In a rundown office, two watchdogs struggle to keep an eye on $2.4 Billion

By CHRIS FARAONE |  June 22, 2011

Steps inside the entrance of 152 North Street, exposed electrical boxes dangle out of a demolished drop ceiling. Dust fills the light beams bouncing through the hallways. There’s a layer of gray soot fused into the tiles of the bathroom.

This dilapidated dump is home to the city’s two-person Finance Commission, which oversees — or tries to oversee — virtually every dollar of the $2.4 billion budget flowing through city channels. If a public-works hack is sleeping on the job, executive director Matthew Cahill and financial analyst Michael Levangie are supposed to expose him. When money goes missing, they’re supposed to find it. And that’s all in addition to inspecting the several thousand contracts the city awards each year.

The Finance Commission, better known as FinComm, has been City Hall’s unwanted stepchild for more than a century. As a state-appointed, city-subsidized body charged with scrutinizing municipal finances, the commission is perceived by many within city government as an unwelcome entity — a last vestige of ancient measures to keep Boston within Beacon Hill’s clutches. (FinComm’s five part-time board members, who do little outside of monthly meetings, are appointed by the governor.)

Throughout its history, the commission has rooted out municipal corruption and waste and saved the city millions of dollars. In 2007, for example, Cahill went undercover in a graveyard to bust an exploitative superintendent of cemeteries. In 2009, the commission highlighted citywide waste on building maintenance and overtime, and exposed former Redevelopment Authority officials for taking quarter-million-dollar pensions and using their positions to steer business.

This month alone, FinComm stopped Boston Public School (BPS) contracts that would have cost our strapped city tens of thousands in frivolous expenditures. In one case they discovered that Dearborn Middle School proposed to pay a consultant a whopping $243 hourly rate for leadership training. The contract was rejected.

“I’m sure that I’m pissing off a lot of people — many of whom won’t admit it,” says Cahill. “That’s what I’m here to do — I come in every day and ask myself what taxpayers would think about all of this.”

But FinComm remains understaffed and underfunded — it will receive less operating money from the city next year than it did a decade ago, and Cahill currently has no administrative support.

As a result, the commission is hamstrung. Just keeping up with the torrent of paperwork is a daunting task that has Cahill and Levangie busy into most evenings and even weekends.

“There might be a day when someone tells me that I have to keep my mouth shut if I want to keep my job,” says Cahill. “In that case, I would be gone — it’s not worth it. Until then, the plan is to keep doing as much as I can with [the resources] I’m given.”

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FROM FITZ TO FLYNN

Established in 1908, FinComm was originally a political insurance scheme orchestrated by the incorrigible John F. “Honey Fitz” Fitzgerald, the grandfather of John F. Kennedy and two-term mayor of Boston. Back then, politics around here were largely framed around Brahmin-versus-Irish rivalries. So when he was accused of engaging in payroll graft, Fitzgerald figured he could ward off state authorities by tapping respected Brahmins to vet the allegations. His plan backfired severely, though, and Fitzgerald lost re-election after the commission revealed patronage in his administration.

With Fitzgerald mauled by his own watchdog — and with a Republican in City Hall — FinComm convinced state legislators to make the commission permanent, and to install other measures that could help secure a Brahmin grip over immigrant Boston. To that end, the city charter of 1909 (which remains in effect today) placed FinComm appointments under gubernatorial control, and stripped much of the power that Irish pols and communities had spent years establishing. The eight-person Board of Aldermen, where Rascal King James Michael Curley cut his teeth, was abolished. As was the 75-man Common Council, which was replaced by a much less representative nine-man City Council.

The men in the Massachusetts State House in the early 1900s “were engaged in a partially successful effort to regulate the government of the city of Boston on the grounds that City Hall was becoming a cesspool of corruption,” according to a 1966 piece in the policy journal The Public Interest. “The chief instrument of state supervision over the suspect affairs of the city was to be the Boston Finance Commission, appointed by the governor to investigate any and all aspects of municipal affairs in the capital.”

