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McLaughlin raised money for Murray, employees say

Fund-raising may have been illegal; worries kept lieutenant governor awake on night of crash

Michael E. McLaughlin Michael E. McLaughlin
By Sean P. Murphy and Andrea Estes
Globe Staff / January 22, 2012
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To hear Lieutenant Governor Timothy P. Murray tell it, former Chelsea housing chief Michael E. McLaughlin was just a campaign volunteer. Though phone records show that the two men called each other 193 times over the past two years - including one call on a Sunday at 1:30 a.m. - Murray aides insist that McLaughlin played no special role.

But a Globe investigation shows that the former Chelsea housing chief ran an extensive political operation for the lieutenant governor right up until McLaughlin resigned in November amid an uproar over his $360,000 salary. The FBI is investigating whether McLaughlin broke federal laws, questioning housing authority employees about McLaughlin’s political activities and management of the agency.

More than two dozen politicians, housing authority employees, and Murray campaign workers say that McLaughlin was a key fund-raiser and organizer for the lieutenant governor even though, as a federally funded employee, McLaughlin was barred from most political activity, especially at work.

Housing authority employees portray a workplace that McLaughlin had turned into a political machine, inappropriately pressuring workers to give time or money to Murray’s campaign and others’.

“Mike made it clear we had to go to this rally [for Murray and running mate Deval Patrick] and that we had to bring our families,’’ said one employee, who asked to remain anonymous because of fear of retaliation. “He wouldn’t let up on it. He kept asking, ‘Who are you bringing?’’’ McLaughlin also provided buses to take elderly public housing residents to a 2006 rally for Murray and Patrick, and records suggest that the housing authority footed the bill, which would violate state and federal law. The only record of payment for buses around the time of the rally is an expenditure of $850 in housing authority funds.

And several employees told the Globe that McLaughlin’s aides sometimes asked for significant cash donations to Murray and other politicians, donations that do not appear in campaign reports. “He always wanted it in cash. No checks,’’ said one employee.

If cash gifts of $50 or more were collected, it would be a serious breach of campaign law.

Campaign presence

Murray aides flatly deny that McLaughlin was ever a fund-raiser for the lieutenant governor, insisting that he was merely a campaign volunteer, which would be legal if he volunteered on his own time. They say they know nothing about any cash contributions collected by McLaughlin or his aides and note that Murray has already returned or given to charity all donations from McLaughlin, his family, and some associates.

“From what we saw, [McLaughlin] did not host a fund-raiser or have his name attached to anything concerning a fund-raiser,’’ said Murray spokesman Scott Ferson. “Did he do other stuff we didn’t know about? I have no idea.’’

McLaughlin, who is facing an array of state and federal investigations into his conduct as Chelsea housing chief, declined through his attorney to comment.

While publicly downplaying his ties to McLaughlin, Murray has told confidants that the scandal over McLaughlin’s extraordinary pay kept him awake the night before his mysterious high-speed crash on Nov. 2. Murray had talked to McLaughlin several times while the Globe was preparing an article about McLaughlin’s salary, phone records show, but Murray said he didn’t know the salary amount until the story was published on Oct. 30. The report triggered multiple investigations.

Murray “felt betrayed. He felt played’’ by McLaughlin, explained one person close to the lieutenant governor. Restless, Murray went out for an early-morning drive to clear his head.

The drive ended abruptly at 5:26 a.m. when his state-owned Crown Victoria slammed into a rock ledge along Interstate 190 at a speed in excess of 90 miles per hour, rolling over twice and triggering the political crisis of his career. Murray’s shifting accounts of how he came to be driving so early in the morning and why he crashed have raised so many questions that he recently hired Ferson, a crisis communications specialist, to handle the fall-out.

Fund-raising rules

Legally, McLaughlin is not permitted to raise money for politicians at all because, as an employee of an agency that receives federal funding, he is covered by the restrictive Hatch Act. McLaughlin is not allowed to engage in any political activity on the job and he cannot conduct political fund-raising on his personal time either, though he may make personal contributions.

Massachusetts law also prohibits fund-raising by appointed public officials such as McLaughlin and pressuring employees to take part in politics.

