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Settlement In the Matter of John Dunnet

Date: 08/01/2012
Organization: State Ethics Commission
Docket Number: 12-0009

Table of Contents

Disposition Agreement

The State Ethics Commission (“Commission”) and John Dunnet (“Dunnet”) enter into this Disposition Agreement pursuant to Section 5 of the Commission’s Enforcement Procedures.  This Agreement constitutes a consented-to final order enforceable in the Superior Court, pursuant to G.L. c. 268B, § 4(j). 

On November 19, 2010, 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 Dunnet.  The Commission has concluded its inquiry and, on March 16, 2012, found reasonable cause to believe that Dunnet violated G.L. c. 268A.

The Commission and Dunnet now agree to the following findings of fact and conclusions of law:

Findings of Fact

1.  Dunnet was a salesman for CBE Holdings, LLC (“CBE”) from January 1991 until August 2009.

2.  CBE was a computer reseller that derived much of its income from sales to state and local governments.[1]  

3.  Dunnet’s biggest clients included Massachusetts government agencies.  Dunnet, like other CBE sales people, was paid on commission, earning between 18-25%  of the gross profit on each sale.

4.  One of Dunnet’s state clients was the then-Executive Office of Transportation’s (“EOT”)[2]  Information Technology Division (“ITD”).  At the time, ITD had an annual budget of approximately $20 million, approximately half of which was allocated to ITD's operations unit.

5.  During the relevant period, Dunnet’s contact at EOT was the Director of Information Technology Operations (the “IT Director”).[3]   The IT Director was responsible for soliciting bids, reviewing requests for proposals, and making purchasing recommendations to the ITD Chief Information Officer ("CIO").  The CIO relied heavily on the recommendations of the IT Director.

6.  According to Dunnet, he and the IT Director had a business lunch together about twice a month.  Dunnet and the IT Director did not have any significant social relationship.

7.  From October 2006 through December 2007, on 32 occasions (about two times a month), Dunnet wrote a check from his personal bank account for approximately $4,500 to the IT Director.  The IT Director cashed each of these checks.  In total, Dunnet gave the IT Director $142,500.

8.  During the period Dunnet issued the checks to the IT Director, Dunnet, in his capacity as a CBE salesman, was seeking to have two large EOT contracts awarded to CBE.  The first was a statewide telephony systems contract, the first phase of which was worth approximately $2 million.  EOT began an internal review of its needs in the late summer 2006 and issued an initial request for bids in December 2006.  EOT subsequently revised its requirements.  CBE submitted its bid in October 2007.[4]  The second contract, referred to as the “thin client project,” was worth around $384,000.  On September 27, 2007, CBE, on behalf of itself and a hardware vendor, submitted a quote to EOT for the thin client contract.  On December 19, 2007, the IT Director, on behalf of EOT, signed an "acceptance of quotes and notice to proceed" awarding the thin client project contract to CBE and the hardware vendor.

9.  The IT Director was significantly involved in the award process for both the telephony systems and thin client project contracts, including making  recommendations.

10.  Dunnet gave the above-described payments to the IT Director in an effort to obtain favorable treatment for CBE regarding the two EOT contracts.

11.  The IT Director has since died.

12.  According to CBE senior managers and Dunnet, no one at CBE was aware that Dunnet had given the IT Director money until after the IT Director’s death.

13.  EOT was not aware that Dunnet had given the IT Director money.

Conclusions of Law

14.  General Laws chapter 268A, §3(a) prohibits anyone, otherwise than as provided by law for the proper discharge of official duty, from directly or indirectly giving anything of substantial value to any state employee for or because of any official act performed or to be performed by such an employee.

15.  The IT Director was a state employee.

16.  Dunnet gave the IT Director on 32 occasions checks in the amount of approximately $4,500 each, which totaled $142,500.

17.  Dunnet’s actions in giving $142,500 to the IT Director were not as provided by law for the proper discharge of official duty.

18.  Each check of approximately $4,500 was of substantial value. [5] 

19.  On each occasion that Dunnet gave such a check to the IT Director, Dunnet gave the check to influence the IT Director regarding the contracts CBE was seeking to be awarded by EOT.

20.  The IT Director’s favorable treatment of CBE regarding EOT contracts would have involved official acts to be performed by the IT Director.  

21.  Therefore, Dunnet repeatedly violated § 3(a), by, as described above, otherwise than as provided by law for the proper discharge of official duty, on 32 occasions, giving something of substantial value to a state employee for or because of official acts performed or to be performed by such an employee.

In view of the foregoing violations of G.L. c. 268A by Dunnet, the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings, based on the following terms and conditions agreed to by Dunnet:

  1. that Dunnet pay to the Commonwealth of Massachusetts, with such payment to be delivered to the Commission, the sum of $35,000 as a civil penalty for repeatedly violating G.L. c. 268A, § 3; and
  2. that Dunnet waive all rights to contest, in this or any other administrative or judicial proceeding to which the Commission is or may be a party, the findings of fact, conclusions of law and terms and conditions contained in this Agreement.

[1] During the relevant time period, Dunnet worked for CBE Holdings, LLC.  In April 2008, the assets of the government contracting division of CBE Holdings, LLC were acquired by Gores Private Equity and renamed CBE Technologies, LLC.

[2]  EOT is now the Department of Transportation.

[3] The IT Director is not being identified as he has since died.

[4] EOT notified vendors in February 2008 that it was cancelling the telephony systems procurement.

[5] The Commission has established a $50 threshold to determine “substantial value.”  930 CMR 5.05.