THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Ex-aide describes DiMasi planning

Asserts speaker groomed DeLeo to succeed him

By Milton J. Valencia
Globe Staff / May 21, 2011

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Although he publicly denied it at the time, Salvatore F. DiMasi was planning his retirement as speaker of the Massachusetts House and grooming his successor as early as December 2007, far earlier than previously disclosed, a former campaign aide testified yesterday in federal court.

Prosecutors sought to use the testimony by Dino Difronzo to suggest that DiMasi was plotting to leave just months after an associate was paid more than $500,000 in a kickback scheme, money that allegedly was to be funneled to DiMasi.

Difronzo’s testimony also indicates that DiMasi had already handpicked Representative Robert A. DeLeo to succeed him.

Difronzo, who said he knew DiMasi “from the neighborhood,’’ the North End, for decades, testified yesterday that he volunteered for DiMasi’s campaigns and that he was called to a meeting at the accounting firm of Richard Vitale, a DiMasi associate, to discuss the retirement. He, DiMasi, and DeLeo were there, DiFronzo said.

“It was a meeting to discuss the succession of the speakership . . . how Bobby [DeLeo] could become next speaker,’’ said DiFronzo, a former MBTA worker who said he is now an independent consultant. A second, similar meeting took place in February 2008, Difronzo said.

Prosecutors allege that DiMasi, 65, planned to secretly benefit from the hundreds of thousands of dollars he received for manipulating the legislative process to favor Cognos, a Burlington software company seeking business with the state. The company won two contracts totaling $17.5 million during DiMasi’s leadership.

The second of the contracts, for $13 million in performance management software, was signed in August 2007, four months before the meeting in Vitale’s office. A former salesman for the company testified earlier in the trial that he paid Vitale $500,000 that, he was told, would be funneled to DiMasi.

Prosecutors also allege that DiMasi planned to work for Vitale’s company after he retired.

DiMasi, Vitale, and lobbyist Richard McDonough face public corruption charges including conspiracy, honest services fraud, and mail and wire fraud, in allegedly using the power of the speaker’s office to help Cognos win the contracts in exchange for secret payments.

They have denied any wrongdoing. The salesman in the case, Joseph P. Lally Jr., pleaded guilty and testified about the alleged scheme in exchange for a sharply reduced jail sentence.

With a list of witnesses including DeLeo, Senate President Therese Murray, and Governor Deval Patrick, who could testify next week, the case is expected to spotlight the behind-the-scenes workings on Beacon Hill. State representatives and aides have already described a legislative process that bends to the leadership’s will.

Difronzo’s testimony continued to magnify the secret dealings. The testimony indicates that DiMasi was secretly grooming DeLeo to succeed him as the speaker was publicly promising to remain in office and as he was lashing out at the jockeying for his position. At one point, according to Globe reports at the time, DiMasi threatened to remove Representative John H. Rogers as majority leader for soliciting votes for the position.

Difronzo’s testimony supports the suspicions of DiMasi’s opponents at the time.

DiMasi held on to his position when the Globe started running a series of stories about his Cognos dealings, but he eventually resigned amid scandal in January 2009. DeLeo succeeded him.

A spokesman for DeLeo, Seth Gitell, declined to comment on yesterday’s testimony.

Difronzo also testified that he was approached by a former DiMasi aide, Daniel Toscano, in January 2006 about providing a loan to DiMasi for home improvement. Difronzo said he and Toscano agreed to jointly loan the speaker $20,000.

Difronzo said that he thought nothing of it and that the money was paid back by fall 2008. By then, DiMasi’s alleged involvement in the Cognos deals had become public.

Earlier yesterday, the questioning of Lally concluded with defense lawyers calling him a liar who shaped his testimony to curry favor with prosecutors. They accused Lally of bragging about ties to DiMasi to feed his own ego.

Lally’s testimony, which took place over two days, turned theatrical at times as he tried to respond to lawyers’ attacks with his own quips. He was admonished by US District Court Chief Judge Mark Wolf and was told to answer questions directly. Defense lawyers were also told to narrow their questioning.

The lawyers had portrayed Lally as a fraud who lied for his own benefit, whether it be dropping DiMasi’s name for contracts or when negotiating the purchase of a boat.

But under questioning by prosecutors, Lally sought to show that he did have ties to DiMasi and the speaker’s associates. He had worked with Vitale to seek investors for his company, according to an e-mail shown yesterday in which Vitale says Lally was referred by “Sal.’’

And prosecutors showed that Lally knew DiMasi as early as 1994, when the future speaker represented Lally on a criminal charge of passing bad checks.

Lally said he was not paying kickbacks to Vitale to gain access to the speaker.

“I paid him to funnel money back to DiMasi,’’ he said, adding he had no ill will toward his former codefendants. “I like them all and don’t want to see anything bad happen to them.’’

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