Michael McLaughlin’s all-you-can-steal buffet: Part 3, back for second helpings

August 21, 2013 | Boston, Chelsea, Corruption, Greater Boston Legal Services, HUD, Law, Michael McLaughlin, Public housing, US News

[Continued from yesterday’s Part 2 and the preceding Part 1.]


By:David A. Smith


As we’ve seen so far in this post, so comprehensive was Michael McLaughlin’s looting of the Chelsea Housing Authority for personal gain, so pervasive his means of following the How To Steal Big reference manual, the business of totting up how much he might in fact have pilfered takes three posts, using as source material the Boston Globe (July 16, 2013; blue font), Boston Herald (July 17, 2013), and Boston Globe (July 17, 2013; brown font), and assorted individual sources.  We’ve covered lubricious contracts, sweetheart deals, employing an ahem, and junkets/ billets-doux to the ahem – and we’re still only halfway through the list.



Steal this blog post?



5. Extra double-dipping pensions


Unlike Whitney Bulger, whose work was entirely entrepreneurial and who had to pay the cops and FBI to leave him alone, Mr. McLaughlin adopted the easier path of taking over an agency and then looting it at leisure from the inside.  As Howie Carr put it with his usual blunt-force-trauma writing style (Boston Herald, July 18, 2013):



Unrepetant Whitey


Mike McLaughlin came so close. He almost out-Bulgered the Bulgers, specifically, the Corrupt Midget, Whitey’s younger brother.



Billy Bulger, a man of no convictions


Billy Bulger, the little man who isn’t there in his brother’s courtroom every day, collects a $200,000-a-year state pension. But Mike McLaughlin almost topped him – he was on the verge of grabbing a $279,000 annual kiss in the mail.



For $278,000 a year, baby, we’ll dress like this


As a side benefit, each time he overpaid himself (or double-paid himself) for not doing work set him up for annuitized pension benefits:




A lawyer working for the Chelsea Housing Authority estimated in court documents that McLaughlin’s salary fabrications could have earned him nearly $900,000 extra in pension payments if his efforts hadn’t been revealed


And people wonder why so many cities are going bankrupt due to excessively large and unfunded public-employee pension liabilities.


Possible ill-gotten gains: $900,000.  The total sum’s going to be impressive, isn’t it?



6. Political shakedowns of CHA employees and contractors


Our next category of theft is ‘altruistic’, in the sense that Mr. McLaughlin wasn’t shaking the money tree for himself directly, but rather for political patrons, including the willing fool Tim Murray, memorably described by Boston Herald columnist Howie Carr (Boston Herald, July 18, 2013):



Getting out while the getting is good


And now it’s all out there … the cash he raised for Tim Murray, the disgraced ex-lieutenant governor, … his boon companion, … who is now such a credit to the Worcester Chamber of Commerce.



Worcester regional Chamber of Commerce, mind you!


The troubles started in October 2011, when McLaughlin’s salary was revealed. Two days later, Murray totaled his state car at dawn in his pajamas while going 108 mph in Sterling.



Wearing his pajamas but not his seat belt


(By the way, none of Mr. Murray’s explanations for his pre-dawn jaunt, in his pajamas no less, ever made the slightest bit of sense.  They were so laughably bad, and he resigned so abruptly afterwards, that the public lost interest in whatever peccadillo he might have been covering up.)


Francis Stewart testified that he was called in 2009 by McLaughlin to make a donation to then-Lieutenant Governor Murray, a request that Stewart complied with. Stewart said McLaughlin called him two years later and urged him to lie about who asked for the donations if he was ever questioned by investigators.


Stewart quoted McLaughlin as telling him to say, “It didn’t come from me [McLaughlin], it came from Walter Underhill.’’


Underhill, a former authority lawyer, was deceased by the time of the conversation between Stewart and McLaughlin.


Possible ill-gotten gains: $1.  No one has quantified in public how much Mr. McLaughlin raised for Mr. Murray, nor has anyone yet shown a direct link between Mr. Murray’s patronage and how much extra Mr. McLaughlin might have pocketed, directly or through shills or fronts, but as the How To Steal Big reference manual notes:


Rule 13: Always upgrade your friends. Constantly upgrade your political friends, and in particular find those whose ambition burns more brightly than their intelligence


Rule 15: Favors are political equity, and will yield a return in due time.





7. Payments to HUD moles and intermediaries to tip him to physical inspections


So far, overlooked in the pursuit of vengeance and recovery against Mr. McLaughlin has been the unindicted, and so far unidentified, co-conspirators – those people, intermediaries or HUD staff, who provided Mr. McLaughlin with critical inside intelligence so that he could assure HUD’s inspectors never went to the disgusting apartments, only to Potemkin village apartments that Mr. McLaughlin had polished up:



Ready for move-in!


