Former Speaker DiMasi, 3 Associates Indicted On Federal Corruption Charges

A federal grand jury on Tuesday indicted (PDF) former Massachusetts House Speaker Salvatore DiMasi and three associates on corruption charges that include wire fraud, mail fraud and conspiracy. DiMasi is alleged to have used his power and influence to help pass legislation that resulted in multi-million-dollar contracts to a software company.

DiMasi was indicted on eight counts. He allegedly received $57,000 in payments arranged by Cognos Corp., a Delaware firm with offices in Burlington, Mass., to help steer almost $20 million in state contracts to the company.

Also indicted were Richard Vitale, DiMasi’s long-time friend and accountant; Richard McDonough, a registered lobbyist; and Joseph Lally Jr., the former vice president of sales for the software company.

A federal indictment lays out an alleged web of personal and financial relationships linked directly and indirectly to former Massachusetts House Speaker Salvatore DiMasi. (WBUR)

FOLLOW THE MONEY: A federal indictment lays out an alleged web of personal and financial relationships linked directly and indirectly to former Massachusetts House Speaker Salvatore DiMasi. Click the image to enlarge. (WBUR)

A private attorney and friend of DiMasi, identified in the indictment only as “P.A.,” allegedly acted as a middle man between Cognos and the former speaker. Prosecutors say Cognos paid DiMasi by hiring P.A. as local counsel for a six-month agreement.

Starting in April 2005, P.A. received a check of $5,000 from Cognos. P.A. allegedly then turned over $4,000 of that money to DiMasi as a referral fee.

According to the indictment, DiMasi allegedly received 11 such checks from P.A., totaling $57,000. P.A. received the final payments from Cognos as a lump sum in December 2006. DiMasi instructed P.A. to split the payment into four parts and backdate them, in order to “further disguise the payments as typical referral fees.”

DiMasi denies the charges. “Every decision I made as speaker and as state representative was made in the best interests of my constituents,” he said in a press conference Tuesday following his arraignment in U.S. District Court in Boston. He held the hand of his wife, Deborah, while speaking.

P.A. has previously been identified as Steven Topazio, an attorney with whom DiMasi shared office space for several years. WBUR could not reach Topazio by phone for a comment.

Federal prosecutors allege that DiMasi arranged to have P.A. hired as a lawyer for Cognos, which wanted to sell almost $20 million of software to the state Departments of Education (DOE) and the Executive Office of Administration and Finance (A&F). The indictment identifies two pieces of legislation in particular: a $5.2-million appropriation to the DOE in 2006, $4.5 million of which was to be used for software, and a $15-million procurement in 2007, allocated to the A&F for a statewide performance management system. The procurement was included in a emergency bond bill.

The legislature passed the bond bill on March 23, 2007. Prosecutors allege that on May 9, 2007, Lally sent an e-mail to Vitale, saying he was “worried” about why A&F had not yet officially awarded the contract to Cognos. Days later, on May 16, Lally e-mailed Cognos officials to inform them that he had spoken by phone to “Coach” and “Dickey” and had been told that “he will call [the] secretary of A/F tomorrow and put the heat on to get this deal done ASAP.”

By June, the contract had still not been awarded. At that point, prosecutors say a Cognos executive sent an e-mail to Lally about the status of the deal, stating, “My gut on this is that she,” referring to then-Secretary of A&F Leslie Kirwan, “is not a fan of how the overall deal is structured or has developed and is holding out either her support and/or multi-year budget project as a result.”

Lally responded in an e-mail, saying, in part, “We have a rogue secretary that has some issues on how PM [process management] should be purchased and implemented. We are dealing with her boss and he is coaching us on how to handle the situation.”

Two months later, Kirwan and Cognos signed an agreement awarding the software firm a $13-million state contract.

“On or about September 6, 2007,” the indictment says, “a Cognos official sent an e-mail to Lally, stating, in part, ‘Please be sure to thank Dick and Sal for getting the contract closed.’ ”

Speaking at Tuesday’s press conference, DiMasi’s attorney, Thomas Kiley, said his client “has never, ever broken the trust of the people of the commonwealth or his district.” What he has done, Kiley said, “as many of the hardworking women and men in the state legislature, the citizen legislatures we elect — he has earned a living. For that he is charged today.”

DiMasi resigned as speaker in January and retired from the North End legislative seat he had held for three decades. The House had re-elected DiMasi as speaker only three weeks before his resignation. An Ethics Commission investigation and ongoing controversies surrounded him, though he denied the inquiries had any part in his decision to step down.

The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine. The wire and mail fraud charges carry a maximum 20-year prison sentence and a $250,000 fine on each of the eight counts. Lally could face an additional maximum punishment of 10 years in prison and a $350,000 fine if convicted for money laundering.

Acting U.S. Attorney Michael Loucks says he does not anticipate bringing charges against any other elected official. No charges were filed against Cognos Corp. Loucks says the company cooperated in the investigation.

WBUR’s Andrew Phelps and Fred Thys contributed to this report.

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