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Martha Coakley rebuilt her name, raising questions among critics

John Blanding/Globe Staff

Martha Coakley delivered the concession speech to her Senate run in January 2010.

By David Scharfenberg Globe Staff 

Attorney General Martha Coakley sat in a conference room in her 20th-floor offices, the golden dome of the State House gleaming below.

It had been just two days since Republican Scott Brown had dealt her a humiliating defeat in their US Senate tilt. But Coakley’s lip was stiff. There would be no wallowing, she made clear to a roomful of top lieutenants. The attorney general was getting back to work.

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Coakley’s aides still speak of that day in January 2010 with a touch of reverence. For a figure who famously struggles with the pomp of politics, though, work has always been a refuge. And a source of strength.

It brought her to the precipice of the United States Senate. And after the loss, it would repair her battered reputation.

Over the last four years, Coakley has solidified her stature as a national leader on the foreclosure crisis, won major settlements with pharmaceutical companies that engaged in Medicaid fraud, and helped push a tough domestic violence bill through the state Legislature.

Now, she is counting on that record to deliver redemption: a victory over Republican Charlie Baker in the governor’s race.

Still, a job that has thrust Coakley into some of the most contentious issues of the time has left her open to criticism. On her handling of public corruption. On her approach to spiraling health care costs.

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Detractors say the attorney general, though accomplished, has not measured up to some of her toughest challenges — at times shrinking from them with a curious caution and at others overreaching with a too-zealous prosecution.

It’s a tough critique. But one, her supporters insist, that fundamentally misconstrues her tenure.

‘I almost started to cry’

The modern attorney general’s office, by most accounts, dates back to Francis X. Bellotti.

After he took office in 1975, he quickly moved to professionalize the place. He required all his lawyers to work full-time for the state, built the office’s first law library, and styled himself a people’s lawyer, crusading for consumer rights and clean water.

Bellotti’s successors, from James Shannon to Scott Harshbarger and Thomas F. Reilly, did the same. And Coakley is squarely in that tradition, her signature accomplishments a sort of progressive prescription for the ills of early 21st-century America.

She has cracked down on for-profit colleges. Gone after unscrupulous health insurers. And she filed an early challenge to the constitutionality of the Defense of Marriage Act, which forbade federal recognition of same-sex marriage.

But Coakley is best known, perhaps, for wrangling some $900 million in settlements from the lenders and investment banks that fueled the subprime mortgage crisis — Goldman Sachs, Morgan Stanley, and Countrywide, among them.

Bruce Marks, chief executive of the Neighborhood Assistance Corporation of America, a Boston-based affordable housing advocacy group with offices in about 40 cities, has spent years sorting through the wreckage of that crisis. And he’s sharply critical of how some politicians have handled it.

But in a recent interview at the group’s Jamaica Plain offices, Marks, clad in a black, collared shirt that blared “Financial Predators Beware” in bright yellow lettering, said Coakley’s record on the foreclosure crisis is unmatched.

“Out of all the attorney generals in the country,” Marks said, “she’s been the most effective in addressing predatory lending.”

Money from the state and national settlements she helped negotiate has gone toward loan modifications for distressed homeowners or modest payments for those who had already lost their houses. And Coakley’s HomeCorps program, established with the proceeds of one of the agreements, has offered assistance to homeowners doing battle with their banks.

In all, more than 40,000 Massachusettshomeowners have received some form of aid — including Kate Reynolds, a teacher who lives in Rowley.

Reynolds said her family fell behind on house payments after her husband, a self-employed arborist, was paralyzed from the chest down on the job. After 18 months of fighting for a restructured loan, all the while tending to her husband, Reynolds resolved the matter with the help of HomeCorps in 10 days.

“I almost started to cry,” said Reynolds, who has appeared in an Internet video on Coakley’s behalf.

But the settlements, often construed as unqualified wins, have their critics.

Gary Klein, a Boston lawyer who once worked for the National Consumer Law Center, said they do little to curb the bad behavior of the banks and offer only modest relief to those hardest hit by the mortgage meltdown.

Coakley, he said, gets credit for directing more of the proceeds of the flawed agreements to real homeowners than any attorney general in the country. But ultimately, he argued, she could only partially ameliorate a devastating crisis.

“It was a freight train headed in the wrong direction,” he said, “and she probably brought it back halfway to where it needs to be.”

‘Lessons learned?’

Coakley faces a stiffer critique for her handling of public corruption.

Critics note that the marquee cases of recent years — state Senator Dianne Wilkerson stuffing a cash bribe into her bra, House Speaker Salvatore F. DiMasi steering lucrative state contracts to a software company in exchange for kickbacks, Probation Commissioner John J. O’Brien overseeing a rigged hiring scheme — were all handled by federal prosecutors.