Murray campaign officials say they are well aware of the laws and did not violate them. Even though McLaughlin’s phone records show that he and Murray’s professional fund-raiser, Kellie O’Neill, called each other at least 51 times since 2008 - including 11 calls in the weeks before a 2010 fund-raiser where McLaughlin introduced Murray and collected donations - O’Neill said she only discussed issues related to campaign volunteers and personal business.

“I never discuss fund-raising with federal or state employees,’’ she said, when asked about McLaughlin. “The law is clear.’’

Interviews with more than two dozen people who attended Murray fund-raisers or made contributions, as well as a review of campaign records, show that McLaughlin played a central role in organizing at least three fund-raisers for Murray since 2008. Each time, McLaughlin introduced Murray to audiences composed mainly of housing authority officials and McLaughlin associates who typically donated $100 or more to Murray.

“Mike controls it real tight,’’ said one person who was at a 2010 fund-raiser for Murray organized by McLaughlin. “Mike was there taking the checks and putting them in a manila envelope.’’

At each event, people who were there say Murray thanked McLaughlin for his help. McLaughlin also got Murray’s support in other ways. Less than three weeks after a 2008 fundraiser, McLaughlin’s son Matthew started a $60,000 state job with Murray’s recommendation. Matthew McLaughlin was recently fired for allegedly falsifying attendance records.

Politicians in the Merrimack Valley, where McLaughlin once served as a state representative and municipal official, say they’ve known for a long time that McLaughlin was “Murray’s guy’’ in the region.

“There is no mystery about that,’’ said Israel Reyes, who ran unsuccessfully for mayor of Lawrence in 2009 with McLaughlin’s backing. “I knew McLaughlin raised money for Murray. I knew because I was in politics. McLaughlin raised money for a host of candidates. . . . He helped me.’’

Operative at work

Numerous current and former Chelsea Housing Authority employees, speaking on condition of anonymity because they are not authorized to speak to the media, say that McLaughlin boasted about his close relationship with Murray, though he sometimes groused at what he said the campaign wanted him to do.

“He was, like, ‘Oh, I’m on the hook for $5,000 - they want $5,000 from me,’ because that’s what he was - a fund-raiser,’’ one employee recalled. “That’s when he would put the squeeze on. He’d get on the phone, calling his friends, raising money.’’

Housing authority employees say McLaughlin never directly ordered them to give money or help candidates, but he would cajole them to help with campaigns and, on at least one occasion, someone stuffed information about a 2010 Murray fund-raiser into employee mailboxes.

Workers said it was clear what the boss wanted, and that the pressure to comply was unmistakable. As one employee said, “If you were good to Mike, he was good to you.’’

One maintenance worker said he bought a $100 ticket to a Murray fund-raiser at the cozy Irish Cottage restaurant in Methuen on June 25, 2010, because he knew that other authority employees were going. At least 22 housing authority employees, outside professionals, and their relatives contributed in connection with the event, campaign records show, which brought in nearly $10,000 from people with ties to McLaughlin.

“I didn’t want to look like the one who didn’t [contribute], that I’m the one who didn’t support him,’’ said this employee.

Political fund-raising “was pretty much done in the open,’’ said another employee who remembered donating cash for Murray’s campaign at the office, though there is no record of such a donation. “[James] McNichols or [Paul] McCarthy would say, ‘Hey, I need $100.’ That was the usual amount. . . . Sometimes there were tickets. Tickets to some event. But I didn’t want the damn tickets.’’

McNichols was the authority’s accountant and a close friend of McLaughlin now under investigation for shredding records; McCarthy is a former authority employee.

It is not clear what became of the cash donations that employees say they gave to McLaughlin’s associates, but state law bans cash donations of $50 or more, and cash donations of any amount must be itemized and the donors identified.

The Murray campaign provided a list of recent cash contributors, but it did not include any of the three housing employees who told the Globe they gave cash to McLaughlin’s aides purportedly for Murray. Ferson said the campaign knows nothing about them and that Murray does not accept cash contributions over the $50 limit.

Political injury after crash

Murray was alone in his state-owned Crown Victoria when he went off Interstate 190 early on Nov. 2, demolishing the vehicle but, remarkably, leaving him without serious physical injuries. The political injury, however, was substantial as Murray repeatedly changed his account of the event.

The lieutenant governor initially said he was inspecting damage from a late-fall snowstorm - though it was dark - and picking up coffee and a newspaper. Later, Murray said he went out after his daughter got into bed with him and his wife and woke him up.

