BOSTON (AP) – To build their corruption case against former Massachusetts Speaker Salvatore DiMasi and three associates, federal prosecutors plumbed a web of e-mails sent among the key players.

Those e-mails, contained in a 32-page indictment, detail a scheme to rig state contracts and pressure officials to unknowingly abet a conspiracy from which DiMasi and the others reaped hundreds of thousands of dollars.

Although DiMasi took home just $57,000, it was his political muscle that fueled the scheme, federal prosecutors said.

The four, indicted on conspiracy and fraud charges, maintained their innocence during a court appearance Tuesday and were released on $10,000 bail. DiMasi faces 20 years in prison for each of seven counts of wire and mail fraud and five years for the conspiracy charge.

The case hinges on the pursuit of two lucrative state contracts by software company Cognos spearheaded by Joseph Lally, the company’s vice president of sales who left to form his own firm.

Acting U.S. Attorney Michael Loucks said Cognos is cooperating and no other public officials are implicated.

According to the indictment, Lally teamed with DiMasi friends Richard McDonough, a lobbyist referred to as “Dickey,” and Richard Vitale, DiMasi’s accountant.

A fifth individual, a private attorney who shared office space with DiMasi, was not identified by prosecutors.

Prosecutors say the scheme was hatched in late 2004, when DiMasi, Lally and McDonough arranged to have payments funneled to DiMasi in exchange for his helping Cognos land the first contract – a $5.2 million sale of software to the Department of Education.

Cognos agreed to pay a monthly $5,000 “referral fee” to the private attorney, $4,000 of which would be sent to DiMasi.

“It’s about time we got business like this,” DiMasi allegedly said.

In return, according to the indictment, DiMasi asked his staff to press another state lawmaker to sponsor budget amendments appropriating the $5.2 million.

When the Commissioner of Education asked DiMasi to change the amendment to give the department more flexibility in negotiating with Cognos, DiMasi allegedly refused.

After the amendment was approved, McDonough sent an e-mail to Lally saying “Mission Accomplished,” according to the indictment.

Cognos paid Lally $891,000. He paid McDonough and Vitale $100,000 each. Lally had allegedly told a business partner that Vitale’s relationship with DiMasi could help close the deal.

Cognos then embarked on a more ambitious effort to win a $15 million contract selling management software to the Executive Office of Administration and Finance.

After an initial effort failed, DiMasi persisted – reassuring a Cognos executive during a golf game that the plan was on track, according to the indictment.

There were efforts by those involved to cover their tracks.

In November 2006, Vitale sent an e-mail telling Lally to warn his partner against using DiMasi’s name.

“On future e-mails let (the partner) know not to use you know who’s name or title,” Vitale wrote.

In later e-mails, Vitale referred to DiMasi as “Coach.”

DiMasi used his clout not only to include the $15 million in a bond bill, but to make sure the state hired Cognos, according to the indictment.

There were glitches.

Toward the end of 2006, Cognos stopped sending the monthly checks, according to the indictment. After DiMasi questioned the delay, Lally e-mailed a Cognos executive saying, “We need to look into the issue fast. Can you escalate this please? We don’t want to piss anyone off this late in the game.”

Cognos sent a $25,000 check. According to the indictment, DiMasi told the attorney he wanted all the money but to send it to him in four backdated checks.

On Aug. 24, 2007, Administration and Finance Secretary Leslie Kirwan signed the agreement. Days later Cognos paid Lally’s firm $2.8 million. The firm, in turn, paid Vitale’s firm $500,000 and McDonough $200,000, according to the indictment.

A week later a Cognos officials sent an e-mail to Lally saying: “Please be sure to thank Dick and Sal for getting this contract closed.”

The administration ultimately canceled the contract, and Cognos refunded the money.

AP-ES-06-03-09 1931EDT

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