On Trial for Software Kick-Backs

  • 16-May-2011

In Boston, USA for most of the month of May, I've been following with interest a local story about former Massachusetts Speaker of the House Sal DiMasi.  A federal grand jury  recently indicted the former Speaker and three of his associates on charges of conspiracy, wire fraud, and mail fraud, after DiMasi allegedly wielded his power to procure multimillion-dollar contracts for a software company, Cognos (now owned by IBM).

It's about time someone got put on trial for this.

According to testimony thus far, it seems the evidence is stacking up against DiMasi. Apparently "suffering" a loss of income from his law practice after he became Speaker, and carrying tens of thousands of dollars in credit card debt, DiMasi's associates entered into a "consulting contract" with the Burlington, MA-based business intelligence software company, and steered state contracts for close to $20 million their way. The prosecution claims that the bribes were disguised as a referral fee.  

The defense, of course, makes the case that evidence of thousands of dollars per month in payments by Cognos to DiMasi's associates, and in turn checks written to DiMasi by those same associates (and DiMasi's subsequent requests to destroy check registers) is not indicative of corruption or abuse of public office. But as we all know, the best lawyers can make even the most damning evidence seem inconsequential to an easily-persuaded jury.

Though DaMasi's culpability remains to be determined, the trial itself is interesting because it's the kind of kick-backs I often see -- and am offered --- by software vendors.

Recently, a software company offered me an all-expenses-paid trip to Europe for a conference, and followed it up with, "what else can we do to ensure you are thinking of us when you are putting together short lists for your customers?" 

What did that vendor accomplish by asking me that question? Ensuring I will talk about that email to anyone considering buying their software.

In the meantime, my next plane ticket to Europe will be funded by the Real Story Group.

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