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November 11, 2011

Contracts detail salary bumps for ex-Chelsea housing chief

John Tlumacki/Globe Staff

Michael E. McLaughlin (right) was seen last week driving away from the Chelsea Housing Authority offices in a Jeep that was one of the perks of his series of employment contracts.

An examination of Michael E. McLaughlin’s employment contracts with the Chelsea Housing Authority is like a reading of “The Art of Seduction.”

The Globe’s reporting during the past two weeks has highlighted his skyrocketing salary and the extraordinary pension he is now trying to claim. It has also documented his resignation and hasty departure from the executive director’s office, and the state and federal investigations that have followed it.

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But at the root of all that activity are McLaughlin’s eight contracts or contract extensions, which boosted his annual salary from $77,500 in 2000 to over $370,000 this year.

That is a nearly fivefold increase in just 11 years.

Without the words printed within the contracts’ four corners, none of that would have occurred. And a line-by-line comparison of them is as revealing as the prior stories of shredded documents, $80,000 cashed checks, and moving boxes kept away from an inquiring reporter.

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All told, there were 19 changes that enriched McLaughlin. They were handed out while he was tasked with providing housing for low-income residents in a city still recovering from being placed into state receivership in 1991.

McLaughlin unabashedly defended his high pay in one interview with the Globe, comparing his stewardship of the authority with the football play of Hall of Fame quarterback Joe Montana.

He has since dropped out of public view.

The first contract lasted for one year, from Feb. 1, 2000, through Jan. 31, 2001.

This gateway document was filled with standard contract language defining McLaughlin’s responsibilities to the housing authority and its commitments to him.

Among the protections reserved by the authority was the ability to fire the new executive director for just cause, defined as a “failure to meet agreed-upon objectives in a satisfactory manner or time.” The authority also was able to remove McLaughlin if he became permanently disabled.

Besides his $77,500 salary, McLaughlin was given 25 vacation days - five weeks. He was barred from carrying over any more than 25 days of unused vacation time from one year to the next without approval of the housing authority’s board of commissioners. And should he have been terminated “for any cause,” he was entitled only to his unused vacation time as of that date.

McLaughlin also was given the opportunity to earn 1-1/4 sick days each month, maxing out at 15 sick days per year. While the contract said there was no cash value to any unused sick time, it said McLaughlin was free to carry over any unused sick days from one year to the next.

The agreement was signed by McLaughlin and Richard Repici, then chairman of the Chelsea Housing Authority Board of Commissioners. Repici is now dead.

On Jan. 1, 2001, a month before the first contract expired, McLaughlin and the authority reached a new agreement.

The pact lasted not one year, but five. It started with the same boilerplate language as the first deal but began to shift in McLaughlin’s favor in the section that dealt with severance pay.

Instead of being eligible for severance of no more than two months of pay, the new language said McLaughlin would be eligible for all salary and benefits slated to be paid over the entire five-year span of his contract. And that severance, should it be necessary, would have to paid in an immediate lump-sum cash payment.

His annual salary was also increased to $95,000 - a 26 percent raise - and the two sides agreed to meet each year to renegotiate the salary and compensation for the ensuing year.

While McLaughlin retained the same 25 days of annual vacation, the new contract expressly stated he was eligible for all of them up front as of Jan. 1 each year - no longer accruing them one-by-one with each month’s continued employment. The change meant he was owed the cash value of all of his annual vacation allowance even if he worked just one day into a new year.

And while his previous contract said he “shall not” accrue more than 25 days of unused vacation time without the board’s approval, the new contract said he “may” do so.

He also was eligible for payment of those days if he left or was terminated “for any cause.”

The same change applied to sick time: McLaughlin was awarded 15 days of sick time as of Jan. 1 of each year - no longer accruing them one-by-one each month but immediately eligible to receive their cash value if he left the authority just one day into a new year. He was allowed to carry over any of that unused sick time from one year to the next.

He also had to be paid for those days if he left or was terminated.

And on that point, the new contract eliminated the provisions allowing the housing authority to terminate McLaughlin for just cause, appearing to make it more difficult to dislodge him.

On top of those vacation and sick leave allowances, that second contract - signed 11 months after his initial deal - entitled McLaughlin to two personal days each year, with the option to convert up to three days of sick leave each year into additional personal days.

The contract also expanded the insurance available to McLaughlin: besides the standard medical, dental, liability, and life insurance available to all housing authority employees, the executive director could be paid up to $3,500 annually to buy a long-term disability policy; $1,500 for a short-term disability policy; and $4,000 for a life insurance policy.

