Salesman, lobbyist crafted Cognos contract
Lally’s partner testifies under immunity agreement
Officials working to sell Cognos software to Massachusetts carefully crafted legislative language to ensure that Cognos would be virtually assured to win a $15 million software contract that lawmakers included in a 2007 bond bill, a witness testified today in the corruption trial of former Speaker Salvatore DiMasi.
Bruce Major, a finance expert who partnered with salesman Joseph Lally in 2006 to sell Cognos software to Massachusetts, said he drafted the language that was ultimately included in the bill and approved by the state Legislature. Patrick administration officials later awarded Cognos a $13 million deal after lowering the price in a negotiation.
Major, who testified under an immunity agreement, said he traded the legislative language with lobbyist Richard McDonough, one of two codefendants in the trial, and received a drafting assist from Charles Stefanini.
DiMasi, McDonough and accountant Richard Vitale are fighting charges that they steered state contracts to Cognos in exchange for hundreds of thousands of dollars in kickbacks. Lally, a fourth defendant, pled guilty in March to conspiracy, mail fraud and wire fraud in exchange for a reduced sentence, and he pledged to cooperate with the prosecution.
Lally, who sold software for Cognos for years, had joined Major in 2006 to form Montvale Solutions, an independent Cognos reseller. Major said Lally ensured that he retained the exclusive right to work on a pair of major pending Massachusetts contracts, including the $13 million contract.
When the $13 million deal went through, Lally received a $2.8 million commission and redirected $500,000 to Vitale and $200,000 to McDonough, according to prosecutors’ indictment.
As Major was working on the language for the $13 million deal in January 2007, around the time Gov. Deval Patrick was taking office, he said he got into a heated argument with Lally.
“Joe and I were going through some acrimonious times,” he said. “We were in a heated argument … I made mention of the fact that I assume a portion of that payment would go to Mr. DiMasi. Joe got very angry and yelled at me and said I had no idea what was going on with the money, he had no idea what was going on with the money.”
Major, who leaned into the microphone when he testified and politely thanked attorneys for their patience and apologized when he failed to remember certain details, testified that Lally once chastised him for including DiMasi’s name in an email.
At Lally’s urging, Major said, he agreed to pay Vitale, a longtime friend of DiMasi’s and whose accounting firm Major once worked for, to help close deals with the Massachusetts government.
“I don’t know to what extent they helped close it,” he said.
Major also acknowledged filing bogus tax returns for the reselling company he ran with Lally, Montvale Solutions. Under cross-examination, Major acknowledged that Lally encouraged him to violate the tax code and that he learned later that Lally concealed income from Major in order to avoid sharing profits with him. He added that he has realized since he ended his business relationship with Lally in 2007, that he now views him as dishonest.
“My experience is Joe was not a truthful person,” he said.
Defense attorneys for DiMasi, McDonough and Vitale have repeatedly hammered Lally as a dishonest, scheming, compulsive gambler who lied on his taxes, to his friends, family and coworkers, and even in negotiations for a boat. Lally’s testimony last week offered some of the most damning and salacious details placing DiMasi at the center of the kickback scheme and included details of conversations to which only he and the other defendants were privy.
They also elicited testimony from various witness asserting that Lally would frequently exploit his relationship to DiMasi in order to advance his personal interests.
“He did say that he was close with the speaker,” Major said. “A line Joe would frequently use was that the speaker was at his wedding.” Prosecutors have previously shown a grainy video from Lally’s wedding in which DiMasi and McDonough are purportedly visible in the crowd.
Major testified that when the Boston Globe began running articles in 2008 questioning Massachusetts’s Cognos deals, he received an email from Lally expressing concerns that they would have to return the $2.8 million commission they earned when the deal closed.
Defense lawyers have also noted that Lally’s plea deal enabled him to sell his home, pay off debts and avoid a jail sentence that could have stretched to nearly a decade. The deal, they emphasized, incentivized Lally to provide “substantial assistance” to the prosecution.
Under cross-examination by McDonough’s attorney, Thomas Drechsler, Major said he recommended that Lally pay McDonough $200,000 after securing the $13 million deal because of the effort McDonough put in on Cognos’s behalf.
Major told jurors, during questioning by DiMasi’s lawyer William Cintolo, that Lally never suggested that DiMasi was being paid for his role in the Cognos deals.
“Mr. Lally never made the assertion that any money was going to Mr. DiMasi,” Major said.
In a second round of questioning by prosecutors, Major said he determined after an 18-month stint as Lally’s partner that he no longer wanted a business relationship with him. Prosecutor Kristina Barclay then asked how long Lally had been business partners with McDonough. Major replied that Lally had worked with McDonough for about 13 years.
Under questioning from Martin Weinberg, Vitale’s attorney, Major described Lally’s ambition to grow Montvale into a nationwide, profit-making powerhouse, in part by providing a new application that would help departments of education across the country meet federal standards.
“Mr. Lally was a driving force behind this,” he said. “The thought process behind Montvale Education was to build an application on top of the Cognos software as it was used by various departments of education across the United States to help them be compliant with the No Child Left Behind legislation.”The company never got off the ground, he said.
Major surprised courtroom attendees by revealing that prior to his experience in finance, he played professional hockey – three years in the minors and a four-game stint for the Quebec Nordiques in the 1990-1991 season. An NHL player profile describes Major as “a decent playmaker who utilized his 6’3” frame to check opposing forwards.”