Docket No. 419
In the Matter of Paul Pezzella
Date: June 27, 1991
This Disposition Agreement (Agreement) is entered into between the State Ethics Commission (Commission) and Paul Pezzella (Mr. Pezzella) pursuant to section 5 of the Commission’s Enforcement Procedures. This Agreement constitutes a consented to final Commission order enforceable in the Superior Court pursuant to G.L. c. 268A, §4(j).
On November 14, 1990, 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 Mr. Pezzella. The Commission has concluded that inquiry. On May 13, 1991, the Commission found reasonable cause to believe that Mr. Pezzella violated G.L. c. 268A, §§4 and 23.
The Commission and Mr. Pezzella now agree to the following facts and conclusions of law:
I. The Violations of G.L. c. 268A, §4(c) and §23(b)(2)
1. On March 1, 1985, Mr. Pezzella was appointed as Governor Dukakis’ Deputy Legislative Director. He served in that position until August 28, 1987, when he resigned to work on the Dukakis presidential campaign. From August 28, 1987 until December 19, 1988, he was not a state employee within the meaning of G.L. c. 268A, §1. He resumed state employment and again became a state employee within the meaning of G.L. c. 268A on December 19, 1988 when he became Governor Dukakis’ Deputy Chief of Staff. In March, 1989 he became Personnel Director. He resigned his position on May 2, 1989.
2. Mr. Pezzella has been a life-long resident and political activist in the City of Worcester. He was a member of the City of Worcester Charter Commission. He is a long-time member of the Worcester Democratic City Committee and has served as its Chairperson for the last six years. While a member of the Governor’s staff he often received requests of Worcester constituents seeking information or assistance with respect to various governmental matters. Mr. Pezzella was generally expected to be, and was, responsive to these requests.
3. Angelo Scola, at all times herein, was a Worcester developer. He did his development business through a company by the name of Scola Development Group.
4. Scola and Mr. Pezzella are friends of longstanding. Their families have been close for many years. Scola and Mr. Pezzella frequently socialize. They exchange gifts on birthdays and at Christmas.
5. On August 15, 1988, the Worcester Redevelopment Authority (WRA) issued a request for proposals for a development plan as to a vacant Worcester parcel known as Lot 35.
6. In September 1988 Scola, through Scola Development Group, submitted a proposal for Lot 35 which contemplated an extensive development costing over $100 million. At or about the same time, four other applicants submitted Lot 35 proposals.
7. On December 7, 1988, Mr. Pezzella and Scola flew to Philadelphia for purposes unrelated to the Lot 35 proposal. While on that trip, at Scola’s request, Mr. Pezzella telephoned WRA member Julie Carrigan and inquired as to her position regarding the Lot 35 development. Mr. Pezzella knew Carrigan through their association in Democratic party politics. He told her that Scola was a friend and that he was calling on Scola’s behalf. He encouraged her to support the Scola Lot 35 proposal. In the course of the conversation, he referred to the fact that Carrigan had been appointed by the Governor. At some point after this telephone conversation, Carrigan called the Worcester Office of Planning and Community Development (OPCD) Director Paul Carey and asked whether she had to vote the way Mr. Pezzella was encouraging her to vote.
8. Shortly after the Philadelphia trip, Mr. Pezzella received an offer to return to government service. As stated above, on December 19, 1988, Mr. Pezzella became Governor Dukakis’ Deputy Chief of Staff.
9. In early January 1989, Mr. Pezzella introduced Scola to an investment banker, Mark Ferber, of Lazard Freres and Co., to discuss possible financing assistance for the Lot 35 project. The introduction took place at a breakfast meeting on January 9, 1989, arranged by Mr. Pezzella. The breakfast was attended by Ferber, Scola and Scola’s financial assistant. Mr. Pezzella made introductions, had a cup of coffee, and departed. He did not participate substantively in the discussion.
10. On or about February 17, 1989, Mr. Pezzella had a second telephone conversation with Carrigan. He asked her if she had made a decision and spoke favorably of Scola. On or about February 21, 1989, Mr. Pezzella had another telephone conversation with Carrigan, to the same effect.
11. On March 2, 1989, the WRA voted 3 to 2 to designate Scola Development Group as the Lot 35 developer. (Carrigan voted for another developer.)
