McLaughlin Arraigned in Illegal Fund-raising for Tim Murray

Former Chelsea Housing Authority (CHA) Director Michael McLaughlin was arraigned in Boston’s Suffolk Superior Court last Thursday morning on a 12-count indictment from a Grand Jury, but sources said he might have thrown a curveball in the plans of Attorney General Martha Coakley by not also entering into a plea deal later that day.

Looking disgusted and a bit annoyed, McLaughlin appeared with his attorney – Tom Hoopes of Boston – in the court Thursday morning and answered to charges contained in an Aug. 29 indictment that related to campaign finance violations tied to former Lt. Gov. Tim Murray and former Lawrence Mayoral candidate Israel Reyes.

The Attorney General’s office also last week fined Murray $80,000 in relation to the case.

In a document that is somewhat controversial in the legal profession, the AG’s office presented a Statement of the Case that detailed what McLaughlin had done at the CHA offices with other disgraced former employees to pressure current and former CHA employees to contribute to Murray’s campaign.

Three annual fundraisers for Murray were identified by the AG’s office, in 2008, 2009 and 2010.

The document indicated that McLaughlin had acted as an informal advisor and liaison to Murray since 2006, engaging in many legitimate and legal campaign efforts. However, it also alleged that to boost contributions and attendance, he pressured CHA employees, vendors and friends.

“To increase turnout and promote each of Murray Committee events, McLaughlin directed a subordinate at the CHA, James McNichols, to collect contributions from CHA employees and other persons who provided legal and accounting services to the CHA,” read the document. “In meetings at the offices of the CHA, McLaughlin directed McNichols to seek contributions from persons identified by McLaughlin, particularly the director-level administrative staff, and also nearly all of the maintenance staff. As instructed by McLaughlin, for each of the Murray Committee events, McNichols collected contributions in the form of cash and checks, usually $100 per person, and delivered it all to McLaughlin in his office at the CHA. McLaughlin also distributed event invitations to McNichols, who distributed them to CHA employees as he collected their contributions.”

The document continued by alleging that McNichols had collected about $1,500 to $2,000 for each event from CHA employees or vendors and delivered the money to McLaughlin.

“All the employees approached by McNichols understood that the solicitation for contributions was ultimately a request from McLaughlin, and by virtue of his involvement, many felt pressured to make contributions,” it read.

It also alleged that McLaughlin had contacted friends, professional contacts, people from other housing authorities, political allies and members of the state housing authority association in an effort to get them to attend and to contribute to Murray’s campaign.

“Over the course of the Murray Committee events, McLaughlin indirectly or directly solicited tens of thousands of dollars of illegal contributions, in violation of [state law],” read the document.

There were also three other charges in the indictment centered around similar illegal campaign contribution allegations for former Lawrence mayoral challenger Israel Reyes – who ran unsuccessfully in 2009.

It was estimated that about $1,000 in illegal contributions were solicited from CHA employees and vendors for that campaign.

McLaughlin pleaded ‘not guilty’ to all counts in court last Thursday.

However, sources inside the courthouse that day told the Record that there was a plan to work out a plea agreement and that the agreement would be taken by the court last Thursday afternoon.

Sources said the AG’s office had planned to arraign McLaughlin and plea him all at once.

The plea agreement part, however, did not happen, and it was purported that someone had changed their mind.

The AG’s Office was not immediately available to confirm or deny any plea agreement on the table.

Hoopes indicated to the court that McLaughlin would likely be in federal prison during the entirety of the upcoming case, and he asked that the case be put off for 36 months, which was uniformly denied by Magistrate Gary Wilson. Hoopes said his client was worried that the federal prison system would not agree to return McLaughlin to Massachusetts for court dates, which might result in a warrant being issued for McLaughlin for failure to appear in court.

Wilson said he felt that could be worked out and that the AG’s Office likely would not issue a warrant. However, prosecutor Edward Beagan said that might not be the case.

“I’m not sure about that,” he said when Wilson indicated there would be no warrant. “It may be the only way to get the defendant back to court.”

That whole conversation, however, was reserved for another day.

A pre-trial conference was scheduled for Oct. 24, and a tentative trial date was marked for May 27, 2014. There was no mention of any plea agreement.

Sidebar –

Former CHA Director Michael McLaughlin will report to federal prison at a still undetermined location this Friday, Sept. 13 – a truly and ironically unlucky day for him.

McLaughlin will begin the three-year jail term that was imposed on July 17 and held up this week in Federal Court, with Judge Doug Woodlock denying a stay of the sentence until after the appeals process. A stay of the sentence would have kept McLaughlin out of jail indefinitely.

Attorneys for McLaughlin did file an appeal in the case last week, noting that they believe they will certainly prevail in the case at the U.S. Appeals Court. They cited they believe obvious errors were made in allowing the CHA attorneys to become de facto prosecutors in the case and question key witnesses, including former McLaughlin friend and CHA accountant James McNichols.

Woodlock disagreed in a short treatise filed Tuesday with the denial of the stay of sentence request.

Also in federal court Tuesday, prosecutors unsealed the March 2013 secret interview of McNichols where he came clean after lying several times to Grand Juries and to investigators.

The transcript of that interview reveals that McNichols had been told of a plan by McLaughlin to say that deceased CHA attorney Walter Underhill had concocted the whole scheme for destroying time cards and soliciting political contributions.

He had held ground on that until earlier this year, saying he felt that if he just stayed loyal and kept quiet, McLaughlin had enough political pull to get them all out of the mess.

“The only benefit that I thought that I might get from it (by lying) was that Mike was a powerful guy that knew a lot of people,” read the recently unsealed testimony from March 2013. “He had been investigated before. He told me that. And he said I’ve been investigated before and the people are going to come in and do all this and if you keep your mouth shut we’ll survive the investigation and all this other stuff. And I thought that – foolishly I thought that if I went along with the story that at some point…all this was going to go away and I was going to be okay.”

McNichols said he had sworn on his father’s grave to stay loyal to McLaughlin, and McLaughlin in turn said he would “never roll” on McNichols.