State told investors safety tests `ongoing'

Pushed by Governor Mitt Romney's administration, Massachusetts assured bond holders this year and last year that Romney's transportation officials were conducting ongoing safety examinations of the Big Dig tunnels, even though their only review was completed a year ago and was limited to a tunnel in the Interstate 93 section.

A March 2005 bond prospectus said that on March 15 Romney had ordered the state Highway Department to ``conduct an examination of the safety of the tunnel elements of the CA/T (Central Artery/Tunnel) project that have been opened to traffic." In four other bond documents over the next year, the state repeated that Romney had ordered the examination, adding that ``the examination is ongoing."

But, according to MassHighway officials, the department completed a single safety inspection, ordered by Romney in March, and wrote a report by July 2005. Its 25-page report concluded that the ``Central Artery tunnel poses a minimal risk to the users of the facility." It based its finding on a review of Big Dig documents and a field inspection of the I-93 tunnel on June 16, 2005.

By offering repeated assurances that the examination of ``the tunnel elements" was ``ongoing," the state appears to have overstated both the scope and the duration of Romney's inspection of the Big Dig. Yesterday, Eric Fehrnstrom, the governor's director of communications, described the contradiction as a miscommunication between two Cabinet offices, the Office of Administration and Finance and the Office of Transportation. He also insisted that the review described in the prospectus ``was in the narrow context" of the leaks that were discovered in the tunnel in 2004.

Two Beacon Hill sources with direct knowledge of the prospectus-writing process said that the Romney administration insisted on the language about the examination for the initial March 2005 offering. The language in the bond disclosure statements was submitted to state Treasurer Timothy Cahill's office and its bond counsel by the Romney administration.

Disclosure statements in a bond prospectus provide information for potential bond investors to evaluate the risks they are taking in buying publicly issued bonds. The failure to disclose to bond purchasers a $1.4 billion cost overrun for the Big Dig in 2000 sparked a fraud investigation by the US Securities and Exchange Commission. The federal agency found no serious wrongdoing and concluded that investors were not harmed.

Yesterday, John Regier, a lawyer with Mintz Levin Cohn Ferris Glovsky & Popeo who is bond counsel on an upcoming bond offering for state spending, said that he was not aware of any discrepancies in earlier prospectuses, but that the parties involved in the new bond offering are meeting today to review the prospectus.

``The question is whether it is correct or not and what is material," Regier said.

``Everyone takes it very seriously," he said of a disclosure statement.

The disclosure counsel for the upcoming sale, Lawrence Bragg of Ropes & Gray, declined to comment.

Romney described his department's safety inspection in a press release March 15, 2005. In that release, he sets no parameters on the safety inspection. At one point, he refers to the tunnel in the singular and at another point he talks broadly about ``the tunnels."

``I am directing my state Highway Department to oversee an independent evaluation of the tunnel's safety and to make sure that's carried out as soon as possible," he is quoted as saying in the release.

``As governor, I have a responsibility to all the people when it comes to public safety," Romney says in his statement. ``My job now is to assure that the tunnels are safe and to take whatever steps are necessary to put in place responsible management at the Turnpike Authority."

At the time, Romney also announced that he was asking the Supreme Judicial Court to clear the way for him to remove Matthew J. Amorello as chairman of the Turnpike Authority. The court rejected his request several months later.

The initial bond prospectus at issue -- dated March 17, 2005, two days after the press release -- mentioned the examination ordered by the governor and said ``the governor's action followed reports of additional leaks and damage to fireproofing caused by water infiltration."

A later bond document, which says that the ``examination is ongoing," does not include the same language about the leaks as a reason for the examination.

Fehrnstrom insisted that the language in the initial prospectus was focused on the I-93 tunnel leaks. He said the paragraph, headlined ``MassHighway Safety Review," follows a section that outlines the leak problems.

``The review focused on the repairs made to the leaks in the I-93 tunnel," Fehrnstrom said in e-mail to the Globe. ``The governor did not have the authority or the funding to conduct a broader safety inspection of the entire CA/T system. That authority had to be granted by the Legislature, which just happened two weeks ago."

In recent weeks, Romney has argued that he has not had control of the safety issues plaguing the project. Shortly after the July 10 ceiling collapse that killed a Jamaica Plain woman, Milena Del Valle, the Legislature granted him oversight authority over inspections of the Big Dig.

Under the 1997 act that put the Big Dig roads and Ted Williams Tunnel under the Massachusetts Turnpike Authority, both the Turnpike Authority and MassHighway were to sign an agreement giving state highway officials access to the project facilities.

But Romney administration sources said it was impractical to assume MassHighway could conduct safety reviews without the needed funds or the cooperation of the Turnpike Authority.