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Some fear Chelsea slipping back

Housing chief pay uproar recalls corruption

By Maria Sacchetti
Globe Staff / November 5, 2011
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Guy Santagate remembers thinking that Michael E. McLaughlin was the last person Chelsea needed as it struggled to extricate itself from decades of devastating corruption that left the city nearly bankrupt and in state receivership. As the city manager in 2000, Santagate said, he told the housing authority that McLaughlin was the wrong one to hire.

Yesterday, Santagate said, he wished the authority had listened.

State and federal officials have launched investigations into McLaughlin’s generous pay package of $360,000 a year, unleashing fears that Chelsea is backsliding to the days when corruption ran rampant. Critics asked why state and federal inspectors failed to act when McLaughlin’s salary more than quadrupled over the past 11 years, and why city officials, particularly City Manager Jay Ash, did not monitor him more closely.

“I have two words: It’s nuts,’’ said Santagate. “I am shocked by it.’’

Ash, who succeeded Santagate in 2000, said yesterday that he was unaware of McLaughlin’s salary, even though he appoints four of the five board members who oversee the authority. But Ash said he has no direct financial oversight over the agency, an assertion confirmed by state officials, and pointed out that the City Council approved all his nominations.

Ash called on the three remaining board members to resign - two quit earlier this week - and proposed more city oversight of the authority yesterday.

“We have all failed,’’ Ash said. “From my perspective, I was going on the reports from other levels of government that the housing authority was high performing.’’

But yesterday, critics said that Ash and others should have scrutinized the authority more closely, given the concerns about McLaughlin.

First elected to the House of Representatives in 1970, McLaughlin was later caught on a wiretap talking to a convicted mobster. Later still, he was subpoenaed amid questions about the Middlesex County Commissioners’ attempt to sell the East Cambridge courthouse to a developer at a below-market price. He was never sanctioned in either case.

McLaughlin acknowledged in an interview this week being investigated for political corruption, but said that “everyone who ran for office in Middlesex County was investigated.’’

Gladys Vega, executive director of the nonprofit Chelsea Collaborative, said she lobbied against McLaughlin because of concerns over his past performance. She said she received many calls yesterday from city residents upset about the salary.

“I can say I told them so,’’ she said. “I said it was a step back, the wrong call, in hiring him.’’

Though the city does not have direct oversight over the housing authority, former councilor Roy Avellaneda said he holds Ash responsible because he named members to the board.

“That board is all him,’’ he said of Ash, adding “I am livid.’’

In addition, Avellaneda and Councilor at Large Roseann Bongiovanni, said they had requested copies of housing authority documents at City Council meetings, to no avail.

“We wanted meeting minutes,’’ Bongiovanni said. “Even though we have asked on numerous occasions, we have never gotten them.’’ She said she also faced criticism from some councilors and others for seeking extra time to review a board appointment.

Yesterday, Ash proposed intensifying city oversight, including having an annual meeting with the housing authority to review audits and budgets, posting housing board agendas and minutes online, and having the City Council vote twice on board appointments to give councilors time to review them.

Ash said he previously believed the housing authority was working well since the reports he received from state and federal officials were all “glowing.’’

The outrage over McLaughlin’s pay - which exceeds that of his counterpart in New York, a much larger authority, and Ash’s own pay - has tarnished Chelsea’s image as an immigrant city reborn, with an A-plus bond rating, a bustling downtown, and many new businesses, including a Marriott. Even the FBI is moving its Boston office to Chelsea.

But now the city is filled with outrage, and many are urging city and state officials to expand their investigation of the housing authority beyond McLaughlin.

Federal and state officials said the investigation is ongoing.

Many in Chelsea felt saddened. They had hoped that allegations of corruption in Chelsea were behind them.

“That’s something that’s really difficult for all of us to deal with because we have worked really hard to make sure the city is on the up and up,’’ said Bongiovanni.

“It almost took us back 15, 20 years where we looked like we were that old Chelsea.’’

Maria Sacchetti can be reached at msacchetti@globe.com.

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