For Immediate Release - January 25, 2012

Treasurer of Former Middlesex Sheriff DiPaola’s Campaign Fined for Campaign Finance Violations; Agrees to Disgorge Over $295,000 in Campaign Funds

AG Coakley Recommends Changes to Campaign Finance Laws, Including Certain Reporting Of All Cash Contributions

BOSTON – Following an investigation into allegations of public corruption during former Middlesex Sheriff James V. DiPaola’s tenure, Attorney General Martha Coakley’s Office entered into a settlement with the former treasurer of DiPaola’s campaign committee in connection with campaign finance violations. AG Coakley is also recommending changes to the campaign finance laws to ensure greater transparency and accountability by elected officials.

In the agreement entered today, Patricia Covelle, age 59, of Stoneham, admitted to campaign finance violations including accepting individual cash contributions over $50 which totaled approximately $4,000 to the DiPaola Committee (“the Committee”).  Covelle admitted to failing to report those cash donations to the Office of Campaign and Political Finance (OCPF). These violations occurred during the period of January 1, 2006 through December 31, 2010. Covelle served as treasurer for the Committee since March 1997.

The agreement requires Covelle to disgorge to the Commonwealth the remaining balance of the Committee’s campaign account totaling $295,160.  Covelle must also pay a $4,000 civil fine from her personal funds and she is prohibited from ever acting as Treasurer for a political committee.

The investigation into the matter is now closed. Middlesex Sheriff Peter Koutoujian fully cooperated with our office during the course of this investigation.

“Our investigation uncovered proof of campaign finance violations that resulted in today’s civil fine against the campaign’s treasurer,” AG Coakley said. “We also found a general perception among many employees that those who made campaign contributions to DiPaola’s campaign were favored within the Office. As a result of this investigation, we believe changes should be made to campaign finance laws to improve transparency and accountability by public officials.”

AG Coakley’s Office began the investigation in October 2010, based on a referral from the Middlesex County District Attorney’s Office regarding allegations of campaign finance violations and corrupt hiring practices during Sheriff DiPaola’s (“DiPaola”) tenure. Because of the serious allegations of public corruption, the office continued its investigation even after the death of DiPaola in November 2010 to determine the full scope of the alleged crimes and whether other individuals, including public employees at the Middlesex Sheriff’s Office (“MSO”), had committed criminal violations of the law.

The AG’s Office, working in cooperation with Massachusetts State Police assigned to the Attorney General’s Office, interviewed more than 75 individuals, including approximately 50 sheriff employees, and reviewed bank records, emails, and spreadsheets. They also conducted an extensive examination of campaign documents, including those pertaining to fundraisers and other campaign activity, as well as the campaign’s tax documents.

The AG’s investigation found circumstantial evidence of the “pay-to-play” culture.  A number of employees interviewed stated that they made campaign contributions as a “thank you” to DiPaola; however, they were also careful to add that “thank you” contributions were not expected but always well-received by DiPaola. The investigation found a general perception among many employees that those who made contributions to the Sheriff’s campaign were favored within the Office. It also revealed that the Sheriff was aware of, and kept a record of, the various employees who had contributed to his campaign.

At the same time, there were other employees interviewed whose accounts contradicted evidence of a “pay-to-play” atmosphere. None of the witnesses interviewed were able to provide direct or circumstantial information sufficient to support a criminal allegation that a specific person was promoted based on a campaign contribution, or series of contributions.

Ultimately, the evidence did not support specific criminal violations and, with the death of DiPaola, there will not be a full explanation of what happened during his tenure. The evidence did support actions taken by the State Ethics Commission against employees of the MSO for violating G.L. c. 268A, the conflict of interest law.

The investigation also found evidence of campaign finance violations by the DiPaola Committee.  Many of the contributors to DiPaola’s campaign were employees of the MSO or family members of those employees.  They contributed largely through two annual DiPaola campaign events.  Every May, the Committee held a Cinco de Mayo fundraiser at Montvale Plaza and, in August, the Committee organized a Boston harbor cruise and a pre-party at Sissy K’s Restaurant on the waterfront.

At many of these and other events cash was given to DiPaola and ultimately not accounted for.  Current state law does not require the public reporting of cash contributions under $50 by a political campaign committee. The investigation revealed a number of instances in which cash contributions over $50 were not reported to OCPF. Those violations were resolved through the settlement entered today. 

AG Recommends Changes to the Campaign Finance Laws

Following the investigation into this case, AG Coakley is recommending the consideration of the following revisions to the campaign finance laws:

All Campaign Contributions For Certain Candidates Should be Reported to OCPF

Current state law does not require the public reporting of cash contributions under $50.  It makes tracking larger and illegal cash contributions very difficult.

Unfortunately, allowing even a small amount to go unreported results in ambiguity that may be exploited by candidates or contributors. For example, any person who gives $45 on multiple occasions may never be recorded and could, in the aggregate, donate well over the maximum allowed per person in one year, or at least an amount that should be reported to OCPF. Meanwhile, the candidate or elected official can aggregate the cash and never account for its receipt or expenditure.  For example, DiPaola held campaign events in which cash was frequently donated and a number of contributions over $50 were not reported to OCPF.

The AG’s office recommends that for every state legislator, county official, and constitutional officer, there should be a corresponding report for every contribution and contributor, regardless of the amount paid.  No cash should go unreported.  This added level of transparency would deter illegal conduct, making it easier for regulators to investigate possible violations and more difficult for candidates to evade the law.

OCPF Should Have Authority to Issue Civil Fines

Under the current law, OCPF is unable to levy civil fines for campaign finance violations.

In cases where violations do not rise to the level of criminal conduct, civil enforcement is often appropriate.  Providing OCPF with the authority to investigate and resolve cases involving campaign finance violations will lead to greater deterrence of inappropriate conduct, allow OCPF to resolve cases quicker to move on to additional investigations and to refer matters to the AG’s Office for criminal investigation when appropriate.

Sharing of Information among OCPF, the State Ethics Commission and the AG’s Office

Currently, there are significant statutorily created investigative “walls” between OCPF and other agencies charged with investigating campaign finance-related violations, including the State Ethics Commission and the AG’s Office. OCPF is often not permitted to notify these other agencies about even basic information such as the mere existence of ongoing investigations and, as a result, they are unable coordinate which office may be the best “lead” agency to conduct initial investigations. It leads to uncertainty about whether individual agencies are looking at particular matters, an inability to effectively coordinate and focus resources on priority cases, and frequent duplication of resources.

Changes to the campaign finance laws should be considered to allow coordination and communication between these three central agencies charged with investigating cases of campaign finance and ethical violations.  

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