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Full text of "Report of the Attorney General for the year ending .."

Public Document 



No. 12 



{Ei\e (EomnuinuiealUi of iilaBBact|UBettfi 



REPORT 



OF THE 



ATTORNEY GENERAL 

FOR THE 
Fiscal Year Ending June 30, 1992 



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CXXMONNE&LTH OF MASSACHUSETTS 



In accordance with the provisions of Section 11 of Chapter 
12 and of Chapter 32 of the General Laws, I hereby submit the 
Annual Report for the Office of the Attorney General. This 
Annual Report covers the period from July 1, 1991 to June 30, 
1992 and it marks the first full fiscal year in which I have been 
the Attorney General of the Commonwealth. 



c ) 



PubJicalion No. 17464-142- 1500- 12/93-3.82- C.R. 
Approved by: Philmore Anderson III. State Purchasing Agert 



F.D.12 



Fiscal Tear 1993 



OFFICE OF THE ATTORNEY GENEPAL 

ATTORNEY GENERAL 
SCOTT HARSHBARGER 

FIRST ASSISTANT ATTORNEY GENERAL 
Thomas H. Green 

CHIEF OF STAFF 
Donald L. Davenport 



Assistant Attorneys General : 

Richard Allen 

Thomas Alpert 

Dorothy Anderson 

Barbara Anthony 

Frederick Augenstern 

Thomas Barnico 

Judith Beals 

Thomas Bean 16 

Steven Berenson 

Edward Berlin 

Anne Berlin 

Cynthia Berliner 

Jean Berke 18 

William Bemian 

Patricia Bernstein 

Ann Berwick 

Mark Bluver 

Edward Bohlen 

Barbara Boden 

David Bookbinder 34 

John Bowen 20 

John Bowman 

Howard Brick 

Matthew Brock 

William Brownsberger 7 

James Bryant 

David Burns 

Andrea Cabral 70 

Cecilia Calabrese 28, 65 

John Capin 

Susan Carnduff 57 

Eric Carriker 

James Caruso, Jr. 

R. Michael Cassidy 

Ellen Caulo 64 

John Ciardi 

Richard Cole 

Mary Connaughton 

Kevin Connelly 59 

Joanna Connolly 15 

Scott Cooper 35 

Peter Coppinger 53 

Pierce Cray 

Phyllis Crockett 

Michael Cullen 

Maurice Cunningham 

William Daggett 

Leslie Davies 

Scott Davis 29 

Edward DeAngelo 

George Dean 

Paula DeGiacomo 51 

Emily Den 8 

Stephen Dick 5 

Carol Dietz 



Elizabeth DiTomassi 3! 
Lawrence Donnelly 52 
Juliane Dow 
Mary Beth Downing 56 
William Duensing 27 
Edgar Dworksy 
Deborah Ecker 
Stanley Eichner 
Betty Eng 62 
Judith Fcibricant 
Michael Fabbri 
Jennifer Ferreira 
Freda Fishman 
Stacey Fortes 69 
Bettye Freeman 
Cynthia Gagne 37 
Andree Gagnon 8 
Rosemary Gale 
Nancy Geary 
Dwight Golann 55 
I. Andrew Goldberg 6 
Richard Goldstein 26 
Tania Gray 
Thomas Green 
Leslie Greer 
Mary Griffin 
Irene Guild 15 
Kristin Guyot 30 
David Hallett 14 
Daniel Halston 
Joslin Ham 63 
Natalie Hardy 
Nancy Harper 
LaDonna Hatton 
Bennet Heart 28 
Lisa Heinzerling 66 
Virgina Hoefling 
David Hofstetter 60 
Philip Holmes 
Pamela Hunt 
Ellz^J^eth Hyman 35 
David Jackson 58 
Marcia Jackson 
Joyce Johnson 24 
Diane Juliar 
Michelle Kaczynski 
Gerald Kelly 54 
Michelle King 
Michael Kogut 
Pamela Kogut 
Viveca Tung Kwan 12 
PsJdIo Landrau 
Jon Laramore 61 
William Lee 
Judy Levenson 



Beth Levi J 

Martin Levin 
Stephen Limon 
Diane Lund 67 
Margaret Malek 
William Matlack 
David Marcus 23 
Thomas McCormick 
Ellen McGinty 
Karen McGuire 
Susan McHugh 
Paul McLaughlin 
Mary McLaughlin '• 
?;ristine McMahon 11 j 
Kevin McNeely 12 | 
William McVey 
William Meade 21 
Elizabeth Medvedow ; 
Joyce Meiklejohn 
Howard Meshnick 
Nicholas Messuri 4 
James Mil key 
Jonathan Mishara 
Daniel Mitchell 
Margaret Monsell 3 
Sarah Morison 
Christopher Morog 
Madelyn Morris 
Susan Motika 
Mark Muldoon 
Timothy Mullen 
Robert Munnelly 29 
Linda Murphy 
Alexander Nappan 
Kevin Nasca 
Michelle O'Brien 13 
Jerrold Oppenheim 
Donna Palermino 
William Pardee 
Margaret Parks 
Robert Patten 12 
Lora Pellegrini 62 
Anthony Penski 
Djuna Perkins 31 
Mary Phillips 
William Porter 
Anne Powers ' 

Edward Rapacki 
Carol Lee Pawn 20 
Elizabeth Reinhardt 20 
Benjamin Robbins 7 
Deirdre Robbins 68 
Beverly Roby 17 
Anthony Rodriguez 32 
Joseph Rogers 24 



F.D.i: 



Delrdre Rosenberg 10 
Abbe Ross 
Stuart Rossman 
Linda SzQsle 
Peter Sacks 
Thomas Samoluk 
Ernest Sarason, Jr. 
Faaqua Scibelll 
Arlie Scott 
Robert Sherman 
Robert Sikellis 
Jeremy Silverflne 25 
Eleanor Sinnott 
Myles Slosberg 
Eric Smith 
Joanne Smith 
Mark Smith 
Johanna Soris 
Amy Spector 



Susan Spurlock 1 
Marie St. Fleur 
Carol Starkey 23 
Kevin Steiling 
James Stetson 
Deborah Steenland 
Edmund Sullivan 
Michael Sullivan 
Walter Sullivan 
Mark Sutliff 
Jatmes Sweeney 
Diane Szafarowicz 
Pamela Talbot 
Rosemary Tarantino 19 
Neil Tassel 9 
Jane Tewksbury 
Jean Thompson 22 
Jeffrey Tocchio 
Edward Toro 



Margaret Van Deusen 
John Van Lonkhuyzen 
Lucy Wall 
Beverly Ward 
Rebecca Webb 
George Weber 
Mark Weber 36 
James Whitcomb 
Douglas Wilkins 
Jane Willoughby 33 
Norah Wylie 5 
Judith Yogman 15 
Pamela Young 
Andrew Zaikis 
Reed Zars 50 
Catherine Ziehl 20 



Assistant Attorneys General Assigned To The Department of Employment ^ Tr<>inj.r 



Brian Burke 
Elizabeth Ann Foley 
Glen MacKinley 27 
Faula Fox Hiziak 
Patricia Preziosa 23 



F.D.i: 



APPOINTMENT DATE 



TERMINATION DATE 



1. 


07/13/92 


2. 


07/22/92 


3. 


08/01/92 


4. 


08/02/92 


5. 


08/03/92 


6. 


08/31/92 


7 . 


09/08/92 


8. 


09/09/92 


9. 


09/14/92 


10. 


09/21/92 


11. 


09/23/92 


12. 


09/28/92 


13. 


09/29/92 


14. 


10/01/92 


15. 


10/05/92 


16. 


10/08/92 


17. 


10/13/92 


18. 


10/19/92 


19. 


11/02/92 


20. 


11/09/92 


21. 


11/16/92 


o -> 


11/30/92 


2 3 . 


12/01/92 


24. 


12/07/92 


25 . 


01/04/93 


26. 


01/11/93 


27 . 


01/19/93 


28. 


02/01/93 


29. 


03/08/93 


30. 


03/15/93 


31. 


03/29/93 


-1 


04/01/93 


33 . 


04/05/93 


34. 


04/26/93 


35. 


05/24/93 


36. 


05/25/93 


37 . 


06/01/93 


38. 


06/14/93 



50. 


07/01/92 


51. 


07/03/92 


52. 


07/04/92 


53. 


07/07/92 


54. 


07/10/92 


55. 


07/31/92 


56. 


10/04/92 


57. 


10/19/92 


58. 


10/23/92 


59. 


11/27/92 


60. 


01/15/93 


61. 


02/05/93 


62. 


02/26/93 


63. 


02/28/93 


64. 


03/13/93 


65. 


03/19/93 


66. 


03/26/93 


67. 


03/31/93 


68. 


05/07/93 


69. 


05/14/93 


70. 


06/18/93 



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F.D.12 



13 



CRIMINAL BDREAO 

The Criminal Bureau is comprised of nine divisions: 
Appellate Division, Special Investigations, Medicaid Fraud 
Control Unit, Public Integrity Division, Environmental Strike 
Force, Urban Violence Strike Force, Division of Employment and 
Training, Economic Crimes Division, Narcotics and Organized 
Crimes Division. 

CRTHTWAT. APPEUATE DIVISION 

The Division handled 428 cases during the course of the 
vear These cases predominantly involved the defense of federal 
habeas corpus petitions attacking state criminal convictions, 
state habeas petitions, appeals from narcotics unit prosecutions 
and the defense of district attorneys, state correctional au- 
thorities and Treatment Center personnel, and other state offi- 
cials and judges sued in the course of their official duties. 

Two hundred and twenty-two (222) new cases were opened by 
the Appellate Division in FY 1992. This is a significant (.8%) 
increase from the 161 new cases opened during the previous year. 

In addition, Appellate Division attorneys participated m 
a 4-month Urban Violence rotation in Lowell District Court, a 
federal civil trial, criminal trials, and a lengthy motion for 
new trial. From an extensive wiretap operation, six indictments 
were obtained, and two other investigations were conducted, lead 
ing to an indictment and a continuing investigation. The Law 
Enforcement Newsletter is edited and produced in the Appellate 
Division . 



SUMMARY 



A. Federal Heibeas 

B. Federal Civil 

C. State Habeas 
State Civil 

D. 211 §3 

E. Criminal 

F. Other 

Total 



ases Disposed 



147 


72 


41 


21 


46 


20 


128 


45 


25 


20 


39 


26 


2 


2 



428 206 



14 p.D.i: 



APPELLATE BRIEFS FILED 

A. U.S. Supreme Court 7 

B. Ct.of Appeals 1st Cir. 9 A. Criminal: 27 

C. Ct.of Appeals 2d Cir 1 B. Federal Habeas: 12 

D. SJC 7 C. Civil/State Habeas: 17 

E. Appeals Court 32 

56 56 

RENDITIONS: 199 warrants reviewed; 23 hearings 

SAAG Supervision: Treatment Center: 30 cases 

Parole Board: 32 cases 

Other: 21 cases 

I. CASES HANDLED 

A. FEDERAL HABEAS COPJ'US 

During the fiscal year July 1, 1991-June 30, 1992, the 
Appellate Division carried a total of 147 habeas corpus 
cases in the various federal courts, and 72 of these 
cases were disposed during the year. This only in- 
volves cases in which there was an order by the federal 
court for us to answer the petition. 

We were successful in all but one case. The writ was 
granted by the District Court in Oses v. Commonwealth , and that 
decision was affirmed by the First Circuit. 

We have filed a petition for writ of certiorari. The writ 
was granted because the federal courts concluded that various 
events infringed Oses's right to represent himself in his 1977 
trial. The Norfolk County District Attorney intends to retry the 
case if our certiorari petition is unsuccessful. 

Among the First Circuit decisions in our favor are: Amirault 
v. Fair (multiple child rapes) which involved a question of juror 
impartiality, and Bembury v. Butler (murder) which concerned the 
effect of an erroneous malice instruction. 

B. FEDERAL CIVIL CASES 

During FY 1992, the Appellate Division handled 40 fed- 
eral civil matters, 5 of which involved our motions to 
quash subpoenas. Twenty-one (21) cases were disposed 
during the year. 

There was a bench trial in one case, Cameron v. Tomes , 
in which the District Court found that Treatrtent Center 
resident had a constitutional right to treatment which 
was violated by the manner in which various security 
procedures were implemented. We have taken an appeal 
of this case. 

C. STATE CIVIL/HABEAS CORPUS CASES 

The Appellate Division handled 46 state habeas cases, 

20 of which were disposed during the year. 

We also represented various state officials in 128 

state civil cases, 45 of which were disposed. 

Approximately twenty of these cases involved matters in 

which the investigative files of District Attorneys, 

the 



F.D.i: 



15 



State Police or the Attorney General were subpoenaed in 

civil cases. This is an area in which our caseload is 

rapidly growing. 

211S43 and other SJC Single Justice Matters 

During the FY 1992 the Appellate Division handled 25 

matters in the single justice session of the SJC. 

Twenty (20) of these cases were disposed. 

Criminal Cases 

Criminal Appeals Division attorneys filed briefs in 27 
criminal cases, three of which have not yet been argued 
or disposed. 



U.S. Supreme 



Court 

1 . Dohertv 

2 . Hussey 

3 . Massachusetts 
A . Massachusetts 



Massachusetts 
Massachusetts 
Moreau 
Tanso 



S.J.C. 



Collins 
Commonwealth 
Commonwealth - 
Commonwealth 
Commonwealth 

Commonwealth 



Commonwealth 

Alvarez, et al 

Ford 

Forkin 

Penta 
(FAP. application) 

Yazbecl'i 
(FAP. application) 



^>peala Court: 








1. Commonwealth 


v 


Claudio/ChaDlin 


o 


Commonwealth 


V 


Colomna 


3 


Commonwealth 


V 


Dedrick 


4 


Commonwealth 


V 


Johnson 


5 


Commonwealth 


V 


Moore 


6 


Commonwealth 


V 


Murillo 


7 


Commonwealth 


V 


Murohv 


8 


Commonwealth 


V 


Nichols/Ruzzano 


9 


Commonwealth 


V 


Payton 


1( 


). Commonwealth 


V 


Pichaido 


1] 


Commonwealth 


V 


Santiago 


i: 


I . Commonwealth 


V 


Savage 


1. 


3. Commonwealth 


V 


Sepulvedalle 


1^ 


1. Commonwealth 


V 


Soto 


1. 


5. Commonwealth 


V 


Walker 


1 


5. Commonwealth 


V 


Wiqf^ll 


1' 


7 . Commonwealth 


V 


Y^zbeck 



16 p.D.i; 



Division attorneys also participated in 12 different Criminal 
Bureau matters, 2 of which were disposed during the year. 

F. OTHER 

The Appellate Division handled 2 cases in Bankruptcy 

Court in which criminal prosecutions by the Department 

of Labor and Industries for non-payment of wages were 

sought yo be stayed pending the outcome of bankruptcy 
proceedings. Both were disposed favorcibly. 

II. BRIEFS FILED 

The Appellate Division filed 56 briefs during FY 1992; in 
the United States Supreme Court (7), First Circuit Court of 
Appeals (9), Second Circuit Court of Appeals (1), Supreme Judicial 
Court (7), and Appeals Court (32). Of these, 26 were in criminal 
cases, 11 federal habeas corpus, and 19 in civil and state heibeas 
matters. Twenty-four cases were argued. 

The division prevailed in all oppositions filed in the 
United States Supreme Court, but was unsuccessful in our two peti- 
tions for certiorari, Massachusetts v Tanso , and Massacusetts v 
Moreau . 

Eight of the nine briefs submitted to the United States 
Court of Appeals for the First Circuit, were in habeas cases; 3 
were argued. We were successful in all cases that have been de- 
cided but one, Oses v Massachusetts , discussed previously. We 
also prevailed in the Court of Appeals for the Second Circuit in a 
civil rights case brought against an Essex County Assistant 
District Attorney. That case was argued. In addition to the 
briefs listed above, a brief in lengthy Treatment Center litiga- 
tion supporting the District Court's denial of attorney's fees was 
filed in Pearson. 

Five full briefs, and two applications for further appellate 
review, were filed in the Supreme Judicial Court. Four cases were 
argued in that court. We were successful in Sheridan v 
Commonwealth , an appeal from the dismissal of an SDP §9 petition 
which concerned the statutory requirement 

that a §9 petitioner appear at a meeting with a clinician; in 
Commonwealth v Ford and Commonwealth v Forkin concerning the 
amount of time to be served on probation surrenders of inmates 
from the Dedham House of Correction who had been given certifi- 
cates of discharge from the federal master before their split sen- 
tences had expired because of overcrowding; and in Commonwealth v 
Alvarez and three companion cases in which we filed an cimicus 
brief in support of the constitutionality of the "school zone" 
drug statute. We were unsuccessful in our two applications for 
further appellate review in Criminal Bureau narcotics appeals and 
in Collins v Commonwealth , a double jeopardy case handled for the 
Suffolk County District Attorney's office. 

Briefs in 17 criminal and 8 civil cases were filed in the 
Massachusetts Appeals Court. Most of the criminal cases arose 
from Criminal Bureau Narcotics Division prosecutions, although 
Commonwealth v Dedrick was an appeal from the conviction of the 
man who shot two Massachusetts State Troopers. Fourteen criminal 
cases were argued. The division also handled several criminal ap- 
peals for the Suffolk District Attorney's office. The civil ap- 
peals, three of which were argued, included Miller v Tink , a ha- 
beas corpus case by a longtime Treatment Center resident who chal- 
lenged the nature of his original SDP commitment after his crimi- 
nal sentence expired and the judge had passed away. 



P.D.12 



17 



There were a substantial number of civil and criminal cases 
pending on appeal at the close of the fiscal year. 

III . RENDITIONS 

Attorneys from the Criminal Bureau, at the request of the 
Governor's Office, review the legal sufficiency of applications 
for Governor's warrants. From July 1, 1991 through June 30, 1992, 
199 different cases were reviewed. 

Once an individual is arrested on a Governor's warrant, he 
has the right to file a writ of habeas corpus to challenge the suf- 
ficiency of the warrant. Hearings in these matters are handled by 
the attorneys who have initially reviewed the papers. During FY 
1992, 23 matters were brought to hearing. One case, Flavel, — peti- 
tioner , represents the extent 

to which these cases can be litigated. From the original superior 
Court case, the matter was presented to a single justice of the 
Appeals Court, and then to the Supreme Judicial Court (Single 
Justice) . Flavel then filed for habeas corpus under a federal 
statute in federal district court, and after relief was denied, ap- 
pealed to the Court of Appeals for the First Circuit. When the 
federal case was concluded, he returned to the Appeals Court and 
the Supreme Judicial Court. 

We sent an attorney (Sikellis) to the National Conference of 
Extradition officials in June, 1992. 

IV. SA&G CaSES SUPERVISED BT APPELLATE DIVISION 

A. Cases handled by SAAG (DMH attorney) at Tre atment Center 
A number of civil cases and state habeas corpus/ de- 
claratory relief matters are handled, under the direc- 
tion and supervision of the Appellate Division, by a 
DMH attorney assigned to the Treatment Center. 

State Habeas: 24 opened 

8 disposed 

State Civil Actions: 4 opened 

disposed 

Federal Civil: 2 opened 

disposed 

A total of 30 civil and habeas cases 

(8 disposed) 



P.D.12 



This attorney also currently handles the annual review hea- 
rings pursuant to G.L. c. 123A, §9. This year there were 35 hea- 
rings conducted (16 resulted in findings that the petitioner re- 
mained sexually dangerous, 15 resulted in release either to a con- 
current prison sentence or absolute release), and 4 which have not 
been concluded. 

Appeals from all cases handled by the DMH attorney are 
handled by the Appellate Division. 

B. Cases handled by SAAG at Parole Board 

A number of civil cases and state habeas corpus/declara- 
tory relief matters are handled, under the direction 
and supervision of the Appellate Division, by Parole 
Board counsel: 32 cases were active at the end of June 
30, 1992. 

Appeals from Parole Board cases are generally handled 
by the Appellate Division although general counsel has 
handled a few appeals. 

C. Other SAAG Cases Supervised: 21 

1. Department of Youth Services v 

Rosenberg (Juv.Ct.) SAAG Hardoon - Matter of con- 
tinuation of DYS commitment of juvenile past age 
21. 

2. Gildea v Sharkey (U.S. District Ct ) 

SAAG Cowin - Federal civil rights action against 
state trooper in Norfolk CPAC unit concerning ex- 
tradition of prisoner to Georgia. When Judge 
Cowin was appointed to the bench, the case was 
brought back to the Appellate Division to handle. 

3. Commonwealth v Murphv (Mass. Superior 
Ct) 

SAAG Savignano - Motion for new trial in criminal 
case prosecuted by A.G.'s office. 

4. Commonwealth v Kellev (SJC) 
SAAG Mikaitis - Juvenile matter. 

5. Commonwealth v Hicks (SJC) 

SAAG Mikaitis - Juvenile matter. Same as Kellev . 

6. Commonwealth v Hampden Division 
District Court 

Department (SJC Single Justice) 

SAAG Sahakian - Nominal party matter. 

7. Commonwealth v Perkins (Uxbridge 
District court) SAAG Kesten - DYS matter. 

8 . Various subpeona matters 

SAAG Zeprun - Represent the Hampden District 
Attorney's office in motions to quash subpoenas 
in 14 separate cases . 



P.D.12 



19 



SPECIAL INVESTIGATIONS UNIT 

During fiscal year 1992, the Special Investigations Unit be- 
came fully operational with the acquisition of designated office 
space, equipment and staff. A total of 3 Assistant Attorney 
Generals, 2 Financial Investigators, 4 State Police officers and 1 
secretary are assigned to SIU. 

Investigations and Prosecutions 

During this fiscal year, SIU reviewed a total of 16 new mat- 
ters and initiated a full investigation into 6 of those matters. 
Two of those investigations led to indictments. In August 1991, 
33 individuals were charged in 99 separate indictments for a 
variety of offenses including supervising an illegal gaming opera- 
tion, loansharking, narcotics offenses, firearms offenses, at- 
tempted extortion, and conspiracy. Those cases are currently pend- 
ing in Middlesex Superior Court. 

In May 1992, 15 individuals were charged in 22 separate in- 
dictments in an alleged narcotics conspiracy. Those cases are 
also currently pending in Middlesex Superior Court. 

Both of those prosecutions relied upon the extensive use of 
Court authorized wiretaps and electronic surveillance. Matters in- 
vestigated by SIU during this fiscal year in one case included the 
review and analysis of over 300,000 pages of business records and 
related documents along with bank account and financial records. 
In addition, SIU reviewed materials referred by federal authori- 
ties for possible violations of state law in two cases. 

Seizures /Forfeitures 

During fiscal year 1992, SIU investigations and 
prosecutions resulted in the seizure of approximately 4 ounces of 
cocaine, 5 pounds of marijuana and the seizure of over 70,000 in 
U.S. currency. In addition, 3 motor vehicles were seized alone 
with a residence in Newton having an assessed value over $200,000. 
Civil actions were filed in Superior Court seeking forfeiture of 
those assets pursuant to G. L. c. 94C. 



Statistics 



Fiscal Year 1992 



Total Defendants Charged 48 

Total Number of Indictments 121 

Arrests 

Search Warrants 7 

Electronic Surveillance Warrants 4 
(Not including aimendments and Renewals) 



20 



Seizures : 

Monies 

Motor Vehicles 

Firearms 

Real Property 
Narcotics : 

Cocaine 

Marl juana 



$70,000 



3 
10 

1 



4 ounce3/112 grams 

5 pounds 



p.D.i; 



ORBAN VIOLENCE STRIKE FORCE 

The Urban Violence Strike Force (UVSF) was organized in the 
spring of 1991 as part of Attorney General Harshbarger' s overall 
commitment to improving the quality of life for residents of the 
Commonwealth's inner cities. Consisting of three to four experi- 
enced prosecutors who work in conjunction with the offices of 
local district attorneys, ITVSF targets for prosecution crimes aris- 
ing out of gang related activity, with a particular emphasis on 
crimes involving the distribution of drugs and/or the use of fire- 
arms . 

In the first full year of its operation, UVSF established 
pilot projects in both Suffolk and Essex Counties and made signifi- 
cant gains both in establishing working relationships with local 
law enforcement agencies and successfully prosecuting individuals 
charged with the targeted offenses. Indeed, by directly indicting 
and aggressively prosecuting those individuals whose cases would 
have otherwise languished in district court for months, or been 
dismissed because civilian witnesses failed to cooperate with the 
prosecution, UVSF has secured the incarceration of a significant 
number of repeat offenders and has made a major contribution to 
the reduction of gang related crime in the City of Boston. 

The Assistant Attorneys General who were assigned to UVSF dur- 
ing FY92 are John Ciardi, Marcy Jackson, Paul McLaughlin, Alex 
Nappan and Linda Sable. 

Number of Defendants 186 

Number of Pending Cases 44 

Number of Convictions 99 

Number of Defendants Incarcerated 91 

Number of Other Dispositions 21 



F.D.i: 



Division OF EMPLOYMENT AND TRAINING 

The Employment and Training Division in the Criminal Bureau 
provides the Department of Employment and Training (D.E.T.) with 
legal assistance and representation necessary to enforce the 
Massachusetts employment laws. The Division also manages appel- 
late matters arising from decisions granting or denying employment 
compensation benefits to individual claimants. 

The Division prosecutes employers who fail to comply with the 
law that requires them to pay a quarterly contribution to the 
Unemployment Compensation Fund as well as prosecutes the individu- 
als who collect unemployment benefits while gainfully employed and 
earning wages or who otherwise collect benefits when they are in- 
eligible. The Division also represents the Commissioner of D.E.T. 
in cases brought against him and also on his behalf. 

In fiscal year 1992, the Division received 283 new cases, dis- 
posed of 256 cases and arrested 173 individuals. Nearly one mil- 
lion dollars in restitution was collected. 

Whenever an employer fails to pay unemployment contributions owed 
to the Department of Employment and Training or an individual is 
found to be collecting unemployment benefits while gainfully emp- 
loyed and earning wages, the matter is subject to prosecution. 

Consistent with Attorney General Scott Harshbarger' s belief 
that unemployment fraud merits treatment consistent with other 
crime against the Commonwealth, several individuals have been sen- 
tenced to terms of incarceration. Particularly of note were 
the following cases : 

William Fields of Fairhaven, was charged in April of this 
year with larceny over $250 and with forgery in connection 
with his receipt of unemployment checks under the name of his 
brother, David Fields, who was serving prison time at 
MCI-Bridgewater . William Fields collected $3,675, over a 15 
month period, in unemployment checks that were not due to 
him. He was found guilty and sentenced to 90 days in the 
House of Correction, 30 days to serve, the balance suspended 
for two years, and ordered to pay restitution in the amount 
of $3,675. 

In early 1991, Joseph DeCarlo of Hyde Park, was charged with 
larceny over $250 for taking $10,000 in unemployment benefits 
by claiming the funds with false social security numbers. He 
was sentenced to two years in the House of Correction. 

In a case involving the cashing of checks stolen from DET, 
six defendants were charged in November, 1991, with 154 
counts of larceny over $250, uttering and receiving stolen 
property involving $22,856. Two of those defendants, Steven 
Tucker of Dorchester, and Nathaniel Davis, also of 
Dorchester, were sentenced to two and one-half years in the 
House of Correction, eight months to serve, the balance sus- 
pended for five years, and ordered to pay restitution in the 
amount of $22,856. 

Within the last year, numerous employers have been ordered to 
pay restitution for amounts in default ranging from $3,000 to 
$125,000. The majority of cases have resulted in guilty findings 
and the imposition of restitution. From July, 1991 to June, 1992, 
the Division processed 943 employer cases, 903 employee cases, and 
collected nearly $1 million from unemployment fund abusers. 



22 p.D.i: 



A major initiative undertaken by DET that resulted in the col- 
lection of $156,173 was the Amnesty Program. The Amnesty Program, 
which ran from September 18, 1991 to December 20, 1991, was de- 
signed to clear a backlog of cases that accumulated in the late 
I960' 3 and grew dramatically in the 1980' s. The program gave 
nearly 1,000 employers and employees the opportunity to fulfill 
their legal responsibility, while giving them the benefit of a 50 
to 90 percent reduction on the interest accrued on the amount they 
owed. 

At the conclusion of the amnesty period, the Attorney 
General's office began a major crackdown on defaulters. In May of 
this year, for example, 13 former employers who failed to contrib- 
ute to the state's Unemployment Trust Fund and did not participate 
in the Amnesty Program were arrested or voluntarily turned them- 
selves over to authorities. The cimount allegedly owed by the de- 
fendants totalled nearly $63,000. All of the defendants are pres- 
ently engaged in paying back the amount. Due to such sweeps of de- 
faulters, the Division has removed 50 percent of the outstanding 
warrants that existed before the Amnesty Program. 

The Assistant Attorney General who prosecute Division of 
Employment and Training cases are Brian Burke, who serves as 
Division Chief, Elizabeth Foley, Paula Niziak, Patricia Preziosa 
and Beverly Ward. 

DIVISION OF EMPIOTMEHT AND TRAJNXNG 

JULY 1. 1991 - JUNE 30,- 1992 

Cases Received: 283 - 12 Appeals 

219 Larceny Claims Cases 
51 Employer Tax Cases 
1 Commissioner Action 

Indictments: 7 
Arrests: 173 

Restitution Collected: $746,619.66 

Court Appearances: 300 courts on 871 cases 
Cases Disposed Of: 256 

Cases Closed: 210 - 7 Appeals 

85 Larceny Claims Cases 
118 Employer Tax Cases 

Amnesty Program Results : 

The effort was successful in contacting 509 people out of 
1,000 (329 employer, 180 employee). A total of $156,173.23 was 
collected. 

There are a total of 310 cases which are ten years or older 
in which less than $5,000.00 is owed to the Commonwealth. A plan 
has been approved to dispose of these cases. 



P.D.12 23 



ECOHOtaC OOMES DIVISION 

INTRODUCTION 

With limited investigative and prosecutorial resources, the 
Economic Crimes Division began the process of defining an agenda 
consistent with the principles outlined in the Attorney General's 
Action Plan. Recognizing the societal costs of fraud upon the gov- 
ernment, and working closely on related investigations pursued by 
both the Public Integrity Division and the Narcotics and Organized 
Crimes Division, the Tax Prosecution Unit initiated several major 
tax evasion and failure to file cases, obtained significant fines 
and restitution orders and, where appropriate, sentences of incar- 
ceration to serve as a general deterrent to tax fraud. Responding 
to the widely-perceived crisis in insurance rates, attorneys in 
the Economic Crimes Division worked with the newly-created 
Insurance Fraud Bureau to initiate several prosecutions involving 
frauds upon automobile insurers and workers compensation carriers. 

Working with attorneys from both the Consumer Protection and 
the Public Charities Divisions of the Public Protection Bureau, 
the Economic Crimes Division brought criminal cases - and obtained 
significant sentences of incarceration - against con artists bilk- 
ing consumers and businesses. And with a special emphasis on 
crimes against the elderly, the Economic Crimes Division prose- 
cuted several attorneys and investment advisors who preyed upon 
senior citizens and absconded, in some cases, with a retiree's en- 
tire life savings. 

In FY93, the Division looks forward to additional investiga- 
tive and prosecutorial resources so that the efforts outlined 
above may be expanded and that additional categories of crimes may 
be addressed. 



TAX PROSECDTICW DNIT 

In FY92, the Tax Prosecution Unit obtained convictions in 21 
cases involving tax evasion and wilful failure to file income tax, 
meals tax and/or sales tax returns. Of these dispositions, 1 de- 
fendants were sentenced to terms of incarceration in state prison 
or house of correction. The Tax Prosecution Unit also obtained a 
total of $321,300 in fines payeible to the Commonwealth, including 
one case in which the fine, $175,000, represented the largest 
single fine ever imposed in a tax prosecution. In all, the pros- 
ecutions initiated and/or disposed in FY92 represented tax liabil- 
ity to the Commonwealth totalling $1,477,452. 

Among the most significant cases brought by the TPU are the 
following : 

Conviction of a major national corporation for failure 
to file and pay sales tax. The corporation was ordered 
to pay a fine of $175,000 in addition to its tax liabil- 
ity. 

Conviction of a tax protester on 4 counts of income tax 
evasion and 2 counts of non-filing returns. The defend- 
ant was sentenced to 4 1/2 to 5 years in state prison. 

Indictment of a city council president and an attorney 
on charges involving the failure to pay taxes on more 
than $1 million earned by the council president. 



p.D.i: 



Indictment of a restaurant owner for 56 counts of meals 
tax evasion. 

Indictment of school committee member/attorney on 5 
counts of failing to file income tax returns. 

The assistant attorneys general who handled TPU prosecutions 
in FY92 are Andy Zaikis, Mary Phillips, John Van Lonkhuyzen, Myles 
Slosberg, and John Ciardi . 

INSURANCE FRAUD UNIT 

For much of FY92, the Insurance Fraud Unit consisted of 
Assistant Attorney General Jim Bryant, paralegal Dan Ciccariello 
and secretary Nicole Ricci. The primary focus has been on automo- 
bile insurance fraud cases investigated by the Insurance Fraud 
Bureau ("IFBII), the Governor's Auto Theft Strike Force 
("GATSFII), and private insurers. For FY93, funding has been ob- 
tained to initiate a similar effort focusing on workers compensa- 
tion fraud. AAGs Jennifer Ferreira and Mike Cullen have assumed 
those responsibilities. 

During FY92, the Unit received 61 referrals of suspected auto- 
mobile insurance fraud from IFB, GATSF, and private insurers. In 
addition, 6 cases of suspected workers compensation fraud were re- 
ceived. Despite the fact that FY92 was a start-up year for both 
our unit and IFB, 13 separate cases resulted in either indictments 
in Superior Court or criminal complaints in a variety of district 
courts. Most of these are still pending, but 4 disposed cases re- 
sulted in convictions. 

Among the significant cases prosecuted in FY92 are the follow- 
ing : 

An insurance company claims adjuster was indicted on 6 
counts each of larceny and fraudulent entries in corpo- 
rate books for a scheme whereby he created files for 
payment on fictitious automobile accident claims. 

A New Hampshire man was indicted for staging a series 
of choking accidents in restaurants for purposes of fil- 
ing several fraudulent insurance claims . 

