Federal and local law enforcement are investigating alleged financial mismanagement in Gray on the heels of the recent resignation of the town manager.
The investigation was first brought to light at a Town Council meeting on Tuesday, when Chairman Michael Johnson said that in November 2024, town officials discovered that Gray had spent approximately $1.25 million on a fire truck, but the town didn’t have the money. The fire truck purchase had been voted on in 2019, but wasn’t completed.
Former Town Manager Michael Foley said he believed there was an additional $1.5 million available following a 2019 audit, and the truck was commissioned and paid for in February of 2025. However, in June, it was discovered that the funds had already been spent, which the board was not informed of at the time. About the same time, the town discovered another purchase of more than $140,000 in ambulance write-offs that had not been disclosed.
In November, Foley stepped down from the role of town manager. In his resignation letter, he said the Town Council was “charting a different direction for the town’s future,” and now was an appropriate time for him to pursue new professional opportunities that “align with (his) leadership values and goals.”
Town Council Vice Chairman Vincent Palange said Foley was aware in June of the issue with the fire truck fund not having the money, when Palange, along with Ken Farrington and Charity Klinger, were elected to the council, but did not disclose this to the council at the time.
Johnson said the town attempted to gain access to Foley’s work computer after his resignation, but it had already been reset to factory settings and no data could be recovered, despite the efforts of two forensic computer technicians.
Johnson said the town is working with local law enforcement and the FBI. Due to the ongoing nature of the investigation, he said the town was limited in the information it could share, and declined to answer further questions.
In a statement to the media, Foley said that, at the time of the fire truck purchase, funds were identified as being available, and that information was shared with both the Town Council and the public as part of the fiscal year 2025 budget process. Following that time, a public bid process was conducted and awarded based on the town’s purchasing policies, he said.
Regarding his computer, Foley said it was an Apple laptop that was not supported by the town’s IT department, with encryption implemented to protect town data. Prior to his departure, the computer was reset to factory settings so it could be used by other town employees, with all town-related files and emails stored on the town servers and remaining intact and accessible. He said he did not destroy or conceal town information.
Interim Town Manager Denise Clavette has been working to identify options regarding the fire truck. Johnson said there are three potential paths forward: Retain the truck as is; return the truck with an estimated loss of $100,000; or finance a significant portion of the truck to recover some funds. The town is waiting on some final numbers to understand the financial impact. Opinions among council members on what to do next are mixed.
Johnson said the town will be making significant changes from a financial operations standpoint, with warrant approval occurring before funds are released, and increased cautions exercised. Changes are expected to be implemented in the next month. The town is also exploring outsourcing certain financial functions to a third-party partner, which will free up staff time, reduce costs, and provide additional protections against fraud.
“These matters are being taken extremely seriously, and we are committed to accountability and transparency,” Johnson told the Town Council.
Correction: Due to a reporting error, an earlier version of this story misstated the nature of a $140,000 cost that Gray town councilors said wasn’t disclosed. That expense was described as “ambulance write-offs.”
