A ‘classic sweetheart deal’
Gregory Sullivan was appalled.
The former state inspector general was studying House Bill 4111, the legislation authorizing a $1.1 billion expansion of the Boston Convention and Exhibition Center. The bill, which sailed through the House of Representatives last week on a 130-19 vote, would empower the Massachusetts Convention Center Authority not only to enlarge its already enormous convention facility in South Boston by 60 percent, but to select a hotel company to build and operate a 1,000- to 1,200-room hotel on land owned by Massport across the street.
With 37 years of Beacon Hill experience under his belt — 17 as a state representative and 20 in the inspector general’s office — there isn’t much about legislative sausage-making and fishy public dealing that is likely to get past Sullivan. He was the IG who uncovered the irregularities that eventually led to the conviction of House Speaker Sal DiMasi. Now he plies his skills as research director for the Pioneer Institute, a Boston think tank that has long kept an eye on the state’s convention-center politics and policymaking.
As Sullivan drilled down into the legislation, he says, “I just cringed.” He sees the makings of a “classic sweetheart deal,” one that will effectively allow the Massachusetts Convention Center Authority “to basically pick whomever they want” to put up the hotel and reap public subsidies that could be worth upward of $100 million. Yet nowhere in the bill or in the detailed Request for Qualifications already issued by the authority is there any stipulation that the hotel contract be awarded to the qualified developer who comes in with the lowest subsidy bid. Nor is there any indication of how the authority intends to assess the proposals it receives.
The gold standard in government procurement is upfront transparency, Sullivan says. “You announce in advance exactly how applications will be scored — for example, 30 percent of a bid’s ranking might be based on experience, 30 percent on management acumen, and 40 percent on the proposed project financing.” As inspector general, he was always impressed by the professionalism of the Division of Capital Asset Management and Maintenance — the government agency primarily responsible for the construction and management of major state buildings. But the bill approved by the House requires the convention center authority merely to “consult” with the agency, which “shall otherwise have no jurisdiction over the BCEC expansion project.”
That isn’t the only way in which the legislation goes out of its way to minimize outside scrutiny of the project. The bill would establish a sweeping new exemption from the state’s Public Records Law and open-meeting rules for any “commercial or financial information regarding the operation of any business” that signs a contract with the convention center authority. This is an alarming level of secrecy, and Sullivan considers the Convention Center Authority’s rationalization — that it’s necessary to shelter companies’ private trade secrets — specious.
Existing freedom-of-information rules already allow for exclusion of proprietary secrets. If other state agencies can contract with private vendors without needing a cone of silence to shield the process from public oversight, the Convention Center Authority should be able to as well. Its unwillingness to do so doesn’t pass Sullivan’s smell test. “Here’s what this means,” he says. “If anybody wants to see the critical financial information underlying these very large contracts, forget it: You’re never going to get that chance.”
As originally written, the bill would have gone even farther, exempting officials from Massport and the Convention Center Authority from state conflict-of-interest laws in connection with the convention center expansion. Sullivan applauds Representative Brian Dempsey, the Haverhill Democrat who chairs the House Ways and Means Committee, for stripping that item from the bill.
There are other red flags. The legislation would add security guards to the state’s “prevailing wage” law, a fresh taxpayer ripoff. It opens the door to diverting all hotel room-tax revenues collected statewide — most of which now go to the state’s general fund — to securing the $1.1 billion in convention-center bonds, if doing so would “increase the [bonds’] marketability.”
Look around the country, says the former inspector general, and you can see “a trail of wreckage” behind similar subsidized-hotel and -expansion deals. In city after city, “the downside risk is dumped on the taxpayers.” Now Beacon Hill is poised to follow suit. And Sullivan, long accustomed to keeping watch over the public purse, is once again crying foul.