"Michael McLaughlin made a career of skirting laws; The felonious Chelsea housing boss outran scandal and the law" by Andrea Estes, Sean P. Murphy and Scott Allen | Globe Staff, February 24, 2013
Friends call him a “warrior from the old school.” But others who watched Democratic power broker Michael E. McLaughlin at work over the last four decades, from Middlesex County commissioner to close ally of the current lieutenant governor, call him “a thug,” “a liar,” and now “a felon.”
The disgraced Chelsea public housing chief, 67, is a throwback to rogue politicians in the mold of the legendary James Michael Curley, who once served as Boston’s mayor from a prison cell. For them, public service was often just a game of “let’s make a deal” in which the only limit was what they could get away with.
Long before McLaughlin stood before a federal judge last Tuesday and pleaded guilty to deliberately concealing his inflated $360,000 salary at the Chelsea Housing Authority, his integrity had been questioned in one job after another and he had repeatedly avoided criminal charges despite at least five previous investigations.
Related: Slow Saturday Special: McLaughlin Begs For Mercy
McLaughlin took a star turn on Lowell’s infamous 1987 “bookie tapes,” in which he was caught on a wiretap urging a bookie with mob connections to help him win promotion to Lowell city manager by leaning on a city councilor with big gambling debts. McLaughlin had once hired the bookie’s son to provide courthouse security; now he was calling in the favor.
But McLaughlin walked away from the scandal, unlike some other politicians, who were indicted based on the secretly recorded tapes, or the bookie, who was shot to death the next year by a mob associate. The worst McLaughlin suffered was a missed opportunity after US Senator Paul Tsongas threatened to “puke in the waste basket” if McLaughlin became Lowell city manager.
Again and again, McLaughlin outmanuevered prosecutors and politicians who could have derailed his career. As an assistant district attorney in 1978, John F. Kerry — now the US secretary of state — investigated the Middlesex County commissioners for selling jobs, including two to relatives of Mafia members.
Investigators uncovered the scam when the commissioners’ office manager picked up a wad of cash that a cooperating witness had placed in a coffee cup to pay for a supposed job.
But McLaughlin declined to answer questions before the grand jury, citing his right to remain silent. He instructed others under investigation to do the same, according to a person with firsthand knowledge of McLaughlin’s scheme, frustrating prosecutors.
“Kerry finally got up, threw a newspaper down and said, ‘We’ll never get anything out of any of these guys,’ ” recalled this person, who asked not to be named because the grand jury operated in secret.
McLaughlin was never charged, though the office manager was convicted and given a suspended prison sentence.
Until McLaughlin’s plea agreement last week, he had never faced anything more serious than a modest fine for accepting illegal campaign contributions. Now, he is a convicted felon who has agreed to cooperate with investigators in hopes of reducing his prison time by implicating others.
McLaughlin twice declined to be interviewed for this article.
It may be a testament to McLaughlin’s charm and his hardball political skills that recurrent questions about his honesty didn’t prevent him from becoming a major player in Democratic politics, running for Congress in 1978 and playing key roles in legislative and statewide campaigns for decades.
Until news of his outsized salary broke in the Globe, McLaughlin served as an informal adviser to current Lieutenant Governor Timothy P. Murray....
Attorney General Martha Coakley is investigating whether McLaughlin served as an illegal fund-raiser for Murray, whose career has been badly damaged by the connection to McLaughlin.
Even though McLaughlin repeatedly left jobs under a cloud — Methuen eliminated the city manager’s post altogether after McLaughlin held it for almost three divisive years — he always found another one. The Chelsea Housing Authority hired him in 2000 despite warnings that he would usher in an era of corruption.
City manager Jay Ash — who had no say in hiring McLaughlin, but appointed most of the housing board that supervised McLaughlin for years — said that he had wrongly believed the housing chief was “a reformed rogue.”
Those who have followed McLaughlin’s career say Chelsea should have known better: McLaughlin’s success lay in gaining control of relatively obscure organizations where he could dole out jobs and contracts without outside interference.
And the housing authority in hard-pressed Chelsea was perfect, run by a board of commissioners that repeatedly voted McLaughlin big pay raises without knowing his actual salary and took no action as McLaughlin allegedly diverted $7 million from federal grants meant to modernize apartments.
