A Beacon Hill Scandal? Cognos, DiMasi, and Conflicts of Interest

Dedicated to Joan Vennochi

I’ve been following this story on Granby01033. These are the basics of what really is or should be a scandal. There are (alleged) instances of bribery and influence-peddling. The appearance of conflicts of interest is present.

Based on the jockeying for position taking place between the House Speaker’s heirs apparent, I’m guessing DiMasi’s days are numbered and almost everyone on Beacon Hill knows it. His position, however, is so powerful, no one wants to commit legislative suicide by making much of a deal out of it yet. The Globe has done good work on this story.

As more details come out, Cognos, the IBM subsidiary that secured grossly over-priced contracts with the Commonwealth of Massachusetts, looks as bad as some of our state officials. Apparently using House Speaker Sal DiMasi’s influence, the maker of business intelligence software secured two contracts worth more than $17 million.

The deal, rushed through without proper bidding processes, was initially approved by Gov. Deval Patrick in the hapless, early days of his administration. The Patrick Administration, however, soon asked the Inspector General to look into things. The Inspector General smelled something funny, the deal was eventually canceled, and the state’s money was returned.

The irregularities of the Cognos deal included:

Cognos offering a Department Of Education official a job. The Globe reported that “a former state Department of Education administrator told investigators that she was offered a private sector job by a sales representative for Cognos ULC, around the same time that the software company was attempting to win a lucrative education contract in 2006, according to officials briefed on the matter.” The official now works for state, not the DOE.

The same Cognos official told the DOE administrator that he could have more money added to the DOE’s budget, apprarently if she signed onto to software deal.


Cognos also “paid lobbyist Richard McDonough hundreds of thousands of dollars to push software contracts with state officials over three years, according to filings the company made this week…The payments for the years 2004 through 2006 had not previously been reported by Cognos or McDonough, as required by state law.” The Globe

All of this follows on the heels of revelations that Richard Vitale, DiMasi’s accountant and campaign treasurer, took $60,000 from The Massachusetts Association of Ticket Brokers to lobby for them. The brokers didn’t report their hiring Vitale for lobbying. They could be fined a whopping $1200 a year. In 2006, Vitale gave DiMasi an unusual $250,000 third [my emphasis] mortgage on his Commercial Street condo at an interest rate that was below prevailing rates. See The Globe

DiMasi’s law associate Steven J. Topazio (they share an office and split profits) has also received money from Cognos The Globe. The actual services Topazio provided are not mentioned in the article. They may be protected under lawyer-client privilege.

M.G. L. Chapter 268A deals with actual conflicts of interest and covers what most of us would call bribery. It’s not hard to imagine DiMasi getting a kickback from Cognos through a third mortgage on his condo. Proving it is another issue. Obviously, it’s interesting that the Cognos representative was able to tell the DOE that he could have money added to their budget. The money was eventually added.

The State Ethics Commission issued ADVISORY NO. 05-01 THE STANDARDS OF CONDUCT (Section 23). It states, “Public employees must avoid conduct that creates a reasonable impression that any person may improperly influence them or unduly enjoy their official favor, or that they are likely to act (or fail to act) because of kinship, rank, position or undue influence of any party or person. A reasonable impression of favoritism or bias may arise when a public employee, knowingly or with reason to know, acts on matters affecting the interest, whether financial or non-financial, of a friend, a business associate or a relative other than an immediate family member or a non-financial interest of an immediate family member.(1)” To escape this charge, DiMasi will have to prove he knew nothing about McDonough or Vitale’s relationships with Cognos.

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9 Comments . Leave a comment below.
  1. dedicated to vennochi?

    the same column that compared DiMasi (or blamed him) to/for Marzilli still being there? Absurd.

    There's a simple fact: Patrick's administration awarded the contract, not DiMasi. Scandal over.  

    • Wow...

      I had assumed your praise of Sal was based on the issues you cared about and Vennochi was out of line suggesting that you praise of him was some signal that as long as Sal pushed the correct agenda, that he'd get a pass from liberals.

