Records contradict House leader

Rogers's stance on Cape real estate deal undercut

House majority leader John H. Rogers told state officials investigating his tangled campaign finances this year that he co-owned a Cape Cod vacation house with his campaign consultant.

But that assertion is contradicted by a review of public records, which show that Rogers and his wife were the only owners listed on the deed, the mortgage they took out for the purchase, and in Falmouth tax records.

That contradiction could pose further legal questions and political problems for Rogers, one of two contenders vying to be the next speaker of the Massachusetts House.

The discrepancy undermines his central argument to the state Office of Campaign and Political Finance. Rogers told the agency's investigators that the consultant, Thomas H. Drummey, a bank executive and close friend, made payments on the house because he was a part owner.

Drummey paid the first 22 monthly mortgage bills while receiving up to $6,000 a month in consulting fees from Rogers's political account. After a yearlong inquiry, the agency recently concluded that the house was paid for in part with money paid to Drummey from Rogers's campaign account, but it stopped short of finding Rogers in violation of state campaign finance law.

Rogers, a Norwood Democrat, has argued that he and Drummey had a private co-ownership agreement when Rogers acquired the house in 2004. He has also said Drummey's ownership was established, in part, because he cosigned Rogers's mortgage note from Randolph Savings Bank, the institution where Drummey was vice president at the time. (Drummey is now president of the bank.)

Rogers has refused repeated requests to release details or a copy of the private agreement.

"My family's private agreement with Mr. Drummey and his wife concerning our joint interest in property we have sold satisfied [the Office of Campaign and Political Finance] during its exhaustive investigation, as it would any legitimate inquiry, and there is no reason to revisit an issue that has already been put to rest," Rogers said in an e-mailed statement yesterday.

Drummey declined requests for an interview. Drummey's lawyer, Anthony M. Traini, said his client's interest in the property was established by a private agreement between the Drummeys and the Rogerses to purchase the property jointly and to share expenses, including the monthly payments on the $351,000 mortgage.

"Their investment in the property was equal, and, as between them, they held the property in joint ownership," Traini said in an e-mail statement to the Globe. He said Drummey disclosed his interest in the property to his bank. He declined to comment when asked whether there was any written contract or agreement between the Rogerses and the Drummeys that would confirm the joint interests on the four-bedroom house on Swallow Street.

A review by the Globe found no public record of Drummey's co-ownership. No agreement was filed with the state's Land Court records, which guarantees land titles. Legal specialists said the recorded deed for a property is the legal document that describes its ownership. Without a deed or other written document, the specialists said, Drummey's claims to ownership of the property are tenuous.

"Unless certain exceptions apply, the recorded deed is notice to all the world that these are the parties who hold legal title to the property," said Shirin Everett, a real estate lawyer with the Boston firm Kopelman and Paige.

According to records at the Land Court section of the Barnstable County Registry of Deeds, Rogers and his wife, Brenda, were the only titleholders to the East Falmouth house that the couple bought in 2004. They also were the only people listed as owners on the Randolph Savings Bank mortgage.

Only the Rogers name shows up on the Falmouth property tax rolls. The couple's names also were the only ones appearing on a rider to the mortgage saying the property would be their second home.

When they sold the house this year, Drummey was not listed in the documents as having an ownership interest.

Questions about Drummey's use of money he received from the campaign to pay for Rogers's house have arrived at a sensitive time for Rogers. He is trying to rally House colleagues to back his bid to become the next House speaker in the event Salvatore F. DiMasi steps down.

DiMasi has said he has no plans to leave his post soon, but the jockeying for his post between Rogers and Robert DeLeo, chairman of the House Ways and Means Committee, has created considerable tension on Beacon Hill.

At issue is whether Drummey's payment is legally justified. There would be no question if Drummey and his wife did have a legally recognized ownership in the property. But under federal income tax law, Drummey must own the real estate if he deducted the payments, as his lawyer said he did.

The tangled real estate deal came to light last month, after state campaign finance regulators found that Drummey started paying the monthly mortgage bills within a month after he began receiving up to $6,000 a month in consulting fees from Rogers's campaign committee, money that was channeled through another corporation. Shortly after Drummey's consulting fees from the campaign ended in March 2006, he stopped paying the mortgage.

While the mortgage documents list only the Rogerses as owners, Drummey and his wife cosigned the mortgage's promissory note, listing themselves as "coborrowers."

Nowhere in the mortgage document and the note accompanying it does it state that the Drummeys have ownership interests in the property.

Traini said both couples shared the use of the house and deducted their shares of the mortgage interest on their federal income tax filings during the time they owned the house. Internal Revenue Service guidelines say that a person must have ownership in the property to claim a mortgage deduction.

The house purchase also raises questions about Drummey's role in the dealings. At the time, he was vice president of residential lending at Randolph Savings Bank. Banking laws, aimed at avoiding potential conflicts of interest, prohibit upper-echelon bank executives from acting as an obligator on mortgages their banks are giving.

Traini said Drummey's job title at the time the mortgage to Rogers was made in 2004, vice president of residential lending, is not covered by the statute. Drummey was appointed executive vice president in 2005 and chief executive in 2006, positions covered by the statute.

The loan was among those required to be listed in the annual reports the bank made to the state Banking Commission. The chairman of the bank's board of directors could not be reached for comment.

Rogers purchased the house in July 2004 for $390,000 and sold it in April for $359,000. The sale took place as the Office of Campaign and Political Finance, reacting to a Globe story, was in the middle of a inquiry into Rogers's political funds.

The campaign finance agency concluded last month that the home was "paid for in part" by the political funds that Drummey received from Rogers, but it said no violation of campaign finance law took place because Drummey had in fact provided political services.

The agency also accepted Rogers's position that Drummey co-owned the property, without explaining what proof it had reviewed. Rogers agreed to pay a $30,000 settlement to cover the costs of the investigation.

The campaign finance agency limited its findings only to whether violations of campaign finance law occurred. The issue of who owned the property was not critical to its decision. It found no violation took place because Drummey had performed services for the Rogers political committee.

A Globe examination of some of the documents in the inquiry shows Drummey's mortgage payments varied between $2,200 and $2,300. After paying off the mortgage, Rogers, who had provided the $40,000 downpayment at the time of purchase, and Drummey divided the remaining proceeds.

The political payments from Rogers's campaign fund to Drummey were made through Bay State Consulting, a firm established by Rogers's former law associate, Philip F. Filosa, a Wrentham lawyer.

The state investigation into Rogers's political account was launched after the Globe reported that Rogers paid $196,000 to the consulting firm, whose only client was Rogers.

Because of a loophole in state law, none of the payments to the consulting firm were required to be itemized in the committee's publicly filed campaign finance reports, so Drummey's involvement remained hidden until the Office of Campaign and Political Finance released its findings.