|According to . . . state records, Salvatore DiMasi (left) was enjoying the perks that came with the office of speaker.|
Prosecutors describe soaring DiMasi debt
Salvatore F. DiMasi racked up so much personal debt while speaker of the state House of Representatives that he sought relief by soliciting kickbacks from a Burlington software company seeking business with the state, according to prosecutors and a witness in federal court yesterday.
Testifying in DiMasi’s public corruption trial, prosecution witness Andrea Roller said DiMasi and his wife saw their consumer debt climb from some $20,000 in 2005 to $275,000 in September 2007, three years after he became speaker.
The debt, fed by what prosecutors said was an “extravagant lifestyle,’’ included money owed under a $250,000 line of credit extended by DiMasi’s friend and financial adviser, Richard Vitale, according to Roller, an accountant in the US attorney’s office who combed through DiMasi’s financial records.
DiMasi’s debt included an average $50,000 monthly credit card balance, for spending on bills, the Fast Lane, and personal items.
“Generally, it was recreational in nature, restaurants, travel, clothing, those types of things,’’ Roller said. She did not specify the places where DiMasi shopped or ate.
The overall tally of his personal debts did not include the $500,000 mortgage DiMasi had on his North End condominium or the $400,000-plus mortgage his wife had on property in Needham.
Prosecutors sought to use the overview of DiMasi’s finances to show he had a motive to engineer state contracts for the
Roller testified that as speaker DiMasi was no longer earning the $200,000-plus salary he made in a private law practice in 2003. Once he became speaker in 2004, he could not handle the case load he once did, and he saw his income drop below $40,000 in 2007.
According to state figures, DiMasi made $93,237 as a legislator in 2007. His wife, Debbie, had an annual income of $72,000, according to Roller, who did not give the source of Debbie DiMasi’s earnings.
All along, according to campaign finance reports and other state records, Salvatore DiMasi was enjoying the perks that came with the office of speaker: He had a coveted North End parking deal with the Boston Redevelopment Authority for $55 a month. His campaign account also paid for outings and for the use of a black Lincoln Navigator sport utility vehicle.
One of DiMasi’s lawyers, William Cintolo, argued while cross-examining Roller that the former speaker had been able to keep up with his bills and make regular payments. Also, Cintolo said, DiMasi’s bank accounts and line of credit consistently fluctuated because DiMasi made regular deposits and payments.
“I did see money coming in and coming out,’’ Roller agreed.
But prosecutors allege DiMasi was supporting his lifestyle with payments from associates in exchange for his help steering two state contracts totaling $17.5 million toward Cognos.
DiMasi, Vitale, and lobbyist Richard McDonough face public corruption charges in allegedly using the power of the speaker’s office to manipulate the legislative process in favor of Cognos, which was trying to sell the state contracts for performance management software. They allegedly worked with Joseph P. Lally Jr., a former Cognos salesman and vice president who was once a codefendant in the case but pleaded guilty and cooperated with prosecutors.
Lally testified earlier in the trial that he was approached by McDonough in 2004 about a plan to funnel payments to DiMasi, because the speaker’s income dropped so dramatically.
One strategy, according to previous testimony, was to put DiMasi’s former law associate, Steven Topazio, on the Cognos payroll and to pay him a retainer. Topazio then paid DiMasi referral fees, prosecutors allege.
Roller testified that Topazio was paid $125,000 by Cognos from 2005 to 2007 and that he funneled a total of $65,000 of that money back to DiMasi.
Topazio testified earlier that he had been an unwitting participant in the scheme. He acknowledged he was never asked to perform any work for Cognos and that he considered his arrangement with the company unusual. Defense lawyers argued that the arrangement was no different from other deals they had that included referral fees.
Prosecutors also said that DiMasi benefited from the $250,000 line of credit he received in 2006 from Vitale, who was paid $600,000 by Lally as part of the deals. Lally testified that DiMasi was going to benefit from that money by working for Vitale’s company after retiring from public service.
DiMasi, McDonough, and Vitale have denied any wrongdoing, and argue that Lally was a liar and a fraud who bragged about ties to DiMasi to bolster his own ego. They argue that any money Vitale and McDonough received was legitimate and that there is no evidence DiMasi received any money from the two.
Earlier yesterday, a former spokesman for DiMasi when he was speaker testified that DiMasi denied he was helping Cognos or that he knew Lally was working for the company when asked about the deals in March 2008. The spokesman, David Guarino, said he queried DiMasi after the Globe asked for comment for a story on the questionable deals.
Guarino, a former reporter who was DiMasi’s spokesman before leaving for a job in the private sector, said DiMasi told him that Lally was only an acquaintance and that he did not know what kind of work Topazio was performing for Cognos.
“He said he wasn’t aware of any relationships,’’ Guarino said. “He said he wasn’t aware of any payments.’’
Thomas Kiley, an attorney for DiMasi, argued that DiMasi was referring to one contract, a $13 million enterprise deal signed in 2007, when addressing Guarino’s questions. He argued that DiMasi had agreed he advocated for the software, but that he did not support Cognos directly.
Milton Valencia can be reached at firstname.lastname@example.org.