, media nationwide revealed that Agee was roiling company waters with more than his arrogant management style. He had underbid contracts, used company monies for personal extravagances and, as a result, racked up and hid from shareholders more than $200 million in losses.

In February 1995 MK's board fired Agee, leaving Salci to finagle some complicated financial maneuvers. He restructured the firm under the name Amerail, liquidated it and sold the remaining assets to a French company in 1999. That same year, Salci cashed in on an early retirement. He and his wife bought a home near two golf courses in Hilton Head. "I was pretty tired," he remembers.

Says consultant Tom Rubin: "This poor guy may hold some kind of record for being associated with snake-bit transit organizations."

"I can sum it up real simply," says Herb Dill. "I've been on this job 30 years, and I've been through some very rough times with Metro -- times where we've had contracts with almost no increases in wages. But overall, the mood and morale of the agency, right now, it's the worst I've seen in 30 years."

Dill is president of the Amalgamated Transit Union Local 788, which represents nearly all of Metro's clerical, mechanical and operational workers. That labor force is one of Metro's biggest expenses and an early target of Salci's cost-cutting. Salci is credited with lowering union absenteeism from 1,743 missed days in 2002 to 1,460 last year. At the same time, worker's compensation payouts have dropped from $6 million to $2.3 million.

"We have cut our operating budgets here between $12 to $14 million," Salci confirms, adding with a boastful air, "I've almost stopped keeping score."

Dill understands that Metro's management has a duty to keep costs down, but still, he notes, Metro and union leaders should be "partners in the adventure" of making taxpayers support Metro. The union, Dill adds, had an excellent relationship with Metro's previous director, Tom Irwin, who was known to appear at Metro garages at 3 a.m. and pick the brains of bus drivers.

"Mr. Salci's style," says Dill, "is completely different."

Many characterize it as unyielding and self-centered.

"I've seen Larry at meetings where he didn't treat people very respectfully. And I'm not talking about kissing the ring; I'm talking about common courtesy," says a local official who asked not to be named in this article. "You know, the difference between it's an 'I don't care who you are, I'm going to do whatever I want' approach, versus one that's more about 'we're all in this together.' We all have a stake in this thing. It's not Larry's transit system."

"He had no interest in working with anybody," agrees Veronica O'Brien, a Lindell Boulevard resident and St. Louis School Board member who squared off in court against Metro in a 2002 Cross County Collaborative-related property dispute. "And the way he talked to people wasn't just firm. He was outright mean. I found him to be incredibly and overly cocky."

Citizens and business owners affected by the light-rail extension complain their letters to Salci go unanswered, while former Metro employees say he ignores all but the highest-level employees. And ex-Cross County consultants claim Salci never visited MetroLink worksites.

"He has a half-a-billion-dollar construction project," grouses Dave Sampl, former Cross County deputy construction manager. "I would expect him to pop in every now and again, or at least have some meetings with the composite management."

Salci admits he's serious about his closed-door policy.

"To my senior managers, you bet [I'm accessible]. To anybody else that wants to walk in that door? Absolutely not. That's what was going on before I got here. I don't have the time," he says.

Salci can make gestures of rapprochement, but even those seem insincere, detractors say.

"When we were meeting with African-American contractors, Larry would be standoffish," says former commissioner Reverend B.T. Rice, who scuffled with Salci over minority business contracts. "He wouldn't make any statements or overtures saying, 'We want to reach out to you.'"

Local officials maintain Salci should rethink his M.O.

"The most important thing for a public official in a situation such as this one is to get out of the bunker. That's Larry's challenge," says Mike Jones, executive assistant to St. Louis County Executive Charlie Dooley.

Politics has proved another of Salci's stumbling blocks, and Dooley is but one politician with whom Metro's CEO has butted heads.

"He can be difficult," says St. Louis County Councilman Kurt Odenwald, who represents numerous neighborhoods affected by Cross County.

"It seems to me that it's been unnecessarily adversarial dealing with Metro," seconds St. Louis 28th Ward Alderman Lyda Krewson.

Even Tom Shrout of Citizens for Modern Transit thinks Salci could "be more attuned to the wishes and thoughts of some of the elected people, and probably accommodate them without making people mad."

But Salci seems wholly immune to such criticism. Dealing with needy politicians distracts him and wastes money, he contends. "Politicians here put their political self-interest above the public good."

Pressed for specifics, he replies, "They know when they do it. And the criticism of me is that I call them on it. I don't hide that. I'm proud of it."

Salci's directness has surprised some who work closely with him.

"He has a fearlessness, in that he seems unconcerned about the political impact of the decisions he makes," confirms one official who asked not to be named in this story. "He's in charge, and the board (appointed by the governor on the recommendation of local politicians) is there to dictate high-level policy, but they're not going to tell him what to do on a day-to-day basis. I think he's demonstrated that by taking on some board members -- essentially trying to kick them off the board."

The source is referring to Rice, Thomas F. Hennessy III and Betty Van Uum, all of whom Salci last year alleged had conflicts of interests.

Rice resigned in April 2004 before the board finished an investigation of his alleged shakedown of Metro contractors for donations to his church. Hennessy quit the same month in protest over a charge that his law practice's representation of MetroLink companies compromised him. The board, meanwhile, decided that Van Uum, a ten-year commissioner, did not violate ethics policies or seek favors for her employer, the University of Missouri-St. Louis, as Salci alleged. She finished her term last November.

It was known in political circles and to anyone who attended Metro board meetings that Rice and Van Uum, in particular, frequently questioned Salci's decisions. And, as many agree, Salci has little patience with those who challenge him.

"When somebody asks him something, he always thinks there's an ulterior motive," says an advocate who works with Metro. So when the media last spring obtained some of Salci's memos detailing his allegations, it looked to many like the CEO had tried to rid his board of fault-finders.