It’s the same path he had been following since his days as a Middlesex County commissioner.
“He’s a thug,” said S. Lester Ralph, a former Somerville mayor who served with McLaughlin on the County Commission in the 1970s. “If he can do something legally, or illegally, he’ll prefer to do it illegally. Because it’s his nature.”
That does show a certain moral failing and psychosis.
But it may have been McLaughlin’s chutzpah that finally did him in just a few months from his planned retirement. Asked by a Globe reporter about reports of his high salary in Chelsea, McLaughlin confirmed that he made $360,000 and that he had deliberately concealed his salary from regulators, calling it “the rebel in me.”
He boasted that he deserved the money, calling himself the Joe Montana of public housing, referring to the Hall of Fame quarterback.
But, even now, people who know McLaughlin are not yet convinced that he’s down for the count.
Guy Santagate, the outgoing Chelsea city manager who tried in vain to prevent the housing board from hiring McLaughlin in 2000, said people shouldn’t underestimate McLaughlin’s resilience.
“Last chapter for McLaughlin? I’m not so sure,” Santagate said. “This is an extremely well-connected guy. He has friends at every level. This is not some clerk who got tempted over some petty cash. This is a shrewd, cunning operative who has survived for decades.”
McLaughlin was a fresh-faced young high school teacher when he was first elected selectman in his hometown of Billerica in 1969. He was teaching in the same Billerica system where his father had been a custodian, but people knew he was going places....
But some observers saw warning signs in McLaughlin’s ceaseless ambition....
By 1975, McLaughlin had already been investigated once — for allegedly pressuring businessmen for contributions; no charges were brought — but he was gaining political clout rapidly....
Bad grammar. Shouldn't it be rapidly gaining? I didn't think you were supposed to end a sentence with an adverb.
Tsongas, who left the commission to run for Congress in 1974, watched in dismay as McLaughlin reversed Tsongas’s efforts to make county government less of a backwater patronage haven. By 1980, when Tsongas ally Thomas Larkin came to the commission, he found departments larded with dozens of jobs held by people who never came to work.
McLaughlin “oversaw a system of hiring that would make the state Probation Department of 2006 to 2010 appear fair and balanced,” wrote Larkin in a recent essay. “Mike was an old-style, quid-pro-quo politician. Every favor done was a favor earned.’’
See: Sunday Globe Special: Spotlight Goes On and Off
McLaughlin also associated with people suspected of being involved in organized crime. He acknowedged providing a job for the son of well-known bookie Jackie McDermott — “he’s a handicapped kid,” McLaughlin explained to the Eagle Tribune newspaper in 1990. “He couldn’t get a job most people can get.” He also signed off on hiring relatives of Boston crime boss Gennaro Angiulo and another mafioso.
A former aide also said McLaughlin collected campaign donations from mobsters, sending him to a bar to pick up the cash.
Yet, neither the organized crime rumors nor the multiple investigations slowed McLaughlin’s ascent, much to the alarm of would-be government reformers....
But McLaughlin’s wheeler-dealer style paid off repeatedly for him, allowing him to trade for the jobs and other perks he wanted....
Despite the acrimonious end of McLaughlin’s tenure in Lowell and the publicity surrounding the “bookie tapes,” he landed a job as Methuen town manager in 1990. Within weeks, as voters learned of McLaughlin’s history, residents packed a Town Council meeting to demand his resignation, prompting police to investigate McLaughlin’s background.
“You had to give him credit,” said one Methuen official, recalling the acrimonious meeting. “He stood up against the onslaught. He took insult after insult.”
McLaughlin hung onto his job — the police found no wrongdoing....
As usual, backroom politics came into play when McLaughlin won the Chelsea housing job in 2000. Charlestown political fund-raiser Jimmy Carroll said he set up a meeting in a restaurant for McLaughlin, his longtime political ally, and Richard Voke, the powerful former Chelsea state representative. At the meeting, McLaughlin asked Voke, known as a shrewd political operator, for help landing the housing job.
“Richie said that he would see what he could do, but no promises,” recalled Carroll. “All I know is McLaughlin got the job. That’s politics.”
