Former state AG goes to aid of ex-Chelsea housing chief

Harshbarger called Governor Deval Patrick on the governor’s cellphone this week trying to cut a deal on behalf of McLaughlin, whose entire agency is now under investigation by the FBI, the attorney general, and several other agencies over his extraordinary pay and his efforts to collect a state-record pension.

Patrick was alarmed by the call, during which Harshbarger asked if McLaughlin could end the controversy by accepting a lower retirement benefit, according to two people briefed on the phone call. The next day, Patrick’s chief of staff, Mo Cowan, called Harshbarger back and told him not to call on the matter again.

Harshbarger, who went on to serve as president of the citizen watchdog group Common Cause after an unsuccessful run for governor in 1998, yesterday told the Globe that he intervened on McLaughlin’s behalf at the request of a “mutual friend,’’ whom he would not name, and was not representing him. He said he had known McLaughlin since the two first ran for office in Middlesex County in 1978.

But Harshbarger called back about 40 minutes later to explain that he was acting as McLaughlin’s lawyer and had met privately with the former housing chief, a fact he did not disclose to the governor.

He also did not disclose that relationship in an e-mail to a Globe editor on Nov. 5 suggesting that McLaughlin is “perilously close’’ to being the victim of a “reputational witch hunt.’’

Harshbarger, 69, said the phone call to Patrick on Nov. 8 was “totally innocent and appropriate. Nothing was intended and nothing came out of it.’’ But, he said, in hindsight “I wouldn’t do it again obviously . . . because of the implications it raises.’’

Since he stepped down as the president of Common Cause in 2002, Harshbarger has been called on frequently to investigate corruption and recommend reforms.

He was appointed by Governor Mitt Romney to head a commission on prison reform and more recently advised the state courts on how to recover from the patronage scandal in the Probation Department that led to an indictment of the former commissioner.

This time, though, Harshbarger was acting on behalf of a man caught in an ever-deepening scandal.

The Globe revealed the size of McLaughlin’s compensation package on Oct. 30. McLaughlin had seen his pay rise nearly fivefold during his 12 years at the helm of the authority, but he told state officials he made only $160,000, less than half the real total.

He resigned on Nov. 3, but just before he departed, he cosigned checks to himself totaling more than $200,000 for what he said was unused vacation, sick, and personal time.

The next day, McLaughlin, 66, applied for a state pension of $278,000, which would be a state record, but state retirement officials have ordered a freeze on any benefits to McLaughlin until they can determine if he is entitled to them.

On Nov. 9, the Chelsea Housing Authority imposed an administrative leave on James McNichols, the agency accountant who cosigned the $200,000 in checks to McLaughlin.

McNichols, a McLaughlin family friend and former bouncer who also helped McLaughlin remove boxes from the authority’s Locke Street offices the night he announced his resignation, was ordered on paid leave until further notice by interim executive director Albert Ewing.

By the time Harshbarger made the phone call to Patrick on Tuesday, the governor had already said he was “boiling’’ over McLaughlin’s compensation and he had asked the inspector general of the US Department of Housing and Urban Development, the state inspector general, the attorney general, and the state auditor to investigate the possible misuse of funds and false reporting by McLaughlin.

“The fact someone would try to cut a backroom deal over this pension is infuriating,’’ said one official briefed on the conversations between Harshbarger and the governor’s office.

Harshbarger, who said he didn’t “want to be part of the [McLaughlin] story,’’ gave conflicting accounts as to how he came to be helping McLaughlin. At first, he insisted he did not call Patrick in the role of McLaughlin’s lawyer, but “solely at the request of the mutual friend. As I saw it, it was a request made of me and I accepted it,’’ he said.

He said he recognized McLaughlin’s reputation is “at best, that of a rogue character,’’ but Harshbarger said he had known McLaughlin for more than 30 years, dating back to when McLaughin was running for Congress and he was running for Middlesex district attorney in 1978 (They both lost).

He said he never investigated McLaughlin as a prosecutor.

But Harshbarger later told the Globe that the mutual friend did not ask him to call Patrick. Instead, he said he took it upon himself to call Patrick.

Two people briefed on Harshbarger’s conversation with the governor said that Harshbarger indicated that McLaughlin was open to the possibility of a lower pension. Harshbarger would not say what resolution he was seeking.

Patrick, Harshbarger said, “didn’t think anything could be done or would be done,’’ but he did not seem to take offense.

Harshbarger confirmed that he had already met privately with McLaughlin to consider representing him on a preliminary basis.

But he said he later decided against it after he learned from reading the Globe that McLaughlin had taken checks totaling more than $200,000 as he left the housing authority.

“Alleged or not, that added significant new dimensions to the story,’’ he said, adding that he referred McLaughlin to another lawyer.

Thomas Hoopes is now representing McLaughlin.

However, Harshbarger laid out a robust, if rambling defense of McLaughlin in an e-mail to a Globe editor on Nov. 5. He suggested that McLaughlin did not deserve so much attention and that the Globe would be better off focusing on the high paycheck of NStar chief executive Thomas May.

“Aside from the fact that all of the government oversight agencies failed totally to monitor/audit/control the financial operations of the Chelsea Housing Authority and are totally embarrassed by the dereliction of their duty . . . nothing has been disclosed that indicates any legal violations,’’ Harshbarger wrote.

He added that McLaughlin “apparently saved Chelsea millions of dollars over the decade and changed the CHA culture, but his salary has embarrassed his supporters and colleagues who otherwise apparently valued his performance immensely.’’

Harshbarger concluded that “we are perilously close to engaging in a reputational witch hunt based on Michael McLaughlin’s past ‘reputation’ compared to 12 years of performance.’’

Andrea Estes can be reached at estes@globe.com. Sean P. Murphy can be reached at smurphy@globe.com.