Galvin to investigate payments to lobbyists
DiMasi associates, friends got $1.8m
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Secretary of State William Galvin yesterday said he will investigate payments to friends and associates of House Speaker Salvatore F. DiMasi by a Burlington software company to determine whether the associates violated state law by not reporting more than $1.8 million in lobbying fees.
"If there are significant omissions or misleading statements - these are things we have to evaluate," Galvin said.
Galvin said he will also look at whether the lobbyists received "success fees," that is, fees paid only when something specific - like the awarding of a contract - takes place. Success fees for lobbyists are prohibited by state law.
The Globe reported yesterday that
Two of them - DiMasi's accountant Richard Vitale and longtime DiMasi friend and Cognos lobbyist Richard McDonough - received large sums on the same day that the state wired Cognos $13 million as payment for one of the contracts, the largest in the company's history. On that day, Aug. 31, 2007, Vitale received $500,000 and McDonough received $200,000.
Vitale and McDonough said through spokesmen yesterday that they followed all state laws and reported everything to Galvin's office that they were supposed to report. The third associate, longtime DiMasi law associate Steven Topazio, could not be reached.
Attorney General Martha Coakley would not comment. Galvin has referred another case to Coakley regarding Vitale, in which he allegedly lobbied for state ticket brokers without disclosing $60,000 in fees.
"We can't comment right now," said Coakley spokeswoman Emily LaGrassa.
The Republican Party renewed calls yesterday for an investigation by Coakley. "There are enough serious allegations to warrant an investigation by the attorney general," said party spokesman Barney Keller.
House Minority Leader Bradley Jones called the circumstances detailed in the Globe story yesterday "troubling."
"It merits further digging and delving," he said.
But he said he would be more concerned if the Legislature had awarded the contracts to Cognos, instead of Governor Deval Patrick's administration. The two biggest Cognos contracts - a $13 million contract with the Secretary of Administration and Finance and a $4.5 million contract with the education department - both required Legislative funding. DiMasi was a strong advocate of the type of software that Cognos was selling and backed funding for the projects; state officials have told investigators that they believed DiMasi wanted the 2007 contract to go to Cognos.
The $1.8 million in undisclosed payments were discovered by Inspector General Gregory Sullivan, who collected internal Cognos records after the Globe reported in July that Cognos had paid Vitale and Topazio in connection with Massachusetts contracts.
Representatives of Sullivan's office, who detailed the undisclosed payments in a letter to Galvin Thursday, are expected to meet with Alan Cote, head of Galvin's lobbying branch, next week.
Though Topazio told the Globe in July that he never lobbied for Cognos, the company's records show he received $125,000 in lobbying fees over that two-year period, according to Sullivan.
Topazio, a lawyer who shares downtown office space with DiMasi, was paid a $5,000-a-month retainer by Cognos from 2005 until March 2007 - the month the Legislature approved an emergency bond bill that paid for the $13 million technology contract, according to a person who has been briefed on the Cognos records.
Vitale collected $600,000 in fees from Lally over two years - none of which was reported to Galvin's office. McDonough received $1.45 million over five years, $1.1 million of which he did not report to regulators.
Galvin has previously demanded that Vitale and McDonough disclose all their lobbying activities and fees. "There may be issues of perjury here" if they did not fully disclose, said Galvin, whose office regulates lobbyists.
Vitale, DiMasi's former campaign treasurer, gave DiMasi a $250,000 third mortgage on his North End condo in 2006. If Vitale was lobbying for Cognos contracts in 2006, as Sullivan's records suggest, the mortgage would have violated state ethics law. Lobbyists are prohibited from giving anything to a state official.
Vitale spokesman George Regan yesterday refused to say what services Vitale performed, calling it a "private business matter." Regan said the fees he received are not required to be reported to the state.
"Richard Vitale is and has always been a highly respected business professional for over 30 years," said Regan in a written statement. "He has always conformed his conduct to all ethical, legal, and regulatory rules, and standards."
McDonough said through a spokesman that he believes he too reported all the fees he was required to report.
Common Cause executive director Pamela Wilmot yesterday called the Cognos contracts "a terrible deal for the Commonwealth."
She said "success fees" were banned long ago, for good reason.
Under the state's relatively loose lobbying laws, Galvin has few ways to force lobbyists to obey the rules.
He can disqualify registered lobbyists for up to six years for violating any of the reporting rules. In addition, he can impose a fine of up to $5,000 under some circumstances, and he can refer the matter to the attorney general's office for possible prosecution.
For those people who lobby but never register, Galvin's powers are more limited.
He has already tried to force Vitale to report earnings he received from the Massachusetts Association of Ticket Brokers in 2007. But Vitale defied Galvin and refused to show up for a hearing. He insisted the $60,000 he received from the group to help with legislation on Beacon Hill was a fee for strategic help, not lobbying - prompting Galvin to refer the matter to Coakley.
Andrea Estes can be reached at estes@globe.com.
