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DIMASI CONVICTION

DiMasi found guilty on 7 of 9 counts in kickback scheme

Ex-House speaker says he will appeal; prosecutors want substantial sentence

By Milton J. Valencia
Globe Staff / June 16, 2011
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A federal jury in Boston found former House speaker Salvatore F. DiMasi guilty yesterday of exploiting one of the most powerful offices in Massachusetts for his own personal gain when he helped a software company win multimillion-dollar state contracts in exchange for kickbacks.

Prosecutors said they will seek a substantial prison sentence for DiMasi, saying he conspired to “line his own pockets.’’

The verdict, after more than 10 hours of deliberations, capped the stunning decline of a leader who served his North End neighborhood for more than 30 years and rose to become the first Italian-American speaker of the state’s House of Representatives.

After the verdict DiMasi, speaking with his lawyers and family nearby, said he did not mean to do anything wrong. “This is an intent crime, and I knew I did not have the requisite intent to commit this crime.’’

He added: “I was a legislator who did the best I could, and I made a lot of good decisions and I helped a lot of people. And I would never have any second thoughts of running for office again.’’

Sentencing is set for Aug. 18. DiMasi said he would appeal.

DiMasi was the third consecutive House speaker guilty of federal charges, and testimony during the eight-week trial painted an unflattering picture of the behind-the-scenes deals that make up the legislative process.

US Attorney Carmen M. Ortiz said that the verdict sent a sharp message to those who would corrupt Beacon Hill.

“Mr. DiMasi abused the power of his office, depriving the citizens of Massachusetts of his fair and honest representation,’’ Ortiz said. “And the jury’s verdict today has demonstrated that, despite having been the powerful speaker of the House, he was still not above the law.’’

Ortiz added, “The voters of Massachusetts put an extraordinary amount of trust in Mr. DiMasi, and he betrayed that trust.’’

DiMasi’s predecessors as speaker, Thomas M. Finneran and Charles F. Flaherty, pleaded guilty to federal charges instead of going to trial and escaped prison sentences. More recently, former state senator Dianne Wilkerson and Boston city councilor Chuck Turner were convicted of taking bribes and sentenced to at least three years in prison.

DiMasi’s convictions carry a maximum sentence of 20 years, but a sentence in the 10-year range is recommended under sentencing guidelines. Ortiz would not say what prosecutors will ask for, but said, “We will be seeking a significant jail sentence.’’

DiMasi, who resigned amid scandal in January 2009, following a series of Globe reports about his relationship with the Burlington-based software company Cognos, sat stone still as the court clerk announced the verdicts of guilty of honest services fraud and extortion. He was convicted of seven of the nine counts he faced.

After the verdict, DiMasi huddled with his wife and his two stepchildren, hugging them as they and other relatives and friends consoled one another.

DiMasi’s longtime friend Richard McDonough, a lobbyist and codefendant, was convicted of six of the eight honest services charges he faced. A third codefendant, DiMasi’s close friend and financial adviser Richard Vitale, was acquitted on all counts.

Vitale appeared somber as he left the courtroom, sharing the hallway with tearful relatives of DiMasi and McDonough.

“Obviously, I’m grateful for myself and thankful to get my life back,’’ he said. “But it pains me greatly that two of my best friends didn’t get the results I did, which I believe they should have.’’

Vitale said he plans to stand by DiMasi and McDonough through the appeals process “to help them fight for their liberty.’’

Vitale’s attorney, Martin Weinberg, called the acquittal “a bittersweet win’’ because of the convictions of his close friends.

“Dick Vitale is an extremely decent man, and I’m just very happy for him that he’s going to walk out of this building free of all of these allegations,’’ said Weinberg.

McDonough declined to comment. His attorney, Thomas Drechsler, said he was disappointed. He said McDonough will probably appeal.

Under the convictions of honest services fraud, jurors sided with prosecutors, finding that DiMasi deprived taxpayers of the honest work he owed them as House speaker by helping Cognos win state contracts in exchange for kickbacks.