Voke’s protégé and former top aide, Ash, would soon become Chelsea city manager. From that time until McLaughlin’s forced resignation in 2011, McLaughlin and Ash enjoyed good relations and Ash stayed out of McLaughlin’s way.
Freed from outside scrutiny, McLaughlin more than quadrupled his salary over the decade and made his close friend and traveling companion Linda Thibodeau the second-highest paid employee at the agency....
See: Chelsea Evictions
In 2004, McLaughlin opened a restaurant in Malden called Roosters — in honor of Linda Thibodeau’s nickname and big hair....
Once the restaurant opened it did not turn out to be the “nice restaurant and lounge” that the Malden licensing board expected.
Neighbors quickly began complaining about the noise and altercations between patrons spilling out onto the street. Often, a dozen motorcycles were parked outside.
The restaurant closed abruptly within a year when McLaughlin declared bankruptcy, leaving investors in the cold.
Alan Gargan said he loaned McLaughlin more than $100,000 to open Roosters, and lost it all. He said McLaughlin made a thousand promises to make payments, but instead came up with one excuse after another....
At the housing authority, McLaughlin seemed to do little housing work — phone records show that he worked only 15 full days at the Chelsea housing office in 2011 — allowing him to devote his time to politics, throwing his full weight behind Murray, then mayor of Worcester, as he first ran for lieutenant governor in 2006.
And the employees and contractors who formed McLaughlin’s political army knew that participation was mandatory....
It remains unclear whether McLaughlin will go to prison. Under federal sentencing guidelines, he could face a year or more for lying about his salary to regulators, but legal observers say a lot may depend on how much he helps prosecutors implicate others. It’s also unclear what charges, if any, may come from the state investigation into McLaughlin’s political activities
Meanwhile, McLaughlin has already moved on to a new venture, running the North End Diner and Pizzeria in a Tewksbury strip mall with his son, Matthew.
He's out of jail?
But he’s already run into controversy. The landlord initiated eviction proceedings against McLaughlin, accusing him of violating his lease....
Poetic irony and justice.
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"McLaughlin probe takes aim at rigged inspections; Ex-Chelsea housing boss seems to have been tipped off" by Sean P. Murphy and Andrea Estes | Globe Staff, May 19, 2013
Federal prosecutors have launched an investigation into whether federal officials or others helped former Chelsea housing chief Michael McLaughlin defraud the government, repeatedly telling him in advance about “surprise” apartment inspections so that his agency could pass with flying colors even though the buildings were poorly maintained.
McLaughlin, who faces sentencing in June for deliberately concealing his bloated $360,000 salary from regulators for years, agreed to cooperate with prosecutors in exchange for the hope of less prison time. However, his lawyer declined to say whether McLaughlin is helping investigators, who say that millions in federal funds remain unaccounted for from McLaughlin’s decade in charge of Chelsea’s low-income housing projects.
A Globe investigation suggests that McLaughlin escaped scrutiny for years in part by rigging the federal inspections that determined how closely Chelsea’s operations would be scrutinized. Several agency employees said McLaughlin always received the list of 25 apartments to be inspected weeks in advance, allowing him to clean them up before the inspectors arrived....
The federal probe of the Chelsea Housing Authority took on new energy in late February after McLaughlin pleaded guilty to four felony counts of hiding his salary, one of the highest paid to any public housing official in the United States. As part of the plea deal, McLaughlin agreed to help investigators trying to understand how he escaped detection for so long and what became of $3.5 million in federal apartment modernization funds that can’t be accounted for.
Since McLaughlin’s plea, at least one authority employee has been questioned by investigators about who might have tipped off McLaughlin about inspections ahead of time. Some questions concerned Bernard J. Morosco, a consultant with HUD connections whom McLaughlin hired to prepare for apartment inspections in 2004, the year Chelsea’s scores suddenly improved dramatically. Morosco, who has not been charged with a crime, has denied tipping off Chelsea officials.
And the authority official in charge of maintenance, Richard Russell, has been called to testify before a federal grand jury on May 21, according to someone with direct knowledge of the subpoena sent to Russell.
Meanwhile, HUD’s inspector general has seized the computer hard drive belonging to the Chelsea official in charge of apartment modernization, James Fitzpatrick, who abruptly retired in March after almost 20 years with the authority. Fitzgerald has admitted that during his tenure the agency kept virtually no records of how modernization funds were spent.
