December 10, 2009

 

DISPOSITION AGREEMENT

 

The State Ethics Commission and Bethann Pepoli enter into this Disposition Agreement pursuant to Section 5 of the Commission's Enforcement Procedures. This Agreement constitutes a consented-to final order enforceable in the Superior Court, pursuant to G.L. c. 268B, § 4(j).


On November 21, 2008, the Commission initiated, pursuant to G.L. c. 268B, § 4(a), a preliminary inquiry into possible violations of the conflict of interest law, G.L. c. 268A, by Pepoli. The Commission has concluded its inquiry and, on September 19, 2009, found reasonable cause to believe that Pepoli violated G.L. c. 268A, § 23.
 

The Commission and Pepoli now agree to the following findings of fact and conclusions of law:
 


Findings of Fact


1. The New England-Canada Business Council ("NECBC") is a private non-profit organization that was created in 1981 to foster business, political and cultural relationships between Canada and New England.
 

2. From January 2006 to the present, Pepoli has been an NECBC Board of Directors member.

3. The Commonwealth of Massachusetts Information Technology Division ("ITD") is a state agency with the Executive Office for Administration and Finance ("A&F").
 

4. From November 2006 to September 2007, Pepoli was the ITD Acting Chief Information Officer ("ACIO").
 

5. Cognos Corporation ("Cognos") was at all times relevant herein a corporation with offices in Burlington, Massachusetts. Among other products, Cognos sold business performance management software.
 

6. On March 22, 2007, the Massachusetts Legislature authorized $15 million in funding for performance management software purchases by the state.
 

7. Shortly thereafter, Pepoli, in her capacity as ACIO, began meeting with Cognos representatives regarding their proposal that ITD spend the entire $15 million on a licensing agreement to be purchased from Cognos through the so-called state blanket contract, which would avoid having to put the purchase out to bid.
 

8. In late April, 2007, ITD issued a request for quotes ("RFQ") regarding the performance management software purchase.
 

9. In late April/early May 2007, Pepoli selected a procurement management team ("PMT") to evaluate the responses.
 

10. Shortly thereafter, four vendors, including Cognos, submitted responses to the RFQ.
 

11. The RFQ process contemplated that the PMT would make a recommendation to Pepoli, and she in turn would make a recommendation to her superiors at the Executive Office of Administration and Finance ("A&F").

12. On May 14, 2007, Pepoli e-mailed Cognos' Eastern Regional Manager for Government and Education asking if he and/or Cognos would be interested in sponsoring the annual NECBC golf outing and/or playing in it. An attached brochure indicated that the event was going to be held in Sharon, Massachusetts on June 4, 2007, and sponsorship would cost $1300.
 

13. Shortly thereafter, but before May 18, 2007, a Cognos representative informed Pepoli that Cognos would be an NECBC tournament sponsor.
 

14. On or about May 18, 2007, the PMT recommended that either the procurement process be started over so that more information would be obtained, or that only a small pilot program be awarded, which would be split between Cognos and another bidder.
 

15. Notwithstanding the PMT's recommendation, shortly thereafter, Pepoli recommended to her superiors at A&F that Cognos' bid be accepted.
 

16. Thereafter, but before June 4, 2007, Cognos made the $1300 contribution to the NECBC.
 

17. In late August 2007, A&F awarded the software contract in the amount of $13 million to Cognos.

 

Conclusions of Law


18. As the ITD ACIO, Pepoli was at all times relevant to this matter a state employee as defined in G.L. c. 268A, § 1.


 

Section 23(b)(2)

19. Section 23(b)(2) of G.L. c. 268A prohibits a state employee from, knowingly, or with reason to know, using or attempting to use his official position to secure for himself or others unwarranted privileges or exemptions which are of substantial value and which are not properly available to similarly situated individuals.[1]  

 

20. The $1300 sponsorship was a benefit to NECBC, and as such a privilege.
 

21. By soliciting this sponsorship from Cognos while Pepoli was in a key position to recommend whether Cognos would receive the performance management software contract, Pepoli knew that she was using her official position to influence Cognos to make this $1300 donation.
 

22. Where Pepoli used her state position to obtain the $1300 sponsorship, the donation was an unwarranted privilege.
 

23. This privilege was of substantial value because it was of $50 or more.
 

24. This privilege was not properly available to similarly situated individuals.
 

25. Therefore, by using her official position as the ITD Acting CIO to induce Cognos to make the $1300 donation to a private party, Pepoli knowingly used her official position to obtain an unwarranted privilege of substantial value not properly available to other similarly situated individuals in violation of § 23(b)(2).

 

Section 23(b)(3)

 

26. Section 23(b)(3) of G.L. c. 268A prohibits a state employee from, knowingly, or with reason to know, acting in a manner which would cause a reasonable person, having knowledge of the relevant circumstances, to conclude that any person can improperly influence or unduly enjoy his favor in the performance of his official duties, or that he is likely to act or fail to act as a result of kinship, rank, position or undue influence of any party or person. It shall be unreasonable to so conclude if such officer or employee has disclosed in writing to his appointing authority or, if no appointing authority exists, discloses in a manner which is public in nature, the facts which would otherwise lead to such a conclusion.
 

27. By, shortly after May 18, 2007, recommending to A&F that Cognos' bid be accepted, after Pepoli had recently secured a $1300 donation from Cognos to the NECBC, a private organization on whose board of directors she sat, Pepoli knowingly or with reason to know, acted in a manner which would cause a reasonable person, having knowledge of all the relevant circumstances, to conclude that the Cognos could unduly enjoy her favor in the performance of his official duties. Pepoli did not file any § 23(b)(3) disclosure to dispel this appearance of impropriety. Therefore, in so acting, Pepoli violated § 23(b)(3).

 

In view of the foregoing violations of G.L. c. 268A by Pepoli, the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings, based on the following terms and conditions agreed to by Pepoli:

 

(1) that Pepoli pay to the Commission the sum of $3,000 as a civil penalty for violating G.L. c. 268A, §§ 23(b)(2) and (3); and

(2) that Pepoli waive all rights to contest, in this or any other administrative or judicial proceeding to which the Commission is or may be a party, the findings of fact, conclusions of law and terms and conditions contained in this Agreement.

 

STATE ETHICS COMMISSION

 

 

    //signed//                         11/19/09     
Bethann Pepoli                     Date 

 

    //signed//                         12/10/09    
Karen L. Nober                     Date
Executive Director

 

 

I, Bethann Pepoli, have personally read the above Disposition Agreement. I understand that it is a public document and that by signing it, I will have agreed to all of the terms and conditions therein including payment of $3,000 to the State Ethics Commission.
 

    //signed//                          11/19/09    
Bethann Pepoli                         Date



 

[1] G.L.c. 268A was amended by c.20 of the Acts of 2009. The language of § 23(b)(2) now appears in § 23(b)(2)(i) of the G.L.c. 268A as amended.