Embezzlement Shocks Flynn's Camp

A campaign worker has apparently embezzled nearly $200,000 from the campaign war chest of former Boston mayor and likely Democratic gubernatorial candidate Raymond L. Flynn, according to a letter written by Flynn's lawyer.

"I believe that there is tangible evidence of the embezzlement of the Committee's funds," Flynn's lawyer, D. Lloyd Macdonald '66, wrote to Flynn in the March 6 letter.

According to the letter, a review conducted last January of recent financial reports found several fraudulent checks made out to Douglas deRusha, a Flynn campaign worker responsible for day-to-day financial operations.

The investigation revealed that someone had forged the signature of Joseph Fisher--the primary signatory on Flynn's accounts--on the checks. The probe also showed that someone impersonated Fisher in dealings with the Commonwealth Cooperative Bank.

"The staff [at the bank] indicated that Joseph Fisher was not the 'Mr. Fisher' with whom the Bank had dealt," the letter says.

Harry Grill, an attorney working with Macdonald on the investigation, attempted to discuss the matter with deRusha, but the campaign aide has dropped out of sight.

Telephone calls to deRusha's Beacon Hill home yesterday revealed that the line had been "temporarily disconnected" at deRusha's request.

Yesterday afternoon, Macdonald said Flynn, who is currently U.S. Ambassador to the Vatican, was "unaware" of the embezzlement until a briefing a week and a half ago.

Flynn said in a statement yesterday that he was "shocked and saddened" by the revelations. The former mayor said he had the information on the possible embezzlement sent to the state attorney general's office for investigation.

As a result of the account review, Macdonald said the amount of money in Flynn's campaign fund as of January 10 has been reduced from about $497,000 to approximately $370,000. Flynn, who is a likely candidate in the Massachusetts gubernatorial race, said in his statement that "a financial setback of this magnitude won't make a potential campaign any easier."

In a statement released yesterday, State Sen. Michael J. Barrett '70 (D-Cambridge), who will likely face Flynn in the Democratic gubernatorial primary, questioned Flynn's ability to manage his campaign staff.

"The bizarre story can only fuel concerns about [Flynn's] management ability," Barrett said. "A handson manager watches the bottom line--and knows when things don't look right."

State Rep. Mark Roosevelt '78, who is also seeking the Democratic nomination for governor, was not available for comment yesterday.

Macdonald's letter offers another hint that Flynn will enter the gubernatorial race.

Flynn asked his lawyers to determine how he could transfer the campaign money he raised for municipal elections so that it can be used in a state contest, according to the letter.

Flynn "instructed us to review the procedure to transfer a political committee from the municipal to the state level," the letter says.

This story was compiled with wire dispatches.