Cognos tied to offer to official
Firm was seeking state contract; Move raises ethical questions
A former state Department of Education administrator has told investigators that she was offered a private sector job by a sales representative for
Maureen Chew was the education department's chief information officer when, she told state officials, she was approached by Joseph Lally, a Cognos representative trying to broker a multimillion-dollar contract between Cognos and the state.
Lally was a former Cognos vice president who was selling the company's software through a new sales firm he had founded. Chew told officials he had offered her a job at his company, Montvale Solutions, during a lunch meeting, and that she declined it.
Chew refused to meet with Lally after the offer was made, but Lally went over her head to her superiors in a successful effort to land a multimillion-dollar software contract, according to the officials. He had unusual access to the Department of Education's headquarters in Malden, she told officials, appearing there multiple times, though she didn't know whom he was visiting.
If he made a job offer, Lally could have violated the state's conflict of interest law, which bars private individuals from offering anything to a public official with the intent to influence an official act.
The report of the job offer marks yet another instance of Cognos appearing in the thick of questionable activity in pursuit of state business. After Cognos won a $13 million contract to sell management performance software to the state in 2007, the state inspector general sharply criticized the deal, saying the bidding process was so rushed and faulty that the deal should be rescinded.
Neither Lally nor Chew, who now works for the information technology division of the Executive Office for Administration and Finance, returned phone calls from the Globe seeking comment. Last week Chew was interviewed by investigators from the inspector general's office.
When asked about the interview, senior assistant inspector general Jack McCarthy said, "I can neither confirm nor deny the existence of any investigation."
The Globe reported in April that House Speaker Salvatore F. DiMasi had personally met with a key state official to express interest in the kind of software that Cognos was trying to sell in the 2007 deal. The Globe also reported that Lally, again serving as a middleman, portrayed himself to state officials as DiMasi's friend, and that Cognos paid longtime DiMasi friend Richard McDonough $100,000 to work as a lobbyist for the company.
Cognos had also been a repeated sponsor of a charity golf tournament hosted by DiMasi at his private club in Ipswich.
Through a spokesman, DiMasi denied having anything to do with the awarding of any Cognos contract.
The $13 million contract with the state was revoked by the Patrick administration in March, and the money has been refunded to the treasury. The deal - and the maneuverings around it - remain the focus of a state Ethics Commission investigation.
The $4.5 million education contract signed in 2006 contained the same players - Lally and McDonough - attempting to exert a similar kind of influence as the controversial $13 million deal in 2007.
In both cases, Lally aggressively marketed software to state officials, bragging about his ties to DiMasi and asserting that he could arrange funding for the purchases, according to the former Department of Education official and two former Cognos employees.
While pushing to land the smaller education department contract, Lally specifically emphasized that he could have money added to the state budget to fund the deal because of his friendship with DiMasi, according to Chew and a former Cognos employee. The contract provided for a data warehouse system, which would allow the department to collect, track, and share data about students, teachers, and finances across the state.
In April 2006, Lally's prediction proved true. House lawmakers added a new $5.2 million line item for the contract through a House budget amendment. DiMasi told fellow legislators at the time that the amendment was a priority, according to an official with direct knowledge of the budget negotiations.
DiMasi declined requests for interviews, but in an e-mail response, his spokesman, David Guarino, said the speaker did not ask the amendment's sponsor, former representative Robert Coughlin, to file the measure.
"He did not press for the amendment and, in fact, had absolutely no conversations with Representative Coughlin about the amendment," Guarino wrote.
"If Speaker DiMasi has a funding priority for the state budget, it is not usually proposed as an amendment by another member but is typically filed directly in the version drafted by the House Ways and Means Committee. Speaker DiMasi had absolutely nothing to do with the awarding of this or any other contract by the administration."
McDonough also pushed for the education contract, according to a state official and a former Cognos employee. Though McDonough had registered as a lobbyist for Cognos in years past, he did not report his activities on Cognos' behalf in 2005 or 2006, according to records of the secretary of state's office.
When contacted by phone last week, McDonough refused to discuss the contract.
"I don't have anything to say about anything," McDonough said. "I don't speak to reporters. Have a great day."
Cognos was selected over 10 other bidders for a yearlong pilot in August 2005, despite ranking fifth in a scoring system that considered cost and a variety of other factors. The $1.1 million pilot program, whose original price was estimated at $500,000, was launched in February 2006, according to a Department of Education memo. The pilot program had run only a few months when then-Education Commissioner David Driscoll, who was appointed by Governor Paul Cellucci, approved a statewide expansion of the program, with Cognos as the vendor. The expanded project, which meant an additional $4.5 million for Cognos, was not put out to bid.
Driscoll made the expanded award though Chew was not satisfied with Cognos's performance during the pilot, Chew has told officials. She said she didn't think the Cognos system had been fully reviewed or that the department had enough money to ensure the project would be successful. She told officials Driscoll approved the plan over her objections while she was out of town at a conference.
Some of Chew's statements to officials were disputed by Robert Bickerton, the education department's senior associate commissioner. In an interview with the Globe, Bickerton said that both he and Chew agreed that the pilot program should be expanded. He said they made the joint recommendation to Driscoll, who signed off on the purchase along with the department's chief financial officer.
But in response to a request from the Globe, Department of Education officials did not produce any written evaluation of the pilot, any verification that Chew advocated moving forward with the purchase, or any documents that Driscoll used before making the multimillion-dollar decision to go forward. They said Bickerton sent Driscoll an e-mail with his recommendation, but such a message was not included in a package of memos and emails provided the Globe.
In an interview with the Globe, Driscoll said it was always the agency's intention to put in place a statewide Cognos software program and that the pilot wasn't meant to test the product, just to introduce it gradually to education department and district users across the state.
"Cognos was the vendor and we started with the pilot districts, just to get going," said Driscoll, who is now a consultant.
"You start with districts that are ready - that's how you roll it out. I think that was the way it was always intended - to be phased in."
He said he did not remember Chew raising any major concerns during the pilot period. "To the best of my recollection, it went fine," he said.
Driscoll said Department of Education officials had to fight for state funding and had no guarantees.
"It wasn't a slam dunk," said Driscoll. "We had to go up [to Beacon Hill] repeatedly because, from the Legislature's perspective, it was a lot of money."
He said he never spoke to DiMasi about the purchase and did not know Lally. He acknowledged having a phone conversation about the program with McDonough.
"He was interested in having the appropriation go through," Driscoll said.
After the Globe made inquiries, Mitchell Chester, the state's newly appointed education commissioner asked Inspector General Gregory Sullivan to review the 2006 contract. In the request, however, Chester told Sullivan that he had been briefed by senior education department managers and saw "nothing to suggest anything inappropriate."
It is not clear whether Chester, who had not been long on the job, was aware of Chew's assertions about a job offer.
According to documents and interviews with Department of Education and former Cognos employees, the agency decided in 2005 to implement a data warehouse and reporting system in part because local districts were considering buying software on their own and state officials thought it better to centralize the purchases.
In addition, the federal No Child Left Behind Act requires states to generate reports about student, staff, and program performance.
Department of Education officials picked the top five bidders and then, after discussion and without any written analyses, chose two finalists - Cognos and Deloitte - according to Department of Education chief of staff Heidi Guarino.
The five semifinalists demonstrated their products for two weeks in June 2005, and in August 2005, after staffers were given a chance to experiment with the systems of the two finalists, the decision was made to buy from Cognos.
"The two finalists - we spent a long period of time putting them through their paces," Bickerton said.
That period of time: two days, according to a timeline provided by the Department of Education. 