Wednesday, June 8, 2016

The Fall

As the controversy over the insurance contracts continued to swirl, Mitch Ogulewicz received something totally unexpected in the mail. It was an old clipping from a Worcester newspaper sent to him by Arthur Chase, a Worcester City Councilor. Chase had read about the controversy in Springfield involving Insurance Cost Control, a subject which interested him because there was also a controversy in Worcester over the contract I.C.C. had with that city. The article was dated January 21, 1988, over a year earlier, and was entitled “Springfield Mayor Visits Spencer.” It began, “Springfield Mayor Richard Neal made a surprise visit to this town Tuesday during a seven-town swing to gain support for a possible bid this fall for a seat in Congress.”

Mitch was startled by this article, since no one locally had any idea that Neal had been visiting towns in the congressional district that early in the year. At the time the congressional incumbent, the nearly four-decade veteran Edward P. Boland, was still expected to be seeking re-election, and it would be months before Boland would shock the district by suddenly retiring just before the deadline to withdraw. No local media had reported on these clandestine Neal campaign forays, and the article contradicted Neal’s public statements at the time that he was respectfully waiting for Boland to announce his plans before engaging in campaigning for the seat.

But as remarkable as that discovery was, what followed in the article was even more surprising. The article continued, “Neal, joined by area Democratic leaders Paul Tinsley, a former Worcester County Commissioner, and Charles Kingston, visited Memorial Town Hall shortly before noon.”

This article, which in the pre-internet world meant it was unlikely that anyone in Springfield had ever seen, was the first document to link the I.C.C. controversy directly to Richard Neal. To that point no one was aware that there was a political relationship between Neal and Tinsley, (who was the founder of I.C.C.) or that Springfield tax collector (and I.C.C. consultant) Charles Kingston was also closely involved. Charlie Kingston is a controversial Springfield political inside operative who in later years was to be indicted and convicted on felony tax charges. The article revealed that both Kingston and Tinsley had been important figures in the Neal congressional campaign since the very beginning. The discovery of this previously unknown Neal connection to I.C.C. added a whole new dimension to the insurance controversy, while in addition casting even further suspicion on the circumstances surrounding the sudden retirement of Eddie Boland.

Yet Mitch was not prepared to open that can of worms, at least not just yet. At the time he was focusing on presenting a written request to acting-Mayor Vincent DiMonaco for a formal investigation into the I.C.C. contract. Mitch soon realized that the scope of the inquiry had to be expanded to include MED-TEC and the John Alden Life Insurance Company, who were both engaged with I.C.C. in administering the city’s insurance program. This was exactly what Mitch had feared, an expanding, ever more complicated probe. Yet the information in the article sent by Chase and the encouragement of acting-Mayor DiMonaco, who told the Union-News it was “absolutely right” to expand the probe, caused the final request to become a wide-ranging overview of the city’s insurance contracts and the ways in which they interacted. DiMonaco insisted to Mitch that he had the votes for Council approval.

In the meantime, Richard Neal was forced to respond to the uproar that accompanied the revelation of his personal relationship with Tinsley and Kingston. Neal tried to downplay the story, stating that he hardly knew Tinsley and had only known him for a year and a half, which would have meant he had first met him in late 1987. While the media accepted this explanation, Mitch could not, because he remembered that the city’s relationship with I.C.C. had actually begun in 1986. Ogulewicz also knew that all contracts had to be signed by the mayor, and Mitch could not accept the claim that Neal had entered into an important, long-term relationship with a company without ever meeting with the company's owner.

On April 10, 1989, the formal vote was held in the council chambers to appropriate $15,000 dollars to hire someone to conduct a formal investigation into the city’s insurance contracts. It passed by a vote of 8 to 0, with Councilor Robert Markel absent. The unanimous vote caught some observers by surprise, but it shouldn’t have. The simple truth is that Richard Neal was not winning any popularity contests on the Council in those days. While most members, fearful of newspaper retaliation, were publicly towing the party line on the fiscal crisis and the insurance controversy by refraining from mentioning Neal by name, in private most Councilors were livid over the mess Neal had left behind for them to fix. The insurance contract controversy was especially galling, because by under-funding the account to cover insurance expenses, Neal had forced the Council to scramble on an almost month to month basis to find the funds to cover the basic insurance costs.