Nobody attracted more FinComm ire than Curley, who warred with the commission throughout his four terms as mayor. In 1915, one year after his first mayoral victory, FinComm crucified Curley for constructing his infamous 21-room Jamaicaway mansion. In addition to marble fireplaces and ornate woodworkings that developers suspiciously donated at no cost, the mayor neglected to account for the $10,000 he used to buy the property. In a testimony before FinComm, Curley concocted an elaborate lie involving imaginary brokers and bogus trust accounts.

FinComm would chap Curley’s ass into the early 1930s, when board members proved that the mayor had pocketed tens of thousands of dollars from city settlements on damage claims. To protect himself, he had thugs loot the FinComm office and steal the related files. But Curley got his ultimate revenge after being elected governor of Massachusetts in 1934. To keep FinComm from examining crimes that he committed during his third term at City Hall — offenses that would eventually land him behind bars — Curley forced the resignations of all board members, and replaced them with political puppets of his choosing.

By the 1960s, FinComm had recovered its independence and was back to scrutinizing city finances. In 1968, the commission humiliated the sheriff of Suffolk County for his department’s irresponsible financial management. In the ’70s, it ousted several no-show administrative assistants. And in 1982, FinComm called out Mayor Kevin White for spending nearly $100,000 in city money on lawyers to defend himself against corruption charges.

FinComm’s strong legacy continued through the ’80s and ’90s, with the commission delivering bombshell reports on everything from waste in the police and fire departments, to how much capital Boston lost from poor management of the city’s golf courses. Squeaky-clean mayor Ray Flynn was not immune; in 1992 the Republican FinComm chairman John de Jong criticized him for using city funds to stump around the country for Bill Clinton.

As for Mayor Tom Menino — some observers say he’s got the commission right where he wants them, out of sight and pathetically underfunded.

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UNDERCOVER NINJA

In 2007, Cahill’s FinComm duties took him to Mount Hope Cemetery in Mattapan. Dressed all in black, he hid behind trees and gravestones, ninja-style, to spy on a city employee who was stealing gas intended for work vehicles. The FinComm stakeout was successful; after also catching workers — on tape — taking three-hour liquid lunches, Cahill and then-FinComm executive director Jeff Conley triggered the firing of superintendent of cemeteries Donald J. Griffis.

“That was a lot of fun,” says Cahill. “I remember [Conley] said to me, ‘If they catch us, at least they’ll already have a place to bury us.’ ”

It wasn’t the first time that FinComm addressed problems during the Menino administration. In 2004 the commission exposed Inspectional Services Department head Kevin Joyce for allegedly firing an employee who refused to rig contracts. Menino championed Joyce’s innocence, claiming the department head was “vilified” by the media. The commission threw another haymaker that same year when, during preparation for the Democratic National Convention, FinComm shamed the police department for renting nearly $200,000 worth of barriers despite the city’s adequate fencing resources.

Hizzoner maintains that he has a positive relationship — or at least a working relationship — with FinComm. A Menino spokesperson was happy to point out that Boston funds the commission at nearly eight times the $25,000 mandated back in 1909 (of course they’d have to fund it at closer to 20 times that to account for inflation). At the same time, Paul Minihane, a Republican who chairs the five-member board, says FinComm currently has more of an “open dialogue” with City Hall than in the past.

Still, the city keeps its watchdog on a short leash. Two weeks ago, Boston’s head of property management knocked on FinComm’s door, and told them they’d be moving to a windowless basement on Hawkins Street. Cahill refused the offer. He doesn’t mind leaving North Street; for years FinComm has recommended selling the valuable property, located just steps from the Rose Kennedy Greenway. But Cahill doesn’t relish the thought of working in a subterranean bunker, and has suspicions about how the deal is being managed.

Fearing a potential loss of millions, the commission put the brakes on the North Street sale, ordering the city to issue a Request for Proposal (RFP). Due out this week, the RFP will address the real value of the parcel, and will help determine how to move forward prudently.