12. On March 3, 1989, Ferber began making inquiries of Brian Carty, Executive Director of the Massachusetts Industrial Finance Agency (MIFA), as to whether MIFA would have any interest in assisting Scola in the financing of the Lot 35 project. Seeking the assistance of MIFA was Ferber’s idea and had not been suggested by or discussed with Mr. Pezzella.
13. On March 23, 1989, Ferber arranged a meeting at the Marriott Long Wharf cocktail lounge to discuss possible MIFA assistance. At Ferber’s invitation the meeting was attended by Carty and Scola. Scola invited Mr. Pezzella and also brought several employees. At the meeting Mr. Pezzella gave input, based on his political expertise, as to how certain issues affecting the Lot 35 project should be resolved. During the meeting Ferber told Mr. Pezzella that he wanted to know if the Dukakis administration was aware of or had any problem with Mr. Pezzella’s involvement in the matter. (By this time Mr. Pezzella had become Personnel Director for the Dukakis Administration). Specifically, he asked Mr. Pezzella to inform the Governor’s Chief of Staff, S. Stephen Rosenfeld, of what was happening.
14. In late March or early April 1989, in a follow up conversation with Ferber, Mr. Pezzella told Ferber that he had spoken with Rosenfeld and that Rosenfeld had no problem with Mr. Pezzella’s involvement. In fact, Mr. Pezzella had not disclosed his involvement in the project to Rosenfeld, and Rosenfeld had not expressed any approval.
15. In late March or early April, 1989, Scola told Mr. Pezzella that Ferber had told him that there would be a delay in MIFA’s preliminary vote. Mr. Pezzella then called Ferber and inquired as to the reason for the delay. Mr. Pezzella told Ferber that Scola was anxious about it.
16. Other than his attendance at the Long Wharf meeting and his conversations with Ferber, as set forth above, the Commission is aware of no evidence indicating that Mr. Pezzella had any other involvement with Scola’s effort to obtain MIFA assistance.
17. On April 6, 1989, the MIFA Board voted preliminary approval for the proposal to issue $86 million in taxable economic development revenue bonds to finance the Lot 35 project, subject to certain conditions.
18. On or about April10, 1989, Mr. Pezzella was contacted by various members of the Governor’s office regarding the drafting of a letter supporting the Lot 35 project. Mr. Pezzella had not suggested or initiated the idea of the letter. However, in response to inquiries, he provided information and spoke favorably of the Scola proposal.
19. Also on Apri110, 1989, Mr. Pezzella took Scola to meet the Worcester legislative delegation in Boston.
20. On April 11, 1989, Governor Dukakis issued a letter supporting the Lot 35 project.
21. General Laws c. 268B, §4(c) prohibits a state employee, otherwise than in the proper discharge of his official duties, from acting as agent or attorney for anyone other than the Commonwealth or a state agency in connection with any particular matter in which the Commonwealth or a state agency is a party or has a direct and substantial interest.
22. The determination as to whether MIFA would support financing for the Lot 35 project was a particular matter in which the Commonwealth, through MIFA, had a direct and substantial interest.
23. Mr. Pezzella acted as an agent for Scola in connection with the foregoing particular matter by his attendance at the March 23, 1989 Long Wharf meeting and in his contacting Ferber in late March 1989 regarding the delay in the MIFA vote.
24. Therefore, by so acting as Scola’s agent in connection with a particular matter in which the Commonwealth had a direct and substantial interest, Mr. Pezzella violated §4(c).
25. Section 23(b)(2) prohibits a state employee from knowingly or with reason to know using or attempting to use his official position to secure for anyone an unwarranted privilege of substantial value not otherwise available to similarly situated people.
26. Mr. Pezzella’s first call to Carrigan on December 7, 1988, in which he referred to the fact that she was a gubernatorial appointee, was not in violation of §23(b)(2) since he was not then a state employee. However, Mr. Pezzella violated that section when he called Carrigan twice more in February 1989. During the second and third call, Mr. Pezzella should have known that, in effect, he was using his position as the Governor’s Deputy Chief of Staff to attempt to secure an unwarranted privilege of substantial value. (Carrigan’s vote in a $100 million proposal would be of substantial value.) By seeking to persuade Carrigan to vote for Scola, he thereby attempted to obtain unwarranted privileges for Scola, since this was not the position of the Dukakis Administration, nor was he authorized to so act by the Administration. Therefore, he was, in effect, using his public position to advance the private interests of his friend, Scola. Moreover, since he knew that Carrigan was a gubernatorial appointee and knew that he had reminded her of this in December in his first call, he should have known that his later calls would have the effect of putting pressure on her to vote for Scola. Therefore, by acting as just described, Mr. Pezzella had reason to know that he was attempting to use his official position to secure an unwarranted privilege of substantial value for another not otherwise available to similarly situated people, thereby violating §23(b)(2).
