Retirement Board Likely Will Continue McLaughlin Pension

August 22, 2013
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Advocates and attorneys on both sides of the table in the pension hearing of former Chelsea Housing Authority (CHA) Director Michael McLaughlin have agreed to continue the long-awaited hearing until more information is available, sources close to the issue told the Record.

While the Retirement Board could ditch the unilateral requests and go ahead with a hearing at its regular meeting today, Aug. 22, it’s highly unlikely.

Sources told the Record that CHA attorneys from Nixon Peabody, attorneys for McLaughlin, CHA Attorney Susan Whalen and attorneys representing the Retirement Board have all agreed that a continuance for the hearing would be prudent right now.

Last month, the Retirement Board called for a mandated hearing to review the pension of McLaughlin following his sentencing in Federal Court on July 17th. That mandated hearing would take away the state’s contributions to McLaughlin’s pension, which is rather standard given the conviction. However, the Board issued a bit of a surprise in calling for a specialized hearing that would look to also take away McLaughlin’s own contributions and award them to the injured party, in this case the CHA.

There were more than $200,000 in his own contributions that would be considered, the Board said at the time.

Those hearings were set for the August meeting, which is today, Aug. 22.

However, in a letter completed Wednesday and filed on Wednesday, sources said Nixon Peabody lawyers argued to continue the hearings until more information is learned about ongoing investigations at the state level into McLaughlin’s activities, multiple sources said.

That same letter cited a November 2011 continuance granted by the Board to hold off on any action in the McLaughlin pension matter until the Federal Court matter had been resolved.

The letter indicated that there was $900,000 in funds that could be proven to be fraudulent and another $7 million in funds from the Capital Improvement Fund that is alluded to in a letter to the CHA from the U.S. Department of Housing and Urban Development (HUD), and in light of those large sums still out there, it would be prudent to wait and see what happens.

By midday on Wednesday, all parties in the matter had agreed that taking a wait and see approach would be best.

The Retirement Board is likely to follow suit at its meeting today, Aug. 22.

However, if the Board moves forward, the letter from Nixon Peabody indicated that they were ready to show and prove that there is $900,000 of proven malfeasance and fraud that they can point to.


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