On October 18, 2007, Respondent Michael J. O'Toole filed a motion for summary decision to dismiss all claims made by Petitioner, the Enforcement Division of the State Ethics Commission, in an Order to Show Cause ("OSC") issued and filed on January 19, 2007. Specifically, Respondent seeks the dismissal of the following claims:
1) that Respondent, as the Executive Office of Public Safety ("HOPS") Assistant Secretary and Executive Director of the HOPS programs division in 2003 repeatedly violated section 6 of G.L. c. 268A by participating as executive director of the EOPS programs division in particular matters in which to his knowledge Crest Associates ("Crest") had a financial interest while negotiating for and/or having an arrangement concerning prospective employment with Crest, by authorizing certain payment vouchers and approving certain reports, and
2) that Respondent, as a former state employee, violated G.L. c. 268A, s. 5(a) in or about the summer of 2003 by receiving compensation from Crest regarding writing a quarterly report for a police department in connection with particular matters in which he had participated as the EOPS undersecretary.
Respondent argues that he is entitled to summary decision dismissing all of Petitioner's claims for the following three reasons:
1) Petitioner's claims are barred by the statute of limitations;
2) Respondent's future employer, Crest, did not have a "financial interest" within the meaning of G.L. c. 268A, s. 6(a) in the authorizations and quarterly reports at issue in the OSC; and
3) Respondent did not "participate" within the meaning of G.L. c. 268A in the payments and approvals at issue in the OSC.
In support of his Motion for Summary Decision, Respondent filed a Memorandum on October 18, 2007, and a Reply Memorandum on December 26, 2007. Petitioner filed an opposition to Respondent's motion and a supporting Memorandum on November 21, 2007. Petitioner opposes all of Respondent's three stated bases for summary decision. The parties have filed affidavits and documents in support of their respective positions.
In deciding Respondent's motion for summary decision prior to any hearing on the evidence, the facts in the record are viewed in the light most favorable to Petitioner. Ravinkar v. Bogojavlensky, 438 Mass. 627, 628 (2003). Summary judgment is appropriate only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." Riley v. Presnell, 409 Mass. 239, 244 (1991).
Facts Relating to Respondent's Alleged Violations of G. L. c. 268A
From September 19, 2001 until March 28, 2003, Respondent was the EOPS Assistant Secretary and Executive Director of the EOPS Programs Division. The EOPS Programs Division annually receives millions of dollars for grant programs from the United States Department of Justice. Respondent oversaw grant operations at the EOPS Programs Division.
Crest was, at the time relevant, a Boston-based private firm that assisted cities, towns and regional police organizations in obtaining public safety grants. Crest's principal was Richard St. Louis ("St. Louis"), who was a former EOPS Chief of Staff. During late February and early March, 2003, Respondent negotiated for private employment with Crest. On March 4, 2003, O'Toole accepted a position with Crest and submitted a resignation letter to EOPS, effective March 28, 2003.
After he began employment negotiations with Crest, Respondent, as the EOPS Programs Division Executive Director, signed five vouchers authorizing a total of $1,118,750 in payments to Crest clients (all municipal police departments) and approved thirteen quarterly reports relating to the payments submitted by police departments which were Crest clients. Under EOPS Program Division policy, the payments were contingent on the approval of the reports. All or most of the authorized payments were to reimburse the Crest clients for payments already made to Crest.
After O'Toole left HOPS in late March, 2003 he began working for Crest in or about April, 2003. In or around the summer of 2003, Respondent, as a compensated Crest employee, wrote or assisted in writing a quarterly report for a Crest municipal police department client that related to an EOPS grant in which he had participated as the HOPS Programs Division Executive Director.