“To change the culture on Beacon Hill, you’ve got to really lead the way,” said James McKenna, a Republican lawyer who ran against Coakley in 2010.

But ceding the stage to the US attorney, Coakley’s supporters say, is no sign of timidity. The federal government has broader investigative and prosecutorial powers than the state. And bowing to that reality, they argue, means acting in the interests of justice.

The federal government, they hasten to add, has long played the lead role in rooting out corruption. It was the FBI that investigated William Bulger, former Senate president, on accusations of influence-peddling and extortion in the so-called 75 State Street affair (he was cleared). And it was the US attorney’s office that got Thomas Finneran, former House speaker, to plead guilty to obstruction of justice.

But critics say a state-level official can do plenty. And they point, as a model, to Gregory Sullivan, former inspector general, whose investigative work played a central role in the spectacular fall of DiMasi, the once-powerful speaker now serving an eight-year sentence in federal prison.

In October 2008, Sullivan published a letter revealing that software firm Cognos had distributed $1.8 million in secret payments to the speaker’s closest friends and business associates during a successful push for lucrative state contracts.

The findings, splashed across the front page of the Globe, jolted Beacon Hill. And Sullivan says Coakley summoned him to her office shortly thereafter. Hewas stunned, he said, by what he heard.

The former inspector general, in his first public comments on the encounter, said Coakley told him she had been looking into the matter and saw no evidence that the players had crossed a “bright line” into criminality.

She asked him to stop his investigation, Sullivan recalled, and suggested she might produce a report on “lessons learned” from the affair, loosely modeled on a report her predecessor had put together on the Catholic Church sex abuse scandal.

“My takeaway,” said Sullivan, in a recent interview, “was that they were not anxious to go prosecuting the speaker of the House.”

After returning to his office from the meeting, Sullivan said, he immediately told the story to his top-echelon staff. Several, including his then-first assistant Richard Finocchio, independently recalled his account from the time. “They were going to do a ‘lessons learned,’ ” Finocchio said. “I remember that, because I remember saying, what the [expletive] is a ‘lessons learned?’ ”

Coakley’s campaign acknowledges that she and three top aides met with Sullivan on Oct. 20, 2008. But the aides present at the meeting sharply dispute Sullivan’s version of events. “She never said ‘I’d like you to stop investigating,’ ” said David Friedman, who was then Coakley’s top deputy. “None of us ever said that.”

Coakley’s camp also provided internal e-mails and documents suggesting some interest in the Cognos matter before and after the meeting, though it was the federal government that ultimately took charge of the case. Aides add that Coakley prosecuted one member of DiMasi’s inner circle, charging his accountant Richard Vitale with failing to register as a lobbyist even as he lobbied the speaker and other lawmakers on a matter unrelated to Cognos. Vitale got two years’ probation and a $92,000 fine.

“It’s absurd and laughable to criticize the attorney general as soft on public corruption when she prosecuted many members of her own party, not to mention [a] very close [associate] of a sitting speaker of the House,” Friedman said.

Sullivan, a former Democratic state representative, now works for the conservative Pioneer Institute in Boston, whose board includes several members who have donated to Baker’s gubernatorial campaign. Coakley’s campaign says Sullivan’s affiliation with Pioneer means he is not credible.

“Greg Sullivan had six years to raise these issues and never did, instead choosing to falsely attack the AG with a few weeks to go in a close election that includes a candidate, Charlie Baker, with very close ties to the conservative think tank that pays Sullivan’s salary,” said Coakley’s campaign manager, Tim Foley, in a statement.

Sullivan said he never publicly discussed the matter when he was at the inspector general’s office because the case was still active. And he did not approach the Globe with the story in the run-up to the election, offering it only after a reporter called seeking comment on Coakley’s record of prosecuting public corruption.

It is a record Coakley’s supporters strongly defend, noting that she has gone after more than 40 public officials since 2007. But where she has taken her shots, critics say, she has sometimes overreached.

A two-year push to prove that Timothy P. Cahill, former state treasurer, conspired to use a $1.5 million lottery advertising campaign to boost his failed independent gubernatorial campaign ended in a hung jury in December 2012 and, ultimately, a $100,000 fine.

“We believe the case had to be brought,” said Coakley, the day she settled with Cahill on the fine. “We believe the evidence was there.”

But Cahill’s defenders argue that the attorney general overreached – that the ad blitz was, at worst, a commonplace bit of rule-bending not worthy of a criminal trial. “The notion that Tim Cahill’s ads were somehow corrupt, I’m never going to be able to go there,” said Tom Kiley, a prominent Boston defense attorney.

‘So incongruous’

Coakley has confronted no issue more complex and, for some, no issue more important than skyrocketing health care costs — the bane of cash-strapped governments, small businesses, and consumers.