A Worcester insurance agent was indicted for collecting 
more than $700,000 in automobile insurance premiums 
without remitting the premiums to the insurer, result- 
ing in the cancellation of insurance coverage for many 
of the agency's clients. 

Thirteen residents of Middlesex County were indicted 
for participating in a scheme to stage phony automobile 
accidents and personal injury claims in Cambridge and 
Somerville. This investigation, which has identified 
more than $100,000 in fraudulent payments, is continu- 
ing. 



F.D.12 25 



FINANCIAL ABOSE OF THE ELDERLY 

In cooperation with the staffs of Secretary of State's 
Securities Enforcement Division and the Commonwealth's Board of 
Bar Overseers, the Economic Crimes Division has prosecuted several 
major cases involving financial abuse of elder Americans. Among 
the cases initiated or disposed in FY92 are 
the following: 

A Newton attorney was indicted on 13 counts of larceny, 
8 counts of forgery and 4 counts of embezzlement by a 
trustee as a result of schemes to defraud several 
clients of funds totalling more than $360,000. 

A Revere financial consultant was indicted on 16 counts 
of larceny and one count of securities fraud for a 
scheme whereby he defrauded an 80 year old widow of the 
$3,000,000 she inherited through her husband's estate. 

A Boston stockbroker was indicted on 6 counts of lar- 
ceny and one count of securities fraud for separately 
defrauding a widow, a retired state employee, and a nun 
of sums totalling more than $500,000. 

A Salem attorney was indicted on 5 counts each of lar- 
ceny and embezzlement by a fiduciary for separate 
crimes involving the embezzlement of the proceeds from 
the sale of an elderly couple's house, and the embezzle- 
ment of life insurance proceeds from an 84 year old 
widow. 

A Weymouth man was convicted for defrauding an 87 year 
old Quincy man of more than $20,000, and was sentenced 
to a one year term in the house of correction. 

A Natick stockbroker was convicted of securities fraud 
and larceny for his scheme to defraud elderly investors 
of more than $180,000. The defendant received sentences 
totalling 10 to 15 years in state prison. 

A Wrentham attorney was indicted on 7 counts of larceny 
and 6 counts of embezzlement by a fiduciary for sepa- 
rate schemes by which he stole more than $200,000 from 
primarily elderly clients. 

An Acton attorney was indicted for multiple charges of 
larceny, forgery and unauthorized practice of law in- 
volving a total of $484,000 embezzled from 16 clients, 
6 of whom were elderly. 

CX3NSCIMER AND CHARITIES FRAUD 

The Economic Crimes Division in FY92 began to work with the 
Public Protection Bureau's Consumer Protection Division and Public 
Charities Division to utilize criminal prosecutions in cases where 
traditional civil remedies had been ignored by con artists. The 
two most significant cases were the following: 

Four individuals were indicted on charges of larceny 
from several small business owners in connection with a 
telephone solicitation 



P.D.12 



scam. Two of the defendants posed as police officers 
or Registry of Motor Vehicles officials in an effort to 
solicit funds for a police yearbook. 

A Newton man was convicted of 17 counts of larceny and 
one count of criminal contempt for fraudulently obtain- 
ing broker fees after promising refinancing assistance 
to homeowners and businesses facing foreclosure. The 
defendant was sentenced to serve a 3 to 5 year state 
prison sentence and was ordered to pay over $30,000 in 
restitution to 56 known victims. 



FIDDCIART E34BEZZLEME3rTS 

In addition to crimes against the elderly, the Economic 
Crimes Division pursued other cases against professionals who vio- 
lated fiduciary relationships and embezzled funds entrusted to 
them by clients. Among the more significant cases were the follow- 
ing : 

A former senior vice-president of a Connecticut-based 
securities brokerage firm was indicted on 11 counts 
each of larceny and securities fraud for misappropriat- 
ing more than $450,000 from eleven individual clients. 

The former chief financial officer of a local private 
college was convicted and sentenced to 9 to 10 years in 
state prison for embezzling more than $1,000,000 from 
the school. 

An East Boston stockJDroker was convicted of larceny and 
securities fraud in connection with the theft of 
$45,000 from a single client. 

A Cape Cod real estate broker was indicted on charges 
of larceny for misappropriating more than $160, 000 in 
funds provided by real estate investors seeking to pur- 
chase property the broker in either claimed to own or 
for which he purported to act as selling agent. 

A Cohasset attorney was indicted on larceny charges in- 
volving his embezzlement of $217,000 from four trusts 
he managed as trustee. 

A Cohasset man was indicted for larceny in connection 
with a fraudulent investment advisor firm he used to em- 
bezzle more than $140,000 from a Randolph resident and 
a Quincy couple. 



P.D.12 27 



OTHER CRIMES 

While focusing on frauds upon the Commonwealth and uniquely 
vulnerable victims, the Economic Crimes Division prosecuted a 
number of other offenses worthy of mention: 

A Lynn man was indicted on arson and insurance fraud 
charges involving a fire that caused $130,000 worth of 
damage to a Lynn business and which resulted in inju- 
ries to two Lynn firefighters. 

11 Massachusetts and New Hampshire residents were in- 
dicted for a series of thefts of copper ground cable 
from the Riverside Branch of the MBTA' s Green Line in 
Newton. The thefts cost the MBTA more than $200,000 in 
repairs . 

A Lynn woman was indicted for arson and insurance fraud 
after setting fire to her three-decker apartment build- 
ing located in a residential neighborhood. 

An East Boston woman was indicted on 2 counts of lar- 
ceny and 6 counts of forgery in connection with the em- 
bezzlement of more than $100,000 from the firm she 
served as executive secretary. 

A Waltham man was convicted and sentenced to 5 to 10 
years in state prison for his participation in a ring 
which sold more than $50,000 worth of computer equip- 
ment stolen from several universities, colleges and 
prep schools . A co-defendant was sentenced to serve a 
3 1/2 to 5 year state prison sentence in connection 
with the same scheme. 

A New Bedford woman was convicted and received a state 
prison sentence for embezzling almost $90,000 from a 
state-financed, non-profit human services corporation 
in Roxbury. 

A New York resident was indicted for embezzling more 
than $100,000 from Boston's Museum of Fine Arts. 

A Scituate man was indicted on charges of larceny and 
false corporate book entries in connection with his em- 
bezzlement of more than $1,000,000 from his employer, a 
Hanover automobile dealership. 

The former chief financial officer of a Boston software 
firm was indicted for stealing more than $650,000 from 
his employer. 

The assistant attorneys general who prosecuted Economic 
Crimes Division cases include Marty Healey, who served as Division 
Chief until May, 1992, Mary Phillips, John Van Lonkhuyzen, John 
Ciardi, Mary Beth Downing, Abbe Ross, Howard Brick, Mark Smith, 
Myles Slosberg, and Alex Nappan. 



F.D.i; 



MEDICAID FRAUD CXWTROL UNIT 

INTRODUCTION 

The Massachusetts Medicaid Fraud Control Unit (MFCU) was es- 
tablished in 1978 as a result of federal legislation authorizing 
individual states to investigate and prosecute waste, fraud and 
abuse within the Medicaid Program. The Massachusetts Unit has 
been certified annually since that time and receives 75% of its op- 
erating budget from the federal government. The total MFCU budget 
for fiscal 1991 was approximately $1.3 million. 

Congress continues to fund the Massachusetts Unit because of 
its commitment to prosecute providers who abuse the system and 
take advantage of those most vulnerable the poor and elderly who 
depend on Medicaid for health care. During the previous 12 months 
the Massachusetts Medicaid Program administered nearly $3 billion 
to over 500,000 recipients. 

The focus of this Unit continues to be criminal prosecution 
and civil enforcement of health care 

providers who defraud the Commonwealth's Medicaid Program or who 
abuse and neglect patients. Investigating and prosecuting 
Medicaid provider fraud is a major responsibility in 
Massachusetts, as the state Medicaid Program is the largest line 
item in the state budget. The Massachusetts medicaid budget is 
ranked sixth largest in the nation. 

The providers who comprise the Commonwealth's Medicaid 
Program are a diverse group. Those who receive reimbursement for 
medical goods and services range from institutions such as nursing 
homes and hospitals to individual health practitioners such as phy- 
sicians, psychiatrists, dentists, pharmacists, and psychologists. 
Also participating are outpatient clinics and home health agen- 
cies, ambulance and other transportation companies, laboratories 
and suppliers of dureible medical equipment. Ownership of health 
care providers range from large multi-state corporations to small 
family proprietorships and individual professional corporations. 

FISCAL 1992 RECOVERIES AND PROSECUTIONS 

The Massachusetts MFCU reached the largest settlement in its 
14-year history in fiscal year 1992 when it entered into a $12 mil- 
lion civil agreement with a well-known Boston children's hos- 
pital. Franciscan Children's Hospital and Rehabilitation Center 
agreed to restitution and free pediatric care as a result of 
over-generating medicaid revenue over a period of approximately 
five years. Part of the unprecedented settlement calls for the 
hospital to provide free pediatric services by mobile van to some 
of Boston's most needy neighborhoods. This agreement is an ex- 
ample of the type of civil enforcement mix the unit has undertaken 
along with criminal prosecutions. 

During Fiscal 1992 the unit also returned 36 indictments, includ- 
ing 7 convictions. 

In all, the unit recovered nearly $13 million. During this 
period, the unit indicted a pediatrician for larceny and filing 
false medicaid claims totalling nearly $250,000. 

Also indicted were a Lawrence emergency room physician and 
his walk-in clinic, a Methuen taxi cab company and its owners and 
a former Brighton nursing home owner and administrator. 



p.D.i; 



PATIENT ABUSE REFERRALS AND PROSECOTIONS 

MFCU is also charged with the responsibility of investigating 
and prosecuting patient abuse in Massachusetts long term care fa- 
cilities. The unit has established a multi-disciplinary team to 
investigate and prosecute patient abuse cases. Abuse consists of 
physical, emotional and financial as well as neglect of our 
elderly population. During fiscal 1992 over 200 matters were re- 
ferred to MFCU. Of those, fifty-six (56) resulted in criminal in- 
vestigations. Four (4) have resulted in convictions and a number 
are under active investigation with the exception of criminal com- 
plaints being issued. 

The Attorney General's office continues to evaluate the 
Medicaid Unit to be more responsive to abuse in this area. A con- 
sistent interdisciplinary approach with the Consumer Protection 
Division is a major initiative begun in fiscal 1992 to address in- 
stitutional abuse of the elderly. 

IV. SUMMARY CHAP.T 
(Fiscal 1992) 

CRIMINAL ACTIVITY 

A. INDICTMENTS 36 

B. CONVICTIONS 7 

C. RECOVERIES $6,800 

CIVIL ACTIVITY 

A. INDIVIDUAL RECOVERIES 25 

B. OVERPAYMENTS RECOVERED $10,000,457.48 

C. PNA RECOVERIES $5,999.26 

D. CIVIL DAMAGES ASSESSED $19,750 

E. OTHER PENALTIES ASSESSED $82,185.20 

TOTAL CIVIL RECOVERY $12,84 9,891.94 

NARCXXnCS AND ORGANIZED CRIMES DIVISION 

In the fiscal year ending July, 1992, the Narcotics and 
Organized Crime Division successfully arrested, prosecuted and con- 
victed large-scale drug traffickers in Barnstable, Essex, 
Middlesex, Norfolk, Plymouth, and Suffolk counties, most of whom 
are now serving minimum-mandatory sentences in state prison. The 
majority of their arrests and prosecutions involve charges of co- 
caine trafficking or marijuana smuggling. State Police officers 
assigned to the Attorney General's Narcotics and organized Crime 
Division in many instances investigated these cases in cooperation 
with local police departments, other State Police officers as- 
signed to the offices of the eleven District Attorneys, and with 
the Drug Enforcement Administration. 

In addition to violations of the Controlled Substances Act, 
the Narcotics and Organized Crime Division of the Criminal Bureau 
investigates other forms of organized criminal activity, including 
murder, arson, armed robbery, gaming, loan sharking, receiving sto- 
len property ("fencing") and prostitution. The eight 
Massachusetts State Police officers assigned to this division con- 
centrate their investigations on organized and disciplined crimi- 
nal enterprises whose activities span county lines, and therefore 
may exceed the reach of local law enforcement authorities. 

Five Assistant Attorneys General specialize in prosecuting 
Narcotics and Organized Crime cases, although many of the Criminal 
Bureau's 40 Assistant 



30 



P.D.12 



Attorney's General handle a caseload which includes prosecutions 
in this area. These cases are supervised by an Assistant Attorney 
General, and Chief of the Division, who oversees both investiga- 
tions and pending prosecutions. 

The Office of the Attorney General has expanded its efforts 
to seize and forfeit the assets of drug dealers which are trace- 
able to narcotics activities. In January, 1991 the Attorney 
General added two full-time Assistant Attorneys General to his 
Narcotics and Organized Crime Division to handle exclusively civil 
forfeiture proceedings, with the assistance of a full-time finan- 
cial investigator. In fiscal year 1992, this Asset Forfeiture 
Unit successfully forfeited to the Commonwealth over $274,000 in 
case, in addition to numerous pieces of real property and motor 
vehicles . 

The statistics of the division are summarized below: 



I. 



PROSECXJTICMJS 



Number of Arrests 90 

Number of Cases Initiated 34 

Number of E'efendants 58 

Number of Indictments 138 

Number of Cases Disposed 56 

Number of Trials 15 

Number of Pleas 40 

Other 1 



II. NARCOTICS SEIZED 



Cocaine 
Mari juana 
Heroin 
Methadone 
PCP 



over 4 kilograms (4,000 grams) 
200 pounds 
100 packets 
38 grams 
Small quantity 



III. ASSET FORFEITURE 



Forfeiture Cases filed: 
State Forfeiture Cases: 
Out-of-state Forfeitures 
Federal Forfeiture Cases 



Disposed: 
Disposed: 
Disposed : 



16 

7 
3 



ASSETS SEIZED 



Vehicles : 
Real Property: 
Computer: 
Monies : 



14 

7 
1 



$357,882.80 



AMOUNT FORFEITED TO COMMONWEALTH OF MASS. 



Monies : 
Vehicles : 



$274,081.36 
3 (valued at $19,525) 



rv. OTHER 



Approximately 1/2 million dollars in stolen jewelry, 
computers, golf equipment, electronics, and construc- 
tion equipments was recovered by the Massachusetts 
State Police assigned to the Office of the Attorney 
General. Eleven (11) firearms were also seized. 



P.D.12 31 



THE MEkSSACHUSETTS ENVlKONMEmAL STRIKE FORCE 

I. THE STRIKE FORCE: 

An Inter-Agency Enforcement Tool 

The Massachusetts Environmental Strike Force is a relatively 
unique enforcement tool used in the investigation and prosecution 
of the Commonwealth's environmental enforcement efforts. Through 
the cooperation of the Attorney General, the Secretary of 
Environmental Affairs, the Department of Environmental Protection, 
the Department of Fisheries, Wildlife, and Environmental Law 
Enforcement, and the Metropolitan District Commission, the ESF 
brings attorney, technical, and police resources under a single um- 
brella. The ESF thus provides the legal, scientific, and inves- 
tigative expertise necessary to identify environmental violations, 
evaluate their impact on the public health, safety, and the envi- 
ronment, and develop the evidence necessary to assess responsibil- 
ity. 

The legal resources devoted to this effort within the 
Attorney General's Office since 1991 are unprecedented in the his- 
tory of the Commonwealth. Three prosecutors from the Criminal 
Bureau have been dedicated full-time to Strike Force efforts. In 
addition, nine Environmental and Metropolitan police officers have 
been stationed in the Criminal Bureau, forming a unitary ESF po- 
lice force. Finally, an increased emphasis on civil enforcement 
has resulted in increased resources from the Attorney General's 
Environmental Protection Division being devoted to ESF cases. 

II. EXPANDING the STRIKE FORCE CONCEPT 

The increase in both resources and inter-depart- mental coor- 
dination reflects the new ESF philosophy to aggressively enforce 
the environmental laws across the board. The Strike Force has pur- 
sued not only the "marquee" cases involving large corporate offen- 
ders, but also those smaller offenders who, taken together, pose a 
significant threat to both the public health and environment. The 
Attorney General has also expanded the "strike force concept" 
through closer coordination with all federal, state, and local 
agencies with responsibility for some aspect of environmental pro- 
tection. As a result, the Strike Force's enforcement efforts have 
virtually covered the spectrum of serious environmental viola- 
tions, from illegal transportation and dumping of hazardous 
wastes, to water pollution, solid waste dumping, improper lead 
paint removal, exposure to hazardous substances in the workplace, 
illegal harvesting of 

shellfish from contaminated waters, unlicensed application of 
pesticides, and septage dumping. 

III. PICKING OP the PACE of PROSECUTIOH 

The pace of criminal prosecutions has dreunatically quick- 
ened. In the past year, criminal charges were filed in twelve 
cases around the state, for an average of one new case a month. 
This may be compared to the total of twenty new cases brought in 
the four years before Attorney General Harshbarger took office. 
In essence, the Strike Force has doubled the pace of criminal envi- 
ronmental enforcement. In addition to relying on inter-agency 
leads and coordination. Strike Force police have executed criminal 
search warrants and engaged in aerial and ground surveillance to 
develop criminal cases . Prosecutors have used both grand jury in- 
vestigations and, in a departure from past practice, have brought 
complaints in the district courts for quick response to some of 



32 P.D.12 



the simpler, but still significant, environmental offenses. 

Criminal convictions which have been obtained in the past 
year include convictions for: 

♦Illegal alteration of a wetland (thirty day suspended sen- 
tence and $42,000 fine) 

♦Illegal transportation and dumping of hazardous waste in a 
residential area of Fall River ($15,000 fine, $6,500 restitu- 
tion for cleanup, probation and community service imposed) 

♦Illegal operation of asbestos waste transfer station 
($10,000 fine, probation) 

♦Illegal application of pesticides by West Springfield exter- 
minator ($2,700 fine) 

♦Illegal removal of asbestos from apartment building (defend- 
ant plead to sufficient facts) 

♦Illegal discharge of asbestos laden water into the Charles 
River (case brought jointly with U.S. Attorney's Office — four 
month federal sentence, $125,000 fine) 

Criminal cases presently pending include: 

1. Com, v. Karl Avancean : Owner of Worcester auto body 
shop indicted for three felony violations of state's 
hazardous waste laws. 

2. Com, v. Wayne F. Bell: Cape man charged with illegal 
disposal of hazardous waste and solid waste in a resi- 
dential area of Foxborough. 

3 . Com. V. James K. Bounakes and Michael G. Reynolds: Two 
men indicted on charges of illegal harvesting of shell- 
fish in contsiminated area of Taunton River in Somerset. 

4 . Com, v. Edna Gilchrist and Bruce Adams: Owner of of- 
fice park and building manager indicted for the illegal 
disposal of waste related to the alleged dumping of 
human waste directly into the Chicopee River. 

5. Com. V. Chung Kendrick: Wakefield landlord charged 
with illegal removal of lead paint from apartment unit. 

6. Com, v. Roger Knowles. Anton Martin. Polymerine. Ltd.: 
Company, company president and employee indicted on sev- 
eral charges of violating Massachusetts hazardous waste 
storage and transfer laws. A fourth defendant, a com- 
pany in New Bedford, found guilty on four charges and 
fined $400,000 on Feb. 28, 1992. Three co-defendants' 
cases still pending. 

7. Com. V. John Lemieux. George Winderlick. Michael 
Winderlick, Steven Winderlick. Robert Chapman, and 
Shawn Martin: Six South Dartmouth men charged with il- 
legal harvesting of shellfish in contaminated area of 
New Bedford harbor. 

8. Com. V. Carl A. Trant. Trant Equipment and Scrap Iron 
Company. Inc.. and Valley Holding Company. Inc.; 
Brimfield man and companies indicted on charges of oper- 
ating waste tire dump. Case pending. 



P.D.12 33 



TV. THE FDTDRE: DESIGNING STRDCTDRAL CHANGE 

Attorney General Harshbarger has gone beyond discrete prosecu- 
tions in an attempt to make important structural changes to im- 
prove the Commonwealth's ability to enforce its environmental 
laws. The Attorney General has filed the Environmental Trust Fund 
and Forfeiture Act which will permit law enforcement officials to 
seize assets and proceeds of 

environmental crimes and channel them into a special fund designed 
to increase environmental enforcement at both the state and local 
levels; the Environmental Endangerment Act which will impose 
longer sentences and larger fines for crimes which actually cause 
physical harm to individuals or natural resources, and which will 
permit the courts to order offending organizations to perform envi- 
ronmental audits to address the causes of polluting conduct; and a 
bill designed to strengthen and harmonize the state's existing en- 
vironmental laws. Finally, in an effort to invigorate the enforce- 
ment of the environmental laws at the local level, the Attorney 
General has brought together representatives of state and federal 
environmental agencies and the private sector to provide training 
to the district attorneys and local 

police and fire officials in the investigation and prosecution of 
environmental crime. 



PDBLIC INTEGRITY DIVISION 

Fiscal year 1992 reflected significant progress in the 
Attorney General's efforts to investigate and prosecute crimes in- 
volving public corruption. 

The Public Integrity Division had under indictment over 30 
individuals in FY 92 for a broad array of offenses, including con- 
flict of interest, bribery, larceny, tax evasion, forgery, per- 
jury, violation of civil service laws, and filing false claims and 
false reports with the Commonwealth. 

In addition the Division disposed of over 19 cases by plea or 
trial, resulting in committed time for defendants in both the 
House of Correction and state prison. Most notably, the 
Commonwealth obtained orders of restitution in excess of $400,000 
for funds unlawfully stolen from the Commonwealth agencies or mu- 
nicipalities . 

In January, 1992, the Public Integrity Division was reconsti- 
tuted to include five full-time attorneys, one financial investi- 
gator, and three state police officers. Since January, 1992, the 
division has secured over 17 indictments in public corrup- 
tion/white collar crime cases. 

The division continues to work closely with representatives 
of other state investigative agencies including the Inspector 
General's office, the State Ethics Commission, the Department of 
Revenue, the Office of Campaign and Political Finance and the 
Office of State Auditor. Over the course of the year, the 
Division has expanded its efforts to coordinate investigative re- 
sources. A group consisting of various watchdog and regulatory 
state agencies was formed this year to advise the Attorney General 
on public integrity issues. In addition, the division maintains 
working relationships with federal and local law enforcement. 

The focus of the cases prosecuted in the past year has been 
in two areas: on public officials and employees of, state, county 
and municipal government who have benefited unlawfully from their 
positions or who have acted in conflict of interest. 

The variety of charges brought in fiscal year 1992 further 
underscores the efforts being made to successfully prosecute pub- 
lic corruption offenses. 



34 P.D.12 



CASES INDICTED BY PUBLIC INTEGRITT DIVISIOM 

1/92 Commonwealth v. 

(State House Court Officer) 
Larceny 
1/92 Commonwealth v. 

14 cts. Ccimpaign Finance Violations 
1/92 Commonwealth v. 

(PRIM Executive Director) 

2 cts. False Tax Returns 
1/92 Commonwealth v. 

(PRIM Director of Finance) 

4 cts. Larceny; 3 cts. False Tax Returns; 

12 cts. False W-2s' 
3/92 Commonwealth v. 

(Lottery Employee) 

10 cts. Larceny; 1 ct. Conspiracy 
3/92 Commonwealth v. 

6 cts . Larceny 
3/92 Commonwealth v. 

(Executive Director, Methuen Housing 

Authority) 

2 cts . Larceny 
3/15/92 Commonwealth v. 

2 cts . Larceny 
4/92 Commonwealth v. 

(Business Manager, Ashburton School 

District) 

6 cts . Larceny 
6/92 Commonwealth v. 

(Springfield City Councilor) 

4 cts. Failure to File Tax Returns 
6/92 Commonwealth v. 

(Springfield School Committee) 

5 cts. Failure to File Tax Returns 

7/1/91 - 12/30/91 
8/91 Commonwealth v. 

(Former EOCD Employee) 

Larceny 

Filing False Claims and False Reports 
8/91 Commonwealth v. 

(Former DOR Auditor) 

1 ct . Filing False Tax Returns and filing 

false claims 
8/91 Commonwealth v. 

Violation of c. 268A, § 2 
8/91 Commonwealth v. 

(Melrose Police Lt . ) 

1 ct . Forgery 

1 ct . Civil Service Violation 
10/91 Commonwealth v. 

(Court Clerk) 

Larceny 

Alteration of Public Records 

Obstruction of Justice 
10/91 Commonwealth v. 

(Three MCAA Parking Garage Employees) 

Larceny 
11/91 Commonwealth v. 

(Chelsea Businessman) 

1 ct . Larceny 
11/91 Commonwealth v. 

(Somerville Firefighter) 

6 cts . Perjury 

TOTAL DEFENDANTS 6/1/91 - 12/30/91: 10 



P.D.12 35 



PUBLIC PROTECTICW BOREAD 

Health Care Policy Development 

In 1992, the Public Protection Bureau increased its focus 
on health care policy issues. Bureau personnel conducted a con- 
tinuing series of meetings with participants in the health care in- 
dustry, including hospitals, insurers, managed care providers, phy- 
sicians, and community health centers. Bureau personnel also met 
on a continuing basis with consumer and employer groups concerned 
about health care cost and access issues. Finally, bureau person- 
nel began to develop informal consulting relationships with acade- 
mics from public health and medical schools in the area. 

These meetings (along with policy research and discussions 
conducted internally by the Bureau) led to the definition of a 
liealth policy "blueprint" for the Attorney General. This document 
is designed to define a direction for long term reform which 
should, in turn, provide a framework for continuing development of 
positions on health care issues by the Attorney General in 1993. 
The priority areas identified are the following: 

* Support for a national solution to the problem of the 
uninsured. 

* Insurance market reform. 

* Relief for non-group health insurance purchasers. 

* Support for industry partnerships. 

* Review of hospital plant and equipment investment. 

* Fraud and abuse by providers. 

* Support for managed care with sensitivity to concerns 
of physicians and patients. 

* Availability of information on cost and quality. 

* Urban health issues. 

LEAD POISONING TASK FORCE AND OTHER LEAD INITIATIVES 

In late 1991, the Attorney General convened a Lead Poisoning 
Task Force to address some of the complex and difficult issues sur- 
rounding the state's lead paint laws and regulations. Members of 
the Task Force included representatives of state and federal agen- 
cies, local boards of health, the real estate, insurance and de- 
leading industries and advocacy groups, attorneys and others. The 
Task Force formed four subcommittees for the purpose of exchanging 
viewpoints and information concerning identified issues. These 
subcommittees: Identification and Response to Children at Risk, 
Residential Removal and Disposal of Lead, Nonresidential Leading 
Removal and Disposal, and Funding and Liability Issues met on a 
regular basis throughout the winter and spring of 1992. As a re- 
sult of the discussions which took place, each of the subcommit- 
tees proposed a detailed analysis of the issues discussed as well 
as suggestions for changes in the laws, regulations, enforcement, 
education and outreach. These findings and recommendations were 
combined and published in the Report of the Attorney General's 
Lead Poisoning Task Force in August of 1992. 

Following publication of the Report the Task Force met again 
in the fall to discuss the Report and plan for implementation of 
many of the proposals. As a result, two implementation groups 
were created and commenced to meet on a regular basis. 



36 



P.D.12 



As another outgrowth of the Task Force, the Bureau began to 

receive and investigate numerous complaint from many different 

sources concerning alleged violation of the lead laws by delea- 

ders, lead inspectors, and property owners. As of the end of 1992 

a number of investigations were ongoing and the announcement of 

several indictments, civil complaints and agreed settlements ap- 
peared imminent. 

ANTITROST DIVISION 

The Antitrust Division enforces federal and state antitrust 
laws prohibiting anti-competitive activity. The U.S. Supreme 
Court has described these laws as the "Magna Carta" of our free en- 
terprise system. Enforcement of these laws protects consumers 
from the adverse economic effect of price-fixing, boycotts, monopo- 
lization and other similar restraints of trade. Enforcement of 
these laws also protects businesses, particularly small busi- 
nesses, by curbing the kind of anti-competitive activity that ham- 
pers the ability of a business to compete on an equal basis in the 
marketplace . 

The Division prosecutes violations that principally affect 
Massachusetts consumers. The Division also joins forces with 
other states to prosecute violations that have a negative impact 
on consumers and businesses in multiple states including 
Massachusetts. Through the National Association of Attorneys 
General, the Division coordinates it activities with those of 
other states and with the activities of federal antitrust enforc- 
ers . 



Multistats Insurance Antitrust Litigation 

The Commonwealth is a party along with 19 other states and 
various private parties in these antitrust actions in the United 
States District Court for the Northern District of California 
against a total of more than thirty insurance companies, reinsu- 
rers, intermediary brokers, and trade associations. The com- 
plaints allege that defendants illegally manipulated the market 
for commercial general liability (CGL) insurance, the insurance 
purchased by most businesses, public agencies, and non-profit or- 
ganizations to cover their liability to third parties for personal 
injuries and property damage. Treble damages for injuries to pub- 
lic entities are sought, as well as extensive injunctive relief. 

The United States Supreme Court granted certiorari to review 
the decision of the Unites States Court of Appeals for the Ninth 
Circuit which reversed and remanded the District Court (Schwarzer, 
J.) decision dismissing the plaintiff's actions on 
McCarran-Ferguson, state action, comity, and pleading grounds. 
The Supreme Court granted certiorari on two issues in the case: 

(1) whether the United States may enforce United States antitrust 
laws against foreign companies for action in a foreign country 
that has effects in the United States (international comity) and 

(2) the scope of the McCarran-Ferguson Act, which exempts certain 
conduct of insurance companies from prosecution under the anti- 
trust laws . 

The Division has taken a leading role in settlement negotia- 
tions as well as the drafting of the states' international comity 
brief which, along with the states' McCarran-Ferguson brief, was 
filed on December 23, 1992. The Division will also take an active 
role in the preparation for the oral argument before the United 
States Supreme Court, to take place in early 1993. (Alpert, Weber) 



F.D.12 37 



In re Clozapine Antitrust Litigation 

This case Involved a multi-state lawsuit against Sandoz 
Pharmaceuticals Corp. and Caremark Corp. alleging illegal tying in 
violation of section 1 of the Sherman Act and monopolization under 
section 2 of the Sherman Act. The states' antitrust lawsuits were 
based on Sandoz' s and Caremark' s marketing of the anti-schizophre- 
nia drug, Clozaril. Sandoz refused to sell the drug unless the 
buyer also agreed to purchase a package of blood monitoring and 
blood testing services provided exclusively by Caremark. The 
Division was part of the eight member Case Management Committee 
that initiated and organized the litigation of this case. 

The case was settled in September 1992 and was joined by all 
states in the United States and the District of Columbia. Sandoz 
and Caremark agreed to pay purchasers of the drug, including state 
agencies, $13 million plus attorney's fees and costs. In addi- 
tion, $3 million will be paid to the National Organization of Rare 
Diseases to be used in the treatment of new patients with 
Clozaril. The defendants also agreed to provide a 15% reduction 
in the wholesale price of Clozaril to at least 2000 patients on so- 
cial security disability income. The defendants are further pro- 
hibited from reinstating the tie between Clozaril and the blood 
monitoring and blood testing services provided by Caremark. 

The United States District Court for the Northern District of 
Illinois approved the settlement on Nov. 24, 1992. (Scibelli, 
Weber) 

Blue Shield - Baystate Merger 

The Attorney General agreed not to make an antitrust chal- 
lenge to Blue Shield' s merger with Baystate Healthcare, a failing 
HMO serving over 350,000 subscribers in the Commonwealth. 
Pursuant to the agreement between the Attorney General and Blue 
Shield, Blue Shield agreed to contribute $2 million to provide 
free health insurance to uninsured children unless its operation 
of Baystate proves financially unsuccessful. Further, for two 
years. Blue Shield is prohibited from merging with any other 
health care insurer or HMO if the Attorney General finds that the 
merger adversely affects competition. Blue Shield also agreed to 
fund a study to determine the causes of Baystate' s failure and to 
aid the Attorney General in monitoring the competitive effects of 
the new health care financing law, G.L. c. 495, by responding to 
inquiries from the Attorney General within two business days. 
(Weber, Scibelli, Alpert) . 

Commonwealth v. Cahill. et al . 

In this federal court action, filed by the Division in August 
of 1988, the Commonwealth alleged that twenty-four Springfield ob- 
stetrician/gynecologists conspired to boycott Blue Shield of 
Massachusetts in violation of state and federal antitrust laws. 
The suit sought injunctive relief and the imposition of civil pen- 
alties against twenty-four defendant physicians. 

In 1992 the remaining eleven defendants entered into consent 
judgments with the Commonwealth: enjoining violations of the anti- 
trust laws; containing agreements to withdraw letters of resigna- 
tion from Blue Shield and to notify the Commonwealth prior to sub- 
mission of any future letters of withdrawal; and providing a total 
recovery to the Commonwealth of $140,000 in money and free medical 
services to low income women. In total, the Commonwealth recov- 
ered over $300, 000 in cash payments and free medical services from 
the twenty-four defendants. (Weber, Davies, Alpert) 



P.D.12 38 



Mitsubishi 

On January 15, 1992, the United States District Court in 
Baltimore, Maryland entered a Final Judgment in this case approv- 
ing the settlement negotiated between the states and Mitsubishi 
Electronics. The terms of the settlement require Mitsubishi 
Electronics to refund $7.95 million to consumers to settle charges 
that it unlawfully fixed the retail prices of certain Mitsubishi 
and MGA brand televisions. The settlement resolved charges that 
Mitsubishi had attempted to enlist electronics retailers in a 
nationwide conspiracy to fix retail prices and had obtained agree- 
ments from dealers not to sell below Mitsubishi's retail price. 
Under the terms of the settlement, more than 11,000 Massachusetts 
consumers were eligible to receive refunds for products purchased 
in 1988. (Weber, Davies, O'Neill, Botte) 

Getty Petroleum Corp. v. Scott Harshbarger 

On September 18, 1992, in anticipation of an enforcement ac- 
tion by the Division, Getty Petroleum Corp. filed a complaint in 
United States District Court for the District of Massachusetts re- 
questing declaratory judgment and injunctive relief regarding the 
applicability of G.L. c. 93E to Getty's policy of requiring dea- 
lers to remain open certain hours per day and days per week. G.L. 
c. 93E prohibits lessors to require lessees to stay open certain 
hours per day or days per week. On the Commonwealth's motion to 
dismiss, Judge Tauro dismissed Getty's preemption claim pursuant 
to the Younger abstention doctrine, and abstained from making a 
decision on Getty's due process claim, pending resolution of the 
Commonwealth's state court action. (Matlack, Alpert, Nasca, 
Weber, Wilkins [Govt.]) 