"Larry was kind of like a shark swimming after B.T. [Rice] the minnow, trying to swallow him up and then move right along with other business," concludes a former board member.

Some officials guess that Salci leaked his correspondence to advance his agenda.

"Commissioner Van Uum went and had an interview done with Mike Owens on KSDK [Channel 5], and he held up for verification the memo that I had written," says an infuriated Salci when told of the accusation. "Stamped at the top of that memo was: 'Received by the Mayor of the City of St. Louis.' Go back and see the video. It's there. I didn't leak the memo. I would never do that."

Mayor Francis Slay's office declined to comment on the issue.

If one local official is willing to overlook Salci's ruffling of political feathers, it's Les Sterman, executive director of the East-West Gateway Council of Governments.

"At a time when Metro really needed somebody to get control of the organization and the budget, Larry's kind of what the doctor ordered," Sterman says. He points to a newfound professionalism that Salci brought to the agency, through hires in the information technology department and marketing tactics such as changing Metro's name.

Salci professes particular pride in that move. "We're a railroad. We're a transportation bus company," he says. "The culture of this agency when I got here was, 'Oh my God, we're just Bi-State, poor old Bi-State.'"

Salci adds with a sneer: "No. We're Metro. And we're damn proud of it. That's the culture we want to instill here."

Salci's contract expired in February of last year, and for several months afterward, his critics savored the rumor that Metro's board was close to ousting him. But their wishes went unfulfilled.

In November, the board finally granted Salci a $225,000 contract. He also gets a $400-a-month vehicle allowance and a raft of bonuses. (In the last two years, he collected $50,000 and stands to earn $110,000 more.) The agreement expires in June 2007.

"Politics and personalities, not performance" held up the renewal, says board member Harvey Harris, adding that some commissioners objected to Salci's salary demands.

Some local lawmakers also consider Salci's pay problematic given that Metro recently justified a 16 percent fare increase by citing a $2 million budget gap.

"There are circumstances when public agencies have been in a tough time where the executive and top-level people forgo raises," says a lawmaker who asked not to be named in this story. "Frankly, that would be the way I'd think he could best lead the agency."

Salci scoffs at the suggestion: "What I probably should have said [in negotiating my contract] was, 'You know what? I'll work for free. Just pay me five percent of the savings that your independent public certified accountant can document! How about that?' I make no apologies for what I make. I've brought, in my mind, tremendous value to this agency. If [the commissioners] want to go back to where they were and hire somebody for 150,000 or 160,000 bucks, fine. They can do that tomorrow."

Last week the Riverfront Times received an anonymous letter stating: "The rumors are flying around Metro that [Salci] has corporate job offers in New York and Chicago and is planning to leave by September. Several other senior staff are planning to leave if he does and are beginning interviews with Salci's blessing. Metro will soon be in a management meltdown."

Salci says there's absolutely no truth to the rumor. He says he's eager to stay onboard and oversee Metro's lawsuit against the Cross County Collaborative. Trial is set to begin next March in St. Louis County Circuit Court.

"I'm never confident anytime I'm involved in litigation," he admits. But, he adds, "I'm very confident of our chances of winning, or we wouldn't have filed the lawsuit. We will win. The only question is how much."

CCC company presidents did not return calls for comment on this article. And Salci refuses to discuss specifics of the 39-page suit.

Metro is claiming fraud, negligence, breach of contract and civil conspiracy, among other charges. It maintains it lost a year's worth of revenues and lost $1.7 million for work that was never done. The CCC is countersuing for $17 million. Their liability does not exceed $8 million.

"Larry took over and said that any plans Tom Irwin had made were wrong, wrong, wrong," says a former commissioner. "Larry had to repackage the contract and re-bid it, and we allowed him to do that. And he was the person who suggested to us that an $8 million cap was perfectly adequate for any kind of overrun. So anything that happened during this Cross County fiasco is nobody's blame but his."

The former commissioner points out Metro's blame for most of the overruns on the CCC's "incomplete" designs. "Why did Metro pay for the designs? Where's our responsibility here? Didn't anybody at Metro look at them?"

Seconds former commissioner Ron Jedda: "If [Salci] had a weakness, in retrospect, maybe he would have come to the board when his first-90-days-on-the-job report of the agency was due and said, 'Hey, folks, I've reviewed this [Cross County] thing, and we've got some serious problems here.'"

"Well," Salci says, clearing his throat when asked why someone at Metro didn't notice the designs' incompleteness. "That's a good question. I can only say that had I been here two years earlier, the contract would have been structured a lot differently."

One thing Salci would have included is an oversight consultant. Asked why he did not hire one when he restructured the contract in late 2002, he says, "I could have. And we did that later [after Metro fired the CCC]."

Transit consultants contend Metro's problems aren't unique. "I've seen similar situations many, many other times," says Tom Rubin. "There's a tendency not to have good project management and not have good controls in place for the schedule, cost and quality assurance. The damn thing gets out of control, and before anybody really knows about it. Then people are tempted to cover it up and hide the problems before anybody else has time to clean them up."

Belleville-based consultant Wendell Cox says commissioners should shoulder more fault in out-of-control projects such as the MetroLink extension. Across the nation, Cox adds, board members get "led around with rings in their noses by management."

All blame aside, Salci knows his legacy is tied to Cross County's. Approaching St. Louis in the train from Emerson Park, he recalls, "The last thing I thought when I took this job three years ago was that I'd have to discharge the engineers and file a lawsuit. I was totally focused on the agency and its internal problems.

"That was an unwelcome surprise. But we had to do it." He pauses. "And ultimately I know I'll be judged on that."

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