Scandal raises issues for Patrick

Team’s dealings with DiMasi are criticized

By Andrea Estes and Matt Viser, Globe Staff | June 4, 2009

The corruption indictment of former House Speaker Salvatore F. DiMasi contains what critics are calling an unflattering behind-the-scenes look at Governor Deval Patrick’s administration, depicting its officials as bowing to political pressure to award a $13 million computer software contract that was allegedly rigged.

No Patrick officials have been implicated in criminal wrongdoing. Yet the scandal, one of the biggest to roil Beacon Hill in decades, has the potential to create political problems for the governor as he pushes forward on ethics law changes and lays the groundwork for a reelection campaign.

Yesterday, critics seized on the impression that the Patrick administration, which awarded one of two Cognos ULC contracts cited in the indictment, failed to respond to a series of red flags indicating that DiMasi and others were exerting heavy influence.

“What the speaker is accused of doing is absolutely wrong – and he should be held accountable – but it takes two to tango,” said House minority leader Bradley H. Jones Jr., a North Reading Republican. “Somebody in the administration knew it was important to the speaker, and somebody made the decision to go forward with it.”

DiMasi is accused by federal authorities of reaping $57,000 from the software company even as his associates pushed state officials to award contracts to the firm. Three friends were also indicted. No further indictments are expected.

“There was a lot of insider baseball going on, and you wonder how the contract got approved in the first place,” said Senate minority leader Richard R. Tisei, a Wakefield Republican. “Was awarding that contract in the best interest of the people in Massachusetts, or was it done to placate the speaker? That’s really the question.”

Yesterday Patrick’s office acknowledged that the administration could have acted sooner to scuttle the project. But administration officials said Patrick and his staff were unaware that DiMasi was pushing for a contract award to Cognos, and they denied any deal-making with the speaker.

“There have been absolutely no allegations by the investigators of misconduct of any kind by any senior Patrick administration official,” said spokesman Joe Landolfi. “We are confident that senior administration officials acted appropriately at all times.”

Landolfi declined to discuss specific allegations in the indictment, citing the ongoing federal investigation.

In the indictment, prosecutors cite at least three instances when DiMasi is alleged to have approached Leslie A. Kirwan, Patrick’s secretary of administration and finance, to discuss “performance management software,” the kind of software manufactured by Cognos. Prosecutors also refer to other unidentified administration officials who were in contact with DiMasi or his chief of staff, Maryann Calia.

In May 2007, the indictment says, Richard McDonough, who was a Cognos lobbyist and close friend of DiMasi’s, told an unnamed “executive official” that DiMasi was keenly interested in the contract and “wanted to make sure it went to the right vendor.” Sources briefed on the investigation have identified the official as David Morales, Patrick’s deputy chief of staff.

Kirwan awarded the contract to Cognos in August 2007.

The administration has refused repeated requests to make Kirwan and Morales available for interviews and continued to refuse interview requests this week in the wake of Tuesday’s indictments. In addition, Patrick declined an interview request yesterday.

DiMasi was indicted Tuesday by a federal grand jury on a charge of participating in a scheme that allowed him to pocket $57,000 in payments from Cognos while making sure the company won state contracts.

Three close DiMasi associates – Cognos lobbyist McDonough, its sales agent Joseph Lally, and DiMasi’s former accountant Richard Vitale – also were indicted. They each collected hundreds of thousands of dollars for their alleged help in winning multimillion-dollar Cognos contracts from the state.

The multiple corruption counts carry maximum prison terms of up to 20 years each, although federal sentencing guidelines would trim those sentences by half or more. Acting US Attorney Michael Loucks announced the indictments at a press conference Tuesday.

In the 33-page indictment, prosecutors cited numerous instances in which Kirwan or officials of the Office of Administration and Finance were alerted to DiMasi’s interest in the software contract:

# Within a month after taking office in 2007, Kirwan held a meeting with acting state chief information officer Bethann Pepoli and DiMasi during which “performance management” software was discussed. Administration officials had not previously publicly acknowledged such a meeting. Cognos, according to records, donated $10,000 to Patrick’s inaugural committee.

# In a March 2007 e-mail to Office of Administration and Finance officials, Pepoli wrote: “I know that Speaker DiMasi really really wants the performance management project in the emergency bond bill and will add it if we don’t include it.”

# Aides to the governor were involved enough to be exchanging e-mails about DiMasi’s desire to have funding for the contract included in the bond bill. “I just spoke with [the speaker's chief of staff],” read an e-mail, sent on March 12, 2007. “I told her that we were including the speaker’s request in the bill. She was very appreciative.”

# In April or May 2007, DiMasi “contacted the Secretary of A&F and inquired how the procurement for business intelligence was going,” referring to the software.

# On May 22, at a function attended by both, DiMasi told Kirwan “he wanted to call or meet with her about performance management.”

Despite the repeated contact, administration officials pointed blame for the award at a holdover from the Romney administration, Pepoli. Pepoli selected the winning bidder and recommended approval to higher-level officials in a bid process that has since been found to be improper. Pepoli has since left state government and did not return phone calls yesterday seeking comment.

The governor and his staff have said Patrick officials, as soon as they discovered something was amiss, referred the matter for investigation, canceled the Cognos contract, and recovered the $13 million.

In December 2007, just four months after she awarded the contract to Cognos, Kirwan asked Inspector General Gregory Sullivan to investigate. Her letter left the impression that it was the administration’s decisive action that prompted Sullivan’s probe. She wrote that the Patrick administration notified Sullivan as soon as it was made aware of any “possible irregularities.”

Officials said yesterday that they did not know that the inspector general had already launched a probe before they contacted the office.

House Democrats made an overwhelming show of support for DiMasi in a reelection vote less than five months ago, just before he resigned in January. Yesterday, less then 24 hours after indictment of their former speaker, House Democrats retreated to a closed-door caucus, where DiMasi’s successor, Speaker Robert A. DeLeo, told members he “felt like he was punched in the stomach,” according to House members in attendance.

Leading Democrats, including DeLeo and Senate President Therese Murray, declined to discuss the impact the indictment could have on the Patrick administration.

Patrick, Murray, and DeLeo released a joint statement calling the charges against DiMasi “deeply disturbing.”

“In light of the recent developments, we believe it is critical that we stand united in our shared commitment to restoring the public trust,” the statement read. “Therefore, we have agreed that ethics reform legislation will be passed and signed into law swiftly that includes the best provisions from all three of our proposals. We owe the people of Massachusetts nothing less.”