Facts Relating to Petitioner's and Public Knowledge of Alleged Violations
According to Petitioner's affidavits, the Petitioner did not learn of Respondent's alleged conduct in violation of G. L, c. 268A until, at the earliest, January 26, 2004 (slightly less than three years before the OSC was issued), when a Boston Globe editorial, focused on former EOPS Secretary James P. Jajuga's actions concerning the disbursement of EOPS grants and Crest, led to an Enforcement Division investigator doing an internet search which turned up various news articles relating to an FBI investigation concerning public safety grants. (Affidavit of Commission Special Investigator Scott Cole and first Affidavit of Commission Special Investigator Brian McWilliams, Petitioner's Exhibits A and B.)
The investigators' affidavits leave unclear exactly when and how Respondent became a subject of a Commission investigation which apparently, at least at first, focused on others. Cole states, "I believe the Respondent was added later, probably when the drafted complaint was reviewed by the Enforcement Division Chief." It is also unclear what conduct by Respondent the investigation concerned when it was first opened. Indeed, the investigators' affidavits indicate that the Enforcement Division only learned of Respondent's alleged violations substantially later than January, 2004. Thus, the Cole Affidavit states that the Enforcement Division, "obtained in or about April 2006, evidence indicating that O'Toole may have participated as an EOPS employee in matters in which Crest had a financial interest after he began negotiating for employment with Crest." The first McWilliams Affidavit states that O'Toole's testimony at an October 25, 2006 deposition was, "the first time that the Enforcement Division became aware that O'Toole had acted as a Crest consultant in a matter directly related to a matter in which he participated as an EOPS employee." A second affidavit by McWilliams (Petitioner's Exhibit D), states the Commission has no record indicating that at any time prior to January 26, 2004, the Commission "was aware of any complaint relating to participation by [Respondent] as executive director for the [EOPS] programs division in matters of financial interest to [Crest] while O'Toole was negotiating for or had an arrangement of [sic] prospective employment with Crest; and/or that O'Toole acted as agent or knowingly received compensation directly or indirectly from [Crest] in connection with a particular matter in which the Commonwealth or EOPS was a party or had a direct and substantial interest, and in which O'Toole participated as a state employee while so employed."
In addition, according to Petitioner's affidavits, the Attorney General and the relevant District Attorneys were also unaware of Petitioner's alleged violations prior to January 26, 2004. (Petitioner's Exhibits E, F, G, H, I, and J).
Respondent's Media Reports
Against Petitioner's affidavits, Respondent has offered copies of more than 20 news stories which appeared in the Boston area news media in late 2003 and early 2004, as proof that Respondent's conduct allegedly in violation of G. L. c. 268A was a matter of "general knowledge in the community" or, at least, discoverable by Petitioner through reasonable inquiry and was, thus, something that Petitioner knew or should have known more than three years before the OSC issued. (Respondent's Exhibits C through U, W through Z, 3 and 4) The news reports, dated between October 30, 2003 and January 20, 2004, generally focus on the state Office of the Chief Medical Examiner ("OCME"), EOPS, public safety grants, including grants to municipal police departments, and Crest.
Although none of the news stories focus primarily on Respondent, eight of them refer to Respondent by name and identify him as a former EOPS employee working for Crest. (Respondent's Exhibits D, E, Q, S, W, X, 3 and 4). Most of these eight reports specifically identify Respondent as a former EOPS Programs Division Executive Director or grants administrator or director or otherwise connect him to the EOPS public safety grants program. An October 30, 2003 Boston Herald article (starting on page 1) stated, "At least two of St. Louis' current associates at Crest are also under federal scrutiny, law enforcement sources said. They are: Michael J. O'Toole, a former chief of staff at public safety... and a former executive director of the Public Safety Office Programs Division..." (Respondent's Exhibit D). An October 31, 2003 Boston Herald article (starting on page 2) stated, "[Crest's] associates include Michael J. O'Toole, also an ex-chief of staff. .." (Respondent's Exhibit E) A December 6, 2003 Boston Globe article (starting on page Al of the Metro/Region section) reported, "Until March, when O'Toole left his job as grants administrator in the [EOPS] to join Crest, he had worked closely with St. Louis, who was submitting grant applications to the state agency on behalf of his clients, state officials said." (Respondent's Exhibit S) A December 23, 2003 Boston Globe article (starting on page Al of the Metro/Region section) concluded with the statement, "Moreover, Michael O'Toole, the