For Immediate Release - December 24, 2008

Former State Undersecretary for Business Development Robert Coughlin Fined $10,000 for Violating the Conflict of Interest Law

The Ethics Commission approved a Disposition Agreement on December 19, 2008, in which former state Undersecretary for Business Development ("Undersecretary") Robert Coughlin admitted to violating § 23(b)(3) of G.L. c. 268A, the Conflict of Interest Law, by repeatedly participating officially as Undersecretary in matters of interest to the Massachusetts Biotechnology Council ("MBC") after Coughlin had applied for the position of MBC President. Coughlin paid a $10,000 civil penalty.

According to the Disposition Agreement, Coughlin was Undersecretary for Business Development within the Executive Office of Housing and Economic Development ("EOHED") from late January 2007 until August 31, 2007. Coughlin's duties included encouraging companies to stay or expand in, or move to, Massachusetts. Coughlin supervised six departments, including the Massachusetts Office of Business Development ("MOBD"). MOBD assisted Massachusetts companies and companies considering relocating to Massachusetts in obtaining grants and loans from various state agencies, and in dealing with permitting issues at the state and local levels. MOBD's Division of Life Sciences specialized in providing these services to the life sciences industry.

The MBC is an association of more than 550 dues-paying members, including biotechnology companies, academic institutions and others involved in the biotechnology industry. The MBC lobbies the legislative or executive branch of government on issues of importance to its members. During Coughlin's tenure as EOHED Undersecretary, MOBD was integrally involved in developing the $1 billion Life Sciences Initiative ("LSI"), an issue of major importance to the MBC. The LSI was announced by the Governor on May 8, 2007, and life sciences legislation was filed on July 19, 2007.

On January 9, 2007, the MBC presidency became vacant. The MBC formed a Search Committee to find a new president. The Search Committee was assisted by MBC senior staff and a recruiting firm. Coughlin indicated to MBC senior staff that he was interested in being considered for the MBC presidency, and on April 1, 2007, Coughlin e-mailed his résumé to an MBC senior staff person, with the understanding it would be passed on to the Search Committee. On several occasions thereafter, including during interviews with the Search Committee and recruiter, Coughlin communicated his interest in the MBC president's position. Coughlin was informed that he would be formally interviewed by the Search Committee on July 31, 2007.

In mid-July, 2007, after consulting with private legal counsel, Coughlin orally advised the Governor's staff of his scheduled MBC interview, and on July 24, 2007, Coughlin filed two disclosure forms with the Governor and the State Ethics Commission. The Search Committee interviewed Coughlin and three other finalists on July 31, 2007. In early August 2007, the Search Committee offered the position to Coughlin, and he accepted the offer on August 10, 2007. Coughlin began his MBC job on September 4, 2007, at an annual salary of $350,000.

According to the Disposition Agreement, during the period that Coughlin was an applicant for the MBC presidency, Coughlin, in his capacity as Undersecretary, met with:

  • MBC senior staff on a regular basis to discuss matters of interest to the MBC or its members;
  • the Governor and MBC representatives regarding the LSI;
  • EOHED staff, MBC employees and MBC-member company representatives to formulate tax proposals for the LSI;
  • senior management of MBC-member company Cubist Pharmaceuticals ("Cubist") to discuss Cubist's proposals for the tax component of the LSI; and
  • GTC Biotherapeutics ("GTC") representatives to discuss GTC's interest in applying for financial and other support from EOHED at a time when GTC's CEO was a member of both the MBC Executive Committee and the MBC Search Committee.

Section 23(b)(3) of G.L. c. 268A, in relevant part, 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. The section further provides that it shall be unreasonable to so conclude if such state employee has disclosed in writing to his appointing authority the facts which would otherwise lead to such a conclusion.

As stated in the Disposition Agreement, "[b]y submitting his résumé for the MBC presidency on April 1, 2007, and subsequently repeatedly acting in his official capacity as EOHED Undersecretary in matters in which the MBC had a significant interest, [and] by subsequently acting in his official capacity as EOHED Undersecretary in meeting with a senior official of an MBC-member company regarding that company's interests before the EOHED, while that official was on the MBC Presidency Search Committee, Coughlin 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 MBC could unduly enjoy his favor in the performance of his official duties. In so acting, Coughlin repeatedly violated § 23(b)(3)." Coughlin failed to make a timely written disclosure of the relevant facts to the Governor, his appointing authority. Coughlin's disclosures were filed on July 24, 2007, after he had repeatedly acted in his official capacity as just described above, and well after April 1, 2007, the date on which he had submitted his résumé to the MBC for consideration.

"After Coughlin submitted his resume in April, his official actions taken in connection with the MBC and its members raised numerous appearances of conflicts of interest," said Executive Director Karen L. Nober. "The penalty reflects the seriousness of those violations."

Disposition Agreement