Former IT Chief: I Wouldn't Have Backed Software Without DiMasi Nod

Bethann Pepoli, who was the deputy chief of the Massachusetts information technology division in 2006, testified Monday that she supported a $15 million contract for performance management software that year primarily because Speaker Salvatore DiMasi had expressed support for it.

Pepoli, testifying at the federal Moakley Courthouse, said that in July 2006 she arranged a meeting with DiMasi at the urging of Joseph Lally, a salesman for Cognos Corp. and a key government witness in DiMasi’s corruption trial, which is entering its third full week. Pepoli said Lally described DiMasi’s interest in performance management software – a type of which is provided by Cognos.

Pepoli said she viewed the call from a salesman about the speaker’s interest unusual but said she called DiMasi’s to verify Lally’s account.

“I called … Speaker DiMasi’s office and spoke to his assistant who verified that the speaker was interested in having a meeting to talk about performance management,” she said.

Pepoli said she met with DiMasi and his chief of staff, Maryann Calia, to discuss performance management software, and she said DiMasi said he had hoped performance management software would help the Legislature track data like the number of food stamp applicants in Massachusetts and the number of people employed by state government. Pepoli said she estimated a statewide performance management program would cost about $10 million but that Lally – and Calia – later proposed a $15 million program.

Asked by prosecutors if she would have supported it if DiMasi did not ask, Pepoli replied in the negative.

DiMasi is accused of steering $17.5 million state technology contracts to Cognos in exchange for tens of thousands of dollars of kickbacks. DiMasi, along with lobbyist Richard McDonough, and accountant Richard Vitale, are charged with conspiracy, mail fraud and wire fraud. Lally pled guilty to the scheme in March in exchange for a reduced sentence and his pledge to cooperate with the government.

Supporters of the $15 million deal for performance management software worked to include it in an information technology bond bill that was making its way through the Legislature in 2006, the last year of Gov. Mitt Romney’s administration. The bill ultimately failed to the chagrin of Romney and his budget chief Thomas Trimarco, but the performance management proposal reemerged quickly in the first few months of the Patrick administration. In March, Gov. Deval Patrick proposed an “immediate needs” bond bill that eventually served as the vehicle for the $15 million program.

Pepoli said that in early 2007, she urged officials at Executive Office of Administration and Finance – the state budget office – to include the $15 million performance management software program in Patrick’s bond bill. Pepoli read from 2007 emails in which she pressed A&F Undersecretary Henry Dormitzer and capital projects director Jay Gonzalez – now the secretary of administration and finance – to support the program, which was ultimately adopted in the bond bill.

Her rationale, she said, was because DiMasi was going to support the proposal anyway, it would be a quicker process if the administration backed the proposal. Prosecutors highlighted an email in which Gonzalez suggested that performance management would not be included in the Patrick administration’s bond bill but had acknowledged the speaker’s interest.

Pepoli said she recommended Cognos to A&F officials on May 18, 2007 because it scored highest in its procurement bid. Cognos would go on to win a $13 million contract – reduced from $15 million during negotiations with Patrick administration officials. After making her recommendation, Pepoli described leaving the meeting and learning she had missed a call from DiMasi. When she called him back, she said, he asked her for an update on the software procurement.

Through Pepoli, prosecutors also displayed emails showing that legislative language that approved the performance management system had originated with Cognos officials in 2006 before it was traded among state IT officials.

During cross-examination by DiMasi’s attorney, Thomas Kiley, Pepoli said that after meeting with DiMasi in July 2006, she never heard from him again until after she had already recommended Cognos to win the state contract, when she got a phone call from DiMasi to ask how her meeting had been with A&F officials.

Kiley also pointed out that DiMasi met with Pepoli to discuss the siting of a Springfield data center but didn’t bring up the performance management software of Cognos.

“At no time did the speaker express an interest in Cognos to you,” Kiley said.

Competing proposals for the siting of the Springfield data center led to a political brawl in 2008 between supporters of the lawmakers vying to succeed DiMasi as speaker: Rep. Robert DeLeo and Rep. John Rogers. Rep. Thomas Petrolati (D-Ludlow), a top ally of DiMasi, had been pressing for one version of the proposal, which split the Springfield caucus.

During Kiley’s cross-examination, Pepoli acknowledged another layer of pressure underlying that debate: the mayor of Springfield and Congressman Richard Neal were opposing Petrolati’s proposal.

“Lots of politics in play,” Kiley said.

Pepoli also described a rush of lobbyists from Cognos competitors who contacted her about the performance management software, including Sean Curran for SAS, Matt Irish for Oracle and Jack Murphy for Microsoft.

Kiley emphasized that Lally was “the source” of Pepoli’s understanding that DiMasi was interested in performance management.

“Did you have reason to doubt the accuracy of what Joe Lally was saying to you?” he asked.

“No,” she replied.

Under questioning by prosecutor Kristina Barclay, Pepoli testified that she sent Lally her resume because he had indicated the speaker would recommend her to become the permanent head of the IT division, a position vacated by Louis Gutierrez and which she coveted but never attained. During cross-examination, Pepoli said she did not know whether the speaker ever made that recommendation.

During proceedings Friday, prosecutors highlighted an email from Lally to Vitale with Pepoli’s resume attached, informing Vitale that Pepoli was hoping the speaker would put in a good word for her with the Patrick administration.