previous public safety director of grants, left office in March and now also works for St. Louis." (Respondent's Exhibit W). A December 27, 2003 Boston Globe article (starting on page Al of the Metro/Region section) about Jajuga reported, "Another former public safety official, Michael O'Toole, a longtime grants director at the [EOPS], left office in March and has since joined Crest Associates. ... Jajuga and O'Toole have helped North Andover secure substantial state and federal grant money. In 2002, for example, North Andover was one of only four police departments statewide to receive extra community policing money. All four were clients of Crest Associates. ... While still a state public safety official, O'Toole exercised his discretion to award extra community policing money to Arlington, which received $40,000 more for a total of $80,000; Concord, an extra $40,000 for a total of $63,750; Melrose, an extra $40,000 fora total of $105,000; and North Andover, an extra $30,000 for a total of $123,000 in fiscal year 2002, according to state records," (Respondent's Exhibit X) A January 19, 2004 Boston Globe article reported, "Two other Jajuga aides, Michael O'Toole and Ann Dawley, recently joined Crest, after serving in high-ranking positions at the public safety office." (Respondent's Exhibit 3) Finally, a January 20, 2004 Boston Herald article reported, "Michael O'Toole, a former top official under Jajuga at the [EOPS] who oversaw the grant program, now works at Crest Associates." (Respondent's Exhibit 4).
A. The Statute of Limitations Regulation
Following the case of Nantucket v. Beinecke, 379 Mass. 345 (1979),2 which applied the three-year tort statute of limitations of G.L. c. 260, section 2A and the limitations period-tolling discovery rule to a claim under G.L. c 268A, section 21, the Commission adopted a regulation establishing a three year limitations period and a six year repose period on the Commission's issuance of an order to show cause. The regulation, contained in 930 CMR 1.02(10), states:
(10) Statute of Limitations.
(a) An order to show cause must be issued within three (3) years after a disinterested person learned of the violation.
(b) A respondent must set forth affirmatively a statute of limitations defense.
(c) When a statute of limitations defense has been asserted, the petitioner will have the burden of showing that a disinterested person learned of the violation no more than three (3) years before the order was issued. That burden will be satisfied by:
1. an affidavit from the investigator currently responsible for the case that the Enforcement Division's complaint files have been reviewed and no complaint relating to the violation was received more than three (3) years before the order was issued, and
2. with respect to any violation of M.G.L. c. 268A other than section 23, affidavits from the Department of the Attorney General and the appropriate Office of the District Attorney that, respectively, each office has reviewed its files and no complaint relating to the violation was received more than three (3) years before the order was issued, or
3. with respect to any violation of M.G.L. c. 268A, section 23, an affidavit from the respondent's public agency that the agency has reviewed its files and the agency was not aware of any complaint relating to the violation more than three (3) years before the order was issued.
(d) If the petitioner meets the burden under 930 CMR 1.02(10)(c), the respondent will prevail on the statute of limitations defense only if he/she shows that more than the three (3) years before the order was issued the relevant events were either:
1. a matter of general knowledge in the community, or
2. the subject of a complaint to the Ethics Commission, the Department of the Attorney General, the appropriate Office of the District Attorney, or, with respect to a section 23 violation only, the respondent's public agency.
(e) The running of the three (3) year limitations period set out in 930 CMR 1.02(10)(a), will be tolled during any court ordered stay of the Commission's inquiry or during the pendency of any court proceeding in which the petitioner seeks to enforce a summons pursuant to M.G.L. c. 268B, section 4(c).
(f) In no event should an order to show cause be issued more than six (6) years after the violation.
Thus, rather than applying a fixed three-year limitation period from the date of the alleged conduct in violation of the conflict of interest law, the Commission's statute of limitations regulation incorporates a version of the tort discovery rule, which tolls the running of the limitation period until "a disinterested person learn[s] of the violation." (A "disinterested person" being a person not involved in the commission of the alleged violation.). Under the Commission's regulation, this knowledge of the violation by the disinterested person may be actual or constructive. More specifically, the regulation establishes "general knowledge in the community" as the point at which a disinterested person, including the Commission, will have constructive knowledge of the violations (or, in other words, the point at which the Commission should have known of the violation).
