For Immediate Release - April 14, 2010

Ethics Commission's Enforcement Division Alleges that Joseph P. Lally, Jr., Violated the Conflict of Interest Law

Allegedly Offered Bribes and Illegal Gratuities to State Employees While Seeking State Business

The Enforcement Division of the State Ethics Commission issued an Order to Show Cause ("OTSC") alleging that Montvale Solutions, LLC ("Montvale") principal Joseph P. Lally, Jr. ("Lally") violated G.L. c. 268A, the conflict of interest law, by offering jobs and/or career assistance to two key state employees while seeking to obtain a multi-million dollar state contract to provide performance management software. The OTSC alleges that by offering jobs and/or career assistance, Lally attempted to bribe and/or offer illegal gratuities to the state employees.

According to the OTSC, in 2007 Cognos Corporation ("Cognos") had a $15 million proposal before the state's Information Technology Division ("ITD") to sell the state a statewide license for Cognos' performance management software. Lally, through Montvale, represented Cognos in dealing with key state employees in connection with this proposal. The state purchased the license from Cognos for $13 million in August 2007. On August 31, 2007, Cognos paid Montvale $2,800,000 as its reseller's commission on the license. In turn, as a Montvale principal, Lally received $1,438,275 of the commission paid by Cognos.

The OTSC states that Lally, while the Cognos license agreement proposal was pending in 2007, contacted then-ITD Chief Operating Officer Stuart Lecky ("Lecky") to offer Lecky a consulting position at Montvale, and also to offer to assist Lecky in obtaining the Chief Information Officer job at the Massachusetts Bay Transportation Authority ("MBTA"). During approximately the same time, Lally also contacted then-Acting ITD Chief Information Officer ("CIO") Bethann Pepoli ("Pepoli") to ask her if she would like to have Lally intercede on her behalf to have then-Speaker Sal DiMasi recommend to the Governor or the Secretary for Administration and Finance that Pepoli receive the permanent CIO appointment. During approximately the same time, Lally also repeatedly offered to hire Pepoli for a job at Montvale. These offers resulted in a July 2007 meeting between Lally and Pepoli where Lally offered Pepoli a specific job at Montvale with an annual salary of approximately $170,000.

Section 2(a) of the conflict of interest law prohibits anyone from, directly or indirectly, corruptly offering, giving or promising anything of value to any state employee with the intent to influence any official act or any act within the official responsibility of such employee.

By corruptly offering a job to Lecky with the intent to influence Lecky in connection with the Cognos proposal and/or the state's procurement process for performance management software, and by corruptly promising assistance to Pepoli in obtaining the permanent ITD CIO position at Montvale and offering her jobs at Montvale with the intent to influence Pepoli in connection with such proposal and/or such procurement process, Lally violated section 2(a), according to the OTSC.

Section 3(a) prohibits anyone, otherwise than as provided by law for the proper discharge of official duty, from directly or indirectly giving, offering or promising anything of substantial value to any state employee for or because of any official act performed or to be performed by such an employee.

By offering Lecky a job at Montvale and assistance in obtaining a job at the MBTA, and by offering Pepoli assistance in obtaining the permanent ITD CIO position and a job at Montvale, for or because of official acts performed and/or to be performed by Lecky and by Pepoli in connection with the Cognos proposal and/or the state's procurement process for performance management software, Lally violated section 3(a), according to the OTSC.

The Commission will schedule a public hearing into this matter within 90 days.