“I’m only going to be speaker for so long, so it’s important that we make as much hay as possible,” Lally said DiMasi told him during a 2006 golf outing.
Former Massachusetts House Speaker Salvatore DiMasi walks into federal court for the start of the trial at Moakley Federal Courthouse in Boston on Feb. 5. On the left is step daughter Ashley and on right is wife Debbie. BOSTON – A key figure in the federal corruption trial of former Massachusetts House Speaker Salvatore DiMasi testified DiMasi personally lobbied top administration officials to sign off on two lucrative contracts that prosecutors say were central to a kickback scheme.
Joseph Lally, a former software salesman, testified Wednesday that DiMasi spoke with Gov. Deval L. Patrick and Patrick’s former budget chief Leslie Kirwan about one of the deals – a $15 million software contract – and that DiMasi was interested in using his position as speaker for personal gain.
“I’m only going to be speaker for so long, so it’s important that we make as much hay as possible,” Lally said DiMasi told him during a 2006 golf outing.
Lally also testified that once the details of the alleged scheme began to come to light, an agitated DiMasi warned in a conference call that “if one of us breaks, we all fall.”
Lally, who pleaded guilty and could receive a lighter prison sentence for his testimony, added an insider’s view of what prosecutors say was a burgeoning plot to defraud the state.
Lally testified he’d known another key player in the alleged scheme, lobbyist Richard McDonough, for more than two decades and in 1996 hired him as a lobbyist for the software firm Cognos. McDonough was initially paid $5,000 a month – a fee that would grow to $25,000.
The two hit on a scheme to use DiMasi’s influence to land Cognos the first of two lucrative contracts, a $4.5 million software deal with the state Department of Education, Lally said.
To funnel money to DiMasi, Lally said they brought in Steven Topazio, a former law associate of DiMasi. Prosecutors said Cognos agreed to pay Topazio, who was not charged, a monthly $5,000 fee, $4,000 of which went to DiMasi.
Lally knew it to be a “sham contract,” he said, since Topazio, a personal injury lawyer, would not do any actual work for Cognos. McDonough urged that some work be found for Topazio, in case the scheme ever unraveled, Lally testified.
They also brought a fourth individual into the alleged conspiracy, Richard Vitale, an accountant and close DiMasi friend. Lally said he agreed to pay McDonough and Vitale $100,000 after the education software contract was approved and was told the money would be used to set up a $250,000 line of credit for DiMasi, who had lost income from his law practice after becoming speaker.
The second alleged scheme would require the state to approve a $15 million software contract – although the total was negotiated down to about $13 million.
Lally said he and McDonough again relied on DiMasi to get the funding into an emergency bond bill in 2007, after Patrick had taken office.
When the administration balked, Lally said he sent talking points through Vitale to DiMasi so DiMasi could make the case to Kirwan, then Patrick’s secretary of administration and finance.
Kirwan wasn’t convinced. Lally said DiMasi also spoke with Patrick during a weekly leadership meeting. He said McDonough said he would also try to press the case for the contract with Patrick’s former top political strategist Doug Rubin.
Kirwan ultimately signed off on the contract although it was later canceled.
Before the administration agreed, Lally said McDonough told him he had to sign another consulting contract with Vitale for $500,000. Lally said that Vitale later told him that he and DiMasi were going to form a business partnership after DiMasi left office.
Defense attorneys are challenging Lally’s credibility as a witness.
Under cross examination from Vitale’s attorney, Martin Weinberg, Lally conceded that he had not always been truthful in his dealings with the defendants and had also lied or misled Cognos on several occasions. He also acknowledged cheating on his income taxes and gambling away much of the money he made from commissions.
Weinberg also asked Lally if he stood to benefit from his plea deal not only by getting a lighter sentence, but also because the government agreed he would not have to forfeit his $1 million home in North Reading.
Lally said proceeds from the sale of the home would be used to pay off gambling debts and repay money he borrowed from family and friends as his finances soured. But he told Weinberg he wasn’t getting any “big pile of money” from the deal and that he pleaded guilty because he wanted to clear his conscience.
Lawyers for DiMasi and McDonough are expected to question Lally on Thursday.
DiMasi was often alternately referred to as “boss,” “coach,” or “the big guy” in emails exchanged by defendants. At one point, Lally said he was admonished by Vitale that DiMasi’s real name should not appear in any emails.
At one point when Cognos stopped making the $5,000 payments to Topazio, Lally fired off an email warning that the company should resume the payments so they don’t upset anyone “this late in the game.”
Lally said the pressure intensified in 2008 after he got a call from a Boston Globe reporter.
During a subsequent meeting in Lally’s basement, he said McDonough was worried he might be hiding a secret recording device.
According to Lally, McDonough said: “I want you to frisk me and then he said I want to frisk you.”