During the next five years, however, auditors discovered in the course of two additional examinations that McLaughlin was still concealing his true salary - and by ever-increasing amounts. Both times they did nothing.
By the time the Globe revealed on Oct. 30 that McLaughlin had become perhaps the highest paid public housing official in the United States, his $360,000 salary was a stunning $200,000 more than the amount he declared on state reports. McLaughlin resigned four days later, but not before one of the 2010 auditors invited him to lunch to cheer him up, according to a housing authority employee.
Now, Attorney General Martha Coakley has convened a grand jury looking into whether McLaughlin and others defrauded the state, calling at least two former state auditors to testify, according to two people with direct knowledge. Meanwhile, state Auditor Suzanne Bump, DeNucci’s successor, last week forced the supervisor of the Chelsea audits to resign because of what her office called his mishandling of the agency reviews.
“Mike’s salary was right there in the payroll records for anyone to see,’’ said one housing authority employee who asked not to be identified for fear of retaliation. “The auditors and accountants came and went, year after year … but nothing ever came out. Mike had a way of managing things so his salary just didn’t come out.’’
On Friday, Bump’s office declined to comment, but a spokesman confirmed that “after reviewing all audits of the Chelsea Housing Authority since 2005, she provided all audit materials to the attorney general.’’
The state auditors’ repeated failure to blow the whistle on McLaughlin’s admitted efforts to hide his extraordinary pay is part of a comprehensive failure of the financial overseers who were supposed to safeguard the $15 million in subsidies to Chelsea public housing from the state and federal governments.
