IG sees subculture of corruption

Sullivan calls special education a ‘money pit’

Inspector General Gregory Sullivan, who has a broad mandate to prevent and detect fraud, waste, and abuse in state and local government, sat down recently with CommonWealth to discuss corruption in Massachusetts and his investigation of financial abuses at the Merrimack Special Education Collaborative. What follows is an edited transcript of that conversation.

CommonWealth: In 1980, the Ward Commission reported that corruption was a way of life in Massachusetts, that political influence, not professional performance, was the prime criterion in doing business with the state, and that shoddy work and debased standards were the norm. The commission referred to an “unholy alliance between private money and public power.” Has anything changed since then?

SULLIVAN: I think that they have changed for the better overall. There are safeguards that have been put in place that I think have ameliorated to a great extent the problems that existed at the time of the Ward Commission. The Legislature set up ways to try to catch the crooks. We now have a very robust competitive procurement system for contracts.

CW: But it’s the rare week when you can’t pick up a newspaper and read about yet another corrupt politician.

SULLIVAN: It’s a never-ending battle because there is a subculture of corruption on Beacon Hill made up of people who always find opportunities to exploit the system to their advantage, but to the detriment of the public. It’s a never ending battle against the tide of people inside and outside of government who seek to use undue influence to affect government and to capitalize on loopholes. Influence peddling is probably as bad today as it ever was. It is unabated. And there’s always a new loophole, a new trick, an artifice someone finds to get around existing law. We are engaged in a constant effort to close new loopholes. People have been able to find more wily, creative ways to do things that are difficult to catch. And it’s not just in the Legislature, we see it all over government.

CW: Your budget is only about $2.8 million. Is that enough?

SULLIVAN: If we had $20 million, we’d be 10 times more effective than we are today. I think more money needs to be spent for proactive investigations.

CW: The Commonwealth has had three consecutive House speakers who wound up being felons: Sal DiMasi, Tom Finneran and Charles Flaherty. Why is it that we can’t seem to find a speaker who doesn’t wind up engaging in criminal activity?

SULLIVAN: It’s opportunity. They have a strong desire for money and they have the opportunity. In the case of Speaker DiMasi, you have an example of an abuse of power that was tolerated by the membership for years. I was in the house for seventeen years, and one thing I observed was that there was an inordinate deference given by the membership to the speaker to a phenomenal degree. There is inordinate concentration of power in the hands of the speaker.

CW: The Legislature is not covered by the Public Records Law. So if I were to ask, for example, Speaker DeLeo for a copy of a document, he doesn’t have to give it to me. Do you think the Legislature should be covered by the Public Records Law?

SULLIVAN: I think every body should be covered by the Public Records Law except in the most narrow sense, like contracts negotiation and litigation. A good Public Records Law is one of the real methods of keeping public officials honest. One of the most effective disinfectants against this disease of corruption is transparency. And I think that it’s very important to solve these problems long term and we need to revisit the public records issues and broaden it to make it easier for people to get these records and not to have to spend an inordinate amount of money. A real reform against waste, fraud, and abuse in government, and influence peddling would involve ready access to public records.

CW: Auditor Suzanne Bump commissioned the National State Auditors Association to examine the last 18 months of former auditor Joe DeNucci’s administration. The report faulted DeNucci’s office for failing to comply with professional government standards on audit planning, staff competence, documentation, and reporting. What are your thoughts on how well DeNucci did his job?

SULLIVAN: I think DeNucci’s office did some really great things. But I did find it disheartening that the outside agency could come in and find the level of operational problems which they identified. Before that report came out, it never crossed my mind that there was a problem. A lot of people had the same reaction of surprise when the report came out.

CW: At last count, the Boston Public Schools gave out about 257 no-bid contracts worth $10,000 or more in its last fiscal year. These 257 no-bid contracts represent about 10 percent of the school’s budget. What do you think about that?

SULLIVAN: It could be indicative of a lazy approach, an easy way out of procurement.

CW: As part of these no-bid contracts, the Boston School Schools gave out at least $130 million for special education. The school department says the state sets how much they can pay these people and that’s what they abide by.

SULLIVAN: Special education is one of the richest areas to look for waste and abuse in government right now, as evidenced by what we found at the Merrimack Special Education Collaborative. We have been arguing for a review of special education contracts for some time. It is a money pit. We looked at the rates for special ed contracts. We found that there are extraordinarily high salaries being paid to administrators at some of the special needs schools.  We asked the administration to do a review and that’s going on right now.

CW: You accused lobbyist Richard McDonough of having a no-show job as director of public affairs at the Merrimack Education Collaborative, allowing him to get pension and medical benefits.  McDonough’s lawyer, Thomas Drechsler, told the Boston Globe: “I want to remind people that the inspector general has never contacted him to hear his side of the story.  They’ve never given him the opportunity to speak with them. I wonder about the quality of the investigatory process.” Is is true that you didn’t contact McDonough?

SULLIVAN: We contacted Dreschsler before we put the report out, but we did not ask him to come in for an interview. We’re not an agency that prosecutes people. We sent a letter to the state retirement board. They’re the ones that have to make that investigation.

CW: Your office has no power to bring cases in court. Would you want that?

SULLIVAN: Not really. We refer a lot of cases to agencies such as the attorney general, the US attorney’s office, district attorneys, and the State Ethics Commission, and we pitch the case.

CW: How is it working out when you turn cases over to Attorney General Martha Coakley for prosecution? Does she always move forward on the cases you would like prosecuted?

SULLIVAN: With rare exception, this attorney general I think is very aggressive on most things that we bring to her. But it’s not always the case. There are cases where I’m frustrated that action isn’t being taken.

CW: Can you give me an example?

SULLIVAN: One such case was the Gloucester Community Charter Arts School, which entered into contracts to build a big modular expensive school all without bids. They didn’t follow the procurement rules. We brought it to the attorney general’s office and we had hoped that they would take action and void the contracts, which they had the authority to do. But instead they entered into a consent agreement where the town agreed not do anything like that in the future, which wasn’t going to happen anyway because they already had built the school.

CW: Did you ever talk to Coakley directly about this?

Sullivan: I talked with her and her chief of staff and tried to convince them to take action on this case, and we really tried to press them on it. But they made the judgment call that the school’s built, the people didn’t know what they were doing, they said they didn’t know they had rules, which to me I would never believe in a million years. So basically they were able to have an outcome that had no consequences, although we consider it to be one of the worst procurement abuses of all time.

CW: There have been many serious allegations made against former Treasurer Tim Cahill. For example, it has been alleged that a former aide to Cahill who went to work for investment banking giant Goldman Sachs, which had dealings with the state, was heavily involved in Cahill’s campaign for governor, writing, for example, a fund-raising pitch and advising him on strategy. What are your thoughts on this?

SULLIVAN: If it is true, it is very disturbing that a major Goldman Sachs corporate player would be so deep inside the politics of the campaign. It would be illegal for the Goldman Sachs employee to have done it, but it would be far worse for the treasurer to have condoned it. For the treasurer to be buddying up with the Goldman Sachs guy and becoming political soul mates with him, it would be quite troubling.

CW: Any final words on corruption in government?

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SULLIVAN: There’s an army of people out there in government who want to scam the system every single time they can. If you leave a crack open a quarter of an inch, someone tries to go through it. So our office always finds itself in a sea of activity where everyday we see things that to us are horrible. We have a never-ending supply of things to look at.

Homepage photo by Kathleen Dooher.