May 5, 2011

Sal DiMasi trial: opening statements

Filed under: law & crime by Victoria Liberty @ 11:54 pm

Today the trial of former speaker of the Massachusetts legislature, Salvatore F. DiMasi, finally kicked off with opening statements. I will be bringing you occasional updates as the trial progresses, but I will not be able to watch or blog about it every day.

DiMasi and two co-defendants, Richard McDonough and Richard Vitale, are charged with three counts of honest services mail fraud, three counts of honest services wire fraud, conspiracy, and for DiMasi only, extortion under the color of official right. A fourth defendant, Joseph Lally, pled guilty in February to similar charges and is expected to be a government witness.

On Tuesday, a jury of 12 plus 4 alternates was selected, and today Judge Mark Wolf (the chief judge of the US District Court in Boston) gave them some preliminary instructions and his clerk read the indictment, which included a summary of the alleged crimes and lasted about a half hour.

Summary of the Case:

For ease of reading, I have not included the word “allegedly” in every sentence, but everything below is what prosecutors allege happened, according to the indictment and opening statement. Nothing has been proven.

Sal DiMasi became the speaker of the state legislature in November 2004. Lally was a vice-president of sales at Cognos, a Canadian software company with an office in Burlington, MA. Later he broke away to found a software re-selling firm called Montvale Solutions. McDonough was a lobbyist for Cognos and a friend of DiMasi. Vitale was DiMasi’s accountant and financial advisor who owned a company called Washington North Advisors. He also gave DiMasi a $250,000 line of credit on his North End condo.

Cognos wanted to sell educational software to the Department of Education, and it is alleged that Lally gave bribes to DiMasi and kickbacks to McDonough and Vitale to make this happen. DiMasi arranged for his fellow lawyer, Stephen Topazio, who is 15 years younger than him and with whom he shared an office and had informal fee-sharing arrangement, to work for Cognos for $5,000 a month. Although Topazio doubted that he had the necessary experience, DiMasi, McDonough, and Lally reassured him that this was okay, and he signed a six-month contract which would ultimately last two years. In total he received $125,000 and was never requested to perform any work. He gave $4,000 out of the $5,000 each month to DiMasi.

In 2006, Governor Mitt Romney’s budget did not give the DOE enough money for statewide use of the software, but DiMasi made sure a $5.2 million budget amendment and $4.5 million earmark passed the House. Lally received 20% of that as a commission. Vitale and McDonough demanded $100,000 each from Lally even though they had done nothing on the deal, and he agreed, signing a sham consulting agreement which called the money payments for future tax and accounting services.

From March to September 2006, Topazio’s contract lapsed, but at DiMasi’s urging, Cognos quickly renewed it and gave him $25,000 in back pay, which DiMasi took. That same year, Cognos had its eye on another deal, this time a $15 million one for performance management software for the Department of Administration and Finance, which would have been the biggest deal in Cognos’s 35-year history. The money for this initially failed to pass, but DiMasi requested it as part of an emergency bond bill in 2007, after Governor Deval Patrick took office. Although this was an unusual request, it was honored because that would be the easiest way to get the bill passed. Vitale then demanded $500,000 forWN Advisors, which Lally paid out of his own commission. McDonough received $200,000, DiMasi got $250,000, and Lally got to keep $50,000 to gamble with. At the last minute, a competition clause was added to the bond bill, but Lally convinced the state to choose Cognos, saying that was what DiMasi wanted. When one of the losing vendors complained and articles began to come out in the Boston Globe, the defendants realized they were in trouble and took steps to cover up the alleged crimes, including DiMasi telling Topazio to lose his check register.

Prosecution’s Opening Statement:

Each party was allotted one hour for an opening statement. Assistant U.S. Attorney S. Theodore Merritt began by saying that the defendants “are guilty of the corrupt and unlawful conduct with which they are charged.” DiMasi was motivated to take bribes, he said, because he gave up much of the income from his law practice when becoming speaker, and he needed to finance his “fairly extravagant living expenses.” He acknowledged that Lally, who will likely be an important government witness, would probably not come across as very likeable. “Has the government cut a deal with Joseph Lally? Absolutely,” he admitted. But, “it was the defendants who decided to enter into a kickback scheme with Mr. Lally, not the government.” He stressed that the case is not about how good or bad the software was, whether DiMasi would have put it into the budget anyway, or criminalizing mere friendship. Instead, “it’s about how three men…used the immense power entrusted to one of them by the voters to line their pockets.”

