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Galvin moves to suspend lobbyist

Demands details on work for Cognos

By Andrea Estes
Globe Staff / December 5, 2008
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Secretary of State William Galvin, frustrated by the refusal of Cognos ULC and its lobbyist, Richard McDonough, to detail his lobbying efforts while the software company was seeking state contracts, yesterday moved to suspend him from lobbying in the state for six years.

Galvin also said that if Cognos does not provide requested information by today, he will ask the administration to bar the company from getting future business with the state.

"It's time for definite action," said Galvin, who will hold a hearing Dec. 29 to decide McDonough's fate. "We've been patient, but the public's right to know supersedes their right to be paid lobbyists for private interests."

Such punishment for a lobbyist in Massachusetts would be extraordinary, and Galvin said he didn't recall ever taking such a step in his 13 years in office.

McDonough, a close friend of House Speaker Salvatore F. DiMasi, has reported earning hundreds of thousands of dollars in lobbying fees each year from several other clients, including Anheuser-Busch Cos., Cambridge Health Alliance, Covanta Energy, and Orbitz Worldwide. If Galvin suspends him, he will be prohibited from working on Beacon Hill for any of them.

"That's the burden of the sanction," said Galvin. "You can't have it both ways. You can't fail to report for one of them, then go off and make a lot of money from the others."

Under state law, Galvin can suspend lobbyists for three legislative sessions, which run for two years.

McDonough's lawyer yesterday protested Galvin's move and said it was unjustified. Thomas Drechsler, McDonough's lawyer, said he should have been given advance notice of Galvin's plans.

"If someone is moving to deprive my client of their First Amendment rights, I'm entitled to notice - and not from the media," said Drechsler. "I'm extremely disappointed that I am getting this information from you."

He said McDonough "has complied with his obligations," and questioned whether Galvin has the authority to suspend McDonough. He said his client has refused to provide the information because Cognos incurred the expenses and is the only entity required to report them.

"There is nothing sinister about it," he said. "My client isn't going to falsely say he incurred and paid expenses when he did not."

Galvin has been seeking details of McDonough's work for Cognos since October, when Inspector General Gregory Sullivan revealed that Cognos and its sales agent, Joseph Lally, had paid McDonough more than $1 million that he never reported to regulators.

Since then, Cognos revised its filings, reporting how much it had paid McDonough, amounts that included lobbying fees as well as expense reimbursements never before disclosed. The expenses reported included $13,000 McDonough spent at the Kentucky Derby in 2007 - $5,500 for tickets to the races, $4,950 for lodging, and $1,477 for meals.

The company also reported reimbursing McDonough for thousands of dollars in other expenses, including $2,000 he spent at an unspecified "leadership conference" in 2004, $4,500 at the National Speakers' Conference in Las Vegas in 2005, and $287.40 on a golf outing in 2003.

McDonough has refused to say whom he was entertaining at these events.

Galvin has no authority to debar, or prohibit, any company from doing business with the state. But under state law, the secretary of administration and finance can remove contractors for up to a year based on a number of reasons, including anything "of such serious and compelling nature" as to warrant such action.

Cognos has contracts with several state agencies, which would not be affected.

A Cognos spokesman did not respond to requests for comment. According to Alan Cote, director of Galvin's public records division, lawyers for the Burlington software firm have said they do not have the detailed expense information that Galvin is seeking.

Last month, Galvin asked state Attorney General Martha Coakley to investigate Lally, a former Cognos vice president, who worked as an independent sales agent to help the company win state business in 2006 and 2007.

According to Galvin, Lally has refused to explain why his company, Montvale Solutions, made hundreds of thousands of dollars in undisclosed payments to McDonough. Lally's company paid McDonough $200,000 on Aug. 31, 2007, the same day the state paid Cognos $13 million for a technology contract that is now the focus of multiple investigations. Lally paid McDonough another $100,000 in the summer of 2006, several weeks after Cognos won a state education contract worth $4.5 million.

Lally and Cognos also paid two other close friends of DiMasi's hundreds of thousands of dollars while the company was seeking state work.

Lally paid DiMasi's accountant and former campaign treasurer, Richard Vitale, $600,000 in 2006 and 2007 and DiMasi's law associate Steven Topazio $125,000 between 2005 and 2007.

Vitale also received money from a ticket brokers group looking for favorable legislation on Beacon Hill. When Vitale refused to report that $60,000 as lobbying fees, Galvin referred the matter to Coakley, who convened a grand jury.

Even though Topazio was paid out of Cognos's lobbying budget, the company insists he did no lobbying. According to Cote, Cognos's lawyers said employees who could explain what Topazio did no longer work for the company. Topazio's lawyer, Frank Corso, told Cote that he was "put on a retainer to render legal services related to contracts. Neither the law office or Mr. Topazio was retained to engage in lobbying activities."

But in a July interview, Topazio said he had nothing to do with any contracts. "I know what people will think when they see that I received money from Cognos," he said at the time. "But all I can say is it had nothing to do with any contracts they were seeking from the state or anyone else. All I can say is it's not what you think."

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