Documents show that Big Dig officials knew about large cost overruns long before they submitted to Wall Street inaccurate bond disclosure documents now under investigation by the Securities and Exchange Commission (SEC).2 This is contrary to what Big Dig officials told Congress, the State Legislature, and regulatory agencies. Big Dig officials continue to represent that they did not begin to sense budget problems until late 1999 and did not verify the problem until after a so-called bottom-to-top review that concluded in early 2000. Documents refute this official explanation offered by Big Dig officials and the administration to justify their failure to disclose the overrun in bond disclosure documents published in December 1999.

Records show that on December 2, 1999 the Turnpike's top outside bond counsel/strategist sent a fax to a Big Dig official specifically identifying 12 components of a $1.35 billion budget overrun with the written warning: "these are hard figures, not worst case #s [numbers]." The attorney sent this fax following a day of meetings with top Big Dig officials, and on the night before the Governor and the Secretary for Administration and Finance met with key Wall Street bond analysts to establish the Commonwealth's bond rating for the upcoming bond sale. A detailed analysis dated November 28, 1999 by B/PB staff included the exact components of the $1.35 billion overrun later described by the Turnpike's outside counsel in his fax.

Records show that before this same December 1999 bond issuance, Big Dig officials weighed the "pros" and "cons" of disclosing the overrun to the State Treasurer or waiting until December 2001. Based on consideration of many explicitly described factors in their pro/con analysis -- marked "Confidential" -- Big Dig officials opted not to disclose the overrun at that time. Factors cited in the pro/con analysis included political considerations, the negative reaction of the State Legislature, and avoidance of "brutal press scrutiny." The pro/con analysis also explicitly acknowledged the fiduciary obligation of Big Dig officials to make disclosure under bond disclosure rules.

Records also indicate that Big Dig officials and the administration knew about large cost overruns before they submitted inaccurate bond disclosure documents for bond issues between 1996 and 1999, and not just the one in 1999 currently under SEC investigation.