The contract was signed by McLaughlin, Repici, and the other four authority commissioners.

The contract was modified again on Aug. 7, 2003, and started with the same standard language as the first two agreements. The first change, though, was in dropping the authority’s ability to remove McLaughlin from the job if he became permanently disabled.

His salary also was increased to $135,000 - a 42 percent raise and a near-doubling of his pay in less than 3-1/2 years - and the package contained two enhancements.

McLaughlin was given the personal use of a housing authority vehicle. He also was granted a $25,000 lump sum - retroactive to Jan. 1, 2002 - “to be used at the employee’s discretion for investment or insurance.”

That is nearly triple the $9,000 allowance for supplemental forms of insurance that had been included in his second contract.

In addition, McLaughlin’s vacation allowance was increased by a week - to 30 days - and a new provision required the housing authority to buy back up to four weeks of vacation annually, retroactive to Jan. 1, 2002.

That had the benefit of increasing his base salary to over $145,000 annually, which fueled even larger future raises.

The contract did have two deletions.

In light of the $25,000 investment/insurance payment, it removed the $3,500, $1,500, and $4,000 allowances for supplemental insurances. It also eliminated the “notices” section, which publicly revealed McLaughlin’s current address.

The contract was signed by McLaughlin, Repici, and the other four authority commissioners.

An undated attachment, signed by the same people, also amended the second contract to retroactively boost McLaughlin’s 2002 pay to $105,000.

The contract was modified a fourth time on Dec. 1, 2004. That one-page amendment retained all prior clauses while extending the agreement to Jan. 31, 2010.

It also stated that the salary, “which includes investment money, is amended to designate a 10 percent increase.” There is no dollar figure defining either the salary or the investment payment at that time.

The extension also was signed only by McLaughlin, Henry Cordero, the authority commission’s new chairman, and Robert McWatters, the vice chairman. McWatters is now dead, and Cordero - a court officer by profession - did not respond to a message left at his home last night.

Cordero previously defended McLaughlin’s pay, telling the Globe, “He’s worth every penny of it,” and highlighting his graffiti-eradication efforts.

A year later, on Dec. 7, 2005, the same three individuals modified the contract a fifth time.

The term was extended to Jan. 31, 2011, and the salary was again the focus of ambiguous language.

“Salary, which includes investment money, is amended to designate a 10 percent increase,” said the one-page extension.

Less than a year later, on Nov. 29, 2006, the contract was modified for a sixth time.

The boilerplate language returned and the changes again began with the term - extended to Jan. 31, 2012 - and the salary. It was set at $242,908, although the percentage increase is unclear because of the ambiguity about his base pay in the two prior extensions.

The contract also deleted the $25,000 investment/insurance allowance, yet it reiterated that McLaughlin was eligible to sell back four weeks of unused vacation and have the cash value of that included in his overall salary calculation.

There also was one final change: instead of McLaughlin being allowed to accrue “more than 30 days of vacation” without the commission’s approval, the language was made even more favorable by saying he could accrue “unlimited days of vacation” without commission consent.

While the contract extension was six pages long, it was signed by the same three people: McLaughlin, Cordero, and McWatters.

The one-page extensions resumed little more than a year later, on Jan. 9, 2008. This seventh modification extended the contract to Jan. 31, 2013, and stated the salary “is amended to designate a 10 percent increase.”

It was signed by McLaughlin and Cordero, but the line for McWatters’s signature was blank.

The eighth and final modification was made on June 10, 2009.

In that one-page amendment, the term was extended to Jan. 31, 2014. The salary also went though a two-step adjustment.

It was adjusted back a half-year, to Jan. 1, 2009, “by a 3 percent increase over the previous year’s total income. In addition, salary is amended on Jan. 1, 2010, 3 percent over the previous year’s total income.”

That contract was signed by just two people: McLaughlin and Cordero.

While that amendment was again ambiguous in detailing the executive director’s salary, that number became clear in the pension application McLaughlin filed this week.

It revealed that his annual salary this year was $370,678, and that his pay averaged $347,665 during the past three years.

And that doesn’t include the more than $200,000 in unused sick, vacation, and salary buyback time for which McLaughlin demanded checks before he walked out of the authority offices last week.

Glen Johnson can be reached at johnson@globe.com. Follow him on Twitter @globeglen.
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