Town officials in Gray announced a series of unreported expenditures and said the FBI was investigating an apparently unrelated fraudulent invoice that cost the town about $100,000.
Town Council Chair Mike Johnson said at a Tuesday meeting that Gray discovered former Town Manager Michael Foley had purchased a new $1.25 million firetruck without approval. Johnson said that purchase, along with $140,000 in expenditures for ambulance services, had not been reported to councilors by Foley, who resigned from his position in November.
The allegations of overspent money, which was disputed by Foley, is the latest startling claim of a public finance error brought to light recently in Maine. Government upheaval last year in nearby Lisbon was sparked by a budgeting error of more than $2 million, and years of budget mismanagement forced a failed bond vote and tax increases in Washington County.
When officials sought to access Foley’s former computer, they found it had been reset to factory settings. Foley, who was mayor of Westbrook until his resignation in 2024, has not been accused of a crime, Gray officials said.
In a Thursday statement, Foley said, “funds were identified as available” at the time the fire truck was purchased and that information was shared with both the Town Council and the public as part of the fiscal year 2025 budget process.
“The issue of ambulance write-offs was identified and disclosed to the Town Council as part of the FY26 budget process and accounted for in future budgeting,” Foley said.
The former town manager said his computer was restored to factory settings so it could be reused and that all town-related files and emails were stored on town serverss.
Gray has also lost money from a seemingly unrelated transaction. Officials say they paid roughly $100,000 toward what appeared to be an invoice from the neighboring town of New Gloucester. The two towns share recreation department services and it’s not unusual for Gray to pay its neighbor. But the banking details on the invoice had been changed by an apparent fraudster, and the transaction was quickly processed.
It’s not clear who was able to access New Gloucester’s invoices to defraud Gray. For their part, New Gloucester officials have said they’re cooperating with investigators, but that the town has had no security breach.
Gray may be able to recoup $50,000 from insurance. The town is also weighing whether to keep its new fire truck. They estimate a loss of $100,000 if they sell it. The outstanding balance on the ambulance changes have also been reduced, Johnson said at the meeting.
Moving forward, Johnson said the town would ensure the council approved expenditures before they’re made.
“We are researching best practices and expect to implement changes within the next month,” he said.
During the public comment period at Tuesday’s meeting, Judy Simoneau, a member of the town’s finance committee, called for further investigation into what she called “loosey-goosey” financial practices.
“I think it’s not so much of a mistake, I think it’s negligence and I think somebody should be held accountable for it,” she said. “I think it’s very unfair that taxpayers are going to be holding the bag on this … This is a lot of money for us.”