DiMasi’s Opening Statement:

DiMasi’s attorney, William Cintolo, speaking loudly and enthusiastically, said of Merritt’s opening, “Not one word he said is evidence in this case – not one syllable, not one paragraph is evidence in this case…Keep your mind open…The burden rests on the government to prove its case beyond a reasonable doubt.” He explained that the government must prove quid pro quo – this for that – which means that both the person giving and the person taking the bribe must understand that it is being given with the intention of bribery. According to Cintolo, the DOE “desperately” wanted the software because federal law required it, and DiMasi was not the cause of them deciding to purchase it state-wide. He said DiMasi never mentioned Cognos by name, that the software increased the $3.99 billion DOE budget by a mere $219 million, and that he removed some earmarks even though that hurt Cognos. “Did he advocate?” asked Cintolo, “Yes he did. Because it was the right thing to do.” He called Topazio “a perceptive, intelligent individual” who would have known and refused to participate if he were being used as a “conduit to do something illegal” and said that “the payments in this case…didn’t amount to any different split than they split for 20 years.” He then began a lengthy criticism of Lally, calling him the source of every accusation by the government. “He’s a liar, a cheat, a manipulator, a quintessential name-dropper,” he said. (When Merritt objected and Judge Wolf scolded Cintolo for being too argumentative, he joked,”I’m like that person in the Austin Powers movie who lost the ability to modulate his voice.”) Then he concluded: “Caveat emptor – let the buyer beware – beware of what Joe Lally is trying to sell you.”

McDonough’s Opening Statement:

Thomas Drechsler, McDonough’s lawyer, continued with the criticism of Lally, calling him a “high-maintenance client” who told his business partner one night, “I can’t stop thinking of how to get money out of this deal.” McDonough, on the other hand, “went about his business advocating for Congnos.” Drechsler said, “It is not a crime to cultivate a political relationship or to express gratitude to your friends or your representatives…There’s no evidence that any quid pro quo, any bribe…was ever discussed.” In fact, according to him, Lally concealed his actions from McDonough, refusing to copy him on emails, so he could take the credit. “He’s not just a gambler, he’s a degenerate gambler,” he said of Lally. “He squandered money that most of us couldn’t even dream of,” and in desperation turned to the U.S. Attorney’s Office to make an “amazing transformation” into a government witness. Drechsler pointed out that if it weren’t for the plea agreement, Lally would face 10-12 years in prison, but as long as he gives “substantial assistance” at trial, the government will recommend 2-3 years, and Lally can ask for as little as probation. “One side gets to reward a witness, one side gets to give a witness a financial inducement,” he said. “The evidence will show that Mr. Lally has no regard for the truth.”

Vitale’s Opening Statement:

Martin Weinberg, Vitale’s lawyer, invoked the founding fathers and the constitution. “There are few horrors greater in democracy than for a man to be accused of a crime he did not commit,” he said. “The case against Mr. Vitale was built on innuendo, on surmise, on speculation, on guesswork…It’s ironic that my client is charged with bribery and the only witness against him is a witness whose testimony was purchased by the government.” All Vitale did was advocate for his clients, and the only payment he ever gave to DiMasi was the $250,000 line of credit, which DiMasi paid back. “It is no crime to be a friend of the speaker and it is no crime to receive favors,” Weinberg said. The hard evidence merely shows that Vitale scheduled meetings with DiMasi and passed information about Cognos from Lally to the State House, and the decision to use Cognos software instead of Oracle or SAS came merely because of the DOE’s experience with the 5-month pilot program. He called Lally “a cunning, shrewd salesman and money was his guide…Basing a case against a man like Mr. Vitale on the word of a man like Mr. Lally is like building a house on quicksand…it’s an…unreliable basis on which to extinguish the liberty of a fellow citizen.”

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