Commonwealth v. Getty Petroleum Corp. 

On September 23, 1992, the Division initiated this state 
court action in Suffolk Superior Court. The Commonwealth alleges 
that Getty' s policy of forcing dealers to stay open certain hours 
per day and days per week violates G.L. c. 93E. (Matlack, Alpert, 
Nasca, Weber) 

Commonwealth v. J.F. Inc., Ludlow Enterprises, Inc., L.A.Z.I. 
Inc ■ , et al . 

In 1988 the Division brought an antitrust action against vari- 
ous liquor stores in Western Massachusetts for agreeing to fix 
prices by jointly advertising the same prices. In 1992 settle- 
ments and signed consent judgments were entered with the six re- 
maining defendants enjoining the defendants from agreeing to fix 
retail prices for the sale of alcoholic beverages or grocery prod- 
ucts or to advertise uniform prices of products for or among 
separately owned retail liquor stores. (Scibelli, Weber) 

Nintendo 

In 1992 a Final Judgment approving a negotiated settlement 
was entered by the District Court for the Southern District of New 
York. The terms of the settlement required Nintendo to issue and 
redeem up to $25 million in consumer coupons nationwide, and to 
pay $1.75 million in attorney's fees and costs. The settlement re- 
solved charges that between June 1988 and December 1990, Nintendo 
controlled retail prices to consumers on its eight-bit Nintendo 
Entertainment. 



P.D.12 39 



System (NES) home video consoles, by pressuring retailers to main- 
tain the "suggested" price of $99.95. More than 120,000 
Massachusetts consumers were eligible to redeem the Nintendo cou- 
pons. (Davies, Weber) 

FTC V. Ticor Title Insurance Co. 

In 1992 the Division joined in an amicus brief with 
thirty-five other states to the United States Supreme Court in the 
above entitled case. The brief urged that some real amount of gov- 
ernmental scrutiny was required in order to protect private action 
from antitrust scrutiny under the "state action" (or Parker v. 
Brown) exemption to the antitrust laws. 

In a 6-3 decision, the Court ruled in favor of requiring that 
the state play "a substantial role in determining the specifics" 
of a policy in order for the state action doctrine to apply. The 
Court relied heavily on the States' amicus brief in ruling that a 
broad version of the exemption would not "serve the States' best 
interest" and would, in fact, "impede [the States'] freedom of ac- 
tion." (Alpert, Weber) 

In re Domestic Air Transportation Antitrust Litigation 
In 1992 the Commonwealth and twenty-three other states filed 
objections of behalf of consumers to a proposed settlement of pri- 
vate antitrust class 

actions against nine major domestic airlines. (American Airlines, 
Inc.; Continental Airlines, Inc.; Delta Airlines, Inc.; Midway 
Airlines, Inc.; Northwest Airlines, Inc.; Pan American World 
Airways, Inc.; Trans World Airlines, Inc.; United Airlines, Inc.; 
Air, Inc . ) . 

The states' objections are that the proposed settlements are 
underfunded, the percentage limitations on redemption are too low, 
the use of blackout periods is unfair, the certificates are not re- 
deemable through travel agents, the certificates are not redeem- 
able against all fares, there were serious questions as to the ade- 
quacy of notice to the class, and that plaintiffs' attorney's fees 
should not be approved until the actual value of the settlement is 
determined. 



Delaware v. New York 

On March 31, 1992, the Division filed a Motion for Leave to 
File Complaint in Intervention and a Complaint in Intervention. 
The case, now in the United States Supreme Court, includes every 
state in the United States and the District of Columbia. The case 
involves a dispute as to which state may take custody of unclaimed 
intangible property consisting of dividends, interest, and other 
distributions arising out of security transactions. 

CIVIL RIGHTS DIVISIOII 

The Civil Rights Division enforces the Massachusetts Civil 
Rights Act which authorizes the Attorney General to seek injunc- 
tive relief when the exercise of legal righns is interfered with 
by threats, intimidation, or coercion. In fiscal year 1991, a 
total of 17 new Injunctions against 30 defendants were obtained by 
the division involving racial, ethnic and anti-gay violence. 

A total of 8 injunctions with 12 defendants involved inci- 
dents in Boston. Three of the cases arose in the South End, two 
of the cases arose in Dorchester, one in South Boston, one in Hyde 
Park and 



40 p.D.i; 



one in Charlestown. The Division also obtained injunctions 
against defendants in Revere, Northbridge, Pembroke, Salem, Lynn, 
Haverill, Milford and in Provincetown . 

Any violation of these court orders would constitute a crimi- 
nal offense punishable by a maximum fine of $5,000 or a two and 
one half year sentence in a house of correction. If bodily injury 
results, the defendants would be subject to a 10 year prison sen- 
tence and a maximum fine of $10,000. 

POLICE RELATED CASES /ACTIVITIES 

Pittsfield Police Department 

An extensive investigation arising out of complaints from 
Pittsfield' 3 minority community revealed that in at least eighteen 
separate incidents the police had conducted strip searches without 
probable cause. On February 11, 1992, a precedent setting compre- 
hensive agreement was executed with the City of Pittsfield and its 
police department. The agreement was designed to act as a guide 
to the Pittsfield Police Department in conducting law enforcement 
operations in the future, and to serve to develop and solidify the 
relationship of trust and cooperation between the police and the 
minority community. Two of the major aspects of the agreement 
call for 1) the restricted use of strip searches and new guide- 
lines as to when such searches are necessary, and 2) specialized 
training programs approved by the Attorney General's office. The 
Division also convinced the City Council to authorize funding 
($80,000) for the trainings. The entire department attended two 
week long training programs held in June and October 1992. 

Revere Police Department 

An agreement with the police department was implemented re- 
sulting from incidents occurring in 1991 within Revere' s 
Southeast-Asian community. In 1992, as a result of the agreement, 
a Southeast Asian Civil Rights Liaison was hired for the Division, 
an active Southeast-Asian Advisory Committee has been maintained 
in Revere, and a TV progrsun has been developed to educate the 
Cajnbodian community as to their rights and the role of the mayor, 
police department. Attorney General, and other governmental agen- 
cies. The Division has also successfully supported funding re- 
quests for ROCA, a community group working with youth and the 
Attorney General's office to reduce violence in Revere. In August 
1992, the Division helped to coordinate a city-wide Cambodian 
Culture Celebration. 



Chathcun Police Department 

After receiving a number of complaints from residents regard- 
ing police misconduct, the Division decided that two complaints in- 
volving the actions of one officer in two separate incidents war- 
ranted complete investigations. On May 27, 1992, it was concluded 
that the officer appeared to have employed unnecessary force in 
both incidents, that the arrests made were not warranted and that 
the department had failed to adequately investigate the com- 
plaints. Both complaints were referred to the Chief of Police and 
the Board of Selectmen for action. In one case, the Board decided 
that the officer required special retraining, but that no discipli- 
nary action would be taken. The other case was not pursued by the 
Board due to the complainant's lack of cooperation. The Civil 
Rights Division continues to work closely with the Police 



P.D.12 41 



Department and the Board of Selectmen in developing procedures to 
handle complaints and to reduce tension within the community. The 
new policies include a new disciplinary code and the creation of a 
Community Advisory Committee. 

Commonwealth v. Adams, et al ■ 

This was a civil suit filed in 1989 alleging that thirteen 
Boston Police officers had used excessive force during the arrest 
of a motorist following a chase which ended in Brookline. A 
two-week trial took place in January, after which the court issued 
a Permanent Injunction enjoining the thirteen defendants from the 
further use of excessive force while detaining, apprehending or ar- 
resting individuals. The injunction also holds the defendants ac- 
countable for failing to report visible injuries occurring during 
arrest or other officers who use excessive force. This is the 
first injunction issued against police officers under the 
Massachusetts Civil P.ights Act, as well as the first known civil 
rights injunction in the U.S. against individual officers (rather 
than a department) enjoining excessive force, and requiring the re- 
porting of other officers' use of excessive force, under threat of 
criminal penalties. The injunction has been temporarily vacated 
pending a full appellate review. 

Commonwealth v. James K. Houlihan 

A Lawrence police officer was indicted for alleged civil 
rights violations during an arrest of two Hispanic men in 
Lawrence. In July the defendant pleaded guilty to six misdemeanor 
charges — four counts of assault and battery and two counts of 
civil rights violations. He also resigned from the force. This 
case included a court ruling which denied an officer's attempt to 
dismiss indictments based on the Massachusetts State 
Constitution's guarantee against self-incrimination. 

Other Police Related Activities 

The Division engaged in a number of investigations related to 
complaints of police misconduct. In the complaints in which al- 
legations were substantiated after investigations, five resulted 
in the referral of substantiated findings to the Chief of Police 
with a recommendation of disciplinary action and training. 
(Richard W. Cole, George Fisher, Andrea Ccibral, Tania Gray) . Two 
police departments also adopted model policies which were recom- 
mended by the Division after investigations identified potential 
policies or practices which might expose the departments to future 
liability. 

In an effort to promote civil rights, assist the police, and 
to provide departments with technical assistance, the Division con- 
tinues to provide an extensive amount of training to police depart- 
ments throughout Massachusetts. Subjects of these trainings in- 
clude the investigation and prosecution of hate crimes, issues of 
bias and prejudice, federal and state constitutional and civil 
rights laws, the civil liability of police supervisors and police 
officers, sexual harassment in the workplace, and the obligation 
of police departments under the newly enacted Americans with 
Disabilities Act. 



42 p.D.i; 



BIAS-MOTIVaTED INJDNCTIOW CASES /TRIALS /SETTLEMENTS 

Cominonwealth v. John Does 

In October 1991 in Boston's South End, the defendants alleg- 
edly attacked three hispanic males with a steam iron and a leather 
coil. As they kicked and punched the victims, the defendants also 
yelled numerous racial and ethnic slurs. A Preliminary Injunction 
was issued on January 24, 1992, enjoining the defendants, two tee- 
nagers, from further harassing, intimidating or threatening the 
victims or any person in the Commonwealth based on their race or 
national origin. 

Commonwealth v. Steven Kaplan 

The defendant allegedly, on numerous occasions, directed ra- 
cial slurs at a Cambodian family at the Revere Housing Authority. 
Between May and July, the victims' car was vandalized with racial 
graffiti, their house was shot at with a BE gun and other property 
was damaged. Because of fear of harassment, the children of this 
family were not allowed to play outside their house and the par- 
ents were compelled to take them to a park so that they could play 
safely. A Preliminary Injunction was issued on February 20, 1992, 
enjoining the defendant, under the Massachusetts Civil Rights Act, 
from further harassing, intimidating or threatening the victims or 
any person in the Commonwealth based upon the person's race or na- 
tional origin. 

Commonwealth v. Peter A. Costa 

On July 4, 1992 in Provincetown, the defendant allegedly ap- 
proached two men and violently shoved one of them backward while 
making anti-gay slurs. Later, the defendant threatened the vic- 
tims, who were in their car, with physical violence. A 
Preliminary Injunction was obtained on October 20, 1992, enjoining 
the defendant under the Massachusetts Civil Rights Act from 
further harassing, intimidating or threatening the victims or any 
person in the Commonwealth based on their sexual orientation or 
perceived sexual orientation. 

Commonwealth v. Bernard Vivolo 

On July 15, 1992 in Boston's North End, the defendant alleg- 
edly assaulted a man with an umbrella. During the assault, the de- 
fendant yelled numerous obscenities and anti-gay slurs at the vic- 
tim. A Preliminary Injunction was issued on November 2, 1992, en- 
joining the defendant under the 

Massachusetts Civil Rights Act from further harassing, intimidat- 
ing or threatening the victim or any person in the Commonwealth 
based on their sexual orientation or perceived sexual orienta- 
tion. 



Commonwealth v. Leonard J. lannantuoni 

On June 21, 1992 at a park on the Avon/Brockton border, the 
defendant allegedly approached the victim and a fellow runner and 
began shouting anti-Semitic slurs at the victim. Shortly after 
the defendant had left, the victim and his friend resumed run- 
ning. As they were running, they passed the defendant. The de- 
fendant struck the victim on the back of his neck and knocked him 
unconscious. The victim sustained injuries to his head, arms, 
legs and knees. The defendant had harassed the victim on a number 
of previous occasions. A Preliminary Injunction was obtained on 
November 3, 1992, enjoining the defendant under the 



P.D.12 43 



Massachusetts Civil Rights Act from further harassing, intimidat- 
ing or threatening the victim or any person in the Commonwealth 
based on their religion. 

Commonwealth v. John V. Devaney, et al ■ 

This civil suit sought a Preliminary Injunction against two 
defendants for allegedly assaulting two women at a Methuen bar 
while yelling anti-gay/anti-lesbian epithets. Parallel criminal 
charges were pending against the defendants as a result of the in- 
cident. C'efendants sought to depose the victims and witnesses. 
The Commonwealth moved for a protective order seeking a stay of 
discovery until the criminal matter was concluded. The protective 
order was granted on September 18, 1992. This is the first ruling 
in Massachusetts which held that when there is a parallel criminal 
prosecution and civil rights injunctive action, a defendant will 
not be permitted to pursue civil discovery in the injunctive case 
until after the criminal trial occurs. 

Commonwealtli v. John Randolph 

A Preliminary Injunction was issued against the defendant in 
July for his alleged continuous harassment of his Portuguese neigh- 
bors with threats and ethnic slurs. The Commonwealth requested 
that the court declare that the defendant had violated the 
Massachusetts Civil Rights Act, and that a Permanent Injunction be 
issued. After a three day trial in March 1992, the court issued a 
Permanent Injunction against the defendant. 

Commonwealth v. Terrence Sullivan 

A Preliminary Injunction was issued against the defendant on 
July 14, 1989 for his allegedly harassing, intimidating and threat- 
ening a Cambodian woman at a Burger King parking lot in Lowell by 
physically preventing her from entering the restaurant while yell- 
ing ethnic slurs. A two-day trial took place in July 1992, in 
which the Commonwealth sought a Permanent Injunction against the 
defendant, along with a declaration that the defendant had vio- 
lated the Massachusetts Civil Rights Act. At the conclusion of 
the trial, the defendant decided to settle the case by consenting 
to the terms of a Permanent Injunction. 

Commonwealth v. Donald Pilkington. et al . 

This case alleged that six defendants physically assaulted 
two men while yelling anti-gay slurs at them. The defendants were 
alleged to be members of a neo-Nazi hate group called the White 
Youth League. An injunction, effective for five years, was en- 
tered against each of the defendants through Consent Judgments. 

Commonwealth v. Ismael Hernandez, et al . 

Five defendants allegedly assaulted a man in Boston's 
Fens/Victory Garden section because of his sexual orientation. A 
Consent Judgment was entered against one of the defendants on 
March 8, 1990. A permanent injunction was issued against each of 
the remaining four defendants on February 2, 1992, through Default 
Judgments . 



44 p.D.i: 



Commonwealth v. Kevin and Denise Foley 

Defendants allegedly harassed a hispanic family and a black 
family with racial epithets and threats. An injunction, effective 
for three years, was entered against each of the defendants 
through Consent Judgments on May 5, 1992. 

Commonwealth v. Carl Beldotti 

The defendant allegedly harassed three men because of their 
sexual orientation. An injunction, effective for three years, was 
entered against the defendant through a Consent Judgment on May 5, 
1992. 



Commonwealth v. Harold Cue 

The defendant allegedly harassed a Jewish woman with 
anti-Semitic slurs, threats, and graffiti. A permanent injunction 
was issued against the defendant through a Consent Judgment on May 
26, 1992. 

OPERATION RESCUE 



Commonwealth v. Operation Rescue 

After a two-week trial, a Permanent Injunction was issued in 
1991 against members of Operation Rescue which prohibited the 
blocking of entrances to clinics which provide abortion services 
and counseling. During 1992 the Commonwealth charged several of 
the members with violation of the injunction. A trial of two of 
those defendants took place in December of 1992. On December 11, 
1992, the jury found one defendant guilty and the other not 
guilty. The guilty defendant has been sentenced to serve six 
months on a two and a half year sentence. 

The Division continues to be involved in ongoing training of 
police departments regarding the arrest and the booking of indi- 
viduals who blockade clinics which provide abortion services and 
counseling . 

The Division coordinated with the Boston Police Department to 
deal with and deter Operation Rescue from succeeding in an at- 
tempted month-long blockade of a clinic located in Boston. 

BOOSING DISCRIMINATION CASES 

Commonwealth v. Robert and Florence Dowd 

This housing discrimination case was based on the complain- 
ant's marital status. A trial was held on November 3, 1991 and 
the court decided in favor of the plaintiff and awarded damages. 
During 1992, after further proceedings, the court also awarded at- 
torney's fees to the Commonwealth. This is the first award of at- 
torney's fees to the Attorney General in a housing discrimination 
case in which the court applied standards and rates for private at- 
torneys. The attorney's fees claim is currently under appeal. 

Commonwealth v. John J. Hannon 

This case, alleging housing discrimination based on the com- 
plainant's sex, was filed in January 1992. In settling the case, 
the defendant agreed to pay compensation to the complainant and to 
enter a consent judgment enjoining him from discriminating in the 
future. 



F.D.12 45 



Commonwealth v. Norman Brettell Trust 

This case, filed in 1991, alleged housing discrimination 
based on the complainant's section 8 subsidy status. The case was 
settled in July 1992. By the terms of the Agreement of 
Compromise, the defendant paid compensation to the complainant and 
attorney's fees to the Commonwealth. The defendant also agreed 
not to discriminate in the future. 



Commonwealth v. Oak Hill Housing Company, et al . 

This housing discrimination case was filed in May 1992. The 
suit alleged that the landlord failed to protect adequately a ten- 
ant from race-motivated harassment and retaliated against the ten- 
ant when she complained of the harassment. In settling the case, 
the defendant agreed (1) not to discriminate in the future and to 
protect its tenants from race-motivated harassment; (2) to estab- 
lish a program to address racial tensions among tenants, train its 
employees to have greater sensitivity in issues involving race or 
color, and revise its policies so as to effect these goals; and 
(3) to pay compensation to the complainant. By the terms of the 
settlement, the Office of the Attorney General will monitor the 
implementation of the agreed-upon programs. 

Commonwealth v. Samia Companies, et al . 

This case, alleging housing discrimination based on the com- 
plainant's subsidy status, was filed in January 1991. The case 
was settled, by an agreement that the Defendant would compensate 
the complainant and would not discriminate in the future. 

DISABILITY ISSUES 

Since the effective date, January 1992, of Title II, the 
Americans with Disabilities Act (ADA) , Division staff have spent a 
substantial amount of time conducting presentations and trainings 
concerning the effect of the provisions of the ADA. Groups to 
whom presentations were made include the Massachusetts Chiefs of 
Police Association, the Association of Human Service Providers, 
the Massachusetts Sheriff's Association, the Association of Town 
Counsel and City Solicitors. Division staff also prepared written 
materials on the ADA for distribution, including a Question and 
Answer article concerning requirements of Title II. Assistant 
Attorney General Stanley J. Eichner has also participated on the 
National Association of Attorneys General working group on the ADA. 

Physical Access to Municipal Meetings 

In 1991 the Attorney General wrote to all the cities and 
towns in Massachusetts informing them of their obligation to guar- 
antee physical access to municipal meetings to their disabled resi- 
dents. As a follow-up to the compliance of many cities and towns 
in 1991, in 1992 the towns of Whitman and Maiden authorized renova- 
tions or relocation of their municipal meeting so as to provide ac- 
cess to disabled persons . Southbridge also agreed to relocate its 
town meetings until renovations occur, in response to a demand let- 
ter, which included the threat of litigation. 



46 p.D.i: 



Credit Convertors 

On December 18, the Division reached an agreement with Credit 
Converters of St. Paul, Minnesota, in which they agreed to refrain 
from engaging in certain unfair debt collection practices and from 
recording conversations with consumers without their consent. In 
addition, the debt collection agency has agreed to pay the 
Commonwealth $15,000 in civil penalties, which will be used to 
fund the SCORE program, and to modify and install a new telephone 
line so that Massachusetts calls will not be recorded in the fu- 
ture . 

Three Out-of-State Debt Collection Agencies 
(Commonwealth v. Credit Protection Association, Inc.) 
(Commonwealth v. North American Collections, Inc.) 
(Commonwealth v. Viking Collection Service, Inc.) 
On December 18, the Division reached settlement agreements 
with three out-of-state debt collection agencies, Credit 
Protection Association, Inc., North American Collections, Inc., 
and Viking Collection Services, Inc. The companies collected 
debts without licenses from the State Banking Commission and 
Viking violated the Massachusetts' debt collection regulations by 
contacting a consumer debtor at work more times than is allowed by 
law. Credit Protection Association and North American Collections 
each paid $3,500, while Viking Collection Services paid $9,000 in 
penalties and costs for collecting debts without a license. In 
three separate consent judgments, each company is prohibited from 
acting as a debt collection agency in Massachusetts until it has 
applied for and been granted a license from the State Banking 
Commission . 

Assurances of Discontinuance with 2 Debt Collectors: EZ 

Finance Company and Joseph Silva 

On June 9, the Division filed an Assurance of Discontinuance 
with Suffolk County Superior Court in which EZ Finance Company, 
Inc. agreed to refrain from engaging in certain unfair and decep- 
tive debt collection acts and practices. In addition, EZ Finance 
agrees to monitor the collection activities of any person or other 
entity to whom it assigns any debts for collection to ensure that 
such person or entity complies with the Assurance. 

Also on June 9, the Division filed an Assurance of 
Discontinuance with Suffolk County Superior Court in which Joseph 
Silva agreed to refrain from engaging in the following acts and 
practices: (1) engaging in the collection of debts in 
Massachusetts without first obtaining from the Commission of Banks 
a license to carry on such business, and without having on file 
with the state treasurer a good and sufficient bond, and (2) using 
a business card which contains threatening statements of any kind. 



P.D.12 47 



MDLTISTATE SETTLEMENTS 

Multistate Environmental Group 

(General Electric) 

(Carlisle Plastics) 

On November 9, the Division joined the Attorneys General of 
32 states in a settlement with the General Electric Company con- 
cerning the claims that the company's "Energy Choice" line of 
light bulbs represents a new, environmentally sound product. The 
Attorneys General allege that GE made various misrepresentations 
about its Energy Choice light bulbs including statements that 
these light bulbs save energy and that using these bulbs could 
help eliminate pollution from the atmosphere. In fact, most of 
the energy savings realized from using Energy Choice incandescents 
are due to the fact that they are simply lower wattage bulbs, and 
not because they are significantly more efficient. The agreement 
required GE to pay $15,000 to each of the eleven original signa- 
tory states, including Massachusetts. 

On March 11, the Division announced that ten states, includ- 
ing Massachusetts, have entered into a settlement agreement with 
Carlisle Plastics, Inc., concerning claims that the company's 
"Ruffles" trash bags are "degradc±>le" and "compostable. " The com- 
pany allegedly made misleading claims that its Ruffles bags "will 
degrade in landfills" and that its yard waste bags are "specifi- 
cally designed for municipal composting operations" and are "per- 
fect for composting." The agreement requires Carlisle Plastics to 
pay a total of $45,000 to the ten states, including $4,500 to 
Massachusetts . 

Multistate Food Group 
(S&B International Corporation) 

On October 8, the Division joined the Attorneys General from 
10 other states in a $33,000 settlement with S&B International 
Corp., a California-based food manufacturer, which allegedly mis- 
led consumers about the monosodium glutamate (MSG) content of some 
of its seasoning mixes. S&B falsely claimed in radio advertise- 
ments and on product labels that its seasoning mixes contained no 
MSG, when, in fact, they contained hydrolyzed protein. The 
Attorneys General alleged that when a substance is hydrolyzed to 
create a hydrolyzed protein using the methods employed by food 
manufacturers, MSG is created. 

OTHER miTIATrVES 

SCORE 

Project SCORE* (Student Conflict Resolution Experts) is a pro- 
gram through which the Division provides funding, training, and 
technical assistance for the development and implementation of 
peer mediation programs in urban schools. These programs, which 
use trained students to mediate school-based conflicts, were de- 
signed particularly to respond to increases in violence and racial 
tensions in the targeted cities. 

In 1992, new SCORE programs were started in Boston and Fall 
Fiver which, added to the existing programs in Somerville, 
Worcester, Lowell, and Springfield, brings the total number of 
SCORE programs to 15 schools in 6 cities. Over 400 disputes were 
mediated by these programs; 96% resulted in written agreements; 
only a handful of these agreements were broken. 



48 p.D.i: 



In addition to developing peer mediation programs, SCORE mon- 
ies were used to fund two basic mediation skills trainings for 
staff and youths in the Department of Youth Services and one for 
fourteen youths in Revere who belong to fueding Cambodian gangs. 

When racial violence broke out in Medford High School in 
early December, SCORE funds were used to restore peace and safety 
to the school. Funds will also be used to develop a SCORE program 
at the high school beginning in January, 1993. SCORE is a pro- 
gram sponsored by the Massachusetts Attorney General and is not af- 
filiated with any private business enterprise. 

Elm Medical Laboratories 

(Commonwealth v. Elm Medical Laboratories, Inc.) 

On July 27, Massachusetts Appeals Court upheld a permanent in- 
junction obtained by the Division which prohibits two individuals 
who formerly supervised Elm Medical Laboratories from supervising 
a medical lab. The Court agreed with our argument that the labora- 
tory had violated the Massachusetts Consumer Protection Act by im- 
properly and inadequately performing pap smears and other tests, 
and further agreed that under this law a laboratory is required to 
disclose to doctors and patients material information about the 
laboratory' s practices that could render its diagnoses inaccu- 
rate. The Appeals Court also held that the state is not a person 
subject to suit under the Civil Rights Act -- an important deci- 
sion for the government bureau and other state agencies. 

Telephone Carrier Agreement 

In May 1992, Attorney General Harshbarger, along with 35 
other state Attorneys General, entered into a voluntary agreement 
with ATST, MCI, and Sprint for the carriers to better monitor and 
potentially to discontinue services of "900 number" offerings 
which are carried on their networks. This cooperative effort 
along with recently enacted federal regulations can help curb 
"900-number" telephone fraud. 

Cite Your Rights Cards 

In October, the Division released the first set of "Cite Your 
Rights" cards designed to teach consumers basic consumer rights in 
the areas of store return policy, defective goods, automobile 
lemon laws, security deposits, and a half dozen other areas. 
Distribution of the cards is through the 8400 line and local con- 
sumer programs. 

Adoptions of New England 

(Commonwealth v. Adoptions of New England) 

A petition was filed and granted in Suffolk Superior Court, 
in March for the appointment of a receiver to take over the 
records of and guardianship proceedings underway for Adoptions of 
New England, Inc., following the suspension of the company's li- 
cense by the Massachusetts Office for Children. The corporation's 
officers and directors resigned when an audit showed that 
Adoptions of New England had a deficit of approximately $900, 000 
and left the state to return to their main base in Arizona. The 
abrupt closure of the agency left a waiting list of 30 families 
who had paid as much as $27,000 in advance deposits for be±>ies who 
never arrived for Adoptions of New England, Inc. clients. 



P.D.12 ^^ 



HORSING HOME CASES: 

Wavne Manor Nursing Home 

(Department of Public Health v. Wayne Manor Nursing Home) 
In February, a patient protection receivership, obtained _by 
the Consumer Protection Division to protect approximately 73 ill 
or mentally disabled patients living in Wayne Manor, a Dorchester 
nursing home, was terminated by the transfer of the facility s 
ownership to Family Rehabilitative Services, Inc. The successful 
transfer of the home to a licensee found suitable to operate it 
ended a long saga which began by the Division's seeking the dis 
missal of the bankruptcy proceeding to protect patients. At that 
time, the patients' health was in serious jeopardy: the utilities, 
the provision of food and other goods and services were about to 
be cut off and the bankruptcy trustee wanted to quit. ^Jie re 
ceiver brought the home back up to health care standards. We then 
negotiated for the bank holding the first mortgage on the property 
instead of a new owner to pay $62,900 to the Commonwealth to re- 
solve successor liability issues and thus facilitated the sale by 
reducing its auction price. The former owner, Barbara Cohen, was 
subsequently indicted and convicted on multiple charges of em- 
bezzlement of patient funds, larceny and Medicaid fraud, by the 
MFCU. 

Harvard Manor Nursing Home 
(Department of Public Health v. Harvard Manor Nursing Home) 

On November 23, following the termination of the Harvard 
Manor Nursing Home's federal Medicaid funding, the Consumer 
Protection Division intervened to have a patient protector re- 
ceiver appointed for the nursing home. The appointment of the re^ 
ceiver was sought by the Attorney General to ensure the patients 
health and safety, since the withdrawal of federal funding re- 
sulted in the loss of 50% of the funds which cover the costs of pa- 
tients' care. The decision to terminate the nursing home from the 
Medicaid program resulted from a finding by the U.S. Department of 
Health and Human Services that the patients were living in harmful 
conditions at the facility. 

Brockton Ridae Long-Term Care Center. Regent Park Long-Term 
(Department of Public Health v. Brockton Ridge Long-Term Care 

(Department of Public Health v. Regent Park Long-Term Care 

Center) 

In individual actions commenced and conducted separately, we 
had obtained the establishment of patient protector receiverships 
for the Brockton Ridge and Regent Park nursing homes, both oper- 
ated by Avanti, Inc. but owned by a California real estate partner- 
ship. Patients had been subjected to mistreatment and neglect. 
This year, Brockton Ridge, a home that had, among other problems, 
30 beds located below ground level, was closed, much to the dismay 
of the owners while Regent Park was successfully sold to another 
operator/owner. The termination of both receiverships, the first 
by closure and the second by transfer and sale, effectuated the of- 
fice's goal of protecting the patients in the manner most calcu- 
lated to improve the quality of life. The property owners were ob- 
liged to pay $64,275 for penalties and the costs of the Brockton 
Ridge receivership and another $100,000 when Regent Park was 
sold. 



50 P.D.12 



REGUL&TIONS 

Mortgage Lender and Broker Regulations 

The Attorney General's regulations under c. 93A governing 
mortgage lenders and mortgage brokers were published in May and 
took effect on August 1, 1992. The regulations require that all 
brokers and many lenders provide borrowers with standardized cop- 
ies of the Attorney General's Mortgage Broker and Lender 
Disclosure forms, which identify the essential features of a mort- 
gage loan transaction as well as the cost and interest rate for 
the borrower. The regulations also require that lenders and bro- 
kers take reasonable steps to assure that borrowers, including 
non-English speaking consumers, understand the loan transaction. 
Unconscionable rates or other loan terms, advertising ploys such 
as "immediate approval" and "immediate closings," are prohibited, 
and the use of other advertising terms such as "bad credit, no pro- 
blem" and "avoid foreclosure, " are restricted. These regulations 
were promulgated to prevent future abuses involving second mort- 
gages or refinancing, while creating a level playing field for le- 
gitimate businesses. 



F.D.12 



51 



I£GISLATIOR 

Home Improvement Contractor Law 

This law regulating home improvement contractors was signed 
on December 31, 1991, and took effect on July 1, 1992. The law 
prohibits home improvement contractors from acting as mortgage bro- 
kers or lenders in connection with the home improvement contracts 
they enter into, requires a written contract for any job over 
$1,000, requires that contractors register with the Bureau of 
Building Regulations and Standards, establishes a guaranty fund to 
provide limited restitution to consumers who have been defrauded 
by a registered contractor but are unable to collect on^ a judg- 
ment, and provides for criminal penalties for those who fail to ob- 
tain a certificate of registration. An additional bill designed 
to streamline the process for injured consumers to obtain access 
to the "guaranty fund" is not expected to pass this session. 

Purchase Privacy Law 

On March 26, 1992, the purchase privacy law which restricts 
the personal information that retailers may demand when they ac- 
cept payment from consumers by check or credit card took effect. 
The measures, which are intended to protect the consumer from 
fraud, prohibits the recording of information other than the con- 
sumer's name, address, motor vehicle license number, and the con- 
sumer's choice of home or business number when the consumer pays 
by check. The merchant can no longer record the consumer's social 
security number, race, or credit card number on a check or else- 
where. The law also prohibits the merchant from requiring that 
the consumer sign a statement allowing his/her credit card to be 
charged if the check is not honored and from accessing the consu- 
mers credit card account to determine the amount of available 
credit when the consumer is paying by check. The law also pro- 
tects a consumer who pays by credit or charge card by prohibiting 
the recording of information on the credit card slip other than 
that which is required by the credit company. 

SPRINGFIEU) CASES 

Commonwealth of Massachusetts v. Basement Waterproofing 
Nationwide, Inc. 

The Attorney General obtained a default judgment against the 
defendants in this case. $379,000 default judgment. 

Commonwealth v. New England Uses Cars. Inc. 

The complaint is ready to be filed. This is also an action 
to enforce the provisions of the Used Car Warranty Law. 

Commonwealth v. Valley Furniture 

This is an action alleging unfair and deceptive acts and prac- 
tices in the conduct of a "going out of business sale." 
Settlement is imminent and will result in the distribution of 
nearly $105,000 in consumer restitution. Settlement agreements 
should be signed before 1993. We have agreed that they will pay 
$104,014.62 in consumer restitution and contribute $25,000 to the 
local Consumer Aid Fund. 



52 p.D.i; 



Commonwealth v. West End Market 

This is an action alleges unfair and deceptive acts and prac- 
tices in the conduct of a meat market. The defendant in this mat- 
ter closed down shop. This mater is still ongoing. Injunction 
vs. meat market arising out 93A violations. 