With the city still struggling to avoid bankruptcy, yet another revelation by acting-Mayor DiMonaco further inflamed the hard feelings. DiMonaco announced that he had informally submitted contract proposals identical to the ones held by I.C.C. to two insurance consultants, Alexander & Alexander of Boston and George Beram Inc. of Newton. The acting-Mayor asked them to suggest what they would offer to do the same work that I.C.C. was being paid for. The results were an offer of approximately $150,000 from one and $60,000 from the other. It raised plenty of eyebrows among the Councilors when they considered that the City of Springfield was paying I.C.C. $480,000 dollars to do the exact same work. At a time when the city was scrounging for every penny it could find, it angered many Councilors to realize that the city might be squandering money on what increasingly looked like a sweetheart deal for Neal’s political allies.

Adding fuel to the fire was an attack on I.C.C. by James Gaffney of the major government employee union AFSCME (American Federation of State, County and Municipal Employees) who wrote to DiMonaco denouncing the money spent on the I.C.C. contract. “My understanding,” Gaffney wrote, “is that the city of Springfield has approximately 105 consultants. Granted some of them are needed, but most of them are not.” He singled out Insurance Cost Control as clearly in the unneeded category, and suggested that the contract be cancelled and the work turned over to city employees. Gaffney’s criticism, which he instructed DiMonaco to consider “a formal complaint from AFSCEME Council 93,” directly contradicted the statements of Jane Curto, the union’s representative on the city’s Insurance Advisory Board, who had joined with her colleagues in defending Insurance Cost Control.

Meanwhile, acting-Mayor DiMonaco announced that he had reached a decision on who should be hired to conduct the inquiry into the insurance contracts. The person he had decided upon was one of Massachusetts most respected investigators, Jeremiah T. O’Sullivan. A former F.B.I. agent who specialized in white collar crime, he was uniquely qualified to conduct the kind of hard-hitting probe that could get to the bottom, once and for all, of the insurance contract controversies. However, he said that he doubted the $15,000 dollar budget the Council had voted for would suffice. Therefore, DiMonaco agreed to set up a second Council vote on an additional $10,000 dollars.

Somehow however, the unanimity that had greeted the first request had mysteriously vanished. For example, acting-Mayor DiMonaco and Joe Tierney of MED-TEC went to see Francis Keough one day at his real estate offices at the corner of Sumner and White. They were discussing strategies for gaining the additional money, with Keough fully onboard, when Keough excused himself to accept a phone call. When he returned, DiMonaco said, Keough appeared very nervous and abruptly brought the meeting to a close. Soon afterward, Keough completely flip-flopped, becoming one of Insurance Cost Control’s strongest defenders. Although he had no way of proving it, Vinnie claimed until the day he died that he believed it was that mysterious phone call that day in Keough’s office that had flipped Frankie’s vote.

So it appeared that someone was calling around, trying to convince Councilors, some of whom were once totally united behind the I.C.C. probe, to flip their votes. But who? What were they saying that was so compelling as to cause the Councilors to totally reverse their earlier positions? To the public's surprise, the request for the additional funds went down to defeat, although acting-Mayor DiMonaco was still able to salvage the contract with O’Sullivan by telling the investigator to start spending the $15,000 dollars that had already been appropriated and to come back later when he needed more. Perhaps by then Vinnie would be able to garner the necessary votes.

No one could predict how long the O’Sullivan investigation would take. As the contract with Insurance Cost Control came under increasing scrutiny by the council and the administration of acting-Mayor Vinnie DiMonaco, it appeared that I.C.C. was increasingly attempting to stonewall the investigation. For example, I.C.C. had repeatedly made public statements to the effect that they had saved the city over two million dollars through its oversight activities and cost-cutting advice. However, when DiMonaco insisted on documentation to prove their claim, I.C.C. replied that it would not be able to provide the evidence until several months later, sometime in May. That date however, would conveniently place the time for producing the proof past the special election for mayor, which DiMonaco was widely predicted to lose to fellow Councilor Mary Hurley. Since one of I.C.C.’s consultants, Charles Kingston, was also involved in the Hurley campaign, it was hard not to notice how convenient it was that I.C.C. could not prove their claims until after a new administration took office, one that presumably might be more friendly to Insurance Cost Control.

