A new report by the state Office of the Inspector General identifies Rockland water commissioner Thomas W. Hannigan as a participant in a past kickback scheme, but the town has little recourse because the statute of limitations for prosecution has expired.
The report alleges that Hannigan partnered in the scheme with former superintendent of sewers Gregory K. Thomson, who was convicted in 2004 of skimming more than $330,000 from town coffers.
The inspector general report - sent on Jan. 17 to state agencies and Rockland officials - identifies Hannigan as a "conduit for kickbacks" for Thomson and a Dracut company that had more than $2 million in construction contracts under Thomson's tenure. The investigation of Hannigan, based on a tip by an informant after Thomson was convicted, was only recently completed.
Town officials say they have no way to address the allegations without the help of a criminal indictment. Unless a recall occurs, Hannigan has the right to hold onto his elected seat on the water commission and will answer to voters if he seeks an other term.
Officials are hoping that Hannigan will use a Feb. 27 meeting of the Abington/Rockland Joint Water Works Commission - on which he has served more than a decade - to address the charges and clear the air.
In an interview with the Globe last week, Hannigan said he never considered the payments to Thomson kickbacks. The money was to repay personal loans and help with charity projects, such as the construction of a skating rink, he said.
"I think I was guilty of an error in judgment," Hannigan said. He said that Thomson was doing positive things in town, and that no one, himself included, realized Thomson's "behind the scenes" embezzlement activities.
"I was naive," Hannigan said, stressing that he has been a hardworking commissioner dedicated to the town's water infrastructure. "I'm human, people make mistakes; we can all learn from our mistakes."
He said he has no plans to resign, and will deal with voters "one by one" come election time.
The inspector general report states "there can be no doubt" that Hannigan was involved with Thomson in the scheme, which took place eight years ago. That has left town officials worrying that the corruption of the past may be more pervasive than previously thought.
"You have to wonder just what was going on; how far reaching is this?" said Mary A. Parsons, chairwoman of the Board of Selectmen.
She said selectmen will meet in executive session to discuss options, which could include a new investigation into town finances. She notes that a forensic audit was conducted six years ago when Thomson was first accused of stealing town funds, and that the audit helped spur new charges against the former superintendent. But it could be tougher to go back eight years to investigate less direct transactions, she said, adding, "None of this transpired through Town Hall."
Selectman Michael Zupkofska said that the inspector general's report paints a picture of collusion between Thomson and Hannigan, and that Hannigan should address the allegations and resign.
"If there's other things to uncover, get it out in the open right now," Zupkofska said. "For the good of the town, step down."
Lacking other legal recourse, the inspector general has sought the assistance of the Department of Revenue to see if any income tax irregularities occurred, and has asked the state Department of Capital Asset Management to investigate whether the Dracut company - Albanese Brothers, Inc. - should be barred from bidding on municipal contracts. The outcome of those queries is pending. Albanese Brothers Inc. was not charged, and representatives from the company did not return calls for comment.
Thomson in 2004 pleaded guilty to four counts of embezzlement by a municipal officer, and served 18 months in jail. He is also serving a five-year probation term, and must undergo drug counseling. He blamed an addiction to OxyContin for his crimes.
The case against Thomson began in 2002, when he tried to deposit a $5,744 check made out to the town into his personal account, and a bank employee tipped off investigators. Thomson later admitted that he worked with an employee of US Filter, which ran the town's water filtration system, to embezzle more than $330,000 from town coffers. They did so, he said, by sending phony invoices and setting up fake accounts. That employee also pleaded guilty.
The new allegations that Hannigan was involved in the illegal activity come as a surprise to town officials, who say they know him as a conscientious and hard-working water commissioner. According to the inspector general's report, starting in 2000 Hannigan helped funnel some $27,000 from Albanese Brothers Inc., which had a contract with the town, to Thomson, and he kept some money for himself.
Hannigan, who owns his own excavating company, told investigators that he never did any work for the town during his role as a commissioner. But records show that Albanese Brothers Inc., paid Hannigan $27,000 in a series of checks between May and September in 2000, investigators said. At least one of the checks was written for the "Rockland job."
Much of the money, the inspector general concludes, was funneled by Hannigan to Thomson in a series of deposits and withdrawals that were kickbacks.
"There can be no doubt that the money paid to Thomson came directly from the payments Hannigan received from Albanese Brothers Inc. and the town," the inspector general's report states.
In another payment detailed in the inspector general's report, Hannigan received a Thomson-approved $2,557 payment from the sewer department for installing a sewer pump at a private residence. Hannigan did not explain why sewer department funds were spent on a private residence, but a day later he paid Thomson $1,000.
The report says Hannigan gave investigators conflicting statements on the reason for the payments to Thomson, saying first that they were repayments of loans and for work Thomson did for him. Later he said they were for donations for Christmas trees to sell for charity. (The purchase of Christmas trees was one of the irregularities auditors found in their investigation into Thomson's misuse of town funds six years ago).
Hannigan, in talking to the Globe last week, said he could not say how or why he received the roughly $27,000 he allegedly funneled to Thomson from the Dracut construction company, saying he cannot recall the events from eight years ago. He said he had no relationship with the company.
The information in the report leaves town officials at a loss.
Daniel Callahan, superintendent of the Abington/Rockland Joint Water Works Commission, said he has no authority over the sewer department and has no say on Hannigan's future on the commission. And John Laughlin, who replaced Thomson as superintendent of the sewer department, said that the allegations stem from before he took office, and that the finances from that time have already been audited. Albanese Brothers has not worked for the town since the 2000 contract, officials said.
Officials are hoping Hannigan provides some explanation at the next meeting.
"I would like for him to bring it up, but he's the guy, he's in the situation," said Raymond T. Campanile, a Rockland water commissioner who said the allegations surprised him, and that he only knew Hannigan as a hard-working commissioner.
He said last week that he has not spoken with Hannigan since the report surfaced.
"Whatever he chooses to do, I hope he makes the right choice."
Milton J. Valencia can be reached at valencia@globe.com.
