Cognos deals face federal scrutiny
Grand jury convened over two state contracts; Threat to DiMasi, whose associates profited
Federal authorities have convened a grand jury to investigate the state's awarding of a pair of multimillion dollar contracts to a Burlington software company that, in turn, provided large and often secretive paydays to close associates of House Speaker Salvatore F. DiMasi as it was winning state work.
The US attorney in Boston has issued subpoenas over the past few weeks that include a request for documents from the state's Information Technology Division, which awarded a $13 million "performance management software" contract to
The launch of the federal grand jury probe, confirmed by several lawyers in Boston, follows a series of stories in the Globe about the Cognos contracts. It significantly raises the stakes for DiMasi, who in recent weeks has sought to downplay the threat that the Cognos controversy poses. He has recently rededicated himself to public issues, particularly pushing for a gas tax over toll hikes, as he aggressively courts House members to reelect him to another two-year term as speaker next month.
A DiMasi aide would not say last night whether the speaker had received a subpoena or spoken to any federal investigators.
"We have no comment," said spokesman David Guarino.
A spokeswoman for US Attorney Michael J. Sullivan also declined to comment.
A confidant of DiMasi, speaking on the condition of anonymity, said the speaker has not received a subpoena from the grand jury.
Cognos has already turned over records to the state Ethics Commission and the office of state Inspector General Gregory Sullivan. Both the commission and the inspector general's office also have been investigating the awards to Cognos - a $4.5 million contract with the state Department of Education in 2006 and the $13 million contract awarded the following year.
The federal grand jury is starting to review evidence around the Cognos contracts as a separate state grand jury, overseen by Attorney General Martha Coakley, investigates financial ties between DiMasi, his longtime accountant, Richard Vitale, and an association of ticket brokers that hired Vitale to help push a bill through the Legislature.
The Massachusetts Association of Ticket Brokers paid Vitale $60,000 as it pursued legislation that would deregulate their industry. Vitale had given DiMasi a rare, below-market-rate third mortgage in 2006 that DiMasi repaid after the Globe wrote about the arrangement.
Vitale would not acknowledge that he lobbied for the group. As a lobbyist, he would be prohibited by the state's conflict of interest law from giving DiMasi the mortgage.
Vitale's lawyer, Martin Weinberg, would not comment on any investigations, but reiterated that his client "has committed no wrongdoing and has always conformed his conduct to the law."
Vitale is also a key figure in the Cognos controversy that is now the focus of the federal grand jury investigation. His company, WN Advisors, was paid $600,000 by Joseph Lally, the sales agent and former Cognos executive who persuaded the state to spend millions on Cognos's computer software. Vitale, who was not registered as a lobbyist and did not publicly disclose the payments, has never publicly explained what he did for the money, the bulk of which he received on the same day the state wired payment to Cognos. The state has since rescinded the $13 million contract, and Cognos's new owner,
Lally's lawyer, Robert Goldstein, would not comment on the investigation. A spokesman for Cognos did not return calls.
Vitale was not the only friend or associate of DiMasi's who received payments from Cognos or Lally. The lawyer who shares downtown office space with DiMasi was placed on a $5,000-a-month retainer by Cognos for two years. The payments to the lawyer, Steven Topazio, stopped the month the Legislature and the governor passed a bond bill that financed the $13 million Cognos contract.
DiMasi has refused to cooperate with the Ethics Commission, which has gone to Suffolk Superior Court to try to compel him to turn over documents related to the Cognos contracts. He told colleagues privately that he was taking a principled stand because the state constitution shields the deliberations of lawmakers from public view.
DiMasi has recently taken a strong stand on multiple policy issues, speaking out against the governor's plan to raise tolls on the Massachusetts Turnpike, projecting up to a 10 percent cut in local aid, and pushing a proposal to allow municipalities to join the state's health insurance program without union approval.
Yesterday, DiMasi met with state and local officials around Fitchburg and Worcester to assess damage from last week's ice storm. Last night, he hosted an annual holiday party at the Omni Parker House.
DiMasi's two likely successors - House majority leader John Rogers and the House chairman of Ways and Means, Robert A. DeLeo - have been jockeying to succeed him. But no lawmakers have been willing to publicly challenge DiMasi for his seat.
Shelley Murphy of the Globe staff contributed to this report. 