Multiple sources have informed the Record that both advocates and legal representatives involved in the pension hearing for former Chelsea Housing Authority (CHA) Director Michael McLaughlin have reached agreement to postpone the proceeding pending receipt of additional information.
Although the Retirement Board retains the option to proceed with the hearing at today’s regular meeting on Aug. 22, such action appears improbable.
According to sources, attorneys representing the CHA from Nixon Peabody, counsel for McLaughlin, CHA Attorney Susan Whalen, and legal representatives for the Retirement Board have collectively determined that a continuance would be the appropriate course of action.
In the previous month, the Retirement Board scheduled a mandated hearing to examine McLaughlin’s pension following his sentencing in Federal Court on July 17th. The standard mandated hearing would eliminate state contributions to his pension given the conviction. However, the Board announced an additional specialized hearing designed to also eliminate McLaughlin’s personal contributions and redirect them to the injured party—the CHA.
The Board noted that McLaughlin’s own contributions exceeded $200,000.
These hearings were originally scheduled for today’s August meeting, Aug. 22.
In a letter filed Wednesday, Nixon Peabody attorneys requested a continuance, citing the need for additional information regarding ongoing state-level investigations into McLaughlin’s conduct, according to multiple sources.
The correspondence also referenced a November 2011 continuance previously granted by the Board to defer action on the McLaughlin pension matter until Federal Court proceedings concluded.
The letter noted $900,000 in demonstrably fraudulent funds and an additional $7 million from the Capital Improvement Fund referenced in correspondence from the U.S. Department of Housing and Urban Development (HUD) to the CHA, suggesting that awaiting further developments would be prudent given these substantial amounts.
By midday Wednesday, all parties had reached consensus on postponing action.
The Retirement Board is expected to adopt this approach at its meeting today, Aug. 22.
Should the Board proceed regardless, Nixon Peabody’s letter indicated readiness to present evidence of $900,000 in documented fraud and malfeasance.