Witness tells of DiMasi pressure

Ex-data chief says Cognos software was not needed

CORRUPTION CHARGES Salvatore F. DiMasi, former House speaker, is charged with taking kickbacks to guide state contracts to Cognos. CORRUPTION CHARGES
Salvatore F. DiMasi, former House speaker, is charged with taking kickbacks to guide state contracts to Cognos.
By Milton J. Valencia
Globe Staff / May 24, 2011

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The state’s former head of information technology testified yesterday that Massachusetts did not need the type of software that House Speaker Salvatore F. DiMasi was pushing in 2006 and that she would not have recommended it if DiMasi had not pressed her to do so.

Taking the stand in DiMasi’s federal corruption trial, Bethann Pepoli, former acting chief information officer, said that in July 2006 she was invited to the speaker’s office, which she called an unusual occurrence.

She told jurors in US District Court in Boston that DiMasi told her he had an interest in performance-management software and recommended that she work with his aides to develop legislation for the product.

Pepoli testified that she “assured him it was not needed and discussed initiatives underway that would help them achieve their objectives.’’

But DiMasi, according to prosecutors, had a hidden interest: He allegedly was conspiring to help a Burlington software company win state contracts in exchange for hundreds of thousands of dollars in kickbacks.

Prosecutors used Pepoli’s testimony to show that DiMasi got so involved in getting the deal done that his aides provided her with language for legislation that would allow the state to buy the software from the company, Cognos.

Prosecutors allege it was Cognos officials who crafted the language and calculated a price of $15 million — $5 million more than Pepoli’s estimate — for the contract, the second of two the company would receive from the state.

DiMasi was so interested in the procurement process, Pepoli testified, that he called her office the day in May 2007 that she reported to administration officials that she was recommending Cognos as the software vendor.

“The speaker asked . . . what my recommendation was and what the next step was,’’ Pepoli told the court. “I said I had recommended Cognos. He said, ‘OK, thanks for the update.’ ’’

Prosecutors allege that DiMasi, who resigned the speaker’s post in January 2009, secretly manipulated the legislative process to steer state contracts totaling $17.5 million toward Cognos.

The company won a $4.5 million contract for software for the state Department of Education in 2006 and then won a $13 million statewide contract for the performance-management software in 2007. The meeting in Pepoli’s office occurred after the education contract had been awarded and once DiMasi and his associates had set their sights on the larger deal, prosecutors say.

DiMasi, lobbyist Richard McDonough, and Richard Vitale, a friend and financial adviser of DiMasi, are charged with conspiracy, mail and wire fraud, and honest services fraud in allegedly using the power of the speaker’s office to help the company. The three defendants have denied any wrongdoing.

A fourth defendant, former Cognos salesman and vice president Joseph P. Lally Jr., pleaded guilty and cooperated with investigators in exchange for a sharply reduced jail sentence. Lally testified of his involvement last week, asserting that DiMasi was at the center of the scheme.

Defense lawyers have depicted Lally as a liar and a fraud who exaggerated his ties to DiMasi to gain access to decision-makers on behalf of his company.

Under cross examination yesterday, Pepoli acknowledged that DiMasi had not mentioned Cognos by name and that he talked only of the software the company produced. She also said that after the 2006 meeting with DiMasi, she did not talk to him again directly until the decision to award the contract to Cognos had been made.

She also acknowledged that Lally had lobbied her directly and that he had offered to use his sway with the speaker to help her get appointed permanent chief of the department.

Pepoli agreed with defense lawyers that Lally often sought leverage by using the speaker’s name and that he contributed to her belief that the speaker wanted the product. For instance, according to Pepoli, it was Lally who told her to contact the speaker’s office in July 2006, saying DiMasi wanted to meet with her.

Pepoli had her own dealings with Cognos: In December 2009, she was fined $3,000 for violating the state conflict-of-interest law by asking the firm to sponsor a golf outing for an independent association. She had made the request at the time the company was recommended for the deal with the state. She was not asked to testify on the fine yesterday.

Pepoli told jurors that she believed the speaker had a significant interest in the software, to the point she warned members of the administration.

“I know that Speaker DiMasi really, really wants the performance-management project in the emergency [budget package] and will add it if we don’t include it,’’ she said in e-mail to supervisors in March 2007, shown in court yesterday.

One administration official responded, according to the documents, “We are aware this is a project the speaker is interested in.’’

Pepoli’s account yesterday of the contract process, more than two weeks since the first witness took the stand, marked the beginning of the government’s final portion of the case: how the contract was approved.

Testimony expected from a list of high-profile political players is expected to spotlight the behind-the-scenes workings of Beacon Hill.

Today, jurors could hear from David Simas, a former top aide to Governor Deval Patrick who now works in the Obama administration. The governor could take the stand by week’s end.

Milton Valencia can be reached at