Winning firm gave to DiMasi charity
Software company supported golf event; Was improperly given $13m state contract
A Canadian software company that was improperly awarded a $13 million state contract, in which House Speaker Salvatore DiMasi took a strong interest, has contributed generously to a favored DiMasi charity. The speaker has played an active fund-raising role in the charity, which holds a golf tournament each year at his home course, Ipswich Country Club.
And Cognos, with its $10,000 annual contributions in at least 2004, 2005, and 2007, was not alone among corporations and Beacon Hill lobbyists who supported the charity financially.
Gold sponsors included Richard McDonough, a veteran lobbyist who includes Cognos as a client; Jay Cashman, a friend of DiMasi's and major state contractor who is currently seeking legislative approval of a law that would allow him to build a wind farm on Buzzards Bay; and John Stefanini, a lobbyist for Suffolk Downs, which is looking to build a casino at the East Boston track.
The lobbyists each gave $3,500, according to a tournament brochure listing the donations required for each level of sponsorship.
DiMasi has hosted the Officer Harold L. Vitale Memorial Golf Tournament since the event began in 1995. In a May 2005 letter obtained by the Globe, DiMasi asked potential donors to sign up for the event and contribute "to a great time for a great cause."
Cognos sponsored the tournament at the same time it was seeking state contracts, including the one awarded in 2007 that is now under scrutiny.
If DiMasi knew the fund-raising letter went to any state employees or companies with business before the state, it could be a violation of the state's conflict-of-interest law, which prohibits public officials from seeking anything "of substantial value" from people they oversee or vendors whose business they could help or hurt.
DiMasi declined a Globe request for an interview. His spokesman, David Guarino, said DiMasi does not oversee the fund-raising activities.
"Speaker DiMasi had no control over the list, had no idea who received the letters, did no work to attract tournament sponsors, and did no follow-up solicitation. Beyond all that, the sponsors of this event had absolutely no influence on the speaker's decisions or actions," Guarino said. "The speaker did nothing more here than help a good cause in a way that is within the bounds of the ethics laws."
Asked whether donors could be giving to curry favor with the speaker, Guarino said, "You'd have to ask them why [they donate]."
In that $13 million deal in 2007, DiMasi, his aides, or his friends played roles in creating a demand for Cognos's computer software or in pushing the firm to the head of the bidding field.
DiMasi personally met with the state's chief information officer to pres for the kind of software that Cognos produces. A middleman in the deal, onetime Cognos executive Joseph Lally, portrayed himself to key state officials as DiMasi's friend. McDonough, another longtime DiMasi friend, was hired as a lobbyist for Cognos and paid $100,000.
The result: a contract awarded in such a rush that it violated basic state bidding rules. The state inspector general determined earlier this month that it was improperly awarded, and the Patrick administration has asked Cognos, now owned by
DiMasi has repeatedly refused to describe his relationship with Cognos or its executives, though the brochures for the annual August golf tournament show the clearest link yet between the speaker and the company.
A 2005 brochure describes the golf event as "Featuring Tournament Host, Speaker of the House, Salvatore DiMasi," and includes an appeal from DiMasi for donations. The charity, named for a Saugus police officer killed in the line of duty in 1985, benefits the families of slain police officers. The officer was the brother of Richard Vitale, DiMasi's friend and former campaign treasurer.
The brochure soliciting sponsors shows that the tournament organizers allowed only one company to be designated "platinum" sponsor and that designation was taken - by "Joe Lally of Cognos for 2 years!"
In the past three years, Cognos has been awarded contracts by 10 state agencies worth $22 million, according to public records. By far the largest single contract was for the controversial $13 million performance management software system bought by the state's Information Technology Division last August.
The transaction was put together by Lally after he left Cognos to form his own software sales company. Because Cognos considered him a partner, Lally would have made a significant commission on the deal, according to industry workers and state officials.
Cognos spokesman Steve Milmore would not say why the software company, with US headquarters in Burlington, would support a charity created to honor the memory of a Saugus police officer.
"The Harold L. Vitale Memorial Golf Tournament is one of a number of charitable sponsorships that Cognos has made through the years both in Massachusetts and in Ottawa," Milmore said in a statement.
The governor's administration - which oversaw the contract award - asked Inspector General Gregory Sullivan to look into the bidding process in December after the newly hired chief information officer Anne Margulie reviewed the contract and found "discrepancies."
In a five-page letter issued more than two weeks ago, Sullivan found that the contract was awarded in a unusually rushed procurement process that was fundamentally flawed.
Bidders were not solicited through public advertisements, rules in the bond bill that authorized the purchase were not followed, and the scoring of the bids was incorrect.
State ethics law prohibits public officials from using their position to secure something for themselves or others that members of the public cannot receive.
In several advisory opinions and rulings, the state Ethics Commission has said that even in a private capacity, politicians cannot fund-raise from people they oversee or vendors whose business they could affect because of the "inherently exploitable" nature of the relationship.
In an opinion issued in 1992, the commission told Governor William Weld that he could not help the Boston Organization Committee, a group seeking to bring the Olympics to Boston, raise money to help mount a campaign.
"Regardless of the purpose of a solicitation," the commission wrote, "the dangers of compromising a public employee's impartiality and objectivity and of creating an atmosphere where potential vendors feel compelled to contribute to foster the agency's or the public employee's good will remain."
In 2001, the Ethics Commission fined former House banking chairman Philip Travis $1,500 after he asked several banks to donate to an Indian tribe looking to buy land in Seekonk. In its disposition agreement, the commission found that Travis knew his solicitations "would create implicit pressure on the banks to contribute because he was the banking committee chair."
It is not clear whether the Officer Harold L. Vitale Memorial Golf Tournament is approved by the IRS, enabling donors to deduct contributions from their taxes.
Neither the attorney general's office nor the Internal Revenue Service had records of any required annual reports for the organization set up in 1992 by the accounting firm, VitaleCaturano. An IRS spokeswoman, Peggy Riley, said the fund is not on its list of charitable, tax-exempt organizations.
A spokeswoman for the firm, Vera Copeland, said in an e-mail Friday that the fund is a charity and has filed all required documents.
"We don't have the answer as to why the authorities do not show the filings on record that we previously submitted, and we are working with the agencies to resubmit duplicates of the original filings and are confident this will resolve the matter," she said.
Andrea Estes can be reached at estes@globe.com.
