State suspends former speaker DiMasi’s retirement checks

Andrea Estes

The State Retirement Board suspended pension payments yesterday to former House Speaker Salvatore F. DiMasi while he awaits trial on federal corruption charges.

DiMasi’s lawyer, Thomas Kiley, called the board’s action unlawful and vowed to go to court as soon as possible to get the decision reversed.

The board voted in executive session to withhold DiMasi’s $5,000-a-month pension, though the criminal case against DiMasi has yet to be heard by a federal jury.

The suspension will take effect Sunday, though the Retirement Board had been withholding payments since June. According to state treasurer Timothy P. Cahill, who oversees the retirement system and is the board’s chairman, DiMasi will receive $25,000 to make up for the previously withheld checks.

Cahill said the board decided to award him the money retroactively after concluding that it had been premature to suspend DiMasi’s pension before yesterday’s full board vote.

Cahill said the board treated DiMasi no differently than anyone else. He said public retirees will lose their pensions if they are either charged with misappropriating funds or convicted of crimes related to their job.

“We’re not taking away anyone’s legal rights,’’ Cahill said. “We’re not overstepping our bounds because the person in this case is a high-profile person. At the same time, were not shying away from doing our duty because the person is a high-profile person and can afford very good attorneys.’’

“It should give people confidence that we’re doing our job,’’ Cahill added.

But Kiley contended that the board has no right to take away DiMasi’s pension without a full hearing where he could question witnesses. DiMasi requested such a hearing, and Cahill agreed. But in late June federal prosecutors asked him to hold off, saying the pension proceedings could harm the federal prosecution.

“With this principle in mind,’’ acting US Attorney Michael Loucks wrote in a June 24 letter, “I am requesting that you defer board proceedings until the conclusion of the criminal case.’’

“My position is clear,’’ Kiley said yesterday. “They don’t have any authority whatsoever to suspend without giving us a full evidentiary hearing. We will pursue whatever remedies are available to us.’’

DiMasi, who resigned in January and started collecting a pension shortly thereafter, did not attend yesterday’s closed-door hearing. He had 33 years of service in government.

The Retirement Board halted the payments to DiMasi in mid-June, just days after he and three associates were indicted by a federal grand jury on corruption charges. He is accused of pocketing $57,000 that a Burlington software firm, Cognos, allegedly funneled to him through an intermediary. In turn, federal prosecutors allege, DiMasi helped the company win multimillion-dollar state contracts.

In a superseding indictment handed down earlier this month, DiMasi was also charged with being a secret partner in a real estate management company that operated the state transportation building and bid on contracts to manage several other government buildings. The new indictment also added a count of extortion to the previous charges, which included conspiracy and honest services fraud.

After Cahill ordered DiMasi’s pension payments stopped in June, critics questioned whether Cahill had political motives for resorting to a punishment typically reserved for officials who have already been convicted of crimes. At the time, Cahill was contemplating a run for governor. He has since announced that he will run as an independent candidate in next year’s election.

Yesterday Cahill denied that politics was a factor.

“It’s bad for the system that someone’s been charged with what the speaker is charged with doing,’’ Cahill said. “I can’t control the timing of that. That is what it is. I have a job to do, regardless of what I’m hoping to do in the future.’’

Cahill said his approach in the case demonstrates that he will “treat everybody the same, regardless of their stature in life or who they’re connected to or who their private attorney is.’’

If DiMasi is acquitted, he would be reimbursed for all payments that have been withheld.