II. The Violation of G.L. c. 268A, §23(b)(3)
27. Sometime in or about June of 1988, Scola and Mr. Pezzella decided jointly to buy a condominium in Boston. At that time, Mr. Pezzella was traveling outside of the Commonwealth in connection with the presidential campaign. He intended to take up residence in Boston upon his return.
28. In the late summer of 1988, Scola decided not to purchase the condominium with Mr. Pezzella. However, according to Mr. Pezzella and Scola, he informed Mr. Pezzella that he was willing to loan Mr. Pezzella funds for the down payment if Mr. Pezzella chose to purchase a Boston condominium.
29. In early December 1988, Mr. Pezzella decided he wanted to purchase a condominium at 341 Beacon Street (the condominium). He so informed Scola. Scola directed one of his subordinates, Brian Kean, to provide Mr. Pezzella with legal assistance in that purchase.
30. On December 13, 1988, Scola issued a $1,000 check to secure Mr. Pezzella’s written offer on the condominium. The next day, Mr. Pezzella, through Kean, submitted a written offer for $172,000 to purchase the condominium, which offer was secured by the foregoing $1,000 check.
31. On January 18, 1989, Scola issued a $9,000 check to Mr. Pezzella for the remainder of the down payment on the condominium.
32. On January 25, 1989, Mr. Pezzella submitted a mortgage application to the Cambridgeport Savings Bank. Scola issued a Scola Development Group check to pay the $235 fee. In his application, Mr. Pezzella omitted mention of the money received from Scola as an outstanding loan.
33. On February 13, 1989, the Cambridgeport Savings Bank rejected Mr. Pezzella’s mortgage application because the down payment was insufficient.
34. On February 21, 1989, Kean submitted a mortgage application for Mr. Pezzella to First American Bank. (Scola issued another Scola Development Group check to pay the $290 fee on that same date.)
35. On April 12, 1989, Mr. Pezzella, through Kean, notified the seller’s real estate agent that he no longer wanted to buy the condominium.
36. On April 24 ,1989, the condominium seller remitted $6,635.86 back to Scola through Kean. The remainder of the $10,000 down payment was retained by the seller as liquidation damages.
37. Section 23(b)(3) 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.
38. By accepting a $9,000 check from Scola for a condominium purchase down payment, as well as by accepting from Scola $525 in mortgage application fees and the value of free legal services in connection with the condominium purchase, all while making phone calls to Carrigan urging her to support Scola’s designation as the Lot 35 developer and, thereafter, assisting Scola in obtaining MIFA assistance for the Lot 35 project, Mr. Pezzella by his conduct acted in a manner which would cause a reasonable person, having knowledge of the relevant circumstances, to conclude that Scola could improperly influence or unduly enjoy Mr. Pezzella’s favor in the performance of his official duties, thereby violating §23(b)(3).
In the Commission’s view, these facts cannot help but create the appearance that Mr. Pezzella was using his official influence to assist Scola. This appearance problem is further underscored by the facts that there was no document evidencing the $10,000 as a loan, the $10,000 was not identified as a loan on Mr. Pezzella’s Cambridgeport Savings Bank mortgage application, the $525 in application fees and the legal assistance appear to have been outright gifts, and Mr. Pezzella did not disclose to Rosenfeld his involvement in the effort to obtain financing for Scola and, indeed, told Ferber that he had disclosed to Rosenfeld and obtained approval (for his involvement) when he had not.
Based on the foregoing, the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings on the basis of the following terms agreed to by Mr. Pezzella:
1. that he pay to the Commission the amount of $2,000.00 as a civil penalty for his violation of G.L. c. 268A, §4(c);
2. that he pay a $1,000.00 civil penalty for his violating §23(b)(2) in connection with his two phone calls to Carrigan;
3. that he pay a $2,000.00 civil penalty for his violating §23(b)(3) by creating an appearance that he was using his official influence to assist Scola; and
4. that he waive all rights to contest the findings of fact, conclusions of law and terms and conditions under this Agreement in this or any related administrative or judicial proceeding in which the Commission is or may be a party.