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Inaugural donors have dealings with state treasurer

Deborah Goldberg declined to talk about the activities of her inaugural committee.
Deborah Goldberg declined to talk about the activities of her inaugural committee.(Suzanne Kreiter/Globe Staff)

Newly installed state Treasurer Deborah Goldberg raised an unprecedented $93,000 for her inauguration and transition costs, over two-thirds of which came in large donations from special interests that deal directly with her office.

Much of that $66,000 of the total came from interests that contract with her office, agencies she controls, or boards she chairs.

Other funding sources included unions and a construction firm that benefits from the state's school building program administered by her office. Also included on the list of donors are liquor-related interests that deal with the treasurer's alcohol control commission.

The practice of inaugural committees raising large donations, including from corporations, is not illegal in Massachusetts. Incoming governors, in particular, have routinely tapped special interests to finance their transitions and inaugurations.

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Pam Wilmot, executive director of Common Cause Massachusetts, said the system, which also has no requirements for detailing expenses, heightens the potential for conflict of interest.

"This whole area is ripe for reform,'' said Wilmot. "Raising money outside the regulated campaign finance system is problematic."

State law requires disclosure of donors to such committees, but not a list of expenditures. Asked to voluntarily provide a detailed accounting of how Goldberg's money was spent, Chris Keohan, a political consultant for Goldberg — who has vowed to bring "new levels of transparency" to the office — refused.

Instead, he provided a broad verbal outline of how the Goldberg Inaugural Committee spent the money. Keohan said the money went to fund events around Goldberg's inauguration last month and to pay for transition costs, including picking up the salaries of the entire political staff and consultants, included himself, who had been getting paychecks from her election campaign committee.

He said he and the staff — which included four people and two fund-raising consultants — were paid the same salaries that they received from her political committee. He said the inaugural committee would not provide records to verify that claim.

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Goldberg declined to speak with the Globe about the committee's activities.

Donations to Massachusetts campaign committees cannot exceed $1,000 per year and cannot come from corporate sources. But inaugural committees can accept any size donation and gifts from corporations. The contributions to Goldberg's inaugural committee from the special interests ranged from $2,500 to $10,000.

Asked if Goldberg thought it was appropriate to ask for large contributions from donors who could be seen as seeking access to her office, Keohan said the treasurer has demonstrated in her public career, including serving as a Brookline selectwoman, that she was above reproach.

"I don't think anyone can call into question Deb Goldberg's integrity,'' he said. "Deb is very happy with the support she got during the campaign from these organizations.''

Keohan said the treasurer needed the inaugural funds because she put together an extensive transition process that required paid staffing and a review of the office's organization, which resulted in a "complete revamp."

"We assembled the most comprehensive transition the Treasurer's Office has ever seen,'' he said. "That required a number of staff to work in a full-time capacity."

Despite raising so much money, Goldberg charged $15 a head at a spaghetti dinner she threw for supporters — and a handful of treasury employees — at a Dorchester union hall after her Jan. 20th swearing-in. An heiress to the Stop & Shop fortune, Goldberg has spent $4 million of her own money for both a failed run for lieutenant governor in 2006 and on her race for treasurer last year.

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A survey of past administrations indicates that previous treasurers and other constitutional officers — other than governors — never raised as large a sum as Goldberg, nor did they pay for such a large staff, relying almost exclusively instead on volunteers.

When Steve Grossman was elected treasurer in 2010, he raised $25,500 for his inauguration in 2011 but not from sources doing business with the treasury. All that money went to pay for inaugural events only. A handful of a campaign staff, paid from his political committee, worked on the transition.

Deborah Goldberg campaigned at a Somerville event in August.
Deborah Goldberg campaigned at a Somerville event in August.(Pat Greenhouse/Globe Staff)

Governors, on the other hand, have routinely tapped special interests to raise millions of dollars for their inaugurations and transitions — including from entities regulated by their administrations.

Public campaign finance records show that Goldberg's campaign committee continued to pay the salaries of her four staff members and fund-raising consultants between the election and Dec. 31. During that period, the inaugural committee raised $32,500 in December and another $59,969 in the first two weeks of January. Her campaign committee has not reported any payments to staff or consultants since the first of the year.

"People did not receive double salaries,'' Keohan said. He said any surplus from the inaugural committee will be donated to charity.

Keohan said Goldberg did not solicit the funds but instead used the two fund-raising consultants — Sheila Capone and Mary Liz Ganley — from her campaign to seek money from the corporations and handful of individuals. Both women received $5,000 payments from Goldberg's political committee on Dec. 16.

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Among Goldberg's donors was Scientific Games, which gets about $15 million a year to produce scratch tickets for the state Lottery. The company gave $10,000 to Goldberg for her inaugural and transition activities. The Lottery's commission, which Goldberg chairs as treasurer, is currently reviewing the firm's contract, which expires in September.

The Boston law firm McDermott, Quilty & Miller depends heavily on its work appearing before liquor boards, particularly in Boston, on behalf of its clients — bars and restaurants. They have also been before the state Alcoholic Beverages Control Commission, an agency that Goldberg's office operates. It has broad powers to regulate and control the sale, distribution, and consumption of alcohol in Massachusetts. The firm donated $2,500 to her inauguration.

A number of donations came from organizations involved with public school construction; Goldberg's office controls the Massachusetts School Building Authority.

Building trade unions and a Boston firm that contracts for the work, Gilbane Building Company, donated total of $19,000. The authority has reimbursed cities and towns over $11 billion for school construction over the past 10 years.

The political action committee for retired public employees donated $10,000. The state treasurer chairs the Pension Reserve Investment Management board, which oversees the state's pension fund.

The Boston law firm Block & Leviton, which has represented PRIM in litigation in the past and specializes in, among other areas, securities litigation, gave $10,000.

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With the state Lottery ready to replace antiquated terminals, DSCI LLC, a technology firm that could play a part in the update, gave $10,000. Future Technologies Group in Quincy, which is already under contract to run the office's telephone system, gave $5,000.

None of the firms responded to requests for comments from the Globe.


Frank Phillips can be reached at phillips@globe.com.