Cognos ultimately won two deals with the state: a $4.5 million contract for education software in 2006 and a $13 million deal for statewide performance-management software in 2007.

Prosecutors called 24 witnesses over 16 days of testimony to outline the conspiracy.

DiMasi went to extraordinary lengths to help Cognos win the contracts, according to testimony. In 2006, knowing Cognos was being considered for the education contract, he ensured that an earmark dedicating $4.5 million solely for the product was not trimmed so that Cognos would get all the money. He did so after administration officials had proposed trimming the allocation.

In 2007, witnesses said, DiMasi flexed his political muscle to have language inserted into an emergency bond bill that would provide money for performance management software. He then pushed for officials in the Patrick administration to sign a contract for the software, knowing it would go to Cognos.

After the deals, according to court testimony, DiMasi planned to retire and benefit from the secret payments.

The witnesses included a who’s who in the state’s political establishment. Governor Deval Patrick testified that DiMasi lobbied him for the contract directly, saying it was important for DiMasi, then the speaker, and indicating it could heal a rocky relationship between the two.

But, according to the testimony, DiMasi never seemed to care about the technology after the contract was signed.

Ultimately, the performance management software was never delivered, and the $13 million was refunded after the state inspector general found it had been awarded in a faulty process.

As part of the scheme, DiMasi was paid $65,000 that was funneled through a former law associate, Steven Topazio.

Topazio testified that DiMasi’s associates put him on the Cognos payroll and paid him a regular retainer, though he never performed any work. He then paid DiMasi referral fees from the money he received from Cognos, he told jurors, though he said he did not know of DiMasi’s alleged scheme.

Prosecutors also alleged that DiMasi planned to benefit from $600,000 that was paid to Vitale by Joseph P. Lally Jr., a former Cognos salesman and vice president.

Lally, who at one time was a codefendant in the case, pleaded guilty and testified that he made the payments to Vitale and put Topazio on the payroll, under the understanding that DiMasi would in turn support Cognos.

Defense lawyers sought to undermine Lally’s credibility by showing he was a liar who boasted falsely of his ties to DiMasi. They also say he shaped his testimony for prosecutors in exchange for a reduced sentence: He had faced nine to 12 years in prison. Prosecutors may recommend a sentence of two to three years, according to a plea deal.

Defense lawyers and legal analysts said Vitale’s acquittal and the jury’s decision to find DiMasi and McDonough not guilty on two specific charges related to Vitale and Lally show that jurors agreed in part that Lally was not credible.

But the jury seems to have focused on the testimony of Topazio, who was the original key witness in the indictment, according to analysts and lawyers in the case.

The jury foreman, who was seen leaving the courthouse yesterday, would not comment on deliberations, only saying, “it’s been eight weeks.’’

US District Court Chief Judge Mark L. Wolf thanked jurors after the verdict.

“It’s been a long, hard case,’’ the judge said. “You’ve been extremely attentive deliberating over three days. It’s clear that you carefully considered each of the defendants on each count, which is the very best tradition in this country.’’

Glen Johnson, Michael Levenson, and Shelley Murphy of the Globe staff contributed to this report. Milton Valencia can be reached at mvalencia@globe.com.

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A brief history of Salvatore F. DiMasi’s career:

1979 — Elected to the Massachusetts House.

2001 — Elevated to House majority leader.

2004 — Elected House speaker, succeeding Thomas M. Finneran.

2006 — The state approves landmark health care legislation, which DiMasi helped write.

2007 — DiMasi helps block a measure that would have put a gay marriage ban on the 2008 ballot.

2008 — The DiMasi-led House rejects Governor Deval Patrick’s plan to legalize casinos.

March 10, 2008 — The Globe publishes the first in a series of articles on DiMasi’s involvement in a questionable software contract.

Jan. 7, 2009 — House reelects DiMasi to a third term as speaker.

Jan. 27, 2009 — DiMasi resigns, saying his decision is not due to ethical cloud.

June 2, 2009 — A federal grand jury indicts DiMasi and three associates.

June 15 — DiMasi convicted on charges of fraud, conspiracy, and extortion.

— Michael Levenson