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DiMasi lawyers seek case dismissal

Prosecutors failed to prove charges, defense contends

Salvatore F. DiMasi is accused of using the power of the speaker’s office to steer two state contracts toward Cognos. Salvatore F. DiMasi is accused of using the power of the speaker’s office to steer two state contracts toward Cognos.
By Milton J. Valencia
Globe Staff / June 3, 2011

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Lawyers for former House speaker Salvatore F. DiMasi and two associates asked a federal court judge yesterday to toss out their corruption charges, saying prosecutors have presented no evidence that DiMasi directly orchestrated a kickback scheme.

The request, made after prosecutors rested their case yesterday morning, is standard legal procedure before the defense brings its case, and it was opposed by prosecutors who argued that DiMasi’s role in the alleged scheme is clear.

But the request foreshadowed the defense strategy as lawyers prepares to present their case beginning Monday.

Defense lawyers are relying heavily on a 2010 Supreme Court ruling that narrowed the scope of evidence allowed in so-called honest services charges, the core of the allegations against DiMasi’s and his associates. That ruling, in the case of former Enron chief executive Jeffrey Skilling, declared that a failure to disclose a conflict of interest does not necessarily constitute evidence that a crime occurred.

In DiMasi’s trial, the lawyers argued, prosecutors have not proven that the defendants made any type of formal agreement to funnel payments to the former speaker in exchange for his directing state contracts toward a Burlington software company. Also, the lawyers argued, prosecutors did not show that DiMasi’s associates received payments at his direction or that he benefited from the payments.

“There’s no evidence of causation,’’ said Martin Weinberg, an attorney for Richard Vitale, DiMasi’s longtime friend and financial adviser and a codefendant in the case. “I think that’s the most gaping hole in the government’s presentation.’’

US District Court Chief Judge Mark L. Wolf took the matter under advisement and indicated that he would make a decision once closing arguments are made. But the judge said that the arguments made during a hearing on the motion yesterday would help him shape final jury instructions, indicating that at least some of the charges will stand.

DiMasi, Vitale, and lobbyist Richard McDonough are accused of using the power of the speaker’s office to steer two contracts totaling $17.5 million toward Cognos in exchange for hundreds of thousands of dollars in payments. McDonough received at least $300,000 from the deals, and Vitale received $600,000.

Prosecutors allege that the $600,000 to Vitale was ultimately to be funneled to DiMasi. According to court testimony, DiMasi planned to work with a consulting company Vitale set up after he retired from the speaker’s office, and he would then reap the payouts.

In addition, Vitale had set up a $250,000 line of credit for DiMasi at the time of the deals, secured by a rare third mortgage on DiMasi’s North End condominium.

Joseph P. Lally Jr., a former Cognos salesman who pleaded guilty and cooperated with authorities, has testified that DiMasi was at the center of the scheme and that DiMasi told him he wanted “to make some hay.’’

One strategy in the alleged scheme, according to testimony in the trial, was to put former DiMasi law associate Steven Topazio on the Cognos payroll, although Topazio testified he never performed any work for the company. Topazio told the court he paid DiMasi referral fees, which prosecutors said amounted to kickbacks.

Topazio, who was not charged, testified that he was an unwitting participant and that he did not know the former speaker was secretly helping Cognos.

Earlier yesterday, Richard Caturano, Vitale’s former business partner of nearly 30 years, testified that Vitale never told him he had received payments from Cognos, in violation of their company’s shareholders agreement. Weinberg argued that Vitale never hid the payments.

Assistant US Attorney Anthony Fuller argued yesterday that the defendants’ role in the honest services conspiracy is clear. He cited testimony by Lally saying that it was McDonough who approached Lally about the scheme to help funnel money to DiMasi.

DiMasi, according to court testimony, had accumulated significant debt and saw his income from a private law practice drop sharply after becoming speaker in 2004.

Fuller also argued that e-mails show that Vitale had planned to communicate with DiMasi about the Cognos contracts. He added, citing court testimony, that it was McDonough and Vitale who told Lally he would have to make the payments to get the Cognos deals done.

Fuller argued that court testimony showed that DiMasi then flexed his political muscle to authorize funding for the Cognos software and then to persuade the administration to sign the contracts.

“The speaker of the House is probably the most powerful politician in Massachusetts,’’ Fuller said.

“It’s a core kickback scheme, where public contracts were awarded and the conspiracy was they were all going to benefit from them,’’ he said.

He also downplayed defense lawyers arguments that the case was only circumstantial, and that there was no formal order from DiMasi that would constitute his direct involvement.

“It doesn’t have to come from DiMasi’s mouth,’’ Fuller said. “There’s no case law that says that.’’

Milton Valencia can be reached at mvalencia@globe.com.