Although Vitale never revealed to his colleagues a $100,000 payment he received from Cognos, he openly reported other sources of outside income, according to Richard Caturano, Vitale’s business partner for 30 years.
Former Massachusetts House Speaker Salvatore DiMasi arrives at federal court in Boston Friday for the continuation of his corruption trial.By KYLE CHENEY
BOSTON - Richard Vitale, an accountant and codefendant in the corruption trial of former House Speaker Salvatore DiMasi, concealed a payment he received from Cognos Corp. -- a software company at the center of charges that DiMasi sold his office for financial gain – despite an agreement with his colleagues at his accounting firm to disclose outside income, a witness testified in federal court Thursday
Although Vitale never revealed to his colleagues a $100,000 payment he received from Cognos in 2006, he openly reported other sources of outside income, according to Richard Caturano, Vitale’s business partner for 30 years at the accounting firm of Vitale Caturano.
“He told me about activities that he had with respect to a minor league baseball team, a property management company and other real estate investments he was involved in over the years,” Caturano said.
According to Caturano, a shareholder agreement at Vitale Caturano required Vitale to cash in his shares in June 2007, when he turned 62. As a result of redeeming his shares, Vitale was owed $6 million over a 10-year period, and he stayed on staff to earn a $400,000-a-year salary from the firm, Caturano said, adding that his continued employment by the firm after reaching the retirement age was a source of tension among his colleagues.
The agreement also required that if employees received outside income, they either turn it over to the firm or deduct an equal amount from their salaries. Vitale, DiMasi’s friend for decades and longtime accountant, including during his tenure as speaker from 2004 to 2009, never disclosed to shareholders his income derived from Cognos or his relationship with the software company, Caturano said.
Vitale’s lawyer Martin Weinberg argued Vitale had openly relied on the accounting firm’s administrative staff to help him establish WN Advisors – the single-employee consulting firm that would go on to collect Cognos payments – indicating that he hadn’t intended to conceal its existence. He listed Vitale Caturano’s address and phone number as the contact information for WN Advisors, and he even denoted in 2006 the $100,000 payment derived from Cognos in an official Vitale Caturano record, Weinberg emphasized.
Weinberg displayed billing sheets for Vitale Caturano in which Vitale recorded hours he spent working on business for WN Advisors and he also displayed a check from WN Advisors to Vitale Caturano.
In addition to the $100,000 payment in September 2006, WN Advisors received $500,000 in 2007 from Montvale Solutions, a Cognos reseller run by Joseph Lally. Lally pled guilty in March to conspiring with DiMasi, Vitale and lobbyist Richard McDonough in an alleged kickback scheme.
Judge Mark Wolf noted to jurors that Vitale was under no obligation to disclose the $500,000 payment, received in August 2007, because he was no longer a Vitale Caturano shareholder when that payment arrived.
DiMasi, Vitale and McDonough are charged with conspiring to use DiMasi’s office to steer a pair of contracts – a $4.5 million deal in 2006 and a $13 million deal in 2007 – to Cognos in exchange for kickbacks. Prosecutors said DiMasi received $65,000 funneled through a law associate and that Vitale received two payments totaling $600,000 after the deals went through. McDonough, prosecutors say, received $300,000 for his role in the contracts as well.
Defense attorneys have argued that the payments to the three defendants were all legal arrangements – the funds to DiMasi came from a fee-sharing arrangement with his law associate Steven Topazio, McDonough was paid for his efforts to lobby on behalf of Cognos and Vitale was paid through a consulting agreement with a Cognos reseller, Montvale Solutions.
Caturano described founding Vitale Caturano in 1978, a tiny outfit with just four employees, and the way it grew into a company with hundreds of accountants on staff and thousands of clients, many of them prominent and powerful. The firm, last year, was acquired by McGladrey, one of the largest accounting companies in New England.
Under questioning from prosecutor Kirstina Barclay and Weinberg, Caturano described openly advertising Vitale’s relationship to other clients at Vitale Caturano, often introducing the speaker to them.
“We did it out of courtesy and respect for our clients,” Caturano said.
Weinberg, during his cross-examination of Caturano, emphasized that Vitale had been involved with education charities through his accounting firm and that he had a host of high-profile political and business connections.
He noted that Vitale worked closely with Paul Guzzi, the president of the Greater Boston Chamber of Commerce, to help advance the interests of Massachusetts businesses. Weinberg also noted that Vitale worked closely with the president of Sovereign Bank and had connections with another well-known Massachusetts politico, former House Majority Leader Richard Voke, who lost a brutal campaign for House speaker to Thomas Finneran in the 1990s.
Caturano agreed with Weinberg’s characterization and suggested that Vitale was proud of his relationship to DiMasi, and the firm ensured it was not kept secret.