The Chelsea Housing Authority is also preparing legal action against McLaughlin, drafting a motion to ask a federal judge to declare the agency a victim of McLaughlin’s criminal deceptions....
McLaughlin resigned under pressure from Governor Deval Patrick in November 2011 after the Globe revealed his salary, and the entire board of the housing authority resigned close behind him. Since then, the authority has been the target of multiple investigations looking at misuse of public funds as well as McLaughlin’s allegedly illegal fund-raising for Democratic politicians, including Lieutenant Governor Timothy P. Murray.
Public housing officials have good reason to want to excel on their federal apartment inspections; it is one of the main tests HUD uses to determine if a housing authority is a “high performer.” By winning HUD’s seal of approval, a housing authority can guarantee that regulators will assume things are well managed and pay less attention to them, even cutting back apartment inspections from yearly to every two years.
“HUD didn’t bother you when you were a high performer,” explained one housing authority employee, who asked not to be named out of fear of retaliation. “You had more flexibility with spending the funds and there was no oversight. That’s why Mike wanted it.”
********************************
There was another incentive: money....
In 2003, Chelsea Housing Authority scored a disappointing 22 out of a possible 30 points for the upkeep of its apartments, threatening its coveted high performer rating. The next year, records show McLaughlin hired Morosco, a former apartment inspector certified by HUD who had started a business to help authorities with the inspection process.
Three months after Morosco was hired in September 2004, the authority aced its first federal inspection, receiving 28 out of a possible 30 points. For the next six years, the authority never received a lower score on its apartments and three times, Chelsea scored a perfect 30, giving McLaughlin major bragging rights, which he exploited in letters to the public and politicians as well as personal commendations from his board.
“We knew we did well as we worked very hard between inspections to keep our buildings in the best shape possible,” McLaughlin gushed in a letter to Chelsea City Manager Jay Ash in 2011. “But even we were a little surprised with a perfect score of 30 points out of 30.”
But inside the authority, several employees said they were convinced that McLaughlin was getting the list of apartments to be inspected ahead of time, despite HUD rules that the authority is not supposed to know until the day of the inspection. Then, McLaughlin would act surprised when the inspector revealed which apartments he wanted to see.
“We had the list at least a month in advance,” said another housing authority official who, like the other two quoted above, asked not to be named for fear of retaliation.
James Cirino, a veteran inspector hired by HUD to do the Chelsea inspections in 2011, said he had no sense that authority officials knew ahead of time, explaining that, on the day of the inspection, he simply pushed a button on his computer and up popped the list of apartments to inspect.
“If [McLaughlin] knew, he didn’t get it from me,” said Cirino, who scored the Chelsea apartments 29 out of 30 points in 2011.
Morosco, who helped Chelsea with the 2011 inspections, said he, too, never provided lists of Chelsea apartments to be inspected, noting that any number of HUD officials would have had access to the lists, which are generally set a month before the actual inspection
“Almost any HUD employee had access to the system,” Morosco said in an interview.
Morosco said he had never heard of a case in which a HUD employee leaked copies of the inspection lists, but he did cite a 2005 incident in which a private inspector certified by HUD allegedly allowed New Haven housing officials to use his password to access confidential information regarding inspections.
In the New Haven case, the consultant along with three top housing officials were banned from doing business with the government for two to three years.
Not forever?
In Chelsea, it’s unclear who, if anyone, leaked the apartment lists to McLaughlin, though he did cultivate close ties with several HUD officials, including one who was a childhood friend of a top aide and close enough to McLaughlin that he donated $200 to Murray for a 2010 fund-raiser for the lieutenant governor organized by McLaughlin.
But one thing is clear: Once McLaughlin resigned in late 2011, the talk about Chelsea’s “perfect” public housing maintenance ended almost immediately.
Residents of Chelsea housing complained that their apartments were cold, leaky, and poorly maintained and often infested with roaches or rats while federal money that was supposed to go toward improvements was being diverted. In 2012, HUD gave Chelsea a dismal 21 out of 40 possible points for its apartments, making it an officially “troubled” agency.
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