      But your simple dismissal of Sal's problems makes me rethink her point.

    • But Ryan, didn't DiMasi advocate for the contract?

      And "scandal over" seems to be a case of prematurely "exonerating in the court of public opinion", which is just as bad as "convicting in the court of opinion" while an official investigation is ongoing. We don't have subpoena power, after all (as Bob noted earlier). Vennocchi criticized liberals for ignoring apparent misconduct because they like a person's politics. Corruption is not a  progressive value- it is a betrayal of public trust and a theft of the people's money. I've never met Sal DiMasi, but it is reasonable to imagine that a skillful politician might count on selective blindness in their allies. Gay rights is not the only issue in Massachusetts, and if DiMasi is indeed subject to bribes and payoffs, or engages in subtle or overt forms of influence peddling, I would seriously question his ability to address many of these issues (such as healthcare, education, or municipal finance reform).

      • The practice of bundling in donations, also....

        ...a lobbyist or elected officer of an association [say of opthamalogists] puts out "the call" for checks made out to "the Committee to Elect Jane Doe" and then clips them  all to the lobbyist/officials check to take to a fund raiser.  Big total for that day.

        Dunno if DiMasi is central to this, or rather "friends"* of DiMasi's who stuck out their hands and peddled their longstanding "friendship" -

        Cognos at fault, definitely.  One important reminder to Cognos and everyone else - "There is nothing hidden save it shall be revealed" - Mark 4:22 [New Testament].

        *with "friends" like this, enemies are safer to have.  Unfortunately, power attracts opportunists.

  2. Ousted?

    I don't know what "ousted" means in this context.

    Should DiMasi be investigated? Certainly. The facts in the Globe already suggest a prima facie case. Conflict of interest law says nothing about whether or not the Governor signed off on the deal. If DiMasi's influence helped friends and/or himself, it doesn't matter who ultimately signed off on the contract. Patrick is irrelevant to conflict of interest charges.

    As for dedicating this to Joan Vennochi, I think my irony went awry. "For Joan Vennochi" would have been more appropriate. Personally, I'm not much of a fan.

  3. This is a good story, but is there anything new here?

    This sounds to me like the same story the Globe reported months ago. What if any are the developments in the past week or so?

    • Just a primer on the issue, Bob.

      The Globe articles go back months. I'm not sure people actually know the facts as the Globe has laid them out.

      I can't say this post is worthy of promotion, but it presents the facts with links including the law, which seems to have been largely ignored.

      Mark

  4. This may be all about casino gambling...

    We are so naive sometimes.  Look, if DiMasi did something wrong, then he should be fined or punished for it.  There should be an investigation to find out what really happened.  But... the way this story came up and the way it keeps being played out, smells a little fishy to me.   Does anyone wonder who dropped the dime on this?

    If the following statement is true, then anyone who opposes casino gambling in Massachusetts should start worrying:

    Based on the jockeying for position taking place between the House Speaker's heirs apparent, I'm guessing DiMasi's days are numbered and almost everyone on Beacon Hill knows it. His position, however, is so powerful, no one wants to commit legislative suicide by making much of a deal out of it yet.

    Basically, it does not really matter whether DiMasi did anyting illegal, the fact that there is this story alleging he did something illegal, is enough to unseat him?  Hopefully, this will not be the result of mere allegations.  With DiMasi out of the way, casino gambling, which was supported by the editorial board of the Boston Globe, by the Governor, and DiMasi's rivals for the Speaker's seat, will probably sail through the legislature.  It looks like the Globe may have buried the lead on this story.  (BTW, I agree with Ryan.  It was the Executive Branch that awarded the contract.  I assume those decisionmakers are being investigated as well.)      

    • A casino-Globe-Patrick conspiracy?

      Interesting theory- certainly stranger things have happened. I wouldn't discount the possibility.

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Mon 20 May 5:58 PM