Pinpointing the cause of the accident proved no less elusive. Murray initially agreed with State Police investigators who said the vehicle slid on black ice, but he later agreed with State Police analysts who concluded that he probably fell asleep at the wheel, based on data from the vehicle’s black box.

Now, it appears that the precipitous fall of McLaughlin - and the resulting state and federal investigations - may have provided the backdrop for the whole episode, spurring Murray to take the early-morning ride.

The lieutenant governor felt angry at McLaughlin, explained the person close to Murray, and surprised by his deceptions.

“Now, everybody is saying it was so obvious that McLaughlin was such a bad guy. But it wasn’t’’ prior to the Oct. 30 revelations about McLaughlin’s high salary, according to this person.

McLaughlin, 66, had, however, long been a controversial figure who had been repeatedly investigated but never prosecuted for ethical lapses. When he was named director of Chelsea Housing in 2000, Chelsea city manager Guy Santagate objected, warning that McLaughlin would pull the city back into the bad old days of corruption.

Murray should have known all this, said one Merrimack Valley official, because at least two people told him about McLaughlin’s background.

“He was warned that Mike McLaughlin was dangerous,’’ said this official, who spoke on condition of anonymity to avoid alienating the Patrick administration.

Political favors

But McLaughlin was eager to help Murray from the day they met, said Boston City Council president Stephen Murphy, who introduced them in 2005. At the time, Murray was the 37-year-old mayor of Worcester getting ready for his first statewide run for office, while McLaughlin was a veteran pol whom Murphy knew from his own statewide campaign for treasurer.

“Mike McLaughlin just married [Murray],’’ said Murphy, noting that he shares Murray’s outrage over McLaughlin’s salary at the housing authority.

Over time, McLaughlin’s value to Murray became obvious, according to one Murray campaign worker who asked not to be identified for fear of retaliation.

McLaughlin “rang the bell for him [Murray],’’ said this worker. “Mike got it done: Delegates, people, organization, money.’’

McLaughlin reveled in his proximity to power, say his former employees, and the help he could get from the lieutenant governor. Murray once angrily called former labor secretary Suzanne Bump when she fired one of McLaughlin’s old friends, John Zimini, according to someone who was briefed about the call. Murray later helped Zimini find a new job at a quasi-public state agency. In addition, Murray recommended people to housing authority boards on McLaughlin’s word, giving McLaughlin added clout.

McLaughlin kept in close touch with Murray, calling him frequently whether he was working or on vacation. A week before the Globe story that disclosed McLaughlin’s salary, McLaughlin told Murray that the Globe was preparing an article and outlined his plan to counter the bad news by getting a political consultant to write a favorable article about McLaughlin’s career.

A few days after the Globe story, consultant Michael Goldman wrote a column in The Sun of Lowell that glowingly described McLaughlin as “a warrior from the old school.’’ Goldman acknowledges that McLaughlin asked him to write the column.

But Murray’s consultant Ferson said the lieutenant governor had no idea that McLaughlin made $360,000 until the Globe story and the lieutenant governor has no recollection of discussing Goldman’s planned column with McLaughlin.

“It is [Murray’s] recollection that there was a call in which McLaughlin said ‘Ah, the Globe is working on a story, but don’t worry about it,’’’ said Ferson. “It was days before the story came out.’’

Ferson said most of Murray’s conversations with McLaughlin in October centered on the Dracut Housing Authority, to which Murray had recommended a board member at McLaughlin’s behest. Murray was upset that the new appointee had immediately attempted to oust the executive director in a move widely seen as orchestrated by McLaughlin to create a vacancy for a friend.

As a result, Ferson said, Murray was miffed with McLaughlin even before he discovered McLaughlin’s salary and the lieutenant governor hasn’t spoken to him since.

Ferson insists that Murray has told the truth about his accident, noting that he has long gone out for drives alone to collect his thoughts and he really was concerned about the damage from the October Nor’easter. If the lieutenant had a second chance to explain why he was out driving around, however, Ferson said he would have kept it simple:

“He would have said, ‘I couldn’t sleep.’ ’’

Scott Allen and Matt Carroll of the Globe staff contributed to this report. Sean P. Murphy can be reached at smurphy@globe.com. Andrea Estes can be reached at estes@globe.com.

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