LOCAL CONSUMER PROGRAMS 

FACE-TO-FACE MEDIATION PROGRAI'lS 

The Local Consumer/Mediation Services (LCMS) administer the 
Local Consumer Aid Fund (LCAF) of the Office of the Attorney 
General. The LCAF was created by statute, G.L. c. 12, §11G, in 
1977. At the present time, nineteen community based Local 
Consumer Programs and seven Face-to-Face Mediation Programs are 
grant recipients of the Fund, which is directed to the resolution 
of consumer complaints. Technical assistance and continuing train- 
ing are given to the programs by the staff of the LCMS. 

These programs, which serve all 351 communities in the 
Commonwealth, annually resolve thousands of consumer problems, and 
serve to educate consumers and businesses alike in the areas of 
state and federal consumer law. Working in cooperation with the 
Office of the Attorney General, they also alert this Office to pat- 
terns of unfair or deceptive acts and practices in the market- 
place, so that appropriate legal action may be taken. 

In fiscal years 1992 and 1993, the General Court appropriated 
$605, 901 for the Local Consumer Aid Fund. Ten percent of these 
grant monies were retained by the Office of the Attorney General 
for administrative purposes. Supplemental funding from settlement 
of consumer cases was also given to the programs, and for FY 1992, 
this supplemental funding resulted in grants to the local programs 
of $666,500.00, and in 1993, grants of $701,100 will be distrib- 
uted. In 1992, the Local Consumer Programs mediated over 12,000 
complaints, recovering over $2,665,657.00 in goods and services 
for consumers. The Programs also fielded over 83,000 inquiry 
calls on various issues, both consumer and non-consumer. Each 
caller was either given self-help information, or directed to 
other appropriate state or federal agencies. 



PUBLIC PROTECTION BUREAU 

Health Care Policy Development 

In 1992, the Public Protection Bureau increased its focus on 
health care policy issues. Bureau personnel conducted a continu- 
ing series of meetings with participants in the health care indus- 
try, including hospitals, insurers, managed care providers, physi- 
cians, and community health centers. Bureau personnel also met on 
a continuing basis with consumer and employer groups concerned 
cibout health care cost and access issues. Finally, bureau person- 
nel began to develop informal consulting relationships with acade- 
mics from public health and medical schools in the area. 

These meetings (along with policy research and discussions 
conducted internally by the Bureau) led to the definition of a 
health policy "blueprint" for the Attorney General. This document 
is designed to define a direction for long term reform which 
should, in turn, provide a framework for continuing development of 
positions on health care issues by the Attorney General in 1993. 
The priority areas identified are the following: 



P.D.12 53 



* Support for a national solution to the problem of the 
uninsured. 

* Insurance market reform. 

* Relief for non-group health insurance purchasers. 

* Support for industry partnerships . 

* Review of hospital plant and equipment investment. 

* Fraud and abuse by providers. 

* Support for managed care with sensitivity to concerns 
of physicians and patients. 

* Availability of information on cost and quality. 

* Urban health issues. 

LEMi POISONING TASK FORCE AND OTHER LEAD INITIATIVES 

In late 1991, the Attorney General convened a Lead Poisoning 
Task Force to address some of the complex and difficult issues sur- 
rounding the state's lead paint laws and regulations. Members of 
the Task Force included representatives of state and federal agen- 
cies, local boards of health, the real estate, insurance and de- 
leading industries and advocacy groups, attorneys and others. The 
Task Force formed four subcommittees for the purpose of exchanging 
viewpoints and information concerning identified issues. These 
subcommittees: Identification and Response to Children at Risk, 
Residential Removal and Disposal of Lead, Nonresidential Leading 
Removal and Disposal, and Funding and Liability Issues met on a 
regular basis throughout the winter and spring of 1992. As a re- 
sult of the discussions which took place, each of the subcommit- 
tees proposed a detailed analysis of the issues discussed as well 
as suggestions for changes in the laws, regulations, enforcement, 
education and outreach. These findings and recommendations were 
combined and published in the Report of the Attorney General's 
Lead Poisoning Task Force in August of 1992. 

Following publication of the Report the Task Force met again 
in the fall to discuss the Report and plan for implementation of 
many of the proposals. As a result, two implementation groups 
were created and commenced to meet on a regular basis. 

As another outgrowth of the Task Force, the Bureau began to 
receive and investigate numerous complaint from many different 
sources concerning alleged violation of the lead laws by delea- 
ders, lead inspectors, and property owners. As of the end of 1992 
a number of investigations were ongoing and the announcement of 
several indictments, civil complaints and agreed settlements ap- 
peared imminent . 

MITITRDST DIVISIOII 

The Antitrust Division enforces federal and state antitrust 
laws prohibiting anti-competitive activity. The U.S. Supreme 
Court has described these laws as the "Magna Carta" of our free en- 
terprise system. Enforcement of these laws protects consumers 
from the adverse economic effect of price-fixing, boycotts, monopo- 
lization and other similar restraints of trade. Enforcement of 
these laws also protects businesses, particularly small busi- 
nesses, by curbing the kind of anti-competitive activity that ham- 
pers the edsility of a business to compete on an equal basis in the 
marketplace . 



54 p.D.i: 



The Division prosecutes violations that principally affect 
Massachusetts consumers. The Division also joins forces with 
other states to prosecute violations that have a negative impact 
on consumers and businesses in multiple states including 
Massachusetts. Through the National Association of Attorneys 
General, the Division coordinates it activities with those of 
other states and with the activities of federal antitrust enforc- 
ers . 

Multistate Insurance Antitrust Litigation 

The Commonwealth is a party along with 19 other states and 
various private parties in these antitrust actions in the United 
States District Court for the Northern District of California 
against a total of more than thirty insurance companies, reinsu- 
rers, intermediary brokers, and trade associations. The com- 
plaints allege that defendants illegally manipulated the market 
for commercial general liability (CGL) insurance, the insurance 
purchased by most businesses, public agencies, and non-profit or- 
ganizations to cover their liability to third parties for personal 
injuries and property damage. Treble damages for injuries to pub- 
lic entities are sought, as well as extensive injunctive relief. 

The United States Supreme Court granted certiorari to review 
the decision of the Unites States Court of Appeals for the Ninth 
Circuit which reversed and remanded the District Court (Schwarzer, 
J.) decision dismissing the plaintiff's actions on 
McCarran-Ferguson, state action, comity, and pleading grounds. 
The Supreme Court granted certiorari on two issues in the case: 
<1) whether the United States may enforce United States antitrust 
laws against foreign companies for action in a foreign country 
that has effects in the United States (international comity) and 
(2) the scope of the McCarran-Ferguson Act, which exempts certain 
conduct of insurance companies from prosecution under the anti- 
trust laws. 

The Division has taken a leading role in settlement negotia- 
tions as well as the drafting of the states' international comity 
brief which, along with the states' McCarran-Ferguson brief, was 
filed on December 23, 1992. The Division will also take an active 
role in the preparation for the oral argument before the United 
States Supreme Court, to take place in early 1993. (Alpert, Weber) 

In re Clozapine Antitrust Litigation 

This case involved a multi-state lawsuit against Sandoz 
Pharmaceuticals Corp. and Caremark Corp. alleging illegal tying in 
violation of section 1 of the Sherman Act and monopolization under 
section 2 of the Sherman Act. The states' antitrust lawsuits were 
based on Sandoz' s and Caremark' s marketing of the anti-schizophre- 
nia drug, Clozaril. Sandoz refused to sell the drug unless the 
buyer also agreed to purchase a package of blood monitoring and 
blood testing services provided exclusively by Caremark. The 
Division was part of the eight member Case Management Committee 
that initiated and organized the litigation of this case. 

The case was settled in September 1992 and was joined by all 
states in the United States and the District of Columbia. Sandoz 
and Caremark agreed to pay purchasers of the drug, including state 
agencies, $13 million plus attorney's fees and costs. In addi- 
tion, $3 million will be paid to the National Organization of Rare 
Diseases to be used in the treatment of new patients with 
Clozaril. The defendants also agreed to provide a 15% reduction 
in the wholesale price of Clozaril to at least 2000 patients on so- 
cial security disability income. The defendants are further pro- 
hibited from reinstating the tie between Clozaril and the blood 
monitoring and blood testing services provided by Caremark. 



P.D.12 



55 



The United States District Court for the Northern District of 
Illinois approved the settlement on Nov. 24, 1992. (Scibelli, 
Weber) 

Blue Shield - Baystate Merger 

The Attorney General agreed not to make an antitrust chal- 
lenge to Blue Shield's merger with Baystate Healthcare, a failing 
HMO serving over 350,000 subscribers in the Commonwealth. 
Pursuant to the agreement between the Attorney General and Blue 
Shield, Blue Shield agreed to contribute $2 million to provide 
free health insurance to uninsured children unless its operation 
of Baystate proves financially unsuccessful. Further, for two 
years. Blue Shield is prohibited from merging with any other 
health care Insurer or HMO if the Attorney General finds that the 
merger adversely affects competition. Blue Shield also agreed to 
fund a study to determine the causes of Baystate' s failure and to 
aid the Attorney General in monitoring the competitive effects of 
the new health care financing law, G.L. c. 495, by responding to 
inquiries from the Attorney General within two business days. 
(Weber, Scibelli, Alpert) . 

Commonwealth v. Cahill, et al . 

In this federal court action, filed by the Division in August 
of 1988, the Commonwealth alleged that twenty-four Springfield ob- 
stetrician/gynecologists conspired to boycott Blue Shield of 
Massachusetts in violation of state and federal antitrust laws. 
The suit sought injunctive relief and the imposition of civil pen- 
alties against twenty-four defendant physicians. 

In 1992 the remaining eleven defendants entered into consent 
judgments with the Commonwealth: enjoining violations of the anti- 
trust laws; containing agreements to withdraw letters of resigna- 
tion from Blue Shield and to notify the Commonwealth prior to sub- 
mission of any future letters of withdrawal; and providing a total 
recovery to the Commonwealth of $140,000 in money and free medical 
services to low income women. In total, the Commonwealth recov- 
ered over $300,000 in cash payments and free medical services from 
the twenty-four defendants. (Weber, Davies, Alpert) 

Mitsubishi 

On January 15, 1992, the United States District Court in 
Baltimore, Maryland entered a Final Judgment in this case approv- 
ing the settlement negotiated between the states and Mitsubishi 
Electronics. The terms of the settlement require Mitsubishi 
Electronics to refund $7.95 million to consumers to settle charges 
that it unlawfully fixed the retail prices of certain Mitsubishi 
and MGA brand televisions. The settlement resolved charges that 
Mitsubishi had attempted to enlist electronics retailers in a 
nationwide conspiracy to fix retail prices and had obtained agree- 
ments from dealers not to sell below Mitsubishi's retail price. 
Under the terms of the settlement, more than 11,000 Massachusetts 
consumers were eligible to receive refunds for products purchased 
in 1988. (Weber, Davies, O'Neill, Botte) 



56 P.D.12 



Getty Petroleum Corp. v. Scott Harshbarger 

On September 18, 1992, in anticipation of an enforcement ac- 
tion by the Division, Getty Petroleum Corp. filed a complaint in 
United States District Court for the District of Massachusetts re- 
questing declaratory judgment and injunctive relief regarding the 
applicability of G.L. c. 93E to Getty's policy of requiring dea- 
lers to remain open certain hours per day and days per week. G.L. 
c. 93E prohibits lessors to require lessees to stay open certain 
hours per day or days per week. On the Commonwealth's motion to 
dismiss, Judge Tauro dismissed Getty's preemption claim pursuant 
to the Younger abstention doctrine, and abstained from making a 
decision on Getty's due process claim, pending resolution of the 
Commonwealth's state court action. (Matlack, Alpert, Hasca, 
Weber, Wilkins [Govt.]) 

Commonwealth v. Getty Petroleum Corp. 

On September 23, 1992, the Division initiated this state 
court action in Suffolk Superior Court. The Commonwealth alleges 
that Getty's policy of forcing dealers to stay open certain hours 
per day and days per week violates G.L. c. 93E. (Matlack, Alpert, 
Nasca, Weber) 

Commonwealth v. J.F. Inc., Ludlow Enterprises. Inc.. L.A.Z.I. 

Inc . . et al ■ 

In 1988 the Division brought an antitrust action against vari- 
ous liquor stores in Western Massachusetts for agreeing to fix 
prices by jointly advertising the same prices. In 1992 settle- 
ments and signed consent judgments were entered with the six re- 
maining defendants enjoining the defendants from agreeing to fix 
retail prices for the sale of alcoholic beverages or grocery prod- 
ucts or to advertise uniform prices of products for or among 
separately owned retail liquor stores. (Scibelli, Weber) 

Nintendo 

In 1992 a Final Judgment approving a negotiated settlement 
was entered by the District Court for the Southern District of New 
York. The terms of the settlement required Nintendo to issue and 
redeem up to $25 million in consumer coupons nationwide, and to 
pay $1.75 million in attorney's fees and costs. The settlement re- 
solved charges that between June 1988 and December 1990, Nintendo 
controlled retail prices to consumers on its eight-bit Nintendo 
Entertainment System (NES) home video consoles, by pressuring re- 
tailers to maintain the "suggested" price of $99.95. More than 
120,000 Massachusetts consumers were eligible to redeem the 
Nintendo coupons. (Davies, Weber) 

FTC v. Ticor Title Insurance Co. 

In 1992 the Division joined in an amicus brief with 
thirty-five other states to the United States Supreme Court in the 
above entitled case. The brief urged that some real amount of gov- 
ernmental scrutiny was required in order to protect private action 
from antitrust scrutiny under the "state action" (or Parker v. 
Brown) exemption to the antitrust laws. 

In a 6-3 decision, the Court ruled in favor of requiring that 
the state play "a substantial role in determining the specifics" 
of a policy in order for the state action doctrine to apply. The 
Court relied heavily on the States' amicus brief in ruling that a 



P.D.12 57 



broad version of the exemption would not "serve the States' best 
interest" and would, in fact, "impede [the States'] freedom of ac- 
tion." (Alpert, Weber) 

In re Domestic Air Transportation Antitrust Litigation 
In 1992 the Commonwealth and twenty-three other states filed 
objections of behalf of consumers to a proposed settlement of pri- 
vate antitrust class 

actions against nine major domestic airlines. (American Airlines, 
Inc.; Continental Airlines, Inc.; Delta Airlines, Inc.; Midway 
Airlines, Inc.; Northwest Airlines, Inc.; Pan American World 
Airways, Inc.; Trans World Airlines, Inc.; United Airlines, Inc.; 
Air, Inc . ) . 

The states' objections are that the proposed settlements are 
underfunded, the percentage limitations on redemption are too low, 
the use of blackout periods is unfair, the certificates are not re- 
deemable through travel agents, the certificates are not redeem- 
able against all fares, there were serious questions as to the ade- 
quacy of notice to the class, and that plaintiffs' attorney's fees 
should not be approved until the actual value of the settlement is 
determined. 

Delaware v. New York 

On March 31, 1992, the Division filed a Motion for Leave to 
File Complaint in Intervention and a Complaint in Intervention. 
The case, now in the United States Supreme Court, includes every 
state in the United States and the District of Columbia. The case 
involves a dispute as to which state may take custody of unclaimed 
intangible property consisting of dividends, interest, and other 
distributions arising out of security transactions. 

CIVIL RIGHTS DIVISIOtI 

The Civil Rights Division enforces the Massachusetts Civil 
Rights Act which authorizes the Attorney General to seek injunc- 
tive relief when the exercise of legal rights is interfered with 
by threats, intimidation, or coercion. In fiscal year 1991, a 
total of 17 new injunctions against 30 defendants were obtained by 
the division involving racial, ethnic and anti-gay violence. 

A total of 8 injunctions with 12 defendants involved inci- 
dents in Boston. Three of the cases arose in the South End, two 
of the cases arose in Dorchester, one in South Boston, one in Hyde 
Park and one in Charlestown. The Division also obtained injunc- 
tions against defendants in Revere, Northbridge, Pembroke, Salem, 
Lynn, Haverill, Milford and in Provincetown . 

Any violation of these court orders would constitute a crimi- 
nal offense punishcible by a maximum fine of $5,000 or a two and 
one half year sentence in a house of correction. If bodily injury 
results, the defendants would be subject to a 10 year prison sen- 
tence and a maximum fine of $10,000. 



58 P.D.12 



POLICE RELATED CASES/ACTIVITIES 

Pittsfield Police Department 

An extensive investigation arising out of complaints from 
Pittsfield's minority community revealed that in at least eighteen 
separate incidents the police had conducted strip searches without 
probable cause. On February 11, 1992, a precedent setting compre- 
hensive agreement was executed with the City of Pittsfield and its 
police department. The agreement was designed to act as a guide 
to the Pittsfield Police Department in conducting law enforcement 
operations in the future, and to serve to develop and solidify the 
relationship of trust and cooperation between the police and the 
minority community. Two of the major aspects of the agreement 
call for 1) the restricted use of strip searches and new guide- 
lines as to when such searches are necessary, and 2) specialized 
training programs approved by the Attorney General's office. The 
Division also convinced the City Council to authorize funding 
($80,000) for the trainings. The entire department attended two 
week long training programs held in June and October 1992. 

Revere Police Department 

An agreement with the police department was implemented re- 
sulting from incidents occurring in 1991 within Revere' s 
Southeast-Asian community. In 1992, as a result of the agreement, 
a Southeast Asian Civil Rights Liaison was hired for the Division, 
an active Southeast-Asian Advisory Committee has been maintained 
in Revere, and a TV progreim has been developed to educate the 
Ccimbodian community as to their rights and the role of the mayor, 
police department. Attorney General, and other governmental agen- 
cies. The Division has also successfully supported funding re- 
quests for ROCA, a community group working with youth and the 
Attorney General's office to reduce violence in Revere. In August 
1992, the Division helped to coordinate a city-wide Caunbodian 
Culture Celebration. 



Chatham Police Department 

After receiving a number of complaints from residents regard- 
ing police misconduct, the Division decided that two complaints in- 
volving the actions of one officer in two separate Incidents war- 
ranted complete investigations. On May 27, 1992, it was concluded 
that the officer appeared to have employed unnecessary force in 
both incidents, that the arrests made were not warranted and that 
the department had failed to adequately investigate the com- 
plaints. Both complaints were referred to the Chief of Police and 
the Board of Selectmen for action. In one case, the Board decided 
that the officer required special retraining, but that no discipli- 
nary action would be taken. The other case was not pursued by the 
Board due to the complainant's lack of cooperation. The Civil 
Rights Division continues to work closely with the Police 
Department and the Board of Selectmen in developing procedures to 
handle complaints and to reduce tension within the community. The 
new policies include a new disciplinary code and the creation of a 
Community Advisory Committee. 



P.O. 12 59 



Commonwealth v. Adams, et al . 

This was a civil suit filed in 1989 alleging that thirteen 
Boston Police officers had used excessive force during the arrest 
of a motorist following a chase which ended in Brookline. A 
two-week trial took place in January, after which the court issued 
a Permanent Injunction enjoining the thirteen defendants from the 
further use of excessive force while detaining, apprehending or ar- 
resting individuals. The injunction also holds the defendants ac- 
countable for failing to report visible injuries occurring during 
arrest or other officers who use excessive force. This is the 
first injunction issued against police officers under the 
Massachusetts Civil Rights Act, as well as the first known civil 
rights injunction in the U.S. against individual officers (rather 
than a department) enjoining excessive force, and requiring the re- 
porting of other officers' use of excessive force, under threat of 
criminal penalties. The injunction has been temporarily vacated 
pending a full appellate review. 

Commonwealth v. James K. Houlihan 

A Lawrence police officer was indicted for alleged civil 
rights violations during an arrest of two Hispanic men in 
Lawrence. In July the defendant pleaded guilty to six misdemeanor 
charges — four counts of assault and battery and two counts of 
civil rights violations. He also resigned from the force. This 
case included a court ruling which denied an officer's attempt to 
dismiss indictments based on the Massachusetts State 
Constitution's guarantee against self-incrimination. 

Other Police Related Activities 

The Division engaged in a number of investigations related to 
complaints of police misconduct. In the complaints in which al- 
legations were substantiated after investigations, five resulted 
in the referral of substantiated findings to the Chief of Police 
with a recommendation of disciplinary action and training. 
(Richard W. Cole, George Fisher, Andrea Cabral, Tania Gray) . Two 
police departments also adopted model policies which were recom- 
mended by the Division after investigations identified potential 
policies or practices which might expose the departments to future 
liability. 

In an effort to promote civil rights, assist the police, and 
to provide departments with technical assistance, the Division con- 
tinues to provide an extensive eimount of training to police depart- 
ments throughout Massachusetts. Subjects of these trainings in- 
clude the investigation and prosecution of hate crimes, issues of 
bias and prejudice, federal and state constitutional and civil 
rights laws, the civil liability of police supervisors and police 
officers, sexual harassment in the workplace, and the obligation 
of police departments under the newly enacted Americans with 
Disabilities Act. 



60 p.D.i; 



BIAS-MOTIVATED IMJUNCTION CASES/TRIALS/SETTLEMQITS 

Commonwealth v. John Does 

In October 1991 in Boston's South End, the defendants alleg- 
edly attacked three hispanic males with a stecim iron and a leather 
coil. As they kicked and punched the victims, the defendants also 
yelled numerous racial and ethnic slurs. A Preliminary Injunction 
was issued on January 24, 1992, enjoining the defendants, two tee- 
nagers, from further harassing, intimidating or threatening the 
victims or any person in the Commonwealth based on their race or 
national origin. 

Commonwealth v. Steven Kaplan 

The defendant allegedly, on numerous occasions, directed ra- 
cial slurs at a Cambodian family at the Revere Housing Authority. 
Between May and July, the victims' car was vandalized with racial 
graffiti, their house was shot at with a BB gun and other property 
was dctmaged. Because of fear of harassment, the children of this 
fcimily were not allowed to play outside their house and the par- 
ents were compelled to take them to a park so that they could play 
safely. A Preliminary Injunction was issued on February 20, 1992, 
enjoining the defendant, under the Massachusetts Civil Rights Act, 
from further harassing, intimidating or threatening the victims or 
any person in the Commonwealth based upon the person' s race or na- 
tional origin. 

Commonwealth v. Peter A. Costa 

On July 4, 1992 in Provincetown, the defendant allegedly ap- 
proached two men and violently shoved one of them backward while 
making anti-gay slurs. Later, the defendant threatened the vic- 
tims, who were in their car, with physical violence. A 
Preliminary Injunction was obtained on October 20, 1992, enjoining 
the defendant under the Massachusetts Civil Rights Act from 
further harassing, intimidating or threatening the victims or any 
person in the Commonwealth based on their sexual orientation or 
perceived sexual orientation. 

Commonwealth v. Bernard Vivolo 

On July 15, 1992 in Boston's North End, the defendant alleg- 
edly assaulted a man with an umbrella. During the assault, the de- 
fendant yelled numerous obscenities and anti-gay slurs at the vic- 
tim. A Preliminary Injunction was issued on November 2, 1992, en- 
joining the defendant under the Massachusetts Civil Rights Act 
from further harassing, intimidating or threatening the victim or 
any person in the Commonwealth based on their sexual orientation 
or perceived sexual orientation. 

Commonwealth v. Leonard J. lannantuoni 

On June 21, 1992 at a park on the Avon/Brockton border, the 
defendant allegedly approached the victim and a fellow runner and 
began shouting anti-Semitic slurs at the victim. Shortly after 
the defendant had left, the victim and his friend resumed run- 
ning. As they were running, they passed the defendant. The de- 
fendant struck the victim on the back of his neck and knocked him 
unconscious. The victim sustained injuries to his head, arms, 
legs and knees. The defendant had harassed the victim on a number 
of previous occasions. A Preliminary Injunction was obtained on 
November 3, 1992, enjoining the defendant under the Massachusetts 
Civil Rights Act from further harassing, intimidating or threaten- 
ing the victim or any person in the Commonwealth based on their re- 
ligion. 



F.D.12 



61 



Commonwealth v. John V. Devaney. et al . 

This civil suit sought a Preliminary Injunction against two 
defendants for allegedly assaulting two women at a Methuen bar 
while yelling anti-gay/anti-lesbian epithets. Parallel criminal 
charges were pending against the defendants as a result of the in- 
cident. Defendants sought to depose the victims and witnesses. 
The Commonwealth moved for a protective order seeking a stay of 
discovery until the criminal matter was concluded. The protective 
order was granted on September 18, 1992. This is the first ruling 
in Massachusetts which held that when there is a parallel criminal 
prosecution and civil rights injunctive action, a defendant will 
not be permitted to pursue civil discovery in the injunctive case 
until after the criminal trial occurs. 

Commonwealth v. John Randolph 

A Preliminary Injunction was issued against the defendant in 
July for his alleged continuous harassment of his Portuguese neigh- 
bors with threats and ethnic slurs. The Commonwealth requested 
that the court declare that the defendant had violated the 
Massachusetts Civil Rights Act, and that a Permanent Injunction be 
issued. After a three day trial in March 1992, the court issued a 
Permanent Injunction against the defendant. 

Commonwealth v. Terrence Sullivan 

A Preliminary Injunction was issued against the defendant on 
July 14, 1989 for his allegedly harassing, intimidating and threat- 
ening a Cambodian woman at a Burger King parking lot in Lowell by 
physically preventing her from entering the restaurant while yell- 
ing ethnic slurs. A two-day trial took place in July 1992, in 
which the Commonwealth sought a Permanent Injunction against the 
defendant, along with a declaration that the defendant had vio- 
lated the Massachusetts Civil Rights Act. At the conclusion of 
the trial, the defendant decided to settle the case by consenting 
to the terms of a Permanent Injunction. 

Commonwealth v. Donald Filklnaton, et al . 

This case alleged that six defendants physically assaulted 
two men while yelling anti-gay slurs at them. The defendants were 
alleged to be members of a neo-Nazi hate group called the White 
Youth League. An injunction, effective for five years, was en- 
tered against each of the defendants through Consent Judgments. 

Commonwealth v. Ismael Hernandez, et al . 

Five defendants allegedly assaulted a man in Boston's 
Fens/Victory Garden section because of his sexual orientation. A 
Consent Judgment was entered against one of the defendants on 
March 8, 1990. A permanent injunction was issued against each of 
the remaining four defendants on February 2, 1992, through Default 
Judgments . 

Commonwealth v. Kevin and Denise Foley 

Defendants allegedly harassed a hispanic family and a black 
family with racial epithets and threats. An injunction, effective 
for three years, was entered against each of the defendants 
through Consent Judgments on May 5, 1992. 



62 P.D.12 



Commonwealth v. Carl Beldotti 

The defendant allegedly harassed three men because of their 
sexual orientation. An injunction, effective for three years, was 
entered against the defendant through a Consent Judgment on May 5, 
1992. 



Commonwealth v. Harold Cue 

The defendant allegedly harassed a Jewish woman with 
anti-Semitic slurs, threats, and graffiti. A permanent injunction 
was issued against the defendant through a Consent Judgment on May 
26, 1992. 



OPEJ^ATIOH RESCUE 

Commonwealth v. Operation Rescue 

After a two-week trial, a Permanent Injunction was issued in 
1991 against members of Operation Rescue which prohibited the 
blocking of entrances to clinics which provide abortion services 
and counseling. During 1992 the Commonwealth charged several of 
the members with violation of the injunction. A trial of two of 
those defendants took place in December of 1992. On December 11, 
1992, the jury found one defendant guilty and the other not 
guilty. The guilty defendant has been sentenced to serve six 
months on a two and a half year sentence. 

The Division continues to be involved in ongoing training of 
police departments regarding the arrest and the booking of indi- 
viduals who blockade clinics which provide abortion services and 
counseling . 

The Division coordinated with the Boston Police Department to 
deal with and deter Operation Rescue from succeeding in an at- 
tempted month-long blockade of a clinic located in Boston. 

HOOSING DISCKIKDIATION CASES 

Commonwealth v. Robert and Florence Dowd 

This housing discrimination case was based on the complain- 
ant's marital status. A trial was held on November 3, 1991 and 
the court decided in favor of the plaintiff and awarded damages. 
During 1992, after further proceedings, the court also awarded at- 
torney's fees to the Commonwealth. This is the first award of at- 
torney's fees to the Attorney General in a housing discrimination 
case in which the court applied standards and rates for private at- 
torneys. The attorney's fees claim is currently under appeal. 

Commonwealth v. John J. Hannon 

This case, alleging housing discrimination based on the com- 
plainant's sex, was filed in January 1992. In settling the case, 
the defendant agreed to pay compensation to the complainant and to 
enter a consent judgment enjoining him from discriminating in the 
future. 



Commonwealth v. Norman Brettell Trust 

This case, filed in 1991, alleged housing discrimination 
based on the complainant's section 8 subsidy status. The case was 
settled in July 1992. By the terms of the Agreement of 
Compromise, the defendant paid compensation to the complainant and 
attorney's fees to the Commonwealth. The defendant also agreed 
not to discriminate in the future. 



P.D.12 



63 



Commonwealth v. Oak Hill Houalna Compa ny, et al . 

This housing discrimination case was filed in May 1992. The 
suit alleged that the landlord failed to protect adequately a ten- 
ant from race-motivated harassment and retaliated against the ten- 
ant when she complained of the harassment. In settling the case, 
the defendant agreed (1) not to discriminate in the future and to 
protect its tenants from race-motivated harassment; (2) to estab- 
lish a program to address racial tensions among tenants, train its 
employees to have greater sensitivity in issues involving race or 
color, and revise its policies so as to effect these goals; and 
(3) to pay compensation to the complainant. By the terms of the 
settlement, the Office of the Attorney General will monitor the 
implementation of the agreed-upon programs. 

Commonwealth v. Samia Companies, et al . 

This case, alleging housing discrimination based on the com- 
plainant's subsidy status, was filed in January 1991. The case 
was settled, by an agreement that the Defendant would compensate 
the complainant and would not discriminate in the future. 

DISABILITY ISSUES 

Since the effective date, January 1992, of Title II, the 
Americans with Disabilities Act (ADA), Division staff have spent a 
substantial amount of time conducting presentations and trainings 
concerning the effect of the provisions of the ADA. Groups to 
whom presentations were made include the Massachusetts Chiefs of 
Police Association, the Association of Human Service Providers, 
the Massachusetts Sheriff's Association, the Association of Town 
Counsel and City Solicitors. Division staff also prepared written 
materials on the ADA for distribution, including a Question and 
Answer article concerning requirements of Title II. Assistant 
Attorney General Stanley J. Eichner has also participated on the 
National Association of Attorneys General working group on the AE'A. 

Physical Access to Municipal Meetings 

In 1991 the Attorney General wrote to all the cities and 
towns in Massachusetts informing them of their obligation to guar- 
antee physical access to municipal meetings to their disabled resi- 
dents. As a follow-up to the compliance of many cities and towns 
in 1991, in 1992 the towns of Whitman and Maiden authorized renova- 
tions or relocation of their municipal meeting so as to provide ac- 
cess to disabled persons. Southbridge also agreed to relocate its 
town meetings until renovations occur, in response to a demand let- 
ter, which included the threat of litigation. 

Other ADA Action 

The Division worked cooperatively with the Administrative Law 
Division of the Office in resolving several group home disputes 
against municipalities (Hopkinton, Littleton, Lowell, Maiden, 
Melrose, Needham, Springfield) to ensure, through enforcement of 
state and federal fair housing mandates, that group homes are not 
excluded from these communities. The Division is working with the 
Administrative Law Division to recommend modifications to the 
state building code to comply with the Federal Fair Housing Act of 
1988. 



64 P.D.12 



The Division co-authored an article on group homes and Fair 
Housing issues for the town counsel newsletter. 

CLUB discrhctnation 

A comprehensive settlement was reached with Veterans of 
Foreign War in Wilmington, based on a charge that the facility com- 
mander intentionally discriminated against a black man who was a 
non-member visitor to the VFW. As part of the settlement, the com- 
mander has been removed from his position. 

The Division worked with the Secretary of Consumer Affairs 
and Alcoholic Beverage Control Commission regarding the promulga- 
tion of regulations to prohibit sex discrimination by golf clubs 
who hold liquor licenses. 

EDDCATIONM. DISCRIMrNATION 

The Division formally advised the Westfield School Committee 
to vote against a resolution which would have barred teachers with 
"accents" from teaching in elementary clasaiooms. The Division ad- 
vised the school committee that passing the resolution would be 
discriminatory, and potentially subject the district to legal ac- 
tion. Consequently, the resolution was defeated by the School 
Committee in July. 

CREDIT DISCRIMINATICW 

Commonwealth v. GECAL 

This case, charging credit discrimination based on sexual 
orientation, by a national consumer company, was settled in 
September 1991. The settlement included an award of daimages and 
an agreement that future discriminatory practices will not occur. 

OTHiaR DIVISION ACTIVITIES/INITIATIVES 

Minority and Women Set Aside Programs 

Assistant Attorney General, Bettye Freeman, was appointed as 
a co-chairperson of the Department of Transportation review commit- 
tee regarding the minority and women set aside progrcims for the 
Harbor Tunnel Project. 

The Division worked with the Essex County District Attorney's 
office and the Salem Police Department to deter repetition of or- 
ganized harassment of witches in Salem. 

The Division organized and coordinated a Hate Crime Study 
Group consisting of constitutional and civil rights advocates to 
discuss the susceptibility of the Massachusetts civil rights stat- 
ute to constitutional challenge in light of the Supreme Court deci- 
sion in R.A.V. V. St. Paul . 

The Division participated as an active member of the Supreme 
Judicial Court Commission on Race and Ethnic Bias in the Courts, 
including involvement in public hearings. 

As a member of the Governor's Hate Crimes Commission, the 
Division assisted in drafting regulations and developing and par- 
ticipating in training programs that concern reporting and investi- 
gating hate crimes. 



P.D.12 65 



As part of the annual Department of Mental Health Human 
Rights Conference, Assistant Attorney General Stan Eichner made a 
presentation on the work of the Office of the Attorney General 
challenging group home discrimination. The Division also gave a 
presentation on how federal and state fair housing 

requirement laws apply to group homes and residents at the 
Association of Town Counsels and City Solicitors' annual conven- 
tion . 