The Commission's use of a three-year tort limitations period and the discovery rule has been upheld in Zora v. State Ethics Commission and LIAM v. State Ethics Commission.3 These court decisions and the Commission's own decisions have indicated that the statute of limitations begins to run when a disinterested person capable of acting on behalf of the Commission to enforce the conflict of interest law knew or should have known of the wrong.4
B. Petitioner Has Met Its Burden under 930 CMR 1.02 (10)(c)
Petitioner has sought to meet its burden under 930 CMR 1.02 (10)(c) (1) and (2) by providing affidavits by an investigator from the Enforcement Division of the State Ethics Commission, an Assistant Attorney General and several Assistant District Attorneys. Petitioner's affidavits do not, however, incorporate the language of sections 1.02 (10)(c)(l) and (2), but instead follow the language of section 1.02 (10)(c)(3), and in other ways fail to conform to the regulation.
Thus, the affidavit of Commission Special Investigator McWilliams (Petitioner's Exhibit D) states "I have caused to be made a diligent search of the State Ethics Commission's record and have found no record indicating that, at any time prior to January 26, 2004, that [sic] the State Ethics Commission was aware of any complaint relating to [Respondent's alleged G.L. c 268A violations] (emphasis added), using the language of section 1.02 (10)(c)(3), instead of section 1.02 (10)(c)(l)'s language "the Enforcement Division's complaint files have been reviewed and no complaint relating to the violation was received more than three (3) years before the order was issued." Similarly, the Assistant Attorney General's affidavit states "I have caused to be made a diligent search of the Attorney General's records and found no record prior to February 1, 2004 indicating that the [Attorney General's Office] was aware of any complaint relating to [Respondent's alleged G.L. c 268A violations] (emphasis added), again using the language of section 1.02 (10)(c)(3), instead of section 1.02 (10)(c)(2)'s language "[the Attorney General's Office] has reviewed its files and no complaint relating to the violation was received more than three (3) years before the order was issued." The several affidavits of the Assistant District Attorneys also incorporate the "was aware of any complaint" language of section 1.02 (10)(c)(3) and, in addition, fail to reference any date or timeframe for the records reviewed.
While Petitioner's affidavits fail to comply with the regulation to varying degrees, the nonconformance of Petitioner's affidavits to the Commission's statute of limitations regulation is not sufficiently significant to warrant the conclusion that Petitioner has failed to meet its burden under the regulation. Accordingly, we find that Petitioner has met its burden under 930 CMR 1.02 (10)(c) (1) and (2).
C. Respondent Has Met His Burden under 930 CMR 1.02 ( 10)(d)
As set forth above, under the Commission's statute of limitation regulation, if Petitioner meets its burden under 930 CMR 1.02 (10)(c), Respondent will prevail on the statute of limitations defense "only if he/she shows that more than the three (3) years before the order to show cause was issued the relevant events were either:
1 . a matter of general knowledge in the community, or
2. the subject of a complaint to the Ethics Commission, the Department of the Attorney General, the appropriate Office of the District Attorney, or, with respect to a section 23 violation only, the respondent's public agency."
Thus, where Petitioner (by submitting the required affidavits) has met its burden under 930 CMR 1.02 (10)(c), the burden of proof shifts to Respondent under 930 CMR 1.02(10)(d).
