In rare slap, DiMasi's pension withheld

The decision, just two days after DiMasi pleaded not guilty to corruption charges in US District Court, sparked a heated reaction from DiMasi's lawyer, who said Cahill appeared to be serving prematurely as judge and jury for DiMasi.

The state Board of Retirement will conduct its own investigation and hold a hearing within a month to decide whether the federal charges against DiMasi warrant the suspension of his retirement payments.

"Thank God we're in America, where there is a presumption of innocence and due process before the government takes things from us," DiMasi's lawyer, Thomas R. Kiley, said in a written statement yesterday.

Cahill countered that he is obliged to suspend the pension of a public official who is accused of misappropriating public funds.

DiMasi is charged with conspiracy and other corruption counts over payments that prosecutors say he received from a software company in return for his help steering state contracts, but he has not been directly accused of taking state money. Kiley said DiMasi "has not been charged with misappropriating state funds, and there is clearly no basis for saying he did."

But Cahill argued that the facts of the case could support a finding that DiMasi misappropriated money, if it can be shown that DiMasi and his three associates, who also have been indicted, were intending to "steal money from the Commonwealth" with their scheme.

"This is something we have to investigate," Cahill said. "I'm damned if I do and damned if I don't."

He added: "Some will see this as taking advantage of the situation or prejudging. But if I didn't act on this and there is case law that says we should, then I'm accused of treating Sal DiMasi differently than others."

There was some quiet support among legislators for Cahill's action. Several lawmakers applauded the treasurer, but did not want to be quoted for fear of being criticized by DiMasi's friends in the Legislature.

"If the rules are that if you allegedly misappropriate funds you forfeit your pension, then those are the rules we all have to live by," said Representative Martin J. Walsh, Democrat of Dorchester. "If Sal is found not guilty, he can get his pension back. As of right now, I don't expect different rules for any members of the House and Senate."

Cahill, who is considering a run for governor in 2010, drew political criticism from a DiMasi ally in the Legislature.

"It seems like piling on at this point," said Representative Daniel E. Bosley, a North Adams Democrat. "And don't get me wrong, if he's found guilty, then by all means. But the problem that we have is everything is done for show. We need a little less politics and a little more government."

Others were struck by the fact that DiMasi, who just five months ago was one of the most powerful politicians in the state, had fallen so far that a fellow Democrat would move to withhold his pension even without a conviction. DiMasi resigned from the House in January.

"It is extraordinary," said Representative James R. Miceli, Democrat of Wilmington. "But some extraordinary things have happened in that building this year."

Cahill said DiMasi's case is different from that of his predecessor as speaker, Thomas Finneran, whose pension was halted only after he pleaded guilty to federal charges of obstruction of justice.

"It didn't involve state money," Cahill said. "That is one of the key factors that has led us to take this action."

Former state senator James Marzilli, who resigned after being charged with accosting women in Lowell last summer, has applied for a pension, but the state Retirement Board delayed taking action until his case is resolved. Former state senator Dianne Wilkerson, under federal indictment for bribery, has not yet applied for a pension, officials said.

The Retirement Board will appoint a hearing officer, who will decide, based on information provided by the board and DiMasi, whether the longtime lawmaker misappropriated state funds and should be denied his pension, which amounts to $60,000 a year after 33 years of government service. DiMasi can appeal the board's decision in Superior Court.

Treasury officials acknowledged they have only rarely withheld pension benefits from an official only accused of wrongdoing. But there is precedent from a 1981 Fall River corruption case in which a similar pension suspension was upheld by the state Appeals Court.

DiMasi and three associates have pleaded not guilty to corruption charges, accused of steering multimillion-dollar state contracts to Cognos ULC, a Burlington software firm.

Matt Viser of the Globe staff contributed to this report.