The matter has put her face to face with one of the mightiest corporations in the state: Partners HealthCare, sometimes called the “800-pound gorilla” of Massachusetts health care.

A Globe investigation, published in 2008, showed Partners using its heft to extract above-market payments for everything from MRIs to heart failure treatments. And Coakley followed with an influential investigation of her own into Massachusetts’ surging health care costs.

“She was fearless,” said David Spackman, a lawyer who worked on the inquiry in the attorney general’s office. “Partners would come in complaining and she would let me say ‘no’ ” to their pushback on the investigation.

Coakley’s work helped pave the way for the state’s landmark health care cost containment legislation and earned the attorney general a reputation for tough oversight. So some observers were surprised, this summer, when she announced a settlement with Partners that would allow the company to grow — acquiring South Shore Hospital in Weymouth and Hallmark Health System’s hospitals in Medford and Melrose.

“I just found the Partners settlement to be so incongruous,” said Spackman, who now works for Partners rival Lahey Health.

But Coakley argues that her office did something quite clever: using Partners’ expansion plans to force the firm to the table and negotiate broad, company-wide changes aimed at curbing its market clout.

The deal, currently before a judge, puts price caps in place for several years and splits Partners, for up to a decade, into four separate contracting groups — academic medical centers, community hospitals, South Shore Hospital, and Hallmark Health.

“To have a simple solution, to say, ‘well, this hospital is too big and we can’t let it get any bigger,’ to me, it’s not a very thoughtful approach,” said Coakley, in a recent interview.

John Kwoka, an economics professor at Northeastern University and research fellow at the American Antitrust Institute, is skeptical. He says these kinds of agreements — chopping up a company and demanding that it compete against itself — usually fail.

Firms find ways around the rules, he says. And the promised savings rarely materialize: “We know what the evidence says, and the evidence says, ‘It ain’t going to happen.’”

Coakley’s supporters, though, insist the deal will work. And they say it demonstrates a larger truth about her tenure: that she’s not the overly cautious lawyer of her critics’ imagination, but a shrewd tactician.

“The attorney general is in the business of problem-solving,” said Reilly, the former attorney general. “And I think she solved that problem.”

‘Gut-level’

Those close to Coakley, though, say she is more than a cool tactician, more than the often guarded figure who appears on the campaign trail.

They say she is a sharp intellect with a strong sense of humor and her own passions, however understated.

Coakley’s brother, Edward, a talented pianist, hangedhimself in October 1996. Supporters say that tragedy has informed one of Coakley’s central campaign proposals: boosting funding for mental health care and working to better integrate it with primary care.

It also sharpened her interest, as attorney general, in going after health insurers that failed to provide required mental health coverage (and other mandated services like mammography and maternity care). She has sued seven of them altogether, including Aetna and Transamerica, and won $5.6 million in payments to consumers and the state.

Another strong interest, protecting children from abuse, comes not from Coakley’s personal experience but from her professional life.

She made her name, as a relatively unknown lawyer in the Middlesex district attorney’s office, prosecuting 19-year-old British au pair Louise Woodward for shaking an 8-month-old baby to death.

And as the head of the office’s child abuse unit, she handled hundreds of lesser-known, but still-searing cases.

It was there, for instance, that she came into contact with the plight of teenage prostitutes. They would enter the system as criminals — arrested on charges of selling drugs or soliciting johns. But it was clear, she said, that they were victims, too. “Not only were they victimized by unscrupulous men for profit, they were then totally isolated,” Coakley said in a recent interview. “They had criminal records, they were told they wouldn’t be believed.”

Years later, as attorney general, she helped steer through the state Legislature a “human trafficking” bill that flipped the legal view of prostitution on its head: recasting minors arrested for soliciting as victims, while enhancing penalties for johns and those who coerce girls and women into the trade.

Audrey Morrissey, associate director of the nonprofit My Life My Choice, worked with Coakley on the legislation and a task force that followed.

Morrissey is a survivor of the commercial sex trade, pushed into Boston’s old Combat Zone at age 16 by a manipulative boyfriend and her own insecurities. The first man to pick her up, she said, was a police officer who threatened to arrest her unless she performed oral sex.

Three years into her work with the attorney general, Morrissey said, she has never talked to Coakley one-on-one about her experience on the street. She has never had the sort of emotive connection Coakley’s supporters pray the candidate will evoke on the campaign trail. But she has watched the attorney general pull the levers of power on the issue. And she has no doubt, she says, about her commitment: “Martha Coakley gets this issue gut-level. It means something to her.”

Coakley’s dedication to the work conveys something that did not much surface during a stiff Senate race or the current contest: a show of passion from the woman who would be governor.


Andrea Estes of the Globe staff contributed to this report David Scharfenberg can be reached at david.scharfenberg@globe.com
Follow him on Twitter @dscharfGlobe