MTA Names Crisis Expert as Interim CEO

The crisis-ridden Metropolitan Transportation Authority board did the obvious thing Friday and turned to a “crisis management” specialist, Julian Burke, to restore order while the agency searches for a permanent transit chief.

Burke is an old friend and former legal colleague of Mayor Richard Riordan, the MTA board’s chairman, and has worked on turnarounds of the troubled Penn Central Railroad and the Teamsters pension fund. He was hired to serve up to a year as interim chief executive officer. He will be paid $15,000 a month.

County supervisor and MTA board member Zev Yaroslavsky said the board will put the frustrating search for a permanent CEO on hold until Burke “whips the place into shape, cleans house and creates an atmosphere where we will once again be able to attract first-rate candidates for the job.”

Even before the appointment was announced, Burke took the CEO’s chair next to Riordan at Friday’s MTA board meeting.

“I think I know a lot about how to bring order out of what apparently is some chaos,” said Burke, who worked with Riordan at the downtown law firm of O’Melveny & Myers in the late 1950s.

After the meeting, Burke checked out his new office on the 25th floor of the MTA’s spiffy headquarters, called a meeting of the executive staff and picked up his employee identification. He will start his new job Tuesday.

Burke’s appointment came the day after New York City transit executive Michael C. Ascher became the second CEO candidate to turn down the politically unattractive job. Burke will replace acting chief Linda Bohlinger, who will return to her post as deputy CEO. Bohlinger was on vacation Friday.

“He is an expert in turning around distressed organizations, and this is certainly a distressed organization,” Yaroslavsky said.

In an interview, Riordan described Burke, 70, as “one of the most brilliant people I have ever come across.”

Among Burke’s first tasks will be to straighten out the agency’s finances.

Burke recently assisted the mayor’s budget team in a review of the $2.8-billion MTA budget, finding that incomplete information and optimistic assumptions have kept the board from making informed decisions when planning transportation projects. The review also found a bigger deficit than the agency thought existed--one that could reach $58 million this year.

Yaroslavsky offered his own fix Friday--a moratorium on new contracts for building or planning rail lines to the Eastside, Pasadena and Mid-City. The agency already has put a hold on new contracts for the subway extension to the Eastside in response to federal action withholding funds.

“The board, starting with Mayor Riordan, is going to have to bite the bullet on the Pasadena line, on the Eastside line and on the Mid-City line,” Yaroslavsky said.

Riordan told his board colleagues that the agency could no longer wait for a permanent CEO. “We have many tough and important decisions ahead of us--decisions that require the leadership of a strong CEO. Unfortunately, we do not have the luxury of time,” he said.

In recommending Burke, Riordan cited the turnaround specialist’s extensive experience working with companies in trouble.

“He has spent many years working with companies confronting the very financial, organizational and operational challenges facing the MTA,” Riordan said.

County Supervisor and MTA board member Don Knabe said Burke “brings to the job the kind of private-sector turnaround know-how” that the MTA needs.

Burke is a partner in the Palmieri Co., which has restructured more than 30 major companies, including Mutual Benefit Life Insurance Co. in what Burke’s resume calls “the largest rehabilitation proceeding in U.S. history.”

It also has managed assets of savings and loans for the Resolution Trust Corp. Most recently he managed U.S. operations of Confederation Life Insurance Co. through rehabilitation proceedings.

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Profile: Julian Burke

* Age: 70

* Residence: Los Angeles

* Education: bachelor of science degree, Northwestern University, 1950; law degree, Georgetown University, 1954.

* Career highlights: Managing director, Palmiere Co., a corporate turnaround management firm. Senior partner, Tuttle & Taylor law firm, 1962-1975; associate, O’Melveny & Meyers law firm, 1957-1962; clerk for U.S. Supreme Court Justice Stanley Reed, 1955-1956.