Galvin asks AG to investigate undisclosed Cognos payments
Money went to DiMasi friend
Secretary of State William Galvin asked the state attorney general yesterday to open an investigation of Joseph Lally, the sales agent who represented software company
Galvin said that Lally is refusing to explain why his company, Montvale Solutions, made hundreds of thousands of dollars in undisclosed payments to a close friend of House Speaker Salvatore F. DiMasi, Cognos lobbyist Richard McDonough, at the same time Cognos was securing $17.5 million in state contracts.
"We have an individual who is absolutely refusing to cooperate," said Galvin, whose office regulates lobbyists. "We want to make it clear: You can't say never mind and have us go away. We're going to pursue this."
Galvin's office suggested in its referral to Attorney General Martha Coakley that the payments were undisclosed lobbying fees, which would violate state law.
Because of the state's weak lobbying laws, he said, "the only option we have is to refer it to the attorney general." Galvin is backing legislation to give him broader authority over lobbyists, including subpoena power.
Coakley's office received the referral and will review it, said Coakley spokeswoman Emily LaGrassa.
Lally's lawyer, Robert Goldstein, declined to comment, saying he had just been made aware of Galvin's action. In the past, he has said that Lally and Montvale Solutions "have at all times conducted themselves in full accordance with the law."
It is the second referral Galvin has made to Coakley in recent months concerning payments made to a friend of DiMasi's. In June, Galvin asked Coakley to investigate DiMasi's accountant, Richard Vitale, after Vitale refused to explain why he was paid $60,000 by an association of Massachusetts ticket brokers who were seeking to gut state antiscalping laws. As a result, Coakley has opened a grand jury investigation of Vitale.
DiMasi has repeatedly said that he never tried to help his friends or individual companies and that actions he took to approve computer contract funding that benefited Cognos or ticket legislation were based on broad policy considerations. He has said he was not involved in any way in the state's contract awards to Cognos.
Galvin's referral of the Lally matter focuses on large payments Lally made to McDonough, which neither man has reported to regulators as lobbying fees.
Lally's Montvale Solutions paid McDonough $200,000 on Aug. 31, 2007, the same day the state paid Cognos for a $13 million technology contract that is now the focus of investigations by several agencies. Montvale paid McDonough another $100,000 in summer 2006, several weeks after Cognos won a state education contract worth $4.5 million.
Lally has failed to "provide a written explanation addressing certain large monetary payments to . . . McDonough, which appear to constitute prima facie evidence of a lobbying relationship," Alan Cote, director of Galvin's Public Records Division, wrote to Coakley.
Although Lally's Montvale Solutions also paid Vitale and his company, WN Advisors, $500,000 on Aug. 31, 2007, and $100,000 in the summer of 2006, Galvin said he did not include questions about those payments in his referral to Coakley because Coakley is already investigating Vitale.
Neither Lally nor Vitale has explained the nature of the payments to Galvin.
Galvin has also opened an inquiry into payments to a third friend of DiMasi's, Steven Topazio, a lawyer who shares a downtown office with DiMasi. Topazio collected $125,000 from Cognos in the form of a $5,000-a-month retainer for two years.
Payments stopped the month the Legislature and the governor approved an immediate-needs bond bill that provided funding for the multimillion dollar technology contract.
Even though company records indicate that Cognos paid Topazio out of its lobbying budget, his lawyer told Galvin's office that he did not lobby, Galvin said. Galvin has requested further clarification and said he is waiting for an answer.
Andrea Estes can be reached at estes@globe.com. 