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"Now that he has been caught, he has couched it as an issue of reform."
-Former HEFA Board Chairman on Governor Patrick's plan to install Sen. Marian Walsh in a $175,000 a year patronage job, The Boston Globe, 4/9/09


Bid to merge agencies called into question
The Boston Globe, 4/9/09
By Frank Phillips, Globe Staff

On the heels of his politically damaging attempt to install a political ally in a high-paying job at a state bonding agency, Governor Deval L. Patrick is now maneuvering to combine the agency with another state authority.

The governor's goal is to merge the Massachusetts Health and Educational Facilities Authority with the much larger Massachusetts Development Finance Agency.

In a letter to HEFA board chairman Allen Larson, Patrick instructed him to complete the merger over the next few months.

Advocates for HEFA say the move is a power grab by the governor and is being undertaken without public notice or serious study of the implications. The charge is denied by the administration, which says the concept has long been under consideration.

"I am counting on you and the board to pursue that goal and specifically to complete a merger with MassDevelopment before July 1," he told Larson, a political ally whom he installed on the board.

The letter, which has been obtained by the Globe, is dated the same day, March 31, that state Senator Marian Walsh bowed to a public outcry and decided to abandon her quest for a $120,000 job at HEFA as its assistant executive director.

Larson, a Patrick loyalist who worked closely with the governor's staff to engineer Walsh's hiring, would not embrace the call for a merger. He said the agency and its board would "look at that" and advise the governor on its findings.

"The governor can count on us to look at it and give it us our best recommendations," Larson said. "That is all I can say. We will get the right data and analysis."

The two agencies have overlapping operations to provide tax-exempt bond financing for state educational institutions and nonprofit cultural institutions. HEFA also issues bonds for hospitals. Advocates for keeping them separate say competition allows those institutions to bid for lower financing costs.

Critics of a merger say Patrick's strong language in instructing Larson to complete a merger by a certain date conflicts with the legislative intent to insulate HEFA and other quasi-public authorities from political and gubernatorial interference.

"They would be creating a political boondoggle, wiping out all the efficiencies that HEFA has," said David Hannan, a former authority board chairman. "If there is a merger, HEFA will be gone, it will become just another state agency."

Hannan also decried the lack of public debate on a merger. And he accused the governor of trying to paper over his failed effort to give Walsh a job with a flimsy policy initiative.

"The governor has chosen to attack this in secret," he said. "Now that he has been caught, he has couched it as an issue of reform."

But the governor's aides said the idea had been in the works before the Walsh episode.
The governor's aides concede there has been no detailed plan outlining the need for a merger, but they insist it would streamline the state's exempt financing operations and allow for expanding financing to some of the state's less wealthy nonprofits.

Patrick and his aides have insisted that Walsh, an early Patrick political supporter, had been hired to oversee a merger between HEFA and MassDevelopment.

But e-mails obtained by the Globe show that Larson's description of Walsh's role to the authority board - as well as the minutes of the board meeting at which she was hired - only mentions her role as reaching out and coordinating operations with MassDevelopment, not merging the two agencies.


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