The fact that I.C.C. could not produce proof of their supposedly successful cost-cutting measures raised other questions. How long had the city been dealing with I.C.C. based upon performance claims not backed by any corresponding evidence? I.C.C. was claiming to save the city all kinds of money, but apparently that was being accepted as fact purely on the basis of I.C.C.’s unsubstantiated claims. Without documentation, no one knew whether two million dollars had actually been saved, or if that was just a figure taken out of thin air which the city had apparently accepted purely on faith. That months were required to pass before I.C.C. could come up with any documentation for their alleged savings raised deep doubts about I.C.C.'s level of transparency in their dealings with the city.

It also cast into a negative light the competency of the city’s Insurance Advisory Board. It was the duty of this little known regulatory body to supervise and oversee the city’s insurance contracts and its members consisted of representatives of each of the city’s departments and unions. However, none of those people were insurance professionals or had any particular background in insurance law. Instead, they were teachers, cops, firemen, secretaries and clerks, all of whom no doubt had a sincere interest in preserving and protecting the insurance benefits of city employees, but all of whom were heavily dependent on what they were told by the paid professionals who actually handled the contracts, such as E. Paul Tinsley of Insurance Cost Control. No one on the Advisory Board really had the expertise to be able to challenge anything these administrators and consultants had to say.

Therefore, the Board ended up looking sort of silly after it was revealed that I.C.C. had never presented any documentation for its effectiveness and was unable to do so in a timely fashion when asked to do so by acting-Mayor DiMonaco. The Board had been strongly defending I.C.C. but apparently they had based that praise upon little more than the fact that I.C.C. executives had told them that they were doing a wonderful job. If the political and financial charges of incompetence, duplication and cronyism being leveled at I.C.C. by Mayor DiMonaco and Mitch Ogulewicz turned out to be true, then the Insurance Advisory Board would look like they had all been duped and would have to face accusations that they had failed miserably in their jobs. Therefore, there was a strong self-interest in the Advisory Board’s stubborn defense of I.C.C. and would explain their apparent desire, along with so many others in City Hall, to make the I.C.C. controversy go away.

Indeed, probably the whole city was sick by now of hearing about insurance troubles. Earlier the Cook Report, which had been commissioned by the state to investigate Springfield’s fiscal crisis, had blasted the Neal Administration for its mismanagement of the insurance accounts. In fiscal years 1987 and 1988, the last two years in which Neal had written a budget, health insurance costs had risen by 24% and 29% concurrently. Yet Neal had increased spending by a mere 5% each year, underfunding the accounts to create artificial “savings” that would then free money to be spent on other things, such as Neal’s city beautification program and the other expenditures on which he would base his claim that the city was undergoing a renaissance under his leadership. There was money to place giant urns filled with flowers on intersection islands, but the essential spending on bedrock expenses such as police protection, school maintenance and of course insurance costs were ignored. The Cook Report had shown Neal no mercy on this score, stating:

“The failure of the City to recognize the “true costs” in its budgets over the past five years IS INEXPLICABLE. Not only was the budget preparation and financial reporting WOEFULLY AT VARIANCE WITH REALITY, none of the parties to the City’s fiscal management applied a reasonableness test to the rate of growth of the expense. While for 1986 and 1987 the “true costs” were rising between 20% and 30% per year and the media was full of stories of the rapid increase in health care costs, the City blithely budgeted increases of only 5% . . ..” (capitals added).

Fortunately for Neal, such passages from the Cook Report were never highlighted for the public by the media. However, it was impossible to hide the almost week to week struggle by the City Council to come up with the cash Neal had failed to budget in order that the city’s employees wouldn’t lose their insurance for non-payment of fees. While only Mitch Ogulewicz, Mayor DiMonaco and Councilor Kateri Walsh dared to criticize Neal in public, in private everyone knew that the entire fiscal crisis and the mushrooming insurance scandal could be placed almost entirely on the doorstep of Richard Neal. An ugly power struggle was beginning to develop between those who felt the public had the right to know this truth and those who were determined to bury it.

So with these controversies serving more to muddy the water than clarifying anything, and political passions having risen to a fever pitch, right in the midst of that chaotic environment occurred the municipal elections of 1989. In that election, Mitchell J. Ogulewicz and Vincent DiMonaco were defeated. DiMonaco died on July 6, 1993 at age 72. In the early 1990's Massachusetts Attorney General Scott Harshbarger conducted an investigation into corruption in Springfield. Paul Tinsley was indicted and convicted. Personnel Director Joseph Douherty was also indicted. Frank Keough was indicted and convicted both in the Harshbarger probe and in a successive probe conducted by the FBI in 2002 and was ultimately sent to prison. Charlie Kingston was indicted in the Harshbarger probe, but claimed to be dying of cancer so he never went to prison. Kingston is still involved in Springfield governmental affairs twenty years later, as of 2016 he is Mayor Dominic Sarno's chief political adviser. Mitch Ogulewicz no longer resides in Springfield.