CONSOMER PROTECTION DIVISION 

The Consumer Protection Division ("CPD") brings enforcement 
actions against businesses which use unfair and deceptive prac- 
tices resulting in injury to consumers. Concentrating on cases 
which are in the public interest and specifically where consumers 
cannot reasonably obtain relief through their own efforts, CPD' s 
caseload consists primarily of large-scale class actions brought 
on behalf of consumers affected in similar ways by the illegal ac- 
tivities of business. These activities include sudden business 
closings, retail advertising and sales, financial services, land- 
lord-tenant and mobile home issues, automobile advertising and re- 
pairs, and nursing home services. CPD also drafted regulations 
and filed comments on legislative and administration matters. 
Through our Complaint Section we also mediated disputes between 
consumers and businesses. 



Fine Hill Estates Mobile Home Park 
(Commonwealth v. George A. Bumila, Sr., et al . ) 

On August 13, the Division filed suit in Southeast Housing 
Court against Pine Hill Estates Mobile Home Park in Raynham, for 
allegedly harassing and intimidating their mostly elderly resi- 
dents . Some of the allegations in the complaint state that Pine 
Hill Estates and its owner, George Bumila, attempted to close the 
park illegally, continually harassed and intimidated park resi- 
dents, enforced unfair and unreasonable park rules, fixed fuel 
prices, illegally discriminated on the basis of age, and destroyed 
Commonwealth wetlands. In addition to injunctive relief, the 
Attorney General is seeking civil penalties, costs, and attorneys' 
fees . 



Avcar 
(Commonwealth v. Hovey Eordekian, Jr., et al . ) 

On February 24, the Division filed suit in Middlesex Superior 
Court against two individuals, Hovey Eordekian and Brian 
Kitteredge, d/b/a AVCAR, who allegedly operated a phony business 
of selling the automobiles of private individuals for a sales com- 
mission, but never turning over the sales proceeds to the owners. 
The defendants also allegedly used, leased, or loaned consumers' 
cars to others without the owners' permission. The Attorney 
General is seeking a permanent injunction, restitution for consu- 
mers, civil penalties, and the cost of litigation and investiga- 
tion. 



66 P.D.i; 



Myatlc Auto Wholesale & RRR Used Cars 

(Commonwealth v. Marjorie Venditti) 

(Commonwealth v. Dorco, Inc.) 

On August 4, the Division filed separate suits against two 
used car dealers for violating the Massachusetts Used Car Lemon 
Law. Marjorie Venditti, d/b/a Mystic Auto Wholesale, is charged 
with violating the Consumer Protection Act by failing to comply 
with the order of a state certified arbitrator to repurchase a 
used car from a consumer under the state's Lemon Law. Venditti 
neither refunded the consumer's money nor appealed the decision to 
the District or Superior Court within the 21-day appeal period. 
In the second suit, Dorco Inc., d/b/a RRP- Used Cars, repurchased 
the consumer's car, after the Division apprised the dealer of po- 
tential enforcement action. However, the company did not pay the 
$500 fine levied by the Executive Office of Consumer Affairs. The 
Division will ask the Court to require each dealer to pay the 
amount of the arbitration award, the $500 fine, a civil penalty of 
$5,000, and the costs of the action. 

Greenwood Trust Co. 

(Greenwood Trust Co. v. Commonwealth) 

On November 4, the Division filed a petition for a writ of 
certiorari with the United States Supreme Court asking for the re- 
versal of a Federal Appeals Court decision that allows Discover 
Card to impose $10 monthly late charges on its Massachusetts consu- 
mers. On August 6, the First Circuit Court of Appeals ruled that 
federal law allows Greenwood Trust Co., a Delaware Bank that is- 
sues the Discover Card credit card, to impose late charges on its 
Massachusetts consumers, and preempts a Massachusetts law which 
prohibits such late charges. More than 30 states prohibit or sig- 
nificantly limit credit card late charges. The Attorney General 
argued that the First Circuit's opinion, if allowed to stand, may 
have a dramatic impact on states' traditional ability to regulate 
all consumer lending practices, not just late charges. 

Management Advisory Group 

(Commonwealth v. Management Advisory Group, Inc., et al . ) 
On December 16, the Division filed a civil suit in Suffolk 
Superior Court against Management Advisory Group (MAG) , an alleged 
venture capital finance firm located in Boston. MAG solicited 
small or new businesses needing investment capital and then failed 
to provide financing or any financial services. Individuals and 
businesses paid advance fees for services ranging from $3,000 to 
$39, 500, but did not receive any investment capital or any refunds 
of those fees, even though demands for refunds were made to MAG. 
The complaint seeks permanent injunctive relief, restitution for 
victims, a temporary freeze of assets, civil penalties, costs, and 
attorneys' fees. 

National Credit Union Administration 

(Commonwealth v. Barnstable Community Federal Credit Union, 
et al.) 

In December, the Division filed an emergency lawsuit against 
the National Credit Union Administration (NCUA) (successor to 



P.D.12 67 



Barnstable Community Federal Credit Union), developer William 
Dacey, and one of the developer's companies to try to enjoin the 
foreclosure of a consumer's home in Mashpee. The consumer had pur- 
chased a home from Mr. Dacey but never received notice of the fore- 
closure sale because neither the deed nor the purchase money mort- 
gage from Dacey were ever recorded. Judge Cratsley of Suffolk 
Superior Court signed a Temporary Restraining Order, but we could 
not deliver notice in time to stop the foreclosure. We then filed 
a Motion for a Preliminary Injunction which Judge Cratsley granted 
thereby enjoining NCUA for 30 days from evicting the consumer or 
selling the home. 

William J. Camuti 

(Commonwealth v. William J. Camuti, et al . ) 

The Division filed a Complaint to Determine Dischargeability 
against Mr. Camuti in Bankruptcy Court, alleging that his unpaid 
judgment debt of $206,000 in c. 93A civil penalties and costs was 
not dischargeable under section 523 (a) (7) of the Bankruptcy 
Code. We had previously sued Mr. Camuti, the Loan Depot, and 
other corporations for contempt and further penalties under c. 93A 
for their failure to pay the judgment (entered after a c. 93A secu- 
rities fraud lawsuit). On the eve of Mr. Camuti's trial, he filed 
his bankruptcy petition. 

SETTLQlEarrS/ JUDGMENTS 

Procter & Gamble — Crest 
(Commonwealth v. Procter & Gamble, Inc.) 

On January 13, the Division reached an agreement with Procter 
& Gamble, makers of Crest toothpaste, in which P&G agreed to stop 
advertising cavity protection "down to the root" of children's 
teeth in a misleading manner. In a nationwide television commer- 
cial, P6G stated that Crest was "the first toothpaste clinically 
shown to protect you down to the root of the tooth." In support 
of its claim, P&G relied upon a test conducted on senior citizens, 
while the commercial focused on the effect of the use of Crest 
toothpaste on children's teeth. 

P&G has deleted all root protection claims in a revised ver- 
sion of the commercial and has agreed to provide $50,000 to the 
Attorney General's "SCORE" program. 

Sears Auto Centers 

(Sears Roebuck & Co.) 

On September 2, the Division joined with the Attorneys 
General in 43 states in a nationwide settlement with the 
Chicago-based Sears Auto Center. As part of the settlement. Sears 
has agreed to distribute $50 coupons to any Sears customers who 
had certain items installed in their cars from August 1990 to 
January 1992. Sears expects that the settlement will affect 
41,566 Massachusetts consumers and result in more than $2 million 
in restitution. In addition. Sears has agreed to reform certain 
of its policies in order to avoid abuses in its auto repair prac- 
tices . 



68 P.D.12 



Crescent Ridge Dairy 

(Commonwealth v. Crescent Ridge Diary, Inc.) 

On June 16, a Consent Judgment was filed in Suffolk Superior 
Court, settling a case that involved the Crescent Ridge Dairy and 
its fortification of milk with excessive aunounts of Vitamin D. 
The case was referred to the Division by 

the Massachusetts Department of Public Health which had traced 
seven reported cases of Hypervitaminosis D to Crescent Ridge 
Dairy. The Judgment contains injunctive relief imposing numerous 
procedural and testing safeguards, prohibitions upon the dairy's 
misrepresentations of certain facts, and requirements that milk be 
tested by an approved independent la±»oratory once every two 
weeks. In addition, the dairy agreed to pay $60,000 in civil pen- 
alties and restitution for medical test costs incurred by unin- 
sured consumers. 



Contour Chair 

(Commonwealth v. Contour Lounge, Inc.) 

On February 12, CPD filed a consent judgment in Suffolk 
Superior Court against the marketers and former local distributor 
of the "Contour Chair." According to the complaint. Contour sales- 
persons used a highly sophisticated, high pressure door-to-door 
sales operation which primarily targeted the elderly, the physi- 
cally infirm, and the disabled. The complaint cites numerous un- 
fair acts and misrepresentations by the defendants and their sales- 
persons including: misrepresenting the usual sale price of their 
chairs by offering illusory discounts to make consumers believe 
they were getting a better price, advertising that purchasers 
would receive a TV or VCR with the purchase of a chair and then 
failing to provide the TV or VCR, refusing to disclose the usual 
sale price of the chair until the salesperson had finished a sales 
pitch in the consumer's home that often lasted 2 to 4 hours, and 
failing to honor warranties. The judgment prohibits the defend- 
ants and their successors from continuing alleged unfair and decep- 
tive acts or practices, and it provides for the payment of 
$230,000, of which $215,000 will be used as restitution for consu- 
mers . 



Carlyle House 

(Commonwealth v. Carlyle House, Inc., et al . ) 

On November 9, the Division filed a Consent Judgment in 
Suffolk Superior Court settling a case brought against The Carlyle 
House, a Freimingham nursing home, and the facility's owner and 
administrator. The case involved allegations of Medicaid discrimi- 
nation and the improper discharge of Medicaid patients. Under the 
terms of the Consent Judgment, the nursing home is enjoined from 
various discriminatory acts targeting medicaid patients and from 
discharging or transferring patients without complying with state 
law. The defendants are required to pay $24,000. Four former pa- 
tients will each receive $500, a sum calculated not to put their 
medicaid eligibility at risk, as "damages" for their improper dis- 
charges. The remaining $22,000 represent civil penalties. 



P.D.12 



69 



Joy of Movement 

(Commonwealth v. Joy of Movement, et al . ) 

On October 23, CPD entered into a Consent Judgment with 
f^enneth Estridge, president and founder of the Joy of Movement 
health club chain. The Division sued Estridge personally in addi- 
tion to the Joy of Movement corporations in March 1991, when they 
abruptly closed their doors and failed to give refunds to 
Massachusetts consumers for membership dues paid in advance. 
Shortly after we filed suit, Estridge and his company filed for 
bankruptcy thereby preventing us from pursuing his case until the 
bankruptcy litigation was completed. When Estridge was discharged 
from bankruptcy, the Division pursued its case against him and ne- 
gotiated an agreement with him whereby he would pay $45,000 to par- 
tially reimburse consumers who had filed complaints with the of- 
fice. In addition, Estridge is barred from owning or operating a 
health club in Massachusetts for three years and thereafter must 
give notice to the office before he resumes owning or managing any 
health club in the state. 

U.S. Funding 

(Commonwealth v. U.S. Funding, Inc. of America, et al . ) 
On August 31, the Division agreed to a class action settle- 
ment of home owners' claims against U.S. Funding, Inc. of America, 
a large South Weymouth mortgage company now in bankruptcy. Under 
the settlement agreement, approximately $2.5 million in mortgage 
loans will be forgiven by the present holders of defective mort- 
gages. Class members may also be entitled to other financial com- 
pensation from a fund of approximately $375,000. U.S. Funding had 
represented to consumers that the proceeds of refinanced mortgages 
would be used to pay off the prior debt. Instead, U.S. Funding 
made only partial or, in many cases, made no payment, leaving con- 
sumers with outstanding "unfunded" or "underfunded" loans. On 
February 26, 1993, Suffolk Superior Court Judge Patrick King will 
hold a hearing to see if the settlement is fair in light of the 
claims by consumers . 

Commonwealth v. U.S. Fidelity Trust, et al . 

The defendants in this case promised people on the verge of 
losing their homes in a mortgage foreclosure that by renting their 
properties to the defendants prior to the foreclosure sale, they 
would be able to remain in their properties at a fraction of the 
monthly mortgage payment. The defendants would rent the property 
from the homeowner at a nominal rate and then rent it back to the 
homeowner for about half of the homeowner's monthly mortgage pay- 
ment. A consent decree was entered by the Court ordering the de- 
fendants to desist from their deceptive practices and to return to 
the victims of this scheme any payments made under the rental 
agreements . 

GMAC Mortgage 

(New York, et al . v. GMAC Mortgage Corp.) 

On January 27, the Division, along with the Attorneys General 
of 11 other states, announced that General Motors Assistance 
Corporation Mortgage Corporation had agreed to stop alleged over- 
charges on 



70 P.D.12 



mortgage escrow accounts, make refunds and offer other economic 
benefits to consumers of approximately $100 million nationwide. 
The agreement will result in economic benefits of more than $1 mil- 
lion to GMAC's 4,000 Massachusetts mortgage holders. The 1990 law- 
suit alleged that GMAC, the nation's fourth largest mortgage 
lender, overcharged its 400,000 mortgage holders' mortgage escrow 
accounts in violation of the Federal Real Estate Settlement 
Procedures Act of 1975 and overcharged consumers individual mort- 
gage contracts. The company agreed to pay a total of $525,000 in 
costs to the states (including $70,000 to Massachusetts) that sued 
GMAC. 



Atlantic West Mortgage Co. 

This action, against the Atlantic West Mortgage Co., and its 
president Robert E. Ciardi, Jr., was settled by the simultaneous 
filing of a Complaint and Final Judgment in December of 1992. The 
complaint alleged that First Atlantic and Ciardi had violated the 
Consumer Protection Act by receiving more than two hundred thou- 
sand dollars in application and rate-lock fees for mortgages that 
were either not processed or never closed, and failing to refund 
these fees to consumers. Under the terms of the Final Judgment, 
Ciardi will pay $100,000 to the Commonwealth for restitution to 
consumers and for civil penalties. 

Hilel & Ferreira 

(Commonwealth v. Hilel & Ferreira Transfer Co., Inc., et al . ) 
On February 25, the Division obtained a court order from 
Judge Barrett of Suffolk Superior Court to distribute partial re- 
funds to consumers who lost money in 1990 when the Hilel & 
Ferreira Transfer Co., Inc. failed to transmit over $219,000 depos- 
ited by consumers. Hilel & Ferreira dealt almost exclusively with 
Brazilian Americans who regularly forwarded portions of their in- 
come to fcimily members in Brazil. In April 1991, the Division ob- 
tained a preliminary injunction enjoining the defendants from en- 
gaging in the foreign transmittal business and freezing the cer- 
tificates of deposits which held the defendant's corporate bond. 
Following the February order, this office worked with the 
Commission of Banks to divide the $76,000 bond among the 42 consu- 
mers . 



Bridge-Way Realty Trust 

(Commonwealth v. Evelyn M. Trottier, et al . ) 

On September 9, the Division obtained a Consent Judgment in 
Suffolk Superior Court permanently enjoining Bridge-Way Realty 
Trust, an East Bridgewater land developer, from collecting depos- 
its for subdivision lots without obtaining the necessary approvals 
required under the state's Subdivision Control Law. According to 
the terms of the judgment, defendant Frederick L. Smith, a benefi- 
ciary of Bridge-Way Realty Trust, will pay restitution of $80,000 
to consumers who paid deposits for house lots in East 
Bridgewater. In addition, defendant Evelyn Trottier, individu- 
ally, and as special administratrix of the estate of Joseph 
Trottier, will pay $208,097.50 for restitution to consumers along 
with interest, penalties, fees and costs. 



P.D.12 "71 



American Woman and its President. William Menchaca 
(Commonwealth v. American Fitness Center, Inc., et al . ) 
In September, the Division obtained a Final Judgment in 
Suffolk Superior Court against American Woman, a fitness center, 
and its president, Willicim Menchaca, who accepted membership dues 
from consumers for the Taunton American Woman health club which he 
never opened. The Judgment states that Mr. Menchaca is barred 
from owning or operating a health club in Massachusetts for three 
years and thereafter must give notice to the Division before he 
resumes owning or managing any health club in the state. In addi- 
tion, Menchaca paid refunds to consumers in the amount of $11,025 
and paid $500 to the Division for costs of investigation and liti- 
gation . 

Great Expectations 

(Commonwealth v. Greatex of Mass., Inc.) 

On July 16, the Division filed an Assurance of Discontinuance 
in Suffolk Superior Court in which Great Expectations, a 
Newton-based video dating service, agreed not to engage in 
high-pressure sales tactics. Great Expectations will also pay 
$20,000 to the Attorney General's Local Consumer Aid Fund. The 
Division had received over 60 complaints that charged Great 
Expectations with using various high-pressure sales tactics, such 
as telling the consumer the price would increase significantly if 
a contract was not signed immediately, resorting to taking consu- 
mers to an ATM machine so they could withdraw money to pay for a 
deposit, and denying refunds to most consumers who joined under 
these conditions. 

Sonotone Hearing Aids Center. Corp. a/k/a Ann a Gordon 
(Commonwealth v. Sonotone Hearing Aids Center, Corp., et al . ) 
On July 22, a Final Judgment was entered in Suffolk Superior 
Court against Sonotone Hearing Aid Centers Corp. and its presi- 
dent, Anna Gordon. The order prohibits Anna Gordon from engaging 
in the practice of advertising and selling hearing aids and orders 
the payment of $29,681 in restitution for 56 consumers and $10,000 
in civil penalties. The Bristol County District Attorney's Office 
also obtained an indictment against Anna Gordon on 47 counts of 
larceny. On December 3, Ms. Gordon was sentenced in Bristol 
Superior Court to 6-10 years in prison with one year to be served 
beginning December 3, 1993 plus an order to pay $400 per month in 
restitution . 

Natick Auto Brokers 

(Commonwealth v. John Paulini) 

On November 4, the Division obtained approval of a judgment 
filed in Middlesex Superior Court against John Paulini, d/b/a 
Natick Auto Brokers, for violating the Massachusetts Used Car 
Lemon Law. Mr. Paulini had been charged with failing to comply 
with the order of a state certified arbitrator to repurchase a 
used car from a consumer under the state's lemon law. Mr. Paulini 
failed to refund the consumer's money or appeal the decision to 
the District or Superior Court within the 21-day appeal period. 
Paulini pe : d $3,902 in restitution, $1,250 in penalties, and $500 
for the costs of the action. 



72 P.D.12 



Robert Johnson d/b/a Nissan of Marlboro 

(Commonwealth v. Robert Johnson) 

On January 30, this office obtained a consented to Final 
Judgment against Robert Johnson, d/b/a Nissan of Marlboro, for vio- 
lating the advertising provisions of the Attorney General's motor 
vehicle regulations by prominently displaying the alleged sale 
price of certain motor vehicles without clearly disclosing that a 
trade-in worth at least $1500 or $1500 in cash would have to be 
provided by the consumer, in addition to the advertised sale 
price. The Judgment enjoined the dealer from future violations 
and required him to pay $3,500 in penalties and costs. 

Commonwealth v. Stephen Thibault 

In December, the office indicted Stephen Thibault on twelve 
counts of larceny over $250. Thibault was doing business as a 
kitchen and bath renovator under the name T'BO's, Inc. in the 
city of Everett. He allegedly stole over $90,000 in funds solic- 
ited over a three year period from customers for work that was 
never performed and products that were never delivered. The case 
first caune to the attention of the office through the consumer com- 
plaint section. It is now pending in Middlesex Superior Court. 

Quantum Tours /Robert Manoukian 

(Commonwealth v. Robert Manoukian) 

In August, a Middlesex Grand Jury returned a total of six in- 
dictments against Robert Manoukian who was charged with larceny 
and forgery in two separate cases. The indictments result from a 
joint effort by the Consumer Protection Division and the Criminal 
Bureau. In the first case, Manoukian was indicted on three counts 
of larceny over $250. The charges stem from a sceun whereby 
Manoukian allegedly bilked 84 members of the Ladies Guild of St. 
George's Albanian Church out of $15,855. Manoukian allegedly prom- 
ised round trip bus transportation, overnight accommodations and 
meals at various restaurants in New York, none of which were deliv- 
ered. Manoukian refunded approximately $10,000 to the victims 
after complaints were made to the Consumer Complaint Section. In 
a separate case, Manoukian was indicted for allegedly using forged 
certified checks to pay for almost $20,000 worth of computer equip- 
ment . 



Beverly Enterprises. Inc. (Greycliffe Nursing Home) 
(Attorney General and Department of Public Health v. Beverly 

Enterprises, Inc.) 

Beverly Enterprises, a nation-wide nursing home chain, vio- 
lated licensure regulations by purchasing five Massachusetts fa- 
cilities without having obtained necessary approvals. 
Investigation revealed that, in addition, Beverly had "paid" far 
more for the homes than the facilities' medicaid reimbursable 
basis could support, indicating that the homes were likely to en- 
counter financial and patient care problems. In addressing the 
matter, we obtained an agreement pursuant of which Beverly refi- 
nanced the sales so that a total of $5,795,492 of debt were trans- 
ferred from these homes to others owned by Beverly outside the 
state, paid approximately $500,000 of medicaid patient costs, and, 
in addition, paid a civil penalty of $39,000. 



P.D.12 73 



The New England Credit Co.. Inc. (The Credit Doctor) 
(Commonwealth v. New England Credit Co., Inc., et al . ) 
On February 18, the Division obtained a preliminary injunc- 
tion in Suffolk Superior Court against The New England Credit Co., 
Inc. and its owner, Michael P. Kalil, who has been engaged in the 
business of auto brokering and credit repair. The company, also 
known as The Credit Doctor, and Mr. Kalil are prohibited from mis- 
representing in their advertisements and business dealings that 
consumers can avoid repossession, or save or improve their credit 
rating by doing business with New England Credit. The injunction, 
issued by Judge Walter Steele in Suffolk Superior Court, also en- 
joins the company from engaging in a number of other activities, 
some of which are: failing to obtain the creditor's permission 
prior to brokering a subleasing transaction, failing to disclose 
to consumers that the operator's fee is non-refundable, and requir- 
ing owners to pay repossession fees and to sign waiver of liabil- 
ity contracts in order to recover their vehicles. Michael Kalil 
has ceased doing business in Massachusetts. Kalil recently filed 
for bankruptcy protection in New Hampshire. The Division is pursu- 
ing our claim against him in the U.S. Bankruptcy Court. 

DEBT CX3LLECTICM CASES: 

Capital Credit Corporation 

On June 29, the Division filed an Assurance of Discontinuance 
in Suffolk Superior Court in which Capital Credit Corporation 
agreed to abide by the Attorney General's debt collection regula- 
tions and to pay the state $144,000 in connection with alleged 
prior violations. Approximately one-third of the money paid by 
Capital Credit will support the Attorney General's "SCORE" pro- 
gram. Over the past two years, the Division received complaints 
charging that, in addition to other violations. Capital Credit 
Corp. told third parties about consumers' debts, threatened debt- 
ors that they would be thrown in jail, and requested or demanded 
that debtors send post-dated checks. Under the Assurance of 
Discontinuance, Capital Credit agreed to refrain from engaging in 
unfair debt collection practices in the future. 

Filene' s 

On May 1, the Division filed an Assurance of Discontinuance 
in which Filene' s department store agreed to refrain from engaging 
in unfair debt collection practices and to pay the state $75,000 
in civil penalties. Over the past two years, the Division re- 
ceived complaints alleging that Filene' s had violated the Attorney 
General's debt collection regulations in a variety of ways includ- 
ing telling third parties about consumer's debts, threatening cer- 
tain actions that the creditor could not legally carry out, and 
continuing to call consumers at work after being requested to 
stop . 



74 p.D.i: 



American Coradius, Inc. and Vengroff, Williams and Associates 
(Commonwealth v. American Coradius, Inc.) 
(Commonwealth v. Vengroff, Willieims & Associates, Inc.) 

On November 20, Suffolk Superior Court found that two New 
York debt collection agencies, American Coradius, Inc. and 
Vengroff, Williams and Associates, were in contempt of Final 
Judgments the Division obtained in 1991. The 1991 judgment en- 
joined each company from engaging in debt collection until they 
had obtained licenses from the Commissioner of Banks. At the time 
of the most recent violations, neither company had obtained the re- 
quired license. The two companies were ordered to pay additional 
penalties and costs amounting to twenty times the sum they sought 
to collect from two consumers. American Coradius paid $17,500 and 
Vengroff, Willieims and Associates paid $16,500. 

Credit Converters 

On December 18, the Division readied an agreement with Credit 
Converters of St. Paul, Minnesota, in which they agreed to refrain 
from engaging in certain unfair debt collection practices and from 
recording conversations with consumers without their consent. In 
addition, the debt collection agency has agreed to pay the 
Commonwealth $15,000 in civil penalties, which will be used to 
fund the SCORE program, and to modify and install a new telephone 
line so that Massachusetts calls will not be recorded in the fu- 
ture. 



Three Out-of-State Debt Collection Agencies 
(Commonwealth v. Credit Protection Association, Inc.) 
(Commonwealth v. North American Collections, Inc.) 
(Commonwealth v. Viking Collection Service, Inc.) 
On December 18, the Division reached settlement agreements 
with three out-of-state debt collection agencies. Credit 
Protection Association, Inc., North American Collections, Inc., 
and Viking Collection Services, Inc. The companies collected 
debts without licenses from the State Banking Commission and 
Viking violated the Massachusetts' debt collection regulations by 
contacting a consumer debtor at work more times than is allowed by 
law. Credit Protection Association and North American Collections 
each paid $3,500, while Viking Collection Services paid $9,000 in 
penalties and costs for collecting debts without a license. In 
three separate consent judgments, each company is prohibited from 
acting as a debt collection agency in Massachusetts until it has 
applied for and been granted a license from the State Banking 
Commission . 



Assurances of Discontinuance with 2 Debt Collectors: EZ 

Finance Company and Joseph Silva 

On June 9, the Division filed an Assurance of Discontinuance 
with Suffolk County Superior Court in which EZ Finance Company, 
Inc. agreed to refrain from engaging in certain unfair and decep- 
tive debt collection acts and practices. In addition, EZ Finance 
agrees to monitor the collection activities of any person or other 
entity to whom it assigns any debts for collection to ensure that 
such person or entity complies with the Assurance. 



F.D.12 75 



Also on June 9, the Division filed an Assurance of 
Discontinuance with Suffolk County Superior Court in which Joseph 
Silva agreed to refrain from engaging in the following acts and 
practices: (1) engaging in the collection of debts in 
Massachusetts without first obtaining from the Commission of Banks 
a license to carry on such business, and without having on file 
with the state treasurer a good and sufficient bond, and (2) using 
a business card which contains threatening statements of any kind. 

MDLTISTATE SETTLQfENTS 

Multistate Environmental Group 

(General Electric) 

(Carlisle Plastics) 

On November 9, the Division joined the Attorneys General of 
32 states in a settlement with the General Electric Company con- 
cerning the claims that the company's "Energy Choice" line of 
light bulbs represents a new, environmentally sound product. The 
Attorneys General allege that GE made various misrepresentations 
about its Energy Choice light bulbs including statements that 
these light bulbs save energy and that using these bulbs could 
help eliminate pollution from the atmosphere. In fact, most of 
the energy savings realized from using Energy Choice incandescents 
are due to the fact that they are simply lower wattage bulbs, and 
not because they are significantly more efficient. The agreement 
required GE to pay $15,000 to each of the eleven original signa- 
tory states, including Massachusetts. 

On March 11, the Division announced that ten states, includ- 
ing Massachusetts, have entered into a. settlement agreement with 
Carlisle Plastics, Inc., concerning claims that the company's 
"Ruffles" trash bags are "degradable" and "composteible. " The com- 
pany allegedly made misleading claims that its Ruffles bags "will 
degrade in landfills" and that its yard waste bags are "specifi- 
cally designed for municipal composting operations" and are "per- 
fect for composting." The agreement requires Carlisle Plastics to 
pay a total of $45,000 to the ten states, including $4,500 to 
Massachusetts . 

Multistate Food Group 
(S&B International Corporation) 

On October 8, the Division joined the Attorneys General from 
10 other states in a $33,000 settlement with S&B International 
Corp., a California-based food manufacturer, which allegedly mis- 
led consumers about the monosodium glutamate (MSG) content of some 
of its seasoning mixes. S&B falsely claimed in radio advertise- 
ments and on product labels that its seasoning mixes contained no 
MSG, when, in fact, they contained hydrolyzed protein. The 
Attorneys General alleged that when a substance is hydrolyzed to 
create a hydrolyzed protein using the methods employed by food 
manufacturers, MSG is created. 



76 P.D.12 



OTHER rHITIATTVES 

SCORE 

Project scops:,* (Student Conflict Resolution Experts) is a pro- 
gram through which the Division provides funding, training, and 
technical assistance for the development and implementation of 
peer mediation programs in urban schools. These programs, which 
use trained students to mediate school-based conflicts, were de- 
signed particularly to respond to increases in violence and racial 
tensions in the targeted cities. 

In 1992, new SCORE programs were started in Boston and Fall 
River which, added to the existing programs in Somerville, 
Worcester, Lowell, and Springfield, brings the total number of 
SCORE programs to 15 schools in 6 cities. Over 400 disputes were 
mediated by these programs; 96% resulted in written agreements; 
only a handful of these agreements were broken. 

In addition to developing peer mediation programs, SCORE mon- 
ies were used to fund two basic mediation skills trainings for 
staff and youths in the Department of Youth Services and one for 
fourteen youths in Revere who belong to fueding Cambodian gangs. 

When racial violence broke out in Medford High School in 
early December, SCORE funds were used to restore peace and safety 
to the school . Funds will also be used to develop a SCORE progreun 
at the high school beginning in January, 1993. SCORE is a pro- 
gram sponsored by the Massachusetts Attorney General and is not af- 
filiated with any private business enterprise. 

Elm Medical Laboratories 

(Commonwealth v. Elm Medical Laboratories, Inc.) 

On July 27, Massachusetts Appeals Court upheld a permanent in- 
junction obtained by the Division which prohibits two individuals 
who formerly supervised Elm Medical Laboratories from supervising 
a medical lab. The Court agreed with our argument that the labora- 
tory had violated the Massachusetts Consumer Protection Act by im- 
properly and inadequately performing pap smears and other tests, 
and further agreed that under this law a lalsoratory is required to 
disclose to doctors and patients material information about the 
laboratory's practices that could render its diagnoses inaccu- 
rate. The Appeals Court also held that the state is not a person 
subject to suit under the Civil Rights Act -- an important deci- 
sion for the government bureau and other state agencies. 

Telephone Carrier Agreement 

In May 1992, Attorney General Harshbarger, along with 35 
other state Attorneys General, entered into a voluntary agreement 
with AT&T, MCI, and Sprint for the carriers to better monitor and 
potentially to discontinue services of "900 number" offerings 
which are carried on their networks. This cooperative effort 
along with recently enacted federal regulations can help curb 
"900-number" telephone fraud. 



F.D.12 7 7 



Cite Your Rights Cards 

In October, the Division released the first set of "Cite Your 
Rights" cards designed to teach consumers basic consumer rights In 
the areas of store return policy, defective goods, automobile 
lemon laws, security deposits, and a half dozen other areas. 
Distribution of the cards is through the 8400 line and local con- 
sumer programs. 

Adoptions of New England 

(Commonwealth v. Adoptions of New England) 

A petition was filed and granted in Suffolk Superior Court, 
in March for the appointment of a receiver to take over the 
records of and guardianship proceedings underway for Adoptions of 
New England, Inc., following the suspension of the company's li- 
cense by the Massachusetts Office for Children. The corporation's 
officers and directors resigned when an audit showed that 
Adoptions of New England had a deficit of approximately $900,000 
and left the state to return to their main base in Arizona. The 
abrupt closure of the agency left a waiting list of 30 families 
who had paid as much as $27,000 in advance deposits for babies who 
never arrived for Adoptions of New England, Inc. clients. 

NURSING HOME CASES: 

Wayne Manor Nursing Home 

(Department of Public Health v. Wayne Manor Nursing Home) 
In February, a patient protection receivership, obtained by 
the Consumer Protection Division to protect approximately 73 ill 
or mentally dissibled patients living in Wayne Manor, a Dorchester 
nursing home, was terminated by the transfer of the facility's 
ownership to Family Rehabilitative Services, Inc. The successful 
transfer of the home to a licensee found suitable to operate it 
ended a long saga which began by the Division's seeking the dis- 
missal of the bankruptcy proceeding to protect patients. At that 
time, the patients' health was in serious jeopardy: the utilities, 
the provision of food and other goods and services were about to 
be cut off and the bankruptcy trustee wanted to quit. The re- 
ceiver brought the home back up to health care standards. We then 
negotiated for the bank holding the first mortgage on the property 
instead of a new owner to pay $62, 900 to the Commonwealth to re- 
solve successor liability issues and thus facilitated the sale by 
reducing its auction price. The former owner, Barbara Cohen, was 
subsequently indicted and convicted on multiple charges of em- 
bezzlement of patient funds, larceny and Medicaid fraud, by the 
MFCU. 



Harvard Manor Nursing Home 
(Department of Public Health v. Harvard Manor Nursing Home) 

On November 23, following the termination of the Harvard 
Manor Nursing Home's federal Medicaid funding, the Consumer 
Protection Division intervened to have a patient protector re- 
ceiver appointed for the nursing home. The appointment of the re- 
ceiver was sought by the Attorney General to ensure the patients' 
health and safety, since the withdrawal of federal funding re- 
sulted in the loss of 50% of the funds which cover the costs of pa- 
tients' care. The decision to terminate the nursing home from the 
Medicaid program resulted from a finding by the U.S. 



78 P.D.12 



Department of Health and Human Services that the patients were liv- 
ing in harmful conditions at the facility. 

Brockton Ridge Long-Term Care Center. Regent Park Long-Term 

Care Center 

(Department of Public Health v. Brockton Ridge Long-Term Care 

Center) 

(Department of Public Health v. Regent Park Long-Term Care 

Center) 

In individual actions commenced and conducted separately, we 
had obtained the. establishment of patient protector receiverships 
for the Brockton Ridge and Regent Park nursing homes, both oper- 
ated by Avanti, Inc. but owned by a California real estate partner- 
ship. Patients had been subjected to mistreatment and neglect. 
This year, Brockton Ridge, a home that had, among other problems, 
30 beds located below ground level, was closed, much to the dismay 
of the owners while Regent Park was successfully sold to another 
operator/owner. The termination of both receiverships, the first 
by closure and the second by transfer and sale, effectuated the of- 
fice's goal of protecting the patients in the manner most calcu- 
lated to improve the quality of life. The property owners were ob- 
liged to pay $64,275 for penalties and the costs of the Brockton 
Ridge receivership and another $100,000 when Regent Park was 
sold. 



