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Brian McGrory

The benefits of political friendship

Try as I might to leave this Liberty Mutual lunacy behind - the $50 million annual pay packages, the fleet of five corporate jets, the rampant conflicts on the board of directors, the $4.5 million renovation to the chief executive’s suite - someone keeps drawing me back, and that someone is Deval Patrick.

I can’t get a remark of the governor’s out of my head. The Globe had revealed that recently retired chief executive Ted Kelly made nearly $200 million over the past four years, that company planes constantly flew to airports near Kelly’s vacation homes, and that the top nine executives at Liberty Mutual were paid $108 million in 2010.


Please keep in mind, Liberty Mutual is owned by its policyholders, hardworking everyday people who are thanked for their patronage, not with dividends, but with a stream of rate hikes.

So what did Patrick tell the radio interviewer who sought his insight? “I want to be clear,’’ Patrick said, “Ted Kelly is a friend of mine.’’

This I can’t get out of my head. This does not make sense. Maybe it’s understandable that our supposedly populist governor, the one who preaches a soft sermon of togetherness and hope, became fast friends with the chief executive of a major Boston-based company that employs thousands of people. But how does this friendship flourish amid these revelations of absurd excess? How does it persevere while pay inequity is driving our economy off a cliff?

For answers to these questions, I turned to the Office of Campaign and Political Finance, and the documents offered an interesting take. They showed that the two had no relationship when Patrick first ran for governor in 2006, that Kelly didn’t give Patrick so much as a dime in contributions. Patrick, in fact, received just $4,400 in campaign contributions from Liberty Mutual employees, less than one-fourth as much as his Republican opponent, Kerry Healey.


But a funny thing happened in 2007. Patrick was inaugurated as the state’s new governor, and there was Ted Kelly with his first $500 contribution, the legal maximum, followed by $500 more each of the next three years. More to the point, by the time Patrick defeated Republican Charlie Baker in November 2010, the incumbent governor had raised $60,660 from Liberty Mutual employees. Suddenly, they saw the light.

In contrast, Baker, an insurance executive, received a total of $6,600 from Liberty Mutual employees. Power has a way of attracting money, just as money has a way of attracting power.

These proved eventful years for Liberty Mutual. The state introduced the concept of “managed competition’’ in auto insurance in 2007, a process in which, by Patrick’s own recent account, Kelly was “very helpful to us.’’ I bet he was. Then in 2010, the state handed Liberty Mutual a $22.5 million tax break to build its new headquarters in Boston, and Patrick administration officials helped facilitate another $20 million plus in breaks from the city of Boston.

Seems like Patrick and Kelly aren’t just friends, but friends with (political) benefits.

The Deval Patrick I know is much better than the Deval Patrick we’re seeing here. Seems like the future he’s most concerned with is his own.

Meantime, into this leadership void, a trio of state senators have finally stepped in - Pat Jehlen, Mark Montigny, and Brian A. Joyce. They have filed three amendments to the state budget designed to require more disclosure by mutual companies, outline conflict-of-interest rules on the boards of directors, and give policyholders a greater say on executive compensation.


They are modest proposals that make endless sense, meaning an army of lobbyists will do everything in its power to kill them. If you see a fleet of Gulfstreams flying low over Beacon Hill this week, run for cover. You had to know Liberty Mutual wasn’t building up its air force just to fly to Vero Beach.

Brian McGrory is a Globe columnist. He can be reached at mcgrory@globe.com.