“Without an RFP, there’s really no telling how much the property is worth,” says Cahill. “With things like this I find that 50 percent of the time it’s an error, and 50 percent of the time it’s someone trying to pull one over on the city. . . . The mayor can’t possibly know about everything that’s going on — he’s like someone who oversees a very big corporation, and has a bunch of managers underneath him. So if I find something that doesn’t look right, I give him a heads-up in writing and then we talk about it.”

Despite the mayor’s civilized rapport with the commission, Cahill is constantly enmeshed in dozens of concurrent struggles with the administration. So far this year, FinComm has reviewed 518 contracts, worth more than $200 million altogether. Of those, the commission rejected 11 — all for appropriations to the school department, which Cahill says has been a constant source of aggravation for FinComm. For example: the comission recently attempted to stop a $7.5 million BPS Apple laptop contract, which Cahill alleges was not properly put up for bidding (a department spokesperson denies the charge). Because of the way BPS purchased the machines — through a state supplier — FinComm was not required to green-light the deal. But if resources allowed, Cahill says he’d be able to pursue the matter further.

“What worries me the most is that we don’t have time to really look into the whole thing as much as we should,” says Cahill. “I’d love to know things like who is getting these computers, how much money is going into servicing them, and what kind of warranties they’ll have. We don’t have the time to go into that in depth. I could do it, but everything else would have to stop.” Even more frustrating, he adds, is the reaction to past attempts to improve his operation by securing grant money. “I won’t name names,” says Cahill, “but I got calls from important people who are high up saying that other important people were not happy with what I was doing.”

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KEEPING WATCH

FinComm’s work isn’t getting any easier. They are, after all, the lone public safeguard against waste in a fragile economy. There are other financial oversight groups, like the privately funded Boston Municipal Research Bureau (BMRB), but they don’t do the same work or bring the same level of scrutiny.According to BMRB president Sam Tyler, FinComm has authority (and subpoena power) to dig where others don’t. “We don’t do exactly what they do,” he says of the BMRB. “We’re in the trenches, but not to the extent of actually staking out workers from trenches and following employees who are using public time for private purposes. . . . We work more on the policy side.”

Not everyone is so kind. Some observers say FinComm has been neutered by a state-appointed board that is pre-approved by City Hall — though Menino spokesperson Dot Joyce says the mayor wields no control over the commission or its appointees. Others say the commission is superfluous, or worse — that it has overstayed its welcome.

“I don’t think we need the [Finance Commission],” says City Council President Steve Murphy. Though the councilor acknowledges the commission’s accomplishments — Murphy credits Cahill with bringing the North Street property issue to his attention — he believes it’s wrong for a state-appointed board to meddle in Boston’s affairs. “[In FinComm’s absence], the City Council would have to roll up its sleeves and do a lot more work,” says Murphy. “But I think that would be appropriate.”

Murphy may be overstating the council’s jurisdiction over contract spending. But the councilor shares the common conviction among City Hall insiders that Boston’s books don’t necessarily need much oversight. Boston has its highest bond rating in its history, he points out, as well as an advanced performance-management system, Boston About Results, that is praised by outside observers as a major money-saver. There’s also the mayor’s Administration and Finance cabinet, which, Joyce notes, recently hired an outside agency to investigate “impropriety” in Boston’s Veteran’s Services department.

Still, in a city where teacher jobs and even schools face the guillotine with regularity — and where penny-pinching is a purported priority — it’s hard to argue that a stronger FinComm would be a bad thing. The commission costs taxpayers less than $200,000 a year. Cahill and Levangie save more than that in any given week.

“If I had two more people,” Cahill says, “I’d feel like I could get to a deeper level of investigation. If I had 10 [more] people, I’d be the biggest outlaw in the City of Boston.”

Chris Faraone can be reached at [email protected]. Follow him on Twitter @fara1.

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