REGOIATIONS 

Mortgage Lender and Broker Regulations 

The Attorney General's regulations under c. 93A governing 
mortgage lenders and mortgage brokers were published in May and 
took effect on August 1, 1992. The regulations require that all 
brokers and many lenders provide borrowers with standardized cop- 
ies of the Attorney General's Mortgage Broker and Lender 
Disclosure forms, which identify the essential features of a mort- 
gage loan transaction as well as the cost and interest rate for 
the borrower. The regulations also require that lenders and bro- 
kers take reasonable steps to assure that borrowers, including 
non-English speaking consumers, understand the loan transaction. 
Unconscionable rates or other loan terms, advertising ploys such 
as "immediate approval" and "immediate closings," are prohibited, 
and the use of other advertising terms such as "bad credit, no pro- 
blem" and "avoid foreclosure, " are restricted. These regulations 
were promulgated to prevent future abuses involving second mort- 
gages or refinancing, while creating a level playing field for le- 
gitimate businesses. 

LEGISLATION 

Home Improvement Contractor Law 

This law regulating home improvement contractors was signed 
on December 31, 1991, and took effect on July 1, 1992. The law 
proliibits home improvement contractors from acting as mortgage bro- 
kers or lenders in connection with the home improvement contracts 
they enter into, requires a written contract for any job over 
$1,000, requires that contractors register with the Bureau of 
Building Regulations and Standards, estad^lishes a guaranty fund to 
provide limited restitution to consumers who have been defrauded 
by a registered contractor but are unable to collect on a judg- 
ment, and provides for criminal penalties for those who fail to ob- 
tain a certificate of registration. An additional bill designed 
to streeimline the process for injured consumers to obtain access 
to the "guaranty fund" is not expected to pass this session. 



P.D.12 79 



Purchase Privacy Law 

On March 26, 1992, the purchase privacy law which restricts 
the personal information that retailers may demand when they ac- 
cept payment from consumers by check or credit card took effect. 
The measures, which are intended to protect the consumer from 
fraud, prohibits the recording of information other than the con- 
sumer's ncime, address, motor vehicle license number, and the con- 
sumer's choice of home or business number when the consumer pays 
by check. The merchant can no longer record the consumer's social 
security number, race, or credit card number on a check or else- 
where. The law also prohibits the merchant from requiring that 
tlie consumer sign a statement allowing his/her credit card to be 
charged if the check is not honored and from accessing the consu- 
mers credit card account to determine the amount of available 
credit when the consumer is paying by check. The law also pro- 
tects a consumer who pays by credit or charge card by prohibiting 
the recording of information on the credit card slip other than 
that which is required by the credit company. 

SPRINGFIELD CASES 

Commonwealth of Massachusetts v. Basement Waterproofing 
Nationwide, Inc. 

The Attorney General obtained a default judgment against the 
defendants in this case. $379,000 default judgment. 

Commonwealth v. New England Uses Cars, Inc. 

The complaint is ready to be filed. This is also an action 
to enforce the provisions of the Used Car Warranty Law. 

Commonwealth v. Valley Furniture 

This is an action alleging unfair and deceptive acts and prac- 
tices in the conduct of a "going out of business sale." 
Settlement is imminent and will result in the distribution of 
nearly $105,000 in consumer restitution. Settlement agreements 
should be signed before 1993. We have agreed that they will pay 
$104,014.62 in consumer restitution and contribute $25,000 to the 
local Consumer Aid Fund. 

Commonwealth v. West End Market 

This is an action alleges unfair and deceptive acts and prac- 
tices in the conduct of a meat market. The defendant in this mat- 
ter closed down shop. This mater is still ongoing. Injunction 
vs. meat market arising out 93A violations. 

LOCAL COHSOKER PROGRAMS 

FACE-TO-FACE MEDIATION PROGRAMS 

The Local Consumer/Mediation Services (LCMS) administer the 
Local Consumer Aid Fund (LCAF) of the Office of the Attorney 
General. The LCAF was created by statute, G.L. c. 12, §11G, in 
1977. At the present time, nineteen community based Local 
Consumer Programs and seven Face-to-Face Mediation Programs are 
grant recipients of the Fund, which is directed to the resolution 
of consumer complaints. Technical assistance and continuing train- 
ing are given to the programs by the staff of the LCMS. 



80 P.D.12 



These programs, which serve all 351 communities in the 
Commonwealth, annually resolve thousands of consumer problems, and 
serve to educate consumers and businesses alike in the areas of 
state and federal consumer law. Working in cooperation with the 
Office of the Attorney General, they also alert this Office to pat- 
terns of unfair or deceptive acts and practices in the market- 
place, so that appropriate legal action may be taken. 

In fiscal years 1992 and 1993, the General Court appropriated 
$605, 901 for the Local Consumer Aid Fund. Ten percent of these 
grant monies were retained by the Office of the Attorney General 
for administrative purposes. Supplemental funding from settlement 
of consumer cases was also given to the programs, and for FY 1992, 
this supplemental funding resulted in grants to the local programs 
of $666,500.00, and in 1993, grants of $701,100 will be distrib- 
uted. In 1992, the Local Consumer Programs mediated over 12,000 
complaints, recovering over $2,665,657.00 in goods and services 
for consumers. The Programs also fielded over 83,000 inquiry 
calls on various issues, both consumer and non-consumer. Each 
caller was either given self-help information, or directed to 
other appropriate state or federal agencies. 

ENVIROIiMENTAL PROTECTIOW DIVISION 

Amesbury Circuit 

A complaint and consent decree were filed against Amesbury 
Circuit Co. of Amesbury in May 1992. Allegations of the illegal 
discharge of wastewater into the Amesbury sewer system was 
resolved by a consent decree requiring the company to pay a 
$100,000 penalty and to install a wastewater treatment /recycling 
facility. 

Paul Revere 

This is a Clean Waters Act case involving problems 
discovered at a condominium development in Millbury constructed 
with inadequate septic systems. EPD sought far-reaching relief, 
including a freeze on assets and the voiding of fraudulent 
conveyances, as against developers who have no continuing 
interest in the project. The defendants include individual 
officers of the corporate developer, as well as the transferees 
of the property alleged to have been fraudulently conveyed. A 
preliminary injunction entered in July 1992, requiring pumping of 
certain of the condominium development's septic systems. A 
preliminary injunction also enjoins the transfer of assets by the 
developer defendants and by certain fraudulent conveyance 
defendants. Interlocutory review has been denied and discovery 
is going forward. 

This case, referred by Food and Agriculture and by Fisheries 
and Wildlife, involved the misuse of pesticides in a cranberry 
bog, resulting in a fish kill. A Consent Judgment was entered on 
August 5, 1992 enjoining the use of pesticides until a water 
management plan is in place and imposing a $30,000 penalty. 



P.D.12 81 



Masaachusetts Military Reservation/Otis 

This matter involves the enormous problem of the 
environmental conteimination at the 22,000 acre Massachusetts 
Military Reservation (MMR) on Cape Cod. The identified 52 acres 
of environmental contamination at and around MMR exists in 
various forms. The most serious threat is to water supply; 21 
existing municipal wells and several private ones are 
threatened. Iline significant plumes of underground contamination 
have been identified. 

MMR is a National Priorities list site, and the Department 
of Defense, as the lead agency, has designated the National Guard 
Bureau (NGB) to conduct the cleanup. NGB, EPA and the U.S. Coast 
Guard (the current tenant at some contaminated portions of the 
site) executed a Federal Facilities Agreement (also known as an 
lAG, or Interagency Agreement) in July, 1991, which the 
Commonwealth did not sign. The TAG set up a timetable for 
cleanup . 

NGB has failed to meet its goals in the first year under the 
lAG, and modifications to the lAG' s schedule have been proposed. 
The Commonwealth submitted comments on the lAG to EPA and NGB in 
November 1992, stating its concerns over the lack of a 
comprehensive and enforceable long-term plan for remediation at 
MMR and the failure of NGB to meet the cleanup schedule, and 
suagesting that the Commonwealth take a more active role in 
re-negotiating the cleanup schedule. 

Other forms of pollution at the site include air pollution 
from the burning of propellant bags. In large part through the 
efforts of this office, this practice has been stopped. 

Municipal wastewater treatment cases 

(1) New Bedford ; Together with the United States, in 
February, 1991 the Division filed a motion to enforce a consent 
decree relative to the construction by the City of New Bedford of 
a new wastewater treatment plant. We have also opposed New 
Bedford's motion to modify the decree (which was filed on the 
grounds that the state has reneged on its "commitment" of 75% of 
the necessary funding under the State Revolving Fund) . In 
response to the governments' motion to enforce. New Bedford 
agreed to construct the plant, solicit bids, and has commenced 
plant construction. The over-all schedule and the amount of 
stipulated penalties to be paid have been agreed to, and we are 
in the process of finalizing the language of a modified decree. 

(2) Gloucester : The United States District Court entered a 
consent decree in 1992 requiring the City of Gloucester to 
eliminate illegal discharges of raw sewage in North Gloucester by 
e.^:tending its sewer system to this area. The decree imposed a 
deadline of January 31, 1993, for the City to move to modify the 
decree if it can find another method of solving North 
Gloucester' s water pollution problem that protects the 
environment as the new sewer system would. In response to notice 
by Gloucester that it would move to use step sewers and a 
subsurface disposal system instead of the sewer system, the 
Commonwealth and the City agreed to modify the Consent Decree to 
allow for alternatives to conventional sewers. This agreement 
provides that the City shall undertake a study to determine 
whether innovative subsurface disposal systems may be used in a 
portion of North Gloucester and requires the City to develop a 
management plan that ensures the long term operation and 
maintenance of alternatives to conventional sewers. A joint 
motion to modify the Consent Decree in accordance with this 
agreement will be filed on January 29, 1993. 



p.D.i: 



(3) Plymouth ; A final judgment was entered in this case in 

1991 requiring the Town of Plymouth, among other things, to pay 
$30,000 to the Massachusetts Environmental Trust and to construct 
a new treatment plant in accordance with a schedule. The 
judgment also provided that the Town would not allow any new 
sewer connections or extensions. In late 1992 the Town and the 
Commonwealth agreed to modify the judgment to allow the new 
county prison to hook up to the sewer and the Town to discharge 
an additional 50,000 gallons of sewage per day to the treatment 
plant after certain system modifications were accomplished. 

Teknor Apex 

This case initially involved extensive multi-media 
violations, including air and water violations in a manufacturing 
company in Attleboro. A consent decree was entered on August 25, 

1992 requiring the payment of an $850,000 penalty and an 
investment of over $2 million in environmental improvements, 
including requiring the company to install water and air 
pollution equipment, to apply for necessary air and water 
permits, to do a G.L. c 21E assessment and to reduce toxics in 
its manufacturing processes. 

MWRA cases 

Three MWRA pre-treatment cases, alleging failure to treat 
waste properly before discharging to the sewer system in 
violation of the Clean Waters Act and regulations have resulted 
in consent judgments filed in September 1992, requiring the 
payment of penalties totaling $215,000. These cases were brought 
against Regalite Plastics Corporation in Newton, Lapuck 
Laboratories in Watertown and Laser Photonics in Bedford. In 
addition, the Division filed a matter in May 1992, involving the 
Army Natick Labs. In that case. Commonwealth v. Cheney, et al . . 
we sued the federal government for allegedly discharging mercury 
and other pollutants from the labs into the Massachusetts Water 
Resources Authority sewer system, in violation of the federal 
Clean Water Act. The suit is pending. 

New England Power Company 

The case, concluded in Suffolk Superior Court in July 1992, 
arises from New England Power's alleged use of an inadequate 
chlorination system at its Brayton Point facility, and a 
resulting fish kill. The consent decree requires payment of 
$500,000 in penalties and environmental damages, including 
$75,000 to the Atlantic State Marine Fisheries Commission for a 
striped bass management plan, and also requires "targeted 
chlorination," to reduce substantially the use of chlorine. The 
resolution of the case is notable, in part, for its source 
reduction aspects. 

Leahy 

A consent decree was entered in this illegal septage 
disposal case in Holden in July 1992 which requires payment of 
$135,000, including $30,000 to the Massachusetts Environmental 
Trust for an education project and $5,000 to the Holden 
Conservation Commission. 



P.D.12 83 



ffETLANDS PROTECTION 

Chatham 

Four different suits have been filed by Chatham residents, 
raising questions regarding the legality of DEP's coastal 
wetlands regulations, which limit construction on certain coastal 
property. The first two cases have now been resolved. In the 
third case, Wilson , the plaintiffs are seeking compensation for 
the loss of a home as a regulatory taking. The Appeals Court 
ruled in January 1992 that plaintiffs could pursue their 
"takings" claims without exhausting their administrative 
remedies. In August 1992, the SJC granted the Division request 
for further appellate review and reversed the Appeals Court on 
the taking claim, holding that there could only be a taking if 
there was unreasonable agency delay. The case was remanded for 
further proceedings . 

In tlie fourth case, Nelson , wliich raises a substantive due 
process claim, a single justice of the Appeals Court upheld the 
denial of the plaintiffs' request for a preliminary injunction. 
In addition, the Superior Court ruled in our favor on summary 
judgment and plaintiffs have appealed. The Nelson case has been 
fully briefed and is pending in the Appeals Court. We are 
working with the environmental agencies and the Town of Chatham 
in an attempt to develop a long-term solution to the coastal 
erosion problems. 

Urkiel 

This case, alleging illegal filling and alteration of 

wetlands in Deerfield, was filed in early February, 1992. A 

preliminary injunction and an attachment for $100,000 (to secure 

penalties) was entered in mid-February. The case is now pending 
in Franklin County Superior. 

Scannell 

We obtained a preliminary injunction in June on an emergency 
basis in a case involving the opening of "great ponds" on 
Nantucket. This is a historical practice which involves digging 
of trenches between the ponds and the ocean. The judge warned 
the defendant that he would not hesitate to hold him in contempt 
for any violation of the order. The defendant had engaged 
repeatedly in opening of great ponds to the sea, with attendant 
destruction of enormous areas of wetlands and habitat. The Court 
granted our motion for summary judgment in December 1992, but 
judgment has not yet formally entered. 

Holm 

The Division obtained a TRO in August of 1992 and then a 
preliminary injunction from Suffolk Superior Court enjoining 
certain on-going wetlands violations in Gardner, Mass. The 
injunction is now being violated, and a complaint for contempt is 
being prepared. 

Lucas V. South Carolina Coastal Council 

Last winter EPD signed on to Florida's amicus brief in the 
United States Supreme Court, arguing that South Carolina's 
regulations governing coastal construction do not constitute a 
taking. Since the Supreme Court's decision in the case in June 
1992, we have been active in advising our client agencies and 
other groups e±)out the appliceible regulatory issues, and in 
developing a "proactive" litigation agenda for the office. 



84 p.D.i: 



Masaachusetts Association of Conservations Commissions (MACC) 

The MACC and our office have set up a referral and screening 

system whereby individual conservation commissions, through MACC 

screeners, can refer cases to us to be evaluated for possible 

action . 



\ 



AIR POLLDTION 



Multi-state ozone suit against EPA 

This action, involving several states, environmental groups 
and the named plaintiff American Lung Association, settled for 
the relief sought -- an agreement by EPA to initiate a 
rule-making to review its 1979 national ambient air quality 
standard for ozone. (Milkey) 

Multi-state suit against EPA under the Clean Air Act 
The multi-state and environmental groups' federal court suit 
against EPA seeking the promulgation of certain Title V 
regulations under the Clean Air Act was mooted by EPA' s 
promulgation of those regulations last summer. 

Findley 

This air pollution case involves a defendant in bankruptcy. 
In January 1993, the bankruptcy court approved our settlement 
with the company that calls for the $100,000 penalty involved in 
this matter to be treated as administrative expense. As a direct 
result of our lawsuit the company has begun the process of 
bringing its emissions of dichloro- 

dif luoromethane and ethylene into compliance with the Clean Air 
Act. 

Half moon 

In July 1992, the New York Siting Board voted to grant a 
certificate to construct and operate the Halfmoon project, a 
coal-fired cogeneration facility, on condition that the applicant 
resolve its power contract disputes with the public utility by 
December 31, 1992. Uneible to meet this deadline, the applicant 
received an extension of about 60 days (subject to certain 
contingencies). Even if the issues are "resolved" in time, the 
Division will continue to press both procedural and substantive 
issues concerning the power contract and environmental impacts 
from the project in a court appeal. Already our participation 
has forced the applicant to improve its project, resulting in 
substantial reductions of S02 and NOx . 



Conrail 

This hotly litigated case is the first in the nation to 
challenge the freight rail industry's practice of continuous 
idling of its diesel locomotives. In May 1992 the Superior Court 
entered a preliminary injunction enjoining Conrail' s idling of 
engines during the summer months. Conrail then moved, 
unsuccessfully, to dismiss the case on preemption and other 
grounds. Conrail' s request for interlocutory review of the 
denial of its motion to dismiss was denied by a single justice of 
the Appeals Court. The Division continued to pursue its claims 
which include an injunction against winter idling. The entry of 
a judgment in the case would be significant because of its 
potential to serve as a national model for anti-idling measures. 



P.D.12 85 



Bay State Smelting 

The Division filed this case in the end of 1991 against Bay 
State Smelting, located in Charlestown. A permanent injunction 
addressing extensive air pollution (illegal operation of smelting 
equipment and an incinerator) , hazardous waste and workplace 
safety compliance issues was entered against the corporate 
defendant in March 1992. The defendant has now completed the 
cleanup of the subject plant. The penalty portion of the case is 
still to be decided, but the entire civil action has been stayed 
by the Court pending the Criminal Bureau's determination of 
whether to seek indictments . 

Motor Vehicle Manufacturers Association 

As anticipated, the auto manufacturers brought suit in U.S. 
District Court in the Northern District of New York to challenge 
New York's adoption of the California auto emissions standards. 
Joined by five other states, the Division wrote an amicus brief 
in opposition to the manufacturers' motion for summary judgment 
and in support of New York's motion for summary judgment. The 
brief was filed in November 1992 and a decision is expected in 
January 1993. 

California tailpipe regulations 

After extensive consultation with us, DEP has adopted the 
California low emission vehicle standards. These new and 
e.xtremely significant regulations are more stringent auto 
emissions standards developed to combat ozone non-attainment and 
to help achieve compliance with the Clean Air Act. 

HAZARDOUS MATERIAL/MASTE 

New Bedford Harbor 

April 21, 1992, the first two settlements in this matter 
against several companies whose actions contributed to the PCB 
contcimination of New Bedford Harbor are final, and the last of 
three consent decrees, for $21 million, was lodged in the federal 
court . This brought the current total recovery to approximately 
$110 million. We have begun to receive payments pursuant to the 
first two settlements. Depending on the choice of remedial 
measures, between 22 and 33 million dollars will be allocated to 
natural resource damages, between 57 and 68 million dollars will 
go towards cleaning up the harbor and the adjoining wetlands area 
and 17 million dollars will be allocated to the reimbursement of 
the governments' past costs. In June 1992, the state and 
government prevailed in the First Circuit against the National 
Wildlife Federation, which had sought a determination that the 
settlements are invalid. 

Circle K 

Circle K is a convenience store/gas station chain with 4000 
stores nation-wide, which is currently in bankruptcy proceedings 
in Arizona. Fifty of the stores are in Massachusetts, and 
thirty-five of them are contaminated with gasoline released from 
leaking underground storage tanks. The Commonwealth has filed a 
proof of claim for $9.5 million. The Commonwealth and four other 
states are preparing to appeal to the Ninth Circuit Court of 
Appeals a ruling by the U.S District Court in Arizona upholding 
the U.S. Bankruptcy Court's decision to allow Circle K to reject 
its leases and avoid environmental liability. Settlement 
negotiations are on-going. 



86 P.D.12 



Commonwealth v. Karain (a/k/a First Church ) 

This case involved the leaking of underground gas tanks from 
a gas station into a nearby church in Weymouth. We succeeded in 
obtaining a ruling from the Superior Court that (1) the doctrine 
of administrative record review applies in cases under the 
pre-amendment G.L. c. 21E; and (2) there is no right to a jury 
trial in such cases. The case is very close to a full settlement 
now that we have secured the agreement of a bank to finance the 
obligations of the principal defendants to pay the Commonwealth's 
response costs and to perform additional site cleanup. 

McMahon v. Amoco 

A consent judgment was filed and approved by the Barnstable 
Superior Court under which the Commonwealth will receive $1.8 to 
$1.9 million, and the Town of Provincetown about $1.2 million, to 
reimburse them for their out-of-pocket costs incurred to 
remediate an underground gasoline storage tank leak that 
threatened to contaminate the Town's principal wellfield. The 
Commonwealth's share also includes funds for future clean-up 
costs . 

Charles George 

A settlement was reached with all but the George defendants 
in this major CERCLA case which was filed in the U.S. District 
Court in Massachusetts in 1985. The settlement provides for over 
$35 million in costs and damages, of which over $12 million will 
go to the state. The consent decree for this settlement was 
lodged with the Court on December 29, 1992. The thirty-day 
public comment period was extended because of an error in the 
Federal Register and will end March 1. A trial against the 
George sons and the land trust defendant is also scheduled for 
March 1, 1993. We have obtained summary judgment against Charles 
George, Sr., Dorothy George, and the Charles George Trucking Co. 

Mendon Road 

This litigation is on-going in the U.S. District Court. It 
is a cost recovery action under CERCLA and G.L. c. 21E. The 
Commonwealth is seeking $2 million in cleanup costs incurred to 
remediate a site in Attleboro contaminated with cyanides. By 
order dated December 20, 1992, the Court granted summary judgment 
as to the lieibility of the operator and transporter of hazardous 
waste. The Court has remanded the administrative record to DEP 
for supplementation, and has rejected the defendants' argument 
that they are entitled to de novo review on issues related to 
DEP's cleanup decisions and the reasonableness of its costs. The 
case is one of the first to address whether a federal court must 
limit its review of state agency decision making under CERCLA. 



F.D.12 87 



Sullivan's Ledge 

Sullivan's Ledge is a National Priorities List site in New 
Bedford that has been divided into two sections. A consent 
decree was entered in 1991 as to the first section of the site. 
The second section, contaminated mostly with PCB's, is a wetlands 
area. A consent decree requiring the responsible parties to pay 
$30,000 (100% of past costs) recently was negotiated in January 
1993 as to the second section. Once signed by the Department of 
Justice, the consent decree will be lodged with the U.S. District 
Court. This case is notable as the first one in which a mediator 
was used in a Commonwealth/EPA Region I National Priorities List 
case . 

Silresim 

The Silresim Superfund Site is a five-acre abandoned 
chemical waste recycling facility located in Lowell, 
Massachusetts, listed on the National Priorities List. 
Throughout 1992 the United States and the Commonwealth negotiated 
a consent decree with 230 responsible parties, whereby the 
responsible parties will pay $41 million in a cash settlement for 
site remediation. This amount covers 100% of the future 
estimated cleanup costs. The proceeds have been placed in an 
escrow account. As soon as the Department of Justice signs the 
consent decree, it will be lodged with the U.S. District Court. 
The Commonwealth also has signed an allocation agreement with EPA 
under which the Commonwealth will receive $15 million. 

Barnstable underground storage tanks 

The Division is assisting the Barnstable County Board of 
Health in developing an approach to enforcing state statutory and 
regulatory requirements that underground storage tanks be 
reported and tested for leaks. We have sent a letter to over 
thirty identified non-compliers advising them to comply with the 
law or risk the filing of enforcement actions, and we are 
participating in publicity about the registration program. All 
but five tank owners have responded to date and have either 
tested or removed their tanks. The Division is now proceeding to 
draft a complaint to file against the unresponsive owners. 

SOLID WASTE 

Lowell Landfill 

This case, involving what DEP has characterized as the worst 
municipal landfill in the state, has been resolved with a consent 
judgment entered in June in the Suffolk Superior Court. By the 
terms of the judgment, the landfill ceased operation at the end 
of 1992 and will be capped. 

Hyde Park landfill 

In a suit filed in April, the Division obtained a 
preliminary injunction enjoining operation of this unpermitted 
landfill and freezing the assets of its owners and operators. 
Discovery is underway to determine what materials were actually 
disposed of at the site, and to develop a position as to the 
appropriate amount of penalties and the final form of injunctive 
relief. 



p.D.i; 



Town of Webster 

In a major defensive effort on DEF's behalf, we prevailed on 
summary judgment in a challenge to DEP's procedures and decision 
regarding the siting of a proposed large landfill in Douglas. 
The Suffolk Superior Court held in August 1992 that DEP had acted 
properly, in accordance with applicable law, and upheld its 
decision approving the site assignment. 

General Electric 

This case involved past hazardous waste disposal practices, 
specifically dumping photo-chemical waste down a sink, in part of 
G.E.'s Fitchburg plant. The complaint and consent decree were 
filed simultaneously in February. A consent decree was entered, 
whereby the company agreed to pay $250,000 in penalties and 
$75,000 for an educational program addressing environmental 
issues posed by photochemical waste. 

ENERGT CASES 

Eastern Energy 

We obtained a significant victory in this case in the 
Supreme Judicial Court in August. The Court set aside the siting 
of a 300 megawatt coal-fired electric cogeneration facility in 
New Bedford on the grounds that the Energy Facilities Siting 
Council (now Siting Board) failed to follow its own statute. The 
Court held that the agency failed to require the comparison of 
the proposed plant to a full range of available energy resource 
alternatives, failed to perform the proper balancing of 
permissible statutory goals, failed to adequately state the 
grounds for its decision, and did not properly address the 
correct methods for assessing need for new power and the effects 
on costs to the ratepayers. The case is now on remand to the 
Board, with hearings on-going. We have prepared extensive expert 
testimony to demonstrate that (1) there is no need for the plant, 
and (2) even if need were assumed, there are other alternatives 
to the plant ( e.g. , conservation and load management, or cleaner 
fossil-fuels and fossil-fuel based technologies) that will be 
better for the environment. The case will be heard concurrently 
with the Silver City Energy Limited Partnership (Taunton) case, 
which will address essentially the same issues. 

Silver City Energy Limited Partnership (Taunton) 
Hearings before the Energy Facility Siting Council on an 
application for permission to construct another coal-fired power 
plant, this one of 150 megawatts, were held concerning the 
Eastern Energy decision. These hearings primarily focused on the 
issue of need. Extensive expert testimony was presented to 
forward our position that there is no need for new power plant 
capacity in the region until the end of this decade, at the 
earliest. Hearings are on-going in this matter, and the case has 
been consolidated with Eastern Energy for the taking of evidence. 



F .0. 12 89 



Environmental Externalities (with RID) 

The DFU issued a favorable decision in November of 1992 
affirming the use of externality values in resource acquisition 
by Massachusetts utility companies. This means that electric 
companies must take into account the real direct and indirect 
costs incurred by the use of new resources that would be borne by 
ratepayers and the rest of society as a result of the facilities' 
environmental impacts. Such impacts include increased health 
care expenses, economic effects on property and agricultural 
resources, and a reduced quality of life. The goal of the DPU' s 
policy is to ensure that competitive resource solicitations 
result in the selection of resources that are truly the least 
cost to society. 

MISCELLANEOUS 

Manville 

Suit was brought in the U.S District Court in the Southern 
District of New York in 1985 against Johns-Manville ("Manville"), 
formerly the largest manufacturer of asbestos-containing products 
in the United States, for the costs of abating asbestos in 
certain public Massachusetts buildings. Manville, which had 
earlier filed for bankruptcy protection, was required to 
establish a Property Damage Settlement Trust (the "Trust") for 
the benefit of building owners who had filed claims for damages 
against Manville. The Trust was required to esteiblish procedures 
for the payment of claims. 

During 1992, $1,005,113 was received from the Trust as a 
partial payment of the Commonwealth's dcimages . 

Ackerley 

In the settlement of a dispute over unlicensed billboards, 
Ackerley agreed last March to remove 96 billboards located 
primarily in Roxbury and Dorchester and to pay $46,870 in back 
permit fees to the Outdoor Advertising Board. 

Comments filed: 

1. With the Nuclear Regulatory Commission. The Division 
submitted comments to the Nuclear Regulatory 
Commission, opposing regulations that would adopt a 
Generic Environmental Impact Statement for all nuclear 
plants that seek to renew their operating licenses. We 
also signed on, with several other state attorneys 
general, to two letters urging EPA to repromulgate on 
an emergency basis its "mixture" and "derived-f rom" 
rules, under the Resource Conservation and Recovery 
Act. EPA did so. 

2. On NRD regulations . Together with EOEA, we commented 
on NOAA' s status report on its proposed rules for 
natural resource damage assessments under the Oil 
Pollution Act of 1990. 

3. Concerning Federal wetlands . The Attorney General, and 
Secretary of Environmental Affairs, Susan Tierney, 
joined together in submitting formal comments to the 
EPA in opposition to the proposed revisions to the 1989 
"Federal Manual For Identifying and Delineating 
Jurisdiction Wetlands," as well as in submitting 
objections to the proposal to incorporate those 
revisions into the regulations governing the federal 
wetlands protection program. 



90 p.D.i; 



PUBLIC CHARITIES 

The Attorney General represents the public interest in the 
proper solicitation and use of all charitable funds. The 
Attorney General is authorized to "enforce the due application of 
funds given or appropriated to public charities within the 
commonwealth and prevent breaches of trust in the administration 
thereof." G.L. c. 12, § 8. The Division of Public Charities is 
established by G.L. c. 12, § 8B to carry out the Attorney 
General's responsibilities in this area. 

The Attorney General's enforcement role extends across the 
spectrum of charitable activity in order to protect charitable 
donors from diversion and waste of funds, and to ensure that the 
beneficiaries of charitable funds receive the intended benefits. 
Through the Division of Public Charities, the Attorney General 
takes enforcement action (i) to ensure that charitable funds held 
by trustees and charitable organizations are used properly, and 
(ii) to protect the public from deceptive and fraudulent 
fundraising practices. In addition, the Attorney General is an 
interested party in the probate of each estate in which there is 
a charitable interest and in legal actions to modernize the 
provisions of philanthropic bequests. 

To further protect the public interest in this area, more 
than 28,000 charities are registered with the Division, as well 
as over 180 fundraisers operating in Massachusetts. A charitable 
organization is one which is nonprofit and whose purpose is to 
benefit a portion of the public; in addition to philanthropic 
organizations, examples of public charities include nonprofit 
hospitals, schools, social service providers, and cultural 
organization. As well as registering and obtaining financial 
reporting by charitable organizations and fundraisers, the 
Attorney General is the defendant in all proceedings brought in 
the Supreme Judicial Court to wind up the affairs of a charitable 
organization . 

SOLICITATION OF CHARITABLE FDHDS 

Commonwealth v. GMC Advertising. Inc.; Gerald Cantazaro 
Granting a contested motion for summary judgment, Judge 
Zobel permanently banned charitable fundraising by this 
Somerville-based solicitation company and its president, Gerald 
M. Cantazaro, and ordered payment of $500,000.00 in penalties, 
the largest fine ever obtained by the Attorney General in a 
contested fundraising case. This action was brought as a result 
of the defendants' unlawful solicitation of charitable funds on 
behalf of state police unions through the deceptive sale of 
advertisements to local businesses. Judge Zobel' s fundraising 
ban is the first such order in a contested lawsuit. Deceptive 
practices included telephone solicitations in which callers 
masqueraded as police officers and local public officials; 
representations to donors that failure to make a contribution 
could subject the donor to police reprisals; and 
misrepresentations that funds raised would promote local 
charitable causes. 



F.D.12 91 



Conroonwealth v. David Gargano, et al . 

Judgment was obtained in this civil and criminal contempt 
action filed against David Gargano, the ring leader of a 
fraudulent fund-raising group which raised more than $200,000 in 
charitable donations by impersonating police officers and other 
law enforcement officials. The court ordered Gargano to pay 
$100,000 in civil penalties and permanently barred him from 
engaging in telemarketing activities of any kind in 
Massachusetts. Concurrently, the Criminal Bureau prosecuted 
Gargano on larceny and deceptive solicitation charges, to which 
he pleaded guilty and was sentenced to three-and-one-half years 
to five years at MCI-Cedar Junction. 

Commonwealth v. Disadvantaged Workers of America, et al . 

A consent judgment entered in this case required the 
defendants, including two Tennesee-based corporations, their 
officers and directors, to pay $70,000 in civil penalties and 
permanently enjoined them from engaging in future deceptive 
charitable telemarketing. The defendants, who had solicited 
charitable funds in Massachusetts through the sale of household 
items, failed to disclose at the outset of their sales 
presentation that Disadvantaged Workers of America is a 
for-profit entity; its sales persons do not have disabilities; 
and that purchases are not tax deductible. 

Commonwealth v. The Way Home. Inc.. et al ■ 

As the result of a consent judgment in this case, a Hinghcim 
man agreed to dissolve The Way Home, Inc., a corporation he used 
to solicit charitable funds through false representations that 
donated monies would be used to benefit Plymouth-area shelters 
for the homeless and for other charitable purposes. He also 
agreed to pay civil penalties, refrain from deceptive 
solicitation practices, and to refrain from serving as a board 
member of any charitable organization that does not have at least 
five other members who are not related to him or to each other. 

Commonwealth v. Kenneth Singer 

In a judgment obtained in this civil contempt action, a 
Stoughton man who was the sole director and employee of 
Nationwide Productions, Inc. was ordered to pay $50,000 in civil 
penalties and was permanently enjoined from engaging in 
charitable solicitation in the Commonwealth or sitting on the 
boards of charitable organizations. Among other things, the 
defendant sold $100 tickets to an awards dinner ostensibly held 
as "a tribute to the most neglected segment of our society, the 
HANDICAPPED," and as a way to provide "'ROLE MODELS' to other 
disabled people, " while disguising the true purpose of the event 
- which was to provide himself with a source of income. This 
contempt action was prompted by Singer's violation of two prior 
court orders . 