Respondent Has Shown that the Relevant Events were a matter of General Knowledge in the Community More than Three Years before the OSC Issued
As reviewed above, Respondent depends on a series of more than twenty media reports in late 2003 and early January, 2004 to establish that the relevant events relating to his alleged violations were a matter of general knowledge in the community more than three years prior to the issuance of the OSC. While these reports did not focus specifically on Respondent, they identified him by name, described his former work for EOPS and his then current work for Crest, and placed him in the middle of a controversy and investigation concerning the awarding of public safety grants by EOPS to Crest's clients prior to and after his service as EOPS grants director. While these reports did not describe the specific acts by Respondent which form the basis for the G.L. c. 268A, sections 5 and 6 violations alleged in the OSC,5 and were not inherently inconsistent with Respondent, in fact, not having engaged in any conduct in violation of the conflict of interest law,6 we find that they contained sufficient relevant information about Respondent's conduct which is the subject of the OSC,7 and were widely and prominently enough published, to have made "the relevant events" concerning Respondent's alleged violations "a matter of general knowledge in the community" within the meaning of 930 CMR 1.02 (10)(d), in late December 2003 and early January 2004, more than three years before the OSC issued.
Accordingly, we find that Respondent has met his burden of proof under 930 CMR 1.02 (10)(d).
D. The evidence in the record establishes that Petitioner knew or should have known of Respondent's alleged violations more than three years before the OSC issued
Even if Respondent's evidence of media reports had fallen short of establishing that the relevant events of Respondent's alleged violations were a matter of general knowledge in the community more than three years before the OSC was issued, the existence of those reports would raise the question of whether the Enforcement Division should, as a result, have made inquiry concerning Respondent's conduct and discovered his alleged violations more than three years before it issued the OSC. To the degree that question is raised, we answer it in the affirmative.
In the Matter of James H. Quirk, 1998 SEC 918 (1998), the Commission looked beyond the affidavits submitted under 930 CMR 1.02 (10) to consider the Respondent's argument that there was other "undisputed evidence" in the record "from which to conclude that the Petitioner knew or should have known of the Respondent's alleged violations [more than three years before the OSC issued]." The Commission reasoned that "[t]o determine when the limitations period commenced, we must evaluate the Petitioner's level of knowledge and its duty to inquire further. 'Reasonable notice that a .. .particular act of another person may have been a cause of harm to a plaintiff creates a duty of inquiry and starts the running of the statute of limitations.' (citation omitted). The required level of knowledge is not notice of every fact that must be proved to support a claim, but rather knowledge that an injury has occurred, (citation omitted) The inquiry is whether, based on the information available to the Petitioner, a reasonably prudent person in the Petitioner's position should have discovered the cause of action, (citation omitted). Thus, the cause of action accrues when the Petitioner knew, 'or in the exercise of reasonable diligence, should have known of the factual basis for a cause of action.' (citation omitted) The unknown factor, however, must be what the facts are, not the legal theory for the cause of action.' (citation omitted).'1 In Quirk, the Commission found that the Commission's Executive Director (and thus the Commission), through his review of a municipal counsel opinion concerning the Respondent's actions relating to his violations alleged by Petitioner in an OSC issued more than three years later, knew or should have known of the Commission's "potential causes of action" more than three years before the OSC issued and granted Respondent's motion for summary decision based upon the statute of limitations.
While here, in contrast to Quirk, there is no evidence in the record that the Enforcement Division or the Executive Director in fact read the media reports in question until late January 2004, the information concerning Respondent contained in the widely disseminated media reports was unquestionably available to Petitioner (through those reports) more than three years before the OSC issued. That Petitioner apparently did not read the media reports until late January 2004 does not alter this fact. In addition, while the media reports in question provided a substantially less than complete picture of the relevant events concerning Respondent's alleged violations, we conclude that the reports, if read, should have caused a reasonably prudent Enforcement Division to make inquiries concerning potential violations by Respondent under the circumstances reported in late 2003. As that was more than three years prior to the issuance of the OSC in this matter, the OSC was time-barred under 930 CMR 1.02 (10) and must be dismissed.
In summary, on review of the memoranda of the parties, we find that Respondent has met his burden of proof. Accordingly, Respondent's Motion to for Summary Decision is ALLOWED and the Order to Show Cause is DISMISSED as time-barred. Because we are dismissing this matter on the basis of the statute of limitations, we do not reach Respondent's other two arguments for summary decision.