Timothy P. Murray agreed Thursday to pay $80,000 to settle charges that he collected $50,000 in illegal campaign contributions raised by two public officials, capping a controversy that derailed the former lieutenant governor’s political career.
Murray, who resigned in June to take a position as head of the Worcester Chamber of Commerce, collected tens of thousands of dollars in donations solicited by former Chelsea Housing Authority executive director Michael E. McLaughlin, according to Attorney General Martha Coakley.
McLaughlin, who has already been sentenced to three years in federal prison for lying to state and federal regulators about his $360,000 salary, was indicted Thursday by a state grand jury in several campaign violations including unlawful solicitation by a public employee.
If convicted, he could face additional jail time. He is scheduled to be arraigned on the state charges Sept. 5, just days before he is to report to federal prison. McLaughlin may plead guilty to the state charges in exchange for a sentence of probation to be served after his federal prison term ends, according to two people briefed on negotiations.
A second official — E. Bernard Plante, a supervisor in the state Department of Transportation — also solicited donations for Murray in the Worcester area between 2008 and 2010, Coakley said. He was not charged.
“Political fund-raising and solicitation by public employees, especially those in management positions, is a violation of law that undermines the integrity of our campaign finance system,” Coakley said.
In a statement, Murray said he should have been “more vigilant” about who was working on behalf of his campaign.
“As I have said from the start, I never asked Michael McLaughlin to solicit funds for my committee, because I know that would have been wrong,” he said. “If I knew in 2006 what I know today about Mr. McLaughlin, I would have never had any association with him at all.”
In a phone interview Thursday, Murray said: “I’m glad that this civil settlement has been reached. It’s been a long, difficult process, but we fully cooperated every step along the way, and we’re just glad it’s come to a closure.”
Murray had asked state campaign finance officials to investigate after the Globe reported in January 2012 that McLaughlin, who as a public employee was barred from fund-raising, had organized several fund-raisers on Murray’s behalf. McLaughlin solicited donations, often in cash, from Chelsea Housing Authority employees and friends and associates.
At the time, Murray downplayed their relationship and said he was unaware McLaughlin raised money for him.
Within months, the investigators turned their attention to Murray. They questioned him and others, in an effort to determine whether Murray himself had engaged in criminal conduct. In the end, prosecutors concluded that even if McLaughlin testified against Murray, there was insufficient evidence that Murray knew what McLaughlin was doing or that he conspired with him, according to three people briefed on the investigation.
Coakley’s office has had difficulty winning convictions in public corruption cases. Earlier this year, a Suffolk County jury found former probation commissioner John O’Brien not guilty of charges he raised money for former treasurer Timothy Cahill in order to get his wife a job at the state Treasury. And last December a jury could not reach a verdict in the trial of Cahill, accused of misusing state lottery money to finance an ad campaign for his 2010 run for governor. Cahill ended up paying a $100,000 fine.
Thursday, Murray repeated that the “process was initiated” by him after he learned that McLaughlin had “improperly solicited funds for my committee.”
“I asked for the investigation because I have always sought to play by the rules and run my political committee within the letter and the spirit of the law,” he said. “This review has been comprehensive, and we have fully cooperated with the authorities every step of the way.”
Murray, who had been preparing a run for governor, saw his political career shelved after the Globe reported his ties to McLaughlin and he ran his car off the road in a predawn crash.
In January, he announced he would not run for governor and stopped fund-raising.
When he later announced he was resigning, Murray dismissed suggestions that the controversies prompted his decision.
As part of his settlement with the attorney general, Murray’s political committee must pay a $20,000 fine. By Aug. 15, Murray’s campaign account contained more than $227,000. Murray must also personally pay a $10,000 fine. Additionally, Murray must dissolve his political committee and have no involvement with a political fund-raising committee for two years, Coakley’s office said.
Murray’s agreement with the chamber of commerce already prohibits him from campaign involvement.
The second public official, Plante, solicited donations from DOT employees for his son, who was a Murray fund-raiser, according to the agreement. Plante, who makes about $88,000 per year, solicited donations from DOT employees and others for three Murray fund-raisers in Worcester in 2008, 2009 and 2010, the agreement said.
A person close to the investigation said Plante’s cooperation in the inquiry helped him avoid prosecution. The Patrick administration refused Thursday to disclose Plante’s name, though Coakley’s aides confirmed it.
“We learned of the attorney general’s investigation involving a MassDOT employee today,” DOT spokeswoman Sara Lavoie said in an e-mail. “We will be reviewing the attorney general’s findings and agreement with the employee and will determine whether or not further action is necessary.”
“That is just the decision that was made,” said Lavoie, explaining why the agency would not release the name. She said the department will circulate “reminder guidelines” about fund-raising rules for its employees.
In addition to four counts of unlawful solicitation by a public employee, McLaughlin is also charged with four counts of solicitation in a public building and four counts of conspiracy to solicit in a public building.
On Tuesday, Coakley and the Office of Campaign and Political Finance took action in another political campaign case, filing suit against Lawrence Mayor William Lantigua, alleging he had violated state campaign finance law by accepting thousands of dollars in potentially illegal cash and corporate contributions.
The legal maneuvering comes as Coakley herself is considering a gubernatorial bid. She has said she will decide soon whether or not to run.
Political observers said the fallout from Murray’s imbroglio with McLaughlin had left him politically damaged, but said his enduring popularity in Central Massachusetts and within the Democratic Party left the door open to a political comeback in the future.
“As bad as the car accident was, it could have been worse, and the same is true of the outcome of this entire situation,” said Mary Anne Marsh, a Democratic strategist with the Dewey Square Group. “Tim Murray doesn’t come out completely unscathed, like the car accident, and with this judgment and some time, Tim Murray could have some future here.”