A regulator's heart
The next time a governor attempts to zero out the budget of the state's inspector general , an annual ritual of the Romney administration, consider the untold story of the massive reconstruction of the state's Saltonstall building on Cambridge Street. Estimated savings of the I G 's recent handiwork: $800 million in reduced interest over 25 years -- real dough, even by state government standards, and a pretty good return on an office with an annual budget of $2.8 million.
The Saltonstall became infamous as a ``sick building" and was closed in 1998 after workers complained of poor air quality and asbestos fibers from insulation were found in the air ducts. Six years and $200 million later the building reopened with a new name, 100 Cambridge St., and 75 condos and townhouses wrapped around the office tower's lower third.
Financially, however, 100 Cambridge St. is deep underwater, a product of the collapse in office rents from their 2000 highs. MassDevelopment, the state's economic development authority, outbid private rivals in part because of its ability to self-finance the project, and in part because of a promise to return all the profits to the state's general fund. If those profits ever materialize, though, they have now been pushed far into the future.
Three years ago Inspector General Gregory Sullivan started digging into the Saltonstall numbers. What he found was that MassDevelopment had loaned the project $20 million at a 16 percent compounded interest rate. The estimated cost of the interest payments over the entire 80-year deal with MassDevelopment: more than $2 billion.
``It would have virtually guaranteed that all profits from the Saltonstall building would go to MassDevelopment and not the taxpayers and the general fund," Sullivan said yesterday.
The investigation produced an extended negotiation with MassDevelopment. The result was that last December MassDevelopment agreed to change the $20 million promissory note to simple interest, cutting about $2 billion in interest payments over 80 years, according to Sullivan's office. In May, MassDevelopment cut the interest rate in half to 8 percent, shaving another $51 million in costs. MassDevelopment puts the savings to the state over a shorter period -- 25 years -- at $800 million.
Significantly, the entire investigation and negotiation were carried out quietly; not a single report or press release was issued by either side. ``We had some very good discussions over this," says Robert Culver, MassDevelopment's chief executive. ``I am perfectly fine with what he found, and when he brought the issue up, I had no problem with it."
Sullivan has the heart of a regulator. In just the past year or so, his office has highlighted the lack of oversight in the state's uncompensated healthcare pool, gone after a sweetheart deal for a developer of a Home Depot in New Bedford, and dogged the missteps of the Middlesex Retirement System. Another recent Sullivan report turned Charlie Lincoln, a retired Brockton cop with a $140,000 annual pension, into the face of the need for public pension reform.
An ex- eight-term Democratic legislator from Norwood, Sullivan was a conservative back-bencher on the Post-Audit and Oversight Committee and made few friends among the leadership, pushing to cut the number of the chamber's door-keepers and to bar legislators from accepting free tickets to games. In 1992, he was named a top deputy to Inspector General Robert Cerasoli, and took over when Cerasoli left in 2001. Sullivan, 54, is a hands-on investigator and administrator, easily underestimated. He has surrounded himself with a stable of like-minded investigators, including former FBI agents and newspaper reporters.
Massachusetts has an annual budget of $25 billion, and an alphabet soup of agencies like MassDevelopment that oversee billions more. If taxpayers are going to be assured their money is being spent well, we need more born troublemakers like Sullivan, not fewer.
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902. 