Global Entertainment & Richard Garden 

"The Big Circus" has permanently folded its tent in 
Massachusetts, after a consent judgment was obtained against a 
Sarasota, Florida corporation and its owner. In this case, the 
defendants approached non-profit groups in the Commonwealth, 
offered to raise funds for them by putting on circuses, and later 
cancelled the shows after tickets had been sold. In addition to 
a permanent injunction prohibiting future circus promotions or 
charitable solicitation campaigns, the defendants agreed to pay 
restitution to two organizations who sold tickets for the circus 
in an effort to raise funds. 



92 p.D.i; 



Commonwealth v. Chosen Children Foundation 

The court has ordered the officers of this charity for 
handicapped children to turn over control of the Foundation's 
assets and operation to a temporary receiver, in order to ensure 
that funds solicited are used for charitable purposes. In 
bringing this case, the Division seeks, inter alia , to enjoin 
permanently the Defendants from engaging in deceptive solicitation 
practices through the pervasive placement of coin collection cans 
in stores across New England and telephone advertising of sales 
throughout the country. Misrepresentations made in the course of 
these solicitations have included statements intended to cause 
potential donors to believe their donations would support 
Make-A-Wish, an unconnected and well-established charity, and 
false representations that monies collected would be used for 
charitable purposes, when, in fact, they were used for personal 
enrichment . 

Commonwealth v. Elite Systems, et al . 

Following an investigation conducted in conjunction with the 
Registry of Motor Vehicles, in October 1992, the Division filed a 
complaint and obtained an agreed-to preliminary injunction 
prohibiting the defendants in this deceptive solicitation case 
from engaging in chariteible fundraising until further notice. The 
complaint alleges that the defendants deceived the public by 
masquerading as inspectors with the Registry, State Fire Examiners 
office and local fire departments; made coercive suggestions of 
favorable treatment in return for a donation; and falsely 
represented that funds raised would be used for charitable 
purposes, when, in fact, they were used for personal enrichment. 

Commonwealth v. Massachusetts Homeless Foundation, et al . 

In January 1992, a preliminary injunction was obtained by 
agreement in this case against two Boston-based solicitors and the 
charity they allegedly used as a front for their telemarketing 
business. The injunction prohibits the defendants from engaging 
in illegal charitable fundraising tactics; bars operation of the 
Massachusetts Homeless Foundation (the charity allegedly 
controlled and managed by its for-profit fundraiser) ; and requires 
the defendants to account for money previously raised. 

Commonwealth v. Suffolk County Sheriff's Department 
Filed on December 16, 1992, along with an agreed to 
preliminary injunction, this complaint alleges that Suffolk County 
Correction Officers Local 419 and their professional fundraiser 
violated the state's charitable solicitation and consumer 
protection laws during their phone solicitation campaign. Paid 
fundraisers allegedly misled potential donors to believe they were 
calling from the Sheriff's Department, the union, or Boston area 
hospitals and that their donations would benefit hospital 
pediatric wards. The preliminary injunction prohibits further 
deceptive solicitation. 



P.D.12 93 



Commonwealth v. R.H. McKnight, Inc., et al . 

During 1992, the Division defeated a Motion to Dismiss 
brought on behalf of Robert H. McKnight, individually, in this 
deceptive solicitation case. Defendant R.H McKnight, Inc. is a 
professional solicitation company which conducts fundraising for 
various police and fire organizations throughout the country, by 
the telephone sale of advertising space in publications or ad 
books it publishes. This action, which alleges that in the course 
of telephone solicitations McKnight employees falsely led donors 
to believe they were law enforcement personnel and that funds 
obtained would benefit local police departments, also names as 
defendants the corporation's president and a supervisory employee. 

ESTATES AND TRUSTS 

Fuller Trust. Inc. 

Settlement reached in this matter resolved a dispute with the 
Attorney General concerning the trustee's expenditure of almost 
all of the Fuller Trust's liquid assets on pre-development costs, 
including sizeable legal fees paid to law firms to develop a life 
care community on property owned by the Trust. The Division 
obtained the resignation of two trustees, both lawyers with 
prominent Boston area firms, and repayment by those attorneys of 
$250,000, each, to the Trust. Established under the will of 
Caroline Weld Fuller, the Trust's original purpose was to provide 
housing for women in need of a home at a reasonable expense. In 
1988, the trustees obtained authorization to proceed with 
development of the life care community, which has yet to be 
built. It was the position of the Division that the trustees' 
actions caused the development of the facility to stall and become 
more difficult to accomplish. 

At the present time, the Fuller Trust is in receivership and 
successor trustees have been presented to the Court for 
appointment. With the infusion of one-half million dollars and 
the appointment of new trustees, it is anticipated that the trust 
will be cible to carry on its purpose. 

Lynch, et al . v. Attorney General, et al . 

Judgment was entered on a c^ pres petition developed in 
consultation with the Division, allowing the transfer of the 
600-acre Ravenswood Park and its endowment, created in 1889 under 
the will of Samuel E. Sawyer, to The Trustees of Reservations 
(TTOR) . The world's oldest land trust operating on a statewide or 
regional basis, TTOR manages 72 other open space reservations and 
wildlife refuges in the Commonwealth. 

Walnut Hill School 

Developed in consultation with the Division, this deviation 
petition filed by the Walnut Hill School in Natick sought 
authority to sell a parcel of land adjacent to the school and to 
use the proceeds for capital improvements and endowment. A 
favorable judgment was entered. 



94 p.D.i: 



Baybank South v. Attorney General (Part I) 

Partial summary judgment was obtained in this c^ pres action 
arising out of cessation of operations at the Massachusetts 
Osteopathic Hospital. In granting the Division's motion, the 
Court found that general charitable donative intent will permit a 
three million dollar gift establishing the Florence Robertson 
Trust to be applied gx pres at the cessation of hospital 
operations. Part II of the case will concern selection of a 
successor beneficiary to receive trust income. 

Worcester City Hospital 

A CY pres petition developed in consultation with the 
Division, on which a favorable judgment was entered, shifted the 
use of hospital land formerly utilized for operation of an 
acute-care hospital to use as a general health care facility. 

Estate of Marion Mavroqenis 

This probate matter involved a will contest arising out of 
the decedent's murder, arranged by the person named executor and 
trustee of her substantial estate, and who also received a legacy 
under her will. Acting to protect the charitable interest in 
scholarships established under the will, the Division arranged a 
compromise agreement for allowance of the will and appointment of 
new fiduciaries, including the Eastern Bank and Trust Company of 
Salem as co-trustee. As a result of the compromise agreement, 
scholarships should be awarded beginning in 1993. 

DeTorriios. et al . v. Miliora. et al . 

The Division successfully intervened in this civil action, 
thereby ensuring that charitable assets contained in the 
Theosophical Society Trust are protected while issues of internal 
governance are litigated. 

CHARITABLE CORPORATIONS 

Bay State Health Care, Inc. v. Attorney General 

Bay State HMO, a registered charitable organization, was 
failing financially. As a strategy for the HMO's survival. Bay 
State and the Division of Insurance settled on dissolution of Bay 
State and a transfer of assets and designated liabilities to Blue 
Cross-Blue Shield. This Division reviewed the proposed 
transaction and negotiated changes in it, while keeping 
communications open with concerned hospitals and other providers. 
The Division filed an answer and assent stating that the Attorney 
General concurred with the judgment of Bay State and the Division 
of Insurance that the proposed transaction was the last and only 
feasible alternative available for resolving this emergency in an 
manner that assured uninterrupted service to Bay State's plan 
members, and that the terms of the transaction were necessary in 
order to continue this health care coverage without imperiling the 
financial stability of the transferee. Blue Cross-Blue Shield. 
Because time was of the essence, the Division also intervened t o 
oppose attempts, one in Middlesex Superior Court and one in the 
SJC Single Justice session, to stop the transaction. The SJC 
Single Justice approved the transaction, and Bay State was 
dissolved with assets and designated liediilities transferred to 
Blue Cross-Blue Shield. 



P.D.12 95 



Berkshire Health Systems, Inc. 

After a lengthy investigation by the Division, Berkshire 
Health Systems, Inc. (BHS), a hospital and health care system 
providing acute and long term care for residents in western 
Massachusetts, entered into an agreement committing its board and 
senior management to substantial reform of its corporate 
governance and oversight practices. The reforms agreed to by BHS 
include (1) restructuring of the board nominating process to 
achieve diversification reflecting that of the community; (2) term 
limits for board members to assure turn-over; (3) tightened 
conflict of interest rules; (4) heightened scrutiny of executive 
compensation packages; and (5) establishment of an audit committee 
and other financial controls. To mitigate the widespread public 
perception that the board had been secretive about its governance 
and management practices, BHS agreed to make the nine-page 
agreement public. 

Isabella Stewart Gardner Museum v. The Attorney General, et 

al. 

The Gardener Museum sought court approval to alter its 
premises by building a gallery on the first floor of the museum 
for periodic exhibits of art works not already owned by the 
museum. Court approval was necessary because of the provision in 
Isabella Stewart Gardner's will prohibiting the trustees from 
moving any art object or bringing in any art objects not already 
on display in the museum. The museum contended that the space in 
which it wanted to build the gallery did not fall within the 
prohibition. After investigation the Attorney General agreed with 
the allegations of the museum that such a gallery did not violate 
the provisions of the will and were necessary in order to more 
effectively carry on the purpose of the museum. Court 
authorization to build the gallery was granted in August 1992. 

New Bedford Glass Museum v. The Attornev General, et al . 

Voluntary dissolution of this financially-troubled museum 
involved complicated issues relating to the proper distribution of 
the museum's glass collection and archival materials. The 
Attorney General is a necessary party to all dissolutions of 
charitcible corporations, in order to assure that the reasons for 
dissolution are appropriate and that the distribution of any 
remaining assets are to a similar charity. With the Division's 
guidance, the museum followed a procedure which Invoked both trust 
law and ethical codes governing museum collection management in 
order to identify proper beneficiaries. The Supreme Judicial 
Court ordered the collection to be distributed according to the 
museum's plan and dissolved the museum in August 1992. 

Commonwealth v. Resthaven Nursing Home 

On January 28, 1992, a hearing on receiver fees effectively 
ended the Division's involvement in the 12 year receivership of a 
non-profit nursing home, originally obtained due to financial 
disarray and to protect residents from inadequate care. Although 
initial patient care issues were resolved by 1980, the nursing 
home remained in receivership due to default on its mortgage, 
repeated state decertification efforts, compounded by Medicaid 
reimbursement strictures, a lack of capital funds, and coats 



96 P.D.12 



and labor problems associated with its location in a high-crime 
area of Roxbury. Along with the Rate Setting Commission, the 
Department of Public Health, and the Welfare Department, the 
Division negotiated a plan to end the receivership and the parties 
submitted to the Court a stipulated consent judgment ending the 
receivership . 

Omnibus Dissolutions 

This year the Division continued the recently revived 
practice under G.L. c.180, §11B of effecting dissolution of groups 
of charitable corporations which are (i) inactive, (ii) have no 
assets, and (iii) have never had other than nominal assets, or 
have not had assets for more than two years. These actions serve 
a dual purpose in that they relieve corporate directors of ongoing 
liability or responsibility for their corporations and serve as a 
means of purging inactive files from the Division's records. 
Thirty charitable corporations were dissolved this year and 
another fourteen are to be the subject of a dissolution petition 
filed in December 1992. 



siarrricANT dtvtsion initiatives 

Second Annual Giving Season Campaign: "Give But Give Wisely" 

On November 17, 1992, the Attorney General announced the 1992 
"Give But Give Wisely" public education campaign, a joint effort 
undertaken by the Attorney General, the Better Business Bureau and 
other interested organizations. 

Utilizing a radio PSA and professionally designed "Give But 
Give Wisely" brochure and logo, this second annual Giving Season 
program seeks to inform individuals and businesses eibout the 
donating process and how to make sure that their charitable 
contributions are put to the best possible use. 

In conjunction with the Ccimpaign kick-off, the Division also 
issued: (i) the second annual "Report on Charitable Fundraising, " 
analyzing the 1991 financial reports of 128 fundraising campaigns 
by professional solicitors (an average of 28% of funds raised were 
actually received by the charities); and (ii) the "Attorney 
General's Guide for Charities Who Fundraise from the Public." 

Division Administration and Statistics 

Enforcement of laws requiring accountability by public 
charities is central to the Division responsibilities with respect 
to charitable funds. With the exception of religious 
organizations and certain federally chartered organizations, all 
public charities must register with the Division and all 
registered charities must submit annual financial reports. The 
registrations and financial reports are public records and public 
viewing files are kept. The Division responded to over 2,320 
requests to view files in 1992 and, in response, 5,570 files were 
pulled. 

Charitable Organizations: Registration and Enforcement 
In calendar year 1992, 1, 652 new charitable organizations 
were reviewed, determined to be charitable, and registered. The 
Division also processed 11,183 annual financial reports and 
collected annual filing fees totalling $284,815.00 during this 
period. 



F.D.12 97 



As part of its ongoing registration and filing enforcement 
program, the Division contacted approximately 2,050 charities 
whose annual filings were deficient or delinquent to rectify 
filing problems. 

Charitable Solicitation; Registration and Enforcement 
In addition to required annual filings, every charitable 
organization which intends to solicit funds from the public (other 
than religious organizations) must apply to the Division for a 
solicitation certificate and pay a fee before engaging in 
fundraising activity, pursuant to G.L. c. 68, §19. The Division 
reviews applications for compliance and must issue a certificate 
within 10 days, unless the application is deficient. In 1992, 
4,961 certificates were issued and $51,330.00 was received in fees. 
All persons acting as professional solicitors, fundraising 
counsel, or commercial co-venturers on behalf of soliciting 
charitable organizations must also register annually and pay a 
registration fee. In addition, solicitors must file a $10,000.00 
surety bond prior to engaging in charitable solicitation. In 
calendar year 1992, the Division registered 65 solicitors, 120 
fund raising counsel, and 19 commercial co-venturers, resulting in 
fees of $2,040.00 to the Commonwealth. 

Dissolutions 

To enforce the public interest in the disposition of 
charitable assets, the Attorney General is a party to all 
voluntary dissolutions of charitable corporations under G.L. 
c.180, §11A. After review of proposed pleadings and negotiation 
of necessary modifications, the Division assented to 62 final 
judgments dissolving charitable corporations. 

Wills. Trust and Probate Matters 

Under statutory and common law, the Attorney General is an 
interested party in the probate of all estates in which there is a 
charitable interest and in all other judicial proceedings 
affecting charitable trusts. In enforcing the due application of 
charitable funds and preventing breaches of trust, the Division 
regularly reviews new wills and other trust documents, taking 
action to protect the public interest where necessary. 

In 1992, 1,650 new wills were received and reviewed, of which 
1,348 contained charitable bequests. In connection, with the 
review process, inquiries were made in response to 491 citations 
giving notice of petitions for the appointment of executors which 
were received without copies of the will. 

After review by the Division, assents were given to 909 final 
accounts of executors and trustees, 139 petitions for the sale of 
real estate, and 70 petitions seeking the termination of a trust, 
83 new cases involving probate litigation were opened, and an 
additional 70 existing matters in litigation were active during 
the year. These cases included will contests and petitions for cy 
pres . deviation, instructions and declaratory judgments. 

The Division also represents the Treasurer of the 
Commonwealth with respect to the public administration of 
interstate estates for which no heirs have been located. During 
calendar year 1992, 236 such estates were closed after review of 



98 P.D.12 



either the final account of the public administrator or the proof 
of heirs submitted to the Division. With respect to 35 of these 
estates, property escheated to the Commonwealth. The total amount 
received and remitted to the Treasurer's office was $242,935.00. 
128 other miscellaneous public administration matters were also 
handled during the year. 

Form PC Revision 

With the assistance of a working group from the Public 
Charities Advisory Committee, the Division conducted a thorough 
review and revision of the primary reporting form utilized 
annually by public charities - the Form PC - and its attachments. 
Significant changes include the new requirement that Federal form 
990 EZ be filed in place of the PC Schedule B, which has been 
eliminated, and the elimination of the requirement that 
investments be reported and certain types of investment 
transactions explained. The goal of this effort was to streamline 
the PC Form and focus it more sharply on relevant information 
which is either not reported at all to the Internal Revenue 
Service or not reported in adequate detail. For excimple, the new 
form strengthens disclosure of executive compensation and of 
related party transactions. As a result of this effort, and 
working through the National Association of State Charity 
Officials, the Division also played a major role in convincing the 
IRS to propose adopting the compensation reporting requirement 
nat ionwide . 

Draft Probate Uniform Practices 

This year the Division, assisted by a working group from the 
Advisory Committee, developed a series of proposed Uniform Probate 
Practices covering those circumstances under which notice of a 
probate proceeding must be given to the Attorney General and those 
in which he must be made a party to the action. In the experience 
of the Division, there have been extreme variations in practice 
eimong the probate courts and registries with respect to these 
requirements. The proposal has been approved by the 
Administrative Committee of the Probate Courts and will be 
published for pre-adoption comment in the spring. 

Legislative Filings 

New statutory filing fees, based on legislation drafted by 
the Division, were enacted in the FY 1993 state budget. A new 
sliding scale for charities ranges from $35 for organizations with 
gross income of $100,000 or less, to $250 for organizations with 
gross income over $500,000. New fees for fundraisers are $300 for 
solicitors, $200 for fundraising counsel, and $50 for commercial 
co-venturers . 

The Division submitted a re-draft of its pending legislation 
to comprehensively revise the chariteible solicitation statute. 
Among other changes, the pending legislation would: 

* Require fund raisers to provide more financial 
information eibout a solicitation campaign, such as 
including good faith estimates of revenue, expenses and 
the charity's net proceeds in contracts, submitting 
monthly financial reports to the charity, and filing 
financial reports with the Attorney General at the end 
of every solicitation campaign. 

* Prohibit charitable solicitation by fund raisers who 
have not filed the required financial reports. 



P.D.12 99 



* Clarify the responsibilities of charities by requiring 
that the compensation paid to the fund raiser be fair and 
reasonable to the charity and by prohibiting the charity 
from giving control or management of its affairs to its 
fund raiser. 

* Prohibit misrepresentation as to the amount or percentage 
which will be received by the charity. (Allen, Soris, 
Lund, Gale) 

Conference Presentations and Publications 

In July, Division Chief Dick Allen submitted a chapter 
entitled "The Role of Attorney General's Office Regarding Public 
Charities and Fundraising" for publication in the upcoming MCLE 
book Massachusetts Nonprofit Organizations . Division attorneys 
also made a number of conference presentations during 1992 to 
groups including the Massachusetts Bar Association, Boston Bar 
Association, Massachusetts Library Association, National Society 
of Fund Raising Executives, Commonwealth Society, United Way, and 
the Professional Firefighters Association. 

NASCO President Initiatives 

Dick Allen served as the President of the National 
Association of State Charity Officials in 1992. Initiatives 
included fostering a closer working relationship between the 
regulators and the charitable sector, a renewed focus on charity 
stewardship issues, a national amicus brief opposing the discovery 
of a national confidential newsletter, convincing IRS to propose 
adoption of the Division's executive compensation disclosure 
requirement nationally, and testimony at the request of the Senate 
Select Committee on POW/MIA affairs. Responsibilities included 
planning and chairing the annual NAAG/NASCO charitable trusts and 
solicitations national conference. 



REGDLaTED INDDSTRIES DIVISICW 

UTILITIES RATE CASE 

Cambridge Electric Light Company . DPU 92-250 

Cambridge Electric Light Company, a subsidiary of 
Commonwealth Energy System which serves the metropolitan Cambridge 
area, has requested an increase in its electricity rates of $10.1 
million or 9.3 percent. Such an increase, if allowed, would raise 
the monthly bill of a residential customer who used 450 kwh per 
month by approximately $4.95. Rate design, intra-company cost 
allocations, rate of return and efficiency of management are all 
issues under review and subject to discovery at the present time. 
Hearings are due to start on February 1, 1993 and be completed by 
the end of the month. The Attorney General's Initial Brief, 
setting out the position of the Office, is set to be submitted on 
March 26, 1993. A decision by the Department of Public Utilities 
(the first major decision of its new Chairman) on the proposed 
increase is due out on May 31, 1993. 



100 P.D.12 



Western Massachusetts Electric Company , DPU 92-8C-A 
The Attorney General Intervened in the DPU' s annual 
performance review of Western Massachusetts Electric Company' s 
(WMECo) generating plants. WMECo' s nuclear generating units 
performed poorly in the June 1, 1991 to May 31, 1992 review 
period. Millstone Units 1, 2, 3, and Connecticut Yankee produced 
only a fraction of the total electricity they could have 
generated. (24.9%, 57.7%, 36.5% and 53.6% respectively). WMECo' s 
performance falls far short of the DPU's established goals of 
76.5% for the Millstone Units and 84.2% for Connecticut Yankee. 
Although still in the discovery phase, the Attorney General will 
seek refunds of replacement power costs charged to customers that 
resulted from the plants failure to generate. Hearings are 
scheduled to commence in May 1993. 

Massachusetts Electric Company . DPU 92-78 

In March 1992, Massachusetts Electric Company (MECo) filed a 
request for a $66 million or 4.8% increase to its base rate 
revenues. The Attorney General represented ratepayers at 16 days 
of hearings before the DPU during the four weeks beginning June 4, 
1992. In September 1992, the DPU allowed MECo a $45.6 million or 
3.3% increase in its rates. 

Berkshire Gas Company , DPU 92-210 

In October 1992, the Berkshire Gas Company filed a request 
for a $2.4 million or 5.45% increase to its base rate revenues. 
The Attorney General represented ratepayers at 12 days of hearings 
before the DPU during the four weeks beginning December 3, 1992. 
Following submission of briefs, a decision from the DPU is 
expected by April 1, 1993. 

New England Telephone and Telegraph Company . DPU - Mass - 10 
On August 14, 1992, New England Telephone (NET) filed 
revisions to be effective January 1, 1993, to its Tariff No. 10 
that would introduce Circuit 9 Service, a call management service 
which, among other features. Includes Automatic Number 
Identification (AND . The Attorney General on November 30, 1992, 
filed a letter reqfuesting that the DPU suspend and investigate 
net's filing as it relates to privacy issues raised by the 
provisioning of ANI . The DPU on December 23, 1992, approved the 
revisions. However, NET must first develop a customer 
notification program for the DPU' s pre-approval before the service 
is offered. Once service is offered, NET must take certain steps 
relating to privacy and blocking. 

Boston Edison Company . DPU 92-92 

In April 1992, Boston Edison Company filed a request for an 
$87 million or 10% increase to its base rate revenues. The 
Attorney General represented ratepayers at 23 days of hearings 
before the DPU during the five weeks beginning June 15, 1992. The 
DPU accepted a Partial Settlement filed by the Attorney General, 
BECo and the Division of Energy Resources which avoided any rate 
increase for the first year, and limited rate increases in the two 
following years to $29 million (less than 2.5%). The Settlement 
also expanded eligibility for residential low income rates and 
instituted performance incentives for BECo' s fossil fuel 
generating units as well as the Pilgrim nuclear plan. 



P.D.12 101 



Western Massachusetts Electric Company , DPU 91-290 
In December 1991, Western Massachusetts Electric Company 
(WMECo) filed a request for a $37 million or 9.1% increase to its 
base rate revenues. The Attorney General represented ratepayers 
at 17 days of hearings before the DPU during the four weeks 
beginning February 24, 1992. The DPU accepted a Partial 
Settlement filed by the Attorney General and WMECo which limited 
rate increases in the two following years to $12 million and $11 
million (about 3% and 2.7%). 

Eastern Edison Company , DPU 92-14 8 

In June 1992, Eastern Edison Company (EECo) filed a request 
for a $16 million or 8.2% increase to its base rate revenues. The 
Attorney General represented ratepayers at 15 days of hearings 
before the DPU during the four weeks beginning August 24, 1992. 
The DPU accepted a Partial Settlement filed by the Attorney 
General and EECo which limited the rate increase to $8.1 million 
and further limited the increase to residential customers to 1.1% 
overall (including demand-side management costs). The Settlement 
also expanded eligibility for residential low income rates. 

AT&T Relaxed Regulation 

AT&T asked the DPU to reduce regulation of almost all of its 
intrastate Massachusetts services. The Attorney General presented 
the testimony of William G. Shepherd, Chairman of the Economics 
Department at University of Massachusetts at Amherst, that such 
reduced regulation was premature and would hinder the development 
of a freely competitive market. Notwithstanding that testimony 
and its prior decisions maintaining full regulation of ATST, the 
DPU allowed the AT&T petition. 

Ocean State Power Company II 

The Attorney General intervened at the Federal Energy 
Regulatory Commission (FERC) to oppose the rates proposed by the 
owners of the Ocean State II (OSPII) power plant in Rhode Island. 
The rates affect Massachusetts ratepayers because OSPII sells 
power to Boston Edison Company and to affiliates of Massachusetts 
Electric Company and Eastern Edison Company. The FERC allowed the 
proposed rates, even though the Petitioners did not satisfy FERC 
standards on self-dealing (adopted since the inception of tlie 
project) which require that projects selling to companies 
affiliated with owners must show that proposed rates are 
comparable to rates based on a competitive market. 

Montaup Electric Company 

The Attorney General intervened at the Federal Energy 
Regulatory Commission (FERC) to oppose the change proposed by FERC 
Staff in the allocation of savings and generating costs following 
the merger of Montaup Electric Company with Newport Electric 
Corporation. Although the merging companies had contracted to 
allocate the bulk of savings to Montaup based on its much larger 
generating capacity, the FERC found that Montaup and Newport must 
split the savings. This decision has the effect of adding about 
$1 million annually to Montaup's costs, most of which will be 
collected from the ratepayers of Eastern Edison Company. 



102 F.D.i: 



Bay State Gas Company , DPU - 92 - 111 

In April 1992, Bay State Gas Company filed with the DPU 
tariff schedules of proposed rates and charges designed to 
increase the Company's annual retail gas revenues by $20,646,572 
or 7 percent. The Attorney General intervened in the case before 
the DPU on behalf of the ratepayers of the Commonwealth. Eighteen 
days of evidentiary hearings were held at the Department beginning 
June 23, 1992. As a result, the DPU issued its order on October 
30, 1992, allowing Bay State Gas to file new schedules of rates 
and charges to produce additional gross revenues of $11,523,418. 

Customer Owned Coin Operated Telephones Settlements 
In September 1992, the Attorney General filed with the DPU 14 
settlement agreements that were reached with the Customer Owned 
Coin Operated Telephones (COCOT) against whom earlier complaints 
had been filed alleging violations of applicable regulations 
governing the provision of COCOT service. The agreements provide 
the funding necessary to ensure future monitoring of the COCOT 
industry's compliance with applicable laws and regulations. 
Hearings were held and briefs filed in the cases of three COCOT 
operators with whom no settlement was reached. No order has yet 
been issued by the DPU as to acceptance of the settlement 
agreement terms, or the individual cases that were litigated. 

Yankee Atomic Electric , FERC Docket No. ER92-592-000 

In June 1992, the Division intervened in the Yankee Atomic 
retirement/decommissioning case. After reviewing Yankee's filing, 
initial discovery responses and discussing the relative merits of 
proceeding to hearing with fellow interveners (R.I. AG, Mass. DPU, 
R.I. DPU and Mass. & Conn, municipals) and FERC Staff, it was 
decided that Yankee's decision to shutdown the plant, i.e. it was 
no longer economic to run given the cost to do NRC safety repairs, 
was likely the correct one, though for the wrong reason, i.e., 
many hold the opinion that the shutdown was justified on safety 
reasons alone. 

A settlement resulted where Yankee was required to write-off 
$3M of plant investment but allowed to recover the balance of its 
outstanding rate base ($46M) and to collect its scaled-down, 
initial decommissioning estimates. Review of final 
decommissioning figures were postponed until after the NRC rules 
on Yankee's decommissioning plan. This office will be given an 
opportunity for input into Yankee's plan and its cost estimates 
through a preview of the company's NRC filing, at the NRC hearings 
and subsequent FERC rate setting proceedings. 

The settlement was filed with the ALJ in early December and 
interim rates have been in effect since January 1, 1993 pending 
its approval by the Commission. One Massachusetts municipality, 
the Town of Norwood, after initial assent, is contesting the 
settlement. Their protest is not expected to hinder FERC approval 
of the proposed settlement. 



P.D.12 103 



Nantucket Electric Company . DPU 92-7B-A 

In July 1992, Nantucket filed its annual generating unit 
performance data for the twelve month performance period April 
1991 to March 1992. The Attorney General represented ratepayers 
in several days of hearings noting the poor performance of the 
Company's generating units. The Attorney General opposed 
replacement power cost charges for two of the Company' s outages of 
its base-load units. One outage (Unit 7) was due to an explosion 
of unknown cause, and the other (Unit 6) had an extended outage 
due to a failed rotor repair. A decision before the DPU is 
pending. 

New England Telephone , DPU 92-100 

The Attorney General intervened at the DPU to oppose New 
England Telephone's (NET) third request in a continuing series of 
annual increases in basic residential rates. The DPU granted the 
rate increase but also approved a Partial Settlement with the 
Attorney General which requires NET to increase its efforts to 
notify low-income consumers of low-cost telephone service options 
and to limit its efforts to sell extra-cost optional services to 
such consumers. NET must also seek to place additional pay phones 
in low-income neighborhoods and notify customers in Dorchester, 
Roxbury and Mattapan about how to obtain satisfaction of their 
complaints for poor service. 

Boston Edison Company . EFSB 90-12/12A 

The Attorney General intervened at the Energy Facility Siting 
Commission, now the Energy Facility Siting Board (EFSB) to 
question the need for Boston Edison Company (BECo) proposed Edgar 
generating plant. After more than 50 days of hearings, the Siting 
Council agreed with the Attorney General that there was no need 
for the plant until at least 1997 and that any future need for the 
plant should only be reviewed in the DPU' s formal planning process 
(called Integrated Resource Management). Although the Company 
withdrew its proposal to build the plant, its proposal to "bank" 
the site for late use is pending. 

Northeast Telesystems Incorporated . DPU 90-137 

After conducting an investigation, the Attorney General 
petitioned the DPU to withdraw the temporary operating certificate 
of this Company because of its failure to possess the requisite 
managerial and technical ability to provide its public utility 
payphone service, including its continuing failure to correct 
overcharges. The DPU granted the petition. 

Western Massachusetts Electric Co.. Boston Edison Co. . DPU 

92-13, DPU 91-233 

The Attorney General has been participating in collaboratives 
that have jointly designed and helped implement and evaluate 
conservation programs at Western Massachusetts Electric Co. and 
Boston Edison Co. These collaborative procedures and programs 
have been at the frontier of conservation implementation in the 
United States. In these cases, agreements were reached to extend 
conservation progreuns for two years at stable budgets and without 
major rate impacts. In addition, the agreements implement 
significantly more cost-effective methods for delivering 
conservation services, thus delivering more conservation and more 
pollution control for the dollar. 



104 p.D.i: 



Boston Edison Company , DPU 92-lA 

During the first part of 1992, the Attorney General 
Intervened In the review of Boston Edison Company's (BECo's) 
generating unit's performance for the period from November 1, 1990 
through October 31, 1991. The review, undertaken by the DPU, 
centered on BECo's most important generating units: New Boston 1 
and 2; Mystic 4,5,6 and 7; and the Pilgrim Nuclear Plant. During 
the process, the Attorney General identified a number of instances 
in which BECo's performance was evidently imprudent and asked the 
DPU to translate those episodes of substandard performance into 
fuel credits to BECo's rate-payers. A decision is pending. 

mSURAHCE 

1993 Private Passenger Automobile Insurance 

On July 2, 1992, the Massachusetts Commissioner of Insurance 
determined that Private Passenger Automobile Insurance Rates for 
1993 must again be fixed and established in accordance with G.L.c. 
175 sec. 113B. The various components of the ensuing process 
continued until late November. As a statutory intervener 
representing the interests of Massachusetts consumers, the 
Attorney General contested several aspects of the 12.3% rate 
increase originally requested by the industry. A decision was 
issued by the Commissioner on December 22, 1992, fixing the 1993 
average rate at a level 5.2% higher than the 1992 average rate. 
This is 58% lower than the increase requested by the industry. 
The Commissioner's decision is not yet final, however, since the 
industry has appealed it before the Supreme Judicial Court. 

Blue Cross/Blue Shield Non-Group Health Insurance 
In April 1992, Blue Cross and Blue Shield of Massachusetts, 
Inc. (BCBS) filed with the Division of Insurance (DOI) a request 
for a 39.6 percent composite rate increase from the MMM Health 
Statement insureds and a 49.4 percent composite rate Increase for 
Group Conversion subscribers in their non-group market. The 
Attorney General intervened in this case on behalf of the 
ratepayers. At the public hearing BCBS proposed that the 
Non-group hearings be delayed for 30 days so that all parties 
could work together to craft a non-group reform package. The 
Commissioner of Insurance granted BCBS's request and together with 
the Attorney General convened a panel of concerned persons to 
participate in a Non-Group Reform Commission. On June 15, 1992 - 
parallel to the Reform Commission's examination of market reform 
issues - the administrative hearings began. Four witnesses for 
BCBS, two for the Attorney General and two for the State Rating 
Bureau presented sworn testimony at the hearings. Briefs were 
submitted by all parties, but no order has yet been issued by the 
Commissioner . 

During the summer of 1992 the Non-Group Commission continued 
to meet to try to reach come sort of consensus as to how to reform 
the non-group market. While the Commission came to some consensus 
as to the problems that have arisen in the non-group market, a 
consensus was not reached as to the solution. 



P.D.12 105 



As a result, the Attorney General presented his own legislation in 
December, sponsored by the Honorable Carmen Buell, which called 
for both (1) market reform of the non-group market in 
Massachusetts, and (2) a tax credit to make a basic health 
insurance product more affordable to those most in need. While 
the legislation is still pending, the Attorney General continues 
to refine the legislation which was submitted, and to search for 
solutions to the health insurance crises which exist. 