For a summary of the Harshbarger corruption probe click here.


Henry J. Piechota

(1930-2001)

One of the most controversial individuals in Springfield's modern history died in February 2001, but you’d never have known that by anything that appeared in the local media. Henry Piechota was the former auditor and budget director for the city of Springfield, the only person ever to hold both of those positions simultaneously. That remarkable dual role made him one of the most powerful unelected officials in the city’s history. Part of his legacy is that when he left the budget director/auditor position, the state ordered that it be separated into two distinct jobs.

Pichoeta retired under mysterious circumstances at the height of the city’s fiscal crisis of the late 1980’s, during a firestorm of controversy over questions about how Springfield suddenly went from what was supposed to be the “golden age” of the mayoralty of Richard Neal to the brink of state receivership. At the time he was said to suffer from a sudden, previously unknown heart condition that made it impossible for him to be questioned about the city’s near financial collapse. He literally disappeared completely from the public eye.

Eleven years after his sudden departure, in a small obituary printed on page B5 of the Union-News, it was announced that Piechoeta had died. His seventeen years with the city as the man who had held the unique (and inherently conflicting) positions of the budget director (who manages the budget) and auditor (who serves as a watchdog over it) was dismissed in his obituary by a single sentence: “He was also the former auditor and budget director for the city of Springfield, retiring in 1990 after 17 years of service.” You would have thought some third-rate city clerk had died for what little attention his passing received. But anyone who remembers the late 1980’s, when Piechota was the subject of blaring headlines for weeks with his picture in the paper almost daily, knows why the death of so prominent a citizen received so little attention:

Because the cover-up of what happened in that era still continues to this day.

Henry Piechota was the guy who took the fall for the widespread financial mismanagement of the Neal Administration. It was necessary for him to disappear for a while so that questions could not be asked that there were no suitable answers to. There was nothing personal about his banishment; it was just what had to be done. It is the nature of machine politics in general, and our local political machine in particular, to put the welfare of the group of insiders as a whole ahead of any individual. No one is non-expendable if it is necessary to protect the rest. Piechota understood that reality and was good team player and went quietly.

Let it be a lesson and a warning to those in city politics today – to those of you who are currently going along to get along, who are playing the game and positioning yourselves to always be with the winners, no matter what that means, who think of themselves as being so goddam clever – to pause a moment to contemplate the fate of Hank Piechota. Once they had used him up they threw him away, even after he took the fall for the sake of all those young, ambitious men with such promising careers. Yet, all he got in the end was a single sentence mentioning that he worked for the city, in a one paragraph long obituary, in the corner of page B5.

Hank Piechota was not an evil man. He struck me as funny and smart and had an odd but endearing mannerism of shrugging his shoulders up and down a little as he talked. I know he loved his family very much. I don’t think he is to blame for the fiscal disaster that struck Springfield on his watch, the severity of which was such that the city still has not completely recovered. At worst, he was only following orders. His was just one of many lives left shattered in the aftermath of the Neal mayoralty. In any case, Piechota no doubt took a lot of secrets to his grave with him, and his death means that there are many questions that must now be filed under “Never to be Known.” Unfortunately, in the City of Springfield that’s a filing cabinet already filled to overflowing. - TD

Here is a video that shows 1989 Election Night coverage of the defeat of Ogulewicz and DiMonaco.

After the election, the City Council condemned the sometimes dirty campaign tactics used by anonymous activists.

Following passage of the resolution condemning the dirty campaign tactics, Councilors speak in tribute of Ogulewicz and DiMonaco.

A special resolution passes honoring Mitch's wife Cyndi.

Although Mitch Ogulewicz would never again hold public office, he did not disappear from the political scene. Mitch went on to have a long running career as a talk radio host and political commentator. Here is video from 1996 when Ogulewicz was a guest on the Dan Yorke Show with guest host Tom Devine.

Here is the conclusion of that TV appearance.

Mitch Ogulewicz hosting his radio show in 2002.

Tom Devine and Mitch Ogulewicz on the air in 2006.

Today Mitch Ogulewicz is retired and lives in South Carolina. Here is a 2016 photo of Mitch and his grandson.

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