If the information is leaked, there must be a mole at the source, and he did not always have one:


In 2003 [Three years after Mr. McLaughlin was hired as Chelsea executive director – Ed.], 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 Bernard J. Morosco, a former apartment inspector certified by HUD who had started a business to help authorities with the inspection process.


bernie_moroscoMiracle worker or just lucky? Bernard J. Morosco


Either Mr. Morosco worked miracles, or he happened just to get lucky while miracles were being worked by others:


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.


Morosco, who has not been charged with a crime [Yet? – Ed.], has denied tipping off Chelsea officials.


Nevertheless, Mr. Morosco might have an arrangement with someone at HUD who did tip off Mr. McLaughlin.


“Almost any HUD employee had access to the system,” Morosco said in an interview.


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.


Let us hope that Mr. Russell is a knowledgeable witness, and let us hope that testifying before a grand jury has helped refresh his memory.



Does this refresh your memory?


Mr. McLaughlin had to have had help inside HUD: corrupt help.  There must be a witness trail, and a money trail.



Follow the money


Possible ill-gotten gains: $1.  At least, Mr. McLaughlin will not have gained money from these particular felonies; but on the other hand, Mr. McLaughlin got the money from somewhere (presumably CHA funds) and sent it to somewhere (probably in brown paper bags of cash)



You are the bagman, I am the walrus




8. Vacation-from-your-vacation severance payments


Rule 5: Be paid to stop stealing. The best gigs are those where one is paid to come in, paid to leave, and one leaves in favor of something better.


Using a principle from the How To Steal Big reference manual, Mr. McLaughlin snatched more cash on his way out the door:




Former Chelsea Housing Authority executive director Michael E. McLaughlin instructed the office accountant to write him checks for more than $200,000 Thursday, just an hour before he left the office for good amid an uproar over his $360,000 annual pay package.


Employees told investigators that the five-member housing authority board – two of whom have quit so far – had authorized the payments to McLaughlin at a hastily called meeting Thursday. McLaughlin posted notice of the meeting Monday, a day after the first Globe report about his salary.


I’ve previously detailed how Mr. McLaughlin followed this rule:


Rule 12: Bribe your bosses. Wherever possible, close the political circle by doing favors for those who can fire you, and by this eliminate the risk of your being fired.


As I previously detailed in the original How To Steal Big multi-part post, quoting the Boston Globe (October 1, 2012) (violet font), Mr. McLaughlin carefully lubricated the Chelsea City Council to leave him undisturbed and unsupervised:


Though technically independent, McLaughlin benefitted from good relations with the city since the city manager names four of his five board members who are then confirmed by the City Council.


This is the same city manager and city council who was being paid twice as much as they should have been:


$530,000 paid to the city of Chelsea for trash pickup [Double what it should have been – Ed.], though city and authority officials could not produce a contract requiring the payments.


On his last day on the job, Mr. McLaughlin sought to exfiltrate $200,000, but he got away with less:


Bad check

Bounced check


Incensed, state officials ordered the Chelsea Housing Authority to stop payments on the checks, but McLaughlin had already cashed one for more than $80,000.


McLaughlin said he was owed the money for unused sick, vacation and personal time during his 12 years at the authority.


This from a man who was on the job maybe 15 days in 2011, according to the Globe.


Possible ill-gotten gains: $80,000.  Fortunately, it wasn’t more.



9. Fraudulently overpaying his own salary


This element of Mr. McLaughlin’s theft is the easiest (Boston Globe, June 3, 2013; teal font):


In a motion filed in federal court Friday, the agency, joined by the city’s tenants association, said it is entitled to almost $550,000 in restitution, a sum equal to the extra money McLaughlin received between 2007 and 2010 beyond his reported salary. McLaughlin faces sentencing June 14 for concealing his $360,000 salary from regulators, an amount that ranked among the highest of any public housing official in the country.


Among the sadder elements of this story is the embarrassing incompetence shown by U S Attorney Carmen Ortiz, who was ready to let Mr. McLaughlin off with no restitution; without the tenants, and their pro-bono lawyers, Mr. McLaughlin would have been able to enjoy nearly all of his ill-gotten gains:


Residents came up with the idea to file the motion, then approached housing officials.


This is just pathetic failure – having the residents to the U S Attorney’s job for her.


The tenants are not seeking individual damages in the case, said Jay Rose, a lawyer with Greater Boston Legal Services who is representing the tenants association.



Doing the state’s job for it


Possible ill-gotten gains: $550,000. Another easy theft to compute, and another one for which Mr. McLaughlin has not a shred of justification.  He might as well have just gone into Chelsea’s offices and helped himself to piles of cash.


For all we know, he did that too.  No one would put it past him.


 [Continued tomorrow in Part 4]





Comment from Charlie
Date: August 21, 2013, 1:13 pm

Her Salary was a little over 100K