Mass. Gov. to testify at ex-speaker's trial

AP News
Posted: May 05, 2011 6:11 PM

Prosecutors said Thursday they planned to call Gov. Deval Patrick to testify in the federal public corruption trial of a former Massachusetts House speaker accused of steering two lucrative contracts to a software firm in exchange for $65,000 in illegal payments.

Assistant U.S. Attorney Theodore Merritt told a jury during opening statements that Patrick will testify that Salvatore DiMasi personally lobbied him on several occasions to support a $15 million performance management software contract for the Executive Office of Administration and Finance.

Merritt said DiMasi, a Democrat, began to have financial problems after becoming speaker because he could no longer devote as much time to his law practice.

"The bad news for DiMasi was that the income from his law practice took a significant hit," Merritt told the 12 jurors and four alternates, adding that DiMasi needed the money "to keep up with an extravagant lifestyle."

At one point, DiMasi was carrying $50,000 in monthly credit card debt, Merritt said.

DiMasi and two co-defendants, lobbyist Joseph McDonough and Richard Vitale, an accountant and close DiMasi friend, have pleaded not guilty. A fourth man charged in the scheme, Joseph Lally, a former salesman for the Cognos software firm, pleaded guilty in a deal that could offer him a lighter prison sentence in exchange for testimony against DiMasi and the others.

Defense attorneys told the jury that the government's case would hinge on Lally's testimony, and that they shouldn't believe him.

"He's a liar. He's a cheat. He's a manipulator and the quintessential name dropper," said William Cintolo, a lawyer for DiMasi.

"Beware of what Joe Lally is trying to sell you," Cintolo said.

McDonough's attorney, Thomas Dreschler, called Lally a "degenerate gambler," who was obsessed with making money but later squandered millions he got in commissions from the software contracts.

The defense attack on Lally's credibility was so harsh that Judge Mark Wolf at one point asked Dreschler to tone down his language.

Merritt acknowledged Lally isn't the most sympathetic witness, calling him a gambler and greedy salesman, but said he'll testify truthfully.

Merritt said the government would prove that the conspirators were intent on cashing in on the "the immense power that DiMasi wielded as speaker."

At issue is whether DiMasi helped orchestrate a scheme to direct contracts to Cognos, a Canadian firm with U.S. headquarters in Burlington, Mass. The company was not charged and has since become a business unit of IBM.

Prosecutors say the scheme was hatched in late 2004, when DiMasi, Lally and McDonough arranged to have payments funneled to DiMasi in exchange for his helping Cognos land the first contract _ a $5.2 million software sale to the Department of Education.

Cognos agreed to pay a monthly $5,000 "referral fee," $4,000 of which would be sent to DiMasi. In return, according to an indictment, DiMasi asked his staff to press another state lawmaker to sponsor budget amendments setting aside the $5.2 million.

Cognos, which cooperated with investigators, then tried to win a $15 million contract selling management software to the Executive Office of Administration and Finance.

Merritt said DiMasi at several points made it known to Patrick that he was interested in the Cognos contract, including during a July 2007 breakfast meeting between the two. Merritt said Patrick passed on DiMasi's wish to then-Administration and Finance Secretary Leslie Kirwan.

On Aug. 24, 2007, Kirwan signed the Cognos agreement. Days later, Cognos paid Lally's firm $2.8 million. The firm, in turn, paid Vitale's firm $500,000 and McDonough $200,000, according to the indictment.

The administration ultimately canceled the contract, and Cognos refunded the money.

There was no evidence Patrick, Kirwan or any other public official knew of the alleged scheme, prosecutors said.

Patrick would be the first Massachusetts governor in more than 15 years to testify in a criminal trial.

Merritt said the $500,000 for Vitale was meant as "seed money" for a future business venture between Vitale and DiMasi once DiMasi left office.

"He wasn't going to be speaker but for a few more years so they should make as much hay as possible," Merritt said, quoting an alleged comment by DiMasi during an 2006 golf outing with others charged in the case.

Cintolo said it was administration officials, not DiMasi, who advocated for the software.

Driscoll, Cintolo said, wanted the money in the budget for the initial $5.2 million software contract, and that Patrick himself advocated for performance management software after taking office in January 2007.

He also said the arrangement where DiMasi received a portion of what Cintolo called a "referral fee" was a standard business procedure, not a bribe.

DiMasi resigned amid the burgeoning scandal in January 2009, before the release of the indictment. He told reporters as he arrived at the courthouse for the start of the trial Thursday that he had been "waiting for this day for a long time."

Testimony was scheduled to begin on Friday, with the government's first witness expected to be Christopher Quinter, a former Cognos employee.