Blue Cross and Blue Shield Medigap Health Insurance 
The Attorney General participated as an intervener in Blue 
Cross and Blue Shield of Massachusetts, Inc. (BCBS) Medi-gap 
insurance rate Increase proceedings before the Division of 
Insurance. On August 3, 1992, BCBS filed a requested composite 
rate increase of 18%. The Attorney General retained an outside 
actuary to challenge various cost projections in the BCBS Filing 
and submitted a Responsive Filing. After the record was closed, 
BCBS filed a motion to reopen the record and introduce substantial 
revisions of its prescription drug program which reduced the 
requested composite rate increase to 14.7%. The motion was 
allowed. 

To facilitate a timely decision on this rate request, the 
Hearing Officer established a bifurcated briefing schedule which 
required the Attorney General to submit an initial brief on 
actuarial and cost containment issues and a supplemental brief 
relating to the prescription drug benefit projection. The 
Attorney General additionally filed a Reply Brief in this 
proceeding. The Commissioner of Insurance is expected to issue a 
decision in January 1993 on this rate request. 

Medigap Commission 

In January 1992, Consumer Affairs Secretary Gloria Larson 
appointed a special working group to review the Medicare 
supplemental ("Medigap") insurance market in Massachusetts and 
make recommendations for needed changes. The formation of the 
Commission was in response to a 21 percent rate increase granted 
in January 1992 by the DOI to Blue Cross/Blue Shield for its 
medigap plans, commonly called Medex. The Attorney General was a 
member of this Commission which met a number of times to review 
information about the medigap market and discuss options for 
reform. A report was issued by the group on November 10, 1992. 

City of Cambridge, et al v. Attorney General 

In October 1992, the Attorney General obtained a consent 
judgment in Suffolk Superior Court from Blue Cross and Blue Shield 
of Massachusetts, Inc. (BCBS), which provides that BCBS will 
review and pay valid claims for chiropractic and infertility 
treatment services rendered to City of Cainbridge employees insured 
under BCBS (at the date of signing the Consent judgment, BCBS had 
already paid $74,377.57 of these claims). BCBS agreed to pay 
$20,000 to the Massachusetts Caring for Children Foundation for 
the provision of primary and preventive health care to children of 
limited means in the City of Cambridge and to pay $20,000 to the 
Attorney General for the costs of the investigation and litigation. 



106 p.D.i: 



BCBS also agreed to comply with the mandated health care benefits 
provisions of M.G.L.c. 176A and 176B, for all health care programs 
it provides or administers for the City of Cambridge. 

This case was initiated by BCBS and seven municipalities 
seeking a declaration that Proposition 2.5 precluded the 
application of mandated health benefits laws to cities and towns. 
The Supreme Judicial Court ruled that Proposition 2.5 had no 
applicability to Blue Cross and Blue Shield's mandated health 
benefits laws. The Attorney General asserted that Blue Cross and 
Blue Shield excluded coverage for chiropractic and infertility 
treatment and diagnosis on and after July 1, 1988, received by 
City of Ccimbridge insured employees, in violation BCBS' s eneibling 
act, Massachusetts insurance law, and the Consumer Protection 
Act. 

Market Forge 

This company changed its group health insurance from Blue 
Cross and Blue Shield of Massachusetts, Inc. ("BCBS") to Bay 
State. BCBS then notified Market Forge that the BCBS Medex 
progrcim would be cancelled as of the termination of the BCBS group 
health plan. The BCBS action had the effect of leaving retirees 
without health insurance for 6 months (when the next Medex 
open-enrollment period would begin) . After the intervention of 
this Office, BCBS agreed to keep in force the Medex plan as a 
stand-alone product so that the retirees would have uninterrupted 
coverage with their existing medical providers. 

State Mutual Life Assurance Company of America 

This insurer had terminated, thus preventing the renewal, of 
a small-group health insurance plan in violation of the Small 
Group Act. The case was of great concern to the Attorney General 
because one member of the group who was diagnosed with AIDS would 
have been without coverage, and because of pre-existing condition 
exclusions, would have been uneible to secure other health 
insurance. After the intervention of the office, the insurer 
rescinded the termination claiming that it had sent incorrect 
information to the employees. The Insurer agreed that future 
renewals will be subject to the Small Group Act. 

American Association for Senior Citizens 

This case involved the sale to Massachusetts senior citizens 
of memberships in American Association of Senior Citizens (AASC) 
an association which offered revocable living trusts, certain 
health services, and pre-paid legal services as membership 
benefits. This pre-paid legal service plan (legal insurance) was 
unauthorized, and thus illegal insurance in Massachusetts. AASC 
also misrepresented the cost, duration and complexity of probate 
proceedings. In response to the Attorney General's investigation, 
AASC ceased doing business in the Commonwealth and agreed to sign 
an Assurance of Discontinuance, which was filed in Suffolk 
Superior Court in June 1992. According to the terms of the 
Assurance, AASC will notify the Attorney General in advance if it 
intends to resume business in Massachusetts, refund the full 
amount of membership fees paid by Massachusetts residents 
(approximately $50,000), and donate $7,500 to the Local Consumer 
Aid Fund. 



P.D.12 107 



American Society of Senior Citizens 

In a similar matter, the Attorney General sent a Civil 
Investigative Demand to the American Society of Senior Citizens 
(ASSC) which was offering memberships similar to those of AASC and 
in a similar manner. In responding to the CID, ASSC agreed to 
stop doing business in Massachusetts. 

Commonwealth v. Poitras. et al . 

This case began in April of 1990, with the Attorney General 
filing a Complaint in Suffolk Superior Court against the 
Massachusetts Lobsterman's Association (MLA) and several other 
defendants. The Complaint alleged that MLA had marketed and sold 
an accident and health insurance plan to fishermen and lobstermen 
in Massachusetts and other coastal states. MLA has more than 1000 
members who paid in excess of $6 million in premiums to the 
Maritime Commerce Foundation Trust Health Plan since 1985. 

The Attorney General alleged that the defendants refused to 
pay legitimate claims in excess of $1 million; repeatedly 
misrepresented the existence of insurance coverage and claim 
payments; and induced participants to remain in the plan by 
falsely informing them that prior claims would be paid by a 
successor administrator if they would pay an additional $50.00 to 
tlie company. 

In September of 1992, the defendants' motions for summary 
judgment were denied. 

Cancer Insurance Testimony 

In October of 1992, Assistant Attorney General Virginia 
Hoefling appeared on behalf of the Attorney General before the 
Commissioner of Insurance during hearings on the ban on Cancer 
Insurance. The Attorney General's position was presented through 
both written and oral testimony. The Attorney General urged the 
Commissioner to retain the ban on cancer insurance because it is 
of little economic value and tends to be marketed in an abusive 
manner. The ban on these policies is still in effect. 

Boston Committee on Access to Health Care 

The Attorney General participates in this Committee which 
presents a report each year on the level of access to health care 
in the City of Boston. The Committee also offers recommendations 
to improve access. 

This year's report includes recommendations on the free care 
pool: the range of services covered by the free care pool should 
include preventive, primary, ambulatory, and inpatient care; the 
free care pool should be adequately funded and services should be 
delivered more cost effectively in the most appropriate setting; 
and there is a need for increased consumer education ab>out access 
to care for the uninsured. 

The Attorney General stressed the need to support the design 
of community-institutional partnerships for outreach to the 
uninsured. Effective projects are those developed through joint 
needs assessment and are linguistically and culturally sensitive 
to the community. 



108 P.D.12 



HOME IMPROVIDENT MORTGAGE CASES AND SETTLEME2ITS 

BayBanks 

A pre-complaint agreement was reached between BayBanks in 
February 1992, the Department of the Attorney General and 
community groups to benefit Massachusetts low-income urban 
homeowners. The agreement resolves the part of the Attorney 
General's banking industry investigation that relates to any 
liability BayBanks may have had in connection with indirect 
financing of home improvements contracting transactions. 

Under the terms of tlie agreement, BayBanks, beginning no 
later than April 1, 1992, will provide $5 million in home 
improvement loans to low income individuals. The loan program 
will be targeted at particular urban neighborhoods. For the first 
3 months of the program, loans will be available at an interest 
rate 3.5% below the rate for similar loans. After the first three 
months, loans will be available at 3% below the rate for similar 
loans . 

BayBanks also agreed to contribute $6 million to 
Massachusetts Housing Investment Corp., Inc. (MHIC) for the 
construction of affordable housing. MHIC works with community 
groups and others to develop permanent and rental housing units. 
If MHIC does not substantially utilize the $6 million within the 
next two years, BayBanks is required to invest in other progreims 
designed to benefit low income individuals. 

The agreement also calls for a greatly strengthened and 
expanded program for the resolution of consumer complaints under 
the auspices of the Massachusetts Community and Banking Council 
(MC/BC) . Under the agreement, BayBanks will make the MC/BC 
process available to more than 11,000 home improvement customers 
whose home improvements were indirectly financed by BayBanks 
between November 1987 and February 19, 1992. BayBanks also agreed 
that home improvement dealers and their sales forces will attend 
training sessions that BayBanks will offer to minimize the type of 
consumer fraud that has troubled certain companies in the home 
improvement industry. 

Fleet Bank 

The Attorney General accepted an Assurance of Discontinuance 
from Fleet National Bank under the authority granted to the 
Attorney General by G.L. c. 93A, §5, on April 9, 1992 in lieu of 
proceeding against Fleet. Under the Assurance, Fleet was required 
to create a $12 million mortgage loan program for low-income 
neighborhoods. The loans under this program feature no 
downpayment, no closing costs, and an interest rate one percent 
below Fleet's best regular rate. Fleet is also obligated to 
provide restitution to 40 persons who borrowed from Resource 
Lending, consisting of a choice of a new loan on very favorable 
terms or a $6,000 cash payment. Fleet is also obligated to obtain 
legal opinions regarding whether the second mortgage companies 
they fund in the future are lending on terms that violate consumer 
protection laws. 



P.D.12 109 



Shawmut 

The Attorney General accepted an Assurance of Discontinuance 
from Shawmut Bank, N.A. pursuant to G.L. c. 93A, § 5 in February 
1992. Under the Assurance, Shawmut is to provide one of two types 
of relief to the approximately 50 Resource borrowers whose loans 
were indirectly funded by Shawmut: (1) A new first mortgage to be 
used to consolidate and reduce existing debt, or to recover a home 
lost due to foreclosure by Resource Services (the new mortgage 
will have no fees, no points, and will be offered at a below 
market rate), or (2) the borrower can accept a cash payment in 
the amount of 12% of the original loan with Resource Services. 

Shawmut is also required to create a $5 million mortgage loan 
program and a $2 million home improvement loan program for low 
income consumers. Under the $5 million loan program no 
downpayment is required, there are no closing costs, and the 
interest rate is one percent below Shawmut' s best regular rate. 
Under the home improvement loan program, loans are to be offered 
at three percentage points below Shawmut' s regular rate. 

Ouincv Savings Bank 

The Attorney General accepted an Assurance of Discontinuance 
from Quincy Savings Bank in Juine 1992 stemming from transactions 
by Lincoln Trust Co. prior to its acquisition by Quincy Savings. 
Under the terms of the Assurance, 100 Resource borrowers will 
receive either a new loan on favorable terms or $1250 in cash. 
Quincy Savings was also required to estciblish a $3 million 
mortgage loan program for low-income individuals. Under this 
program the loans have no down payment, no closing costs, and an 
interest rate one percent below Quincy Savings' best regular 
rate. Quincy Savings also agreed to continue not to fund any 
second mortgage companies for three years, unless authorized by 
the Attorney General. 

South Shore Bank 

The Attorney General accepted an Assurance of Discontinuance 
in June 1992 from South Shore Bank resolving claims regarding 
South Shore's role in funding Resource Financial. Under the terms 
of the Assurance, South Shore is required to provide relief to 367 
Resource borrowers. The 278 consumers who have already paid off 
their Resource loans will receive a flat cash payment of $2,350. 
An additional 68 consumers whose loans are outstanding will 
receive their choice of a cash payment or refinancing of their 
loans on very favorable terms. The 21 Resource borrowers whose 
properties are currently held by Resource will receive either the 
cash or a loan to re-acquire their homes. The favorable terms of 
the loans to be made by South Shore include no downpayment, no 
closing costs, and an interest rate one percent below South 
Shore's best regular rate. South Shore is also obligated to 
donate $150,000 to establish a Legal Assistance Program for 
consumers facing foreclosure by lenders other than Resource. 

USTrust 

A pre-complaint agreement was reached between USTrust and the 
Attorney General in July 1992 resolving the Attorney General's 
investigation regarding any liability USTrust may have had in 
connection with the indirect financing of home improvement 
transactions. Under the terms of the agreement, US Trust will 
provide $3 million in mortgage loans targeted to low income 
communities. The loans have terms very favoraible to consumers 
including no downpayment, no closing costs, and an interest rate 
one percent below USTrust' s best regular mortgage rate. 



ilO P.D.12 



The agreement also requires USTrust to make $2 million in 
loans to small minority business enterprises at below market 
rates. USTrust is further required to institute a Consumer 
Complaint Resolution Program to resolve consumer complaints 
regarding home improvement loans funded by USTrust. Approximately 
400 consumers who received home improvement financing through 
USTrust are eligible for the arbitration program. 

Commonwealth v. Labonte 

This action alleges that the defendants engaged in unfair and 
deceptive acts and practices in the business of providing loans. 
It alleges that the defendants fraudulently induced homeowners to 
transfer title to their homes under the guise of obtaining a 
mortgage. This case involves over fifty consumers and is very 
fact and time intensive. 

In an effort to move this along we have set January 15, 1993 
for the filing of our Summary Judgment Motion. The threat of this 
motion has once again scared up settlement discussions. 
Nevertheless, the likelihood is we will file and if necessary get 
a trial date for late spring. 
Cases filed: 

Commonwealth v. Carefree Building Products 

On May 4, 1992 the Attorney General filed this suit in 
Suffolk Superior Court against a home improvement company for 
committing unfair and deceptive practices in the sale and 
financing of home improvements. The complaint alleges that the 
defendants misled consumers regarding the price they would have to 
pay for home improvements, misrepresented to consumers that home 
improvement loans with burdensome financial terms would be 
refinanced at lower rates, and prepared and submitted falsified 
income verification documents to lenders. 

Commonwealth v. James Pentland and Earl Pentland 
The Attorney General filed this complaint in Suffolk Superior 
Court on May 4, 1992 against two home improvement contractors for 
committing unfair and deceptive practices in the sale and 
financing of home improvement services. 

James Pentland entered into a Final Judgment by Consent on 
April 30, 1992 which was approved and ordered by Justice Abrams on 
October 15, 1992. Under the terms of the Final Judgment, James 
Pentland agreed to pay a total of $23,000 in restitution to two 
consumers and $2,000 in civil penalties to the Commonwealth. 
Pentland is also permanently enjoined from engaging in unfair and 
deceptive practices in sale and financing of home improvement 
services . 

Commonwealth v. Better Home Concepts and Commonwealth v. 

Rolling Shutters of New England 

On June 2, 1992, the Attorney General filed suit against 
three North Shore men doing business as Better Home Concepts, 
Inc. Better Home Concepts allegedly may have victimized more than 
40 homeowners, by engaging in a scheme to solicit money from 
homeowners by offering home improvement services that they never 
intended to perform. The defendants allegedly deceived consumers 
by making false representations and grossly underbidding home 
renovation jobs to induce homeowners to enter into work contracts 
with financing arranged through Better Home Concepts. 



P.D.12 111 



They also allegedly substituted inferior quality materials 
for the ones shown, obtained loans in consumers' names without 
their knowledge, installed fixtures and supplies that they failed 
to pay for, and, in the final days of the business' operation, 
continued to solicit contracts from customers when virtually all 
of their workers had resigned after not being paid. 

On the same day, the Attorney General also filed suit against 
Rolling Shutters of New England, and two of the individuals also 
named in the Better Homes complaint. In the Rolling Shutters 
case, the office alleges that the defendants took advantage of a 
couple with mental disabilities living in Gardner, Massachusetts 
by allegedly engaging in unfair and deceptive practices in 
connection with the arranging for home improvements. The 
complaint alleges that the defendants arranged to sell the couple 
security shutters and vinyl replacement windows in two separate 
transactions for a total price of approximately $20,000. The two 
transactions were secured by mortgages requiring monthly payments 
in excess of 33% of the couple's disability payments. 

Resource 

The Attorney General filed a complaint against Resource 
Financial Group, Inc. and several of its related companies on 
October 4, 1991. The complaint alleged that Resource is a self 
described "asset recovery company" that aggressively used home 
foreclosure procedures. Additionally, the complaint alleged that 
Resource charged consumers interest for "security deposit" escrow 
funds that the consumers did not effectively borrow. Resource 
also allegedly misrepresented to consumers that high interest 
loans would be refinanced at low rates and that security funds 
could be drawn upon without penalty if the consumer missed a 
payment . 

The Resource companies were funded through lines of credit 
with four of the banks that entered into settlement agreements 
with the Attorney General in order to resolve the investigation 
into possible liaisility by the banks. The suit sought restitution 
for consumers, civil penalties and injunctive relief. 

Soon after the suit was filed, the Resource companies filed 
for bankruptcy. Negotiations have been ongoing with the 
principals of the Resource companies. 

Seacoast Home Builders. Money Tree and Rhodes Financial 

Services 

In addition, after filing complaints against Seacoast Home 
Builders, Money Tree and Rhodes Financial Services in 1991, during 
1992 we proceeded to prosecute these cases and seek restitution 
for consumers who are injured as a result of the unfair and 
deceptive acts and practices of these companies. 



112 P.D.12 



CIVIL mVESTIGATION DIVISIOII 

The Civil Investigation Division investigates all 
non-criminal matters within the office, both affirmative and 
defensive, for all divisions within the Public Protection and 
Government Bureaus. 

The major duties of Division investigators are: locating and 
interviewing victims, witnesses, subjects and others; obtaining 
and reviewing documentary evidence from numerous sources including 
individuals, corporations, and Federal, state, county and 
municipal agencies; conducting surveillance, background checks and 
asset checks; analyzing financial records and performing other 
forensic accounting tasks; serving process such as complaints, 
injunctions and other court orders; and representing the office at 
Industrial Accident Board conciliations in Boston, Lawrence, Fall 
River, Worcester and Springfield. 

In 1992, the Division conducted over two hundred 
investigations in the following major subject areas: 

Civil Rights 

The Division investigated "hate crimes," allegations of 
police misconduct and other violations of the Massachusetts Civil 
Rights Act by interviewing alleged victims, witnesses and, where 
appropriate, subjects of such investigations. In cases of alleged 
police misconduct, investigators obtained and reviewed police 
reports, court documents and other available evidence. 

Public Charities 

The Division investigated individuals and/or organizations 
who raised funds from the public, allegedly in violation of 
Massachusetts laws. Investigators interviewed victims, usually 
business people, who made donations to a charity based on the 
misrepresentation of a solicitor. On several occasions, CID 
worked with local police departments in locating "couriers" who 
picked up donations. 

Consumer Protection 

Investigators continued to perform their traditional role by 
assisting the office in bringing M.G.L. c. 93A enforcement actions 
against businesses and individuals in major consumer areas such as 
automobiles, health spas, travel, mobile home parks, retail sales, 
hearing aids, advance fee loan scajRS and insurance/investment 
scams affecting the elderly. CID continued to play a major role 
in the office's HIMS investigation of banks, mortgage companies, 
brokers and home improvement contractors. 

Environmental Protection 

The Division's role in EPD cases primarily involved locating 
and identifying assets of potentially responsible parties lieible 
for paying costs incurred by DEP in the clean up of polluted or 
hazardous waste sites. Investigators located former employees and 
officers of defunct companies responsible in part for such 
violations . 

Torts 

The Division investigated the deaths of clients in state 
care, alleged wrongful teirmination of state employees, and 
personal injuries and other daunages which occurred on state-owned 
property and/or in accidents on state roads or involving state 
cars, in order to obtain accurate information relevant to tort 
actions filed against the Commonwealth. 



F.D.12 113 



GOVERNMENT BUREAU 

Fiscal Year 1992 was the first year of the newly-reorganized 
Government Bureau, consisting of the Administrative Law Division 
(the former Government Bureau) and the Trial Division (the former 
Civil Bureau) . By operating as two divisions of a single bureau, 
under common leadership, the two former bureaus have come to recog- 
nize the substantial areas of overlap in their work, have institu- 
tionalized the sharing of available expertise and resources in 
these areas, and have made significant progress toward developing 
common standards and approaches. 

The newly structured Government Bureau is headed by a Bureau 
Chief and a Chief of Litigation and Training, with each division 
headed by a Division Chief. During Fiscal Year 1992, the Bureau 
conducted a series of training programs focussing on matters of 
relevance to the work of both divisions. In addition, supervisory 
structures were established in the Trial Division to mirror those 
already in place in the Administrative Law Division, and to draw 
on the expertise available throughout the Bureau. Teams drawn 
from both divisions were assigned to handle particular cases; 
these assignments served to broaden the skills and experience of 
the individuals involved as well as to assemble the combination of 
skills and expertise best suited to the particular cases. As of 
the end of the fiscal year, one attorney was assigned permanently 
to devote part time to each of the two divisions of the Government 
Bureau, and plans were pending for other such assignments. 

Consolidation of the two former bureaus has also provided op- 
portunities for increased coordination of affirmative litigation. 
A single Coordinator of Affirmative Litigation for the entire 
Bureau has been appointed; the Coordinator receives referrals from 
client agencies and others, conducts the initial development of po- 
tential cases, and then refers them to one or both division chiefs 
for assignment within a division or to a team drawn from both divi- 
sions. This system has served to integrate affirmative work into 
the Bureau's regular caseload, as well as to broaden the Bureau's 
involvement in affirmative work, particularly in the areas in 
which substantive expertise is availeible in the Trial Division. 

The Bureau has continued its efforts to develop and maintain 
close working relationships with agency counsel. Meetings with 
all agency general counsel were held in September of 1991 and 
March of 1992; these meetings provided opportunities for reporting 
on significant events in the Commonwealth's litigation, as well as 
for general discussion of issues of mutual concern. In addition, 
early in 1992 the Bureau adopted the practice of distributing to 
agency counsel the bi-monthly Government Bureau Report to the 
Attorney General, which summarizes significant events in cases, 
case dispositions, and important new litigation. As of the end of 
Fiscal Year 1992, plans were in progress for the publication of an 
Agency Counsel Newsletter, and for a training session for agency 
counsel in handling administrative review cases. 



114 p.D.i: 



THE ADMINISTRB.TIVE LM» DIVISION 

The Administrative Law Division has maintained the structure 
it had as the former Government Bureau, without internal sub-divi- 
sions. Cases are assigned within the division based on experience 
and expertise, but division attorneys do not generally specialize 
in particular subject areas. To assist the Trial Division during 
a time of particularly acute resource scarcity, as well as to 
bring the allocation of case responsibilities more into conformity 
with the distribution of institutional experience and expertise, 
the Administrative Law Division in fiscal year 1992 took over from 
the Trial Division responsibility for cases seeking judicial re- 
view of adjudicatory decisions of the Contributory Retirement 
Appeals Board. During the same period, the Division developed an 
increasingly systematic process for handling these and other admin- 
istrative review cases involving non-state co-defendants in such a 
way as to require co-defendants to represent their own interests, 
and to avoid duplication of their activities. Through this ap- 
proach, the Division has succeeded in conserving its resources for 
use in cases of greatest significance to the interests of the 
Commonwealth. During fiscal year 1992, the Division opened 599 
cases and closed 98 cases. These numbers reflect a substantial in- 
crease in the Division's caseload over the previous year. 

The Administrative Law Division has four functions: 

1. Defense of lawsuits against state officials and agencies 
concerning the legality of governmental operations, par- 
ticularly those seeking injunctive or declaratory relief. 

2. Initiation of affirmative litigation on behalf of state 
agencies and the Commonwealth, particularly claims for 
such relief. 

3. Legal review of all newly-enacted municipal by-laws. 

4. Preparation of legal opinions for constitutional offi- 
cers, heads of agencies, and certain other officials con- 
cerning issues arising from the performance of their offi- 
cial duties. During fiscal year 1992, significant events 
occurred in each of these areas. 

1. Defensive Litigation 

Cases defended by Division attorneys resulted in one reported 
decision of the United States Supreme Court, thirty-seven reported 
decisions of the Supreme Judicial Court, eleven reported decisions 
of the Massachusetts Appeals Court, three reported decisions of 
the United States Court of Appeals for the First Circuit, and 
twelve reported decisions of the United States District Court. As 
well, division attorneys were involved in many cases in these 
courts which resulted in unpublished decisions. 

In Rufo V. Inmates of Suffolk County Jail , the Supreme Court 
set forth standards for the modification of consent decrees govern- 
ing public institutions. The Court adopted a flexible standard 
for modification of these decrees, as proposed by the Commonwealth. 



P.D.12 115 



Consent decrees regarding public institutions continued to 
consume considerable time for Division attorneys. The Division un- 
successfully sought to reduce court oversight of Department of 
Mental Retardation facilities in Massachusetts Association of 
Retarded Citizens v. King and related cases . As of the end of the 
fiscal year, this decision was on appeal to the First Circuit. 
The U.S. District Court ended its oversight of mental health serv- 
ices in Western Massachusetts in Brewster v. Dukakis . During this 
fiscal year, the Division moved to terminate the consent decree 
governing Worcester State Hospital in United States v. 
Massachusetts . The federal Health Care Finance Administration and 
the United States District Court's independent monitor evaluated 
the hospital favorably during the year, and the court should 
shortly rule on the motion. 

During this year, the Department of Justice advised the 
Commonwealth that it would not file litigation regarding 
Westborough State Hospital, finding that it presented no signifi- 
cant violations of federal law. Also during this fiscal year, the 
United States District Court reopened the cases regarding the 
Bridgewater Treatment Center to determine whether certain proposed 
changes at the facilities violate the consent decrees entered in 
the 19703. 

The Division also spent significant time and resources in fis- 
cal 1992 defending changes in a variety of state income mainte- 
nance and other benefit programs, many of which involved budget 
cuts . 

In Barnes v. Weld , the SJC affirmed the Governor's authority 
to use his line item veto power to cut the appropriation for the 
Emergency Assistance program. In Maclnnes v. Department of Public 
Welfare, the SJC upheld a regulation requiring that all children 
in a fcimily receiving Aid to Families with Dependent Children be 
included in the assistance unit for purposes of determining the 
grant amount . 

In Salem Hospital v. Commiaaioner of Public Welfare , the SJC 
affirmed regulations disqualifying non-resident aliens from eligi- 
bility for Medicaid. In Berrios v. Gallant , the SJC affirmed emer- 
gency regulations regarding the Emergency Assistance welfare pro- 
gram, promulgated as required by legislation. 

In Woods V. EOCD , the SJC held that the Executive Office of 
Communities and Development had improperly implemented legislation 
requiring cuts in its housing voucher program. 

In Flint v. Commissioner of Public Welfare , the SJC declined 
to rule on a challenge to certain Medicaid regulations, finding 
the controversy moot. 

In Rawston v. Department of Public Welfare , the SJC affirmed 
decisions regarding AFDC living arrangements. 

In significant litigation involving challenges to statutes 
and rules, the Division represented the Supreme Judicial Court in 
Washington Legal Foundation v. Massachusetts Bar Foundation , in 
which the U.S. District Court dismissed a challenge to a judicial 
rule requiring interest on lawyers' trust accounts to be used for 
indigent legal services and programs to improve administration of 
justice. 

In Powers v. Secretary of Administration , the SJC upheld the 
constitutionality of the statute placing the City of Chelsea into 
receivership . 

In Rushworth v. Gnazzo . the SJC upheld the statute requiring 
forfeiture of driver's licenses of persons convicted of certain 
drug crimes . 



116 p.D.i: 



In Davrod v. Coates , the First Circuit upheld restrictions on 
shellfishing against a Commerce Clause challenge. 

The Division also defended multiple attacks on the Central 
Artery/Third Tunnel project in state and federal courts. 

In Sierra Club v. Larson , the Division successfully opposed a 
motion to enjoin the project pending review of the plaintiff's 
challenge to the tunnel ventilation systems. The remaining cases 
reached a state of repose as a result of settlements between the 
project proponents and the plaintiffs. 

The Division represented the Commonwealth in several cases in- 
volving health care financing. In Rate Setting Commission v. 
Faulkner Hospital , the SJC affirmed several decisions of the Rate 
Setting Commission, saving the Commonwealth approximately $5 mil- 
lion in Medicaid payments. 

In Franciscan Children's Hospital v. Rate Setting Commission , 
the SJC rejected the Rate Setting Commission's interpretation of 
the governing statute, requiring an increase in payments to 
chronic care hospitals. 

In Massachusetts Hospital Association v. Department of 
Medical Security , the SJC found that the agency lacked power to 
set a ceiling on the amount of bad debt it would reimburse. The 
Division also negotiated settlement in Massachusetts Hospital 
Association v. Department of Public Welfare , which challenged the 
method for calculating the federally-mandated upper limit on 
Medicaid expenditures for acute care hospitals. 

In Heritage Hill v. Rate Setting Commission . the Appeals 
Court upheld denial of a claim for attorneys' fees in an adminis- 
trative proceeding regarding reimbursement rates. 

In another provider reimbursement case defended by the 
Division, Behavior Research Institute v. Secretary of 
Administration and Finance , the SJC rejected a special education 
school's claim for higher rates. 

The Division represented the Commonwealth in a variety of 
cases involving state employment policies and practices. In Equal 
Employment Opportunities Commission v. Commonwealth , the United 
States District Court upheld the statute requiring state employees 
older than age 70 to take an annual medical examination to estab- 
lish their fitness for work. In another case of the same name, 
the U.S. District Court invalidated the statute barring state emp- 
loyees older than age 70 from continuing to accrue creditable serv- 
ice for pension purposes. 

In Madden v. Secretary of Public Safety , the SJC determined 
that the applicable statute required that a state police officer 
convicted of a crime be given back pay for a period after his 
first indictment, which was nol prossed, and before his second in- 
dictment, which resulted in conviction. 

In McCarthy v. Civil Service Commission , the Appeals Court up- 
held the Civil Service Commission's decision that certain emp- 
loyees transferred from the Boston Department of Public Works to 
the Boston Water and Sewer Commission retained only limited civil 
service rights . 

In Correction Officers Local 419 v. Sheriff , in which the 
Division filed an amicus brief, the SJC upheld the legality of a 
statute removing employees of the Suffolk County House of 
Correction from provisions of the civil service law. 



P.D.12 117 



In Caron v. Silvia , the Appeals Court determined that a dis- 
charged state employee was entitled to a trial on her claim that 
she was fired because she spoke out cibout her right to smoke in 
the workplace. 

The Division participated in several cases involving state in- 
tervention in the family. In A.R. v . C.R. , the SJC adopted the 
legal framework suggested by the Division to analyze a claim that 
a husband could challenge his paternity of children born during 
his marriage. 

In Department of Revenue v. G.W.A. , the SJC set forth a frame- 
work for reviewing a trial court's departure from the guidelines 
established for setting child support, determining that the trial 
court's deviation in this case was appropriate. 

In Department of Revenue v. B.P. , the SJC decided that a puta- 
tive father's refusal to submit to a blood test is admissible in a 
civil paternity action, and that an adverse inference may be drawn 
from such a refusal. 

In Department of Revenue v. W.Z. . the SJC rejected a claim 
for refund of child support paid by a man who, years after being 
adjudged the father of a child out of wedlock, obtained blood test 
evidence that he was not the biological father. 

In Department of Revenue v. Robar , the Appeals Court upheld a 
judgment of paternity against a man who sought vacation of judg- 
ment because he did not have counsel. 

Also, the Division represented the Department of Social 
Services in Care and Protection of Beth , in which the SJC affirmed 
the trial court's order that a 4-year-old girl in DSS' s custody, 
who is in a persistent vegetative state, should not be resusci- 
tated by intrusive means if she has cardiac or respiratory ar- 
rest. In D.L. V. Matava , the SJC upheld Department of Social 
Services regulations allowing DSS to place children in its custody 
in inpatient mental health treatment. 

In Guardianship of Roe , the SJC affirmed the trial court's 
judgment that an individual was incompetent to evaluate the risks 
and benefits of receiving antipsychotic medication because he did 
not admit his illness. 

The Division represented agencies of the Commonwealth in a 
variety of matters challenging regulatory decisions. These agen- 
cies included the Division of Insurance in Aetna v. Commissioner 
of Insurance (company agrees to follow rules regarding withdrawal 
from market), Scott v. Monarch Life Insurance Company (receiver- 
ship) , Telles V. Commissioner of Insurance (SJC invalidates regula- 
tions prohibiting discrimination in premiums or benefits on the 
basis of gender) and Reliance Insurance Company v. Commissioner of 
Insurance (Appeals Court affirms dismissal of challenge to rules 
governing withdrawal from market). The Department of Public 
Utilities in Bertone v. Department of Public Utilities (SJC af- 
firms decision to allow additional taxi medallions) and Monsanto 
V. Department of Public Utilities (SJC affirms decision regarding 
conservation and load management against antitrust challenge) . The 
Department of Revenue in Commissioner of Revenue v. New England 
Power Company (SJC rejects Commissioner's position regarding con- 
struction work in progress for corporate excise tax apportionment). 



118 p.D.i: 



The Energy Facilities Siting Council in Maaaachusetts 
Municipal Wholesale Electric Company v. Energy Facilities Siting 
Council (SJC invalidated regulations requiring filing of certain 
data as not authorized by enabling statute) . 

The Division also handled the following cases involving re- 
view of licensing or permitting decisions: 

Board of Appeals of Rockport v. DeCarolis 

(Appeals Court remanded for declaratory judgment regarding 
conflicting orders of local board of appeal and State Building 
Code Appeals Board) ; Oznemoc v. Alcoholic Beverages Control 
Commission (SJC affirmed license suspension over Fifth Amendment 
challenge); Selectmen of Saugus v. Alcoholic Beverages Control 
Commission (Appeals Court upheld agency decision allowing licensee 
additional time to transfer license) ; DeMello v. Alcoholic 
Beverages Control Commission (SJC upheld license revocation); 
Varga v. Board of Registration of Chiropractors (SJC affirmed sus- 
pension of chiropractor's license against challenge to composition 
of board) ; and Benmosche v. Board of Registration in Medicine (SJC 
affirmed revocation of medical license) . 

Other decisions of impoitance included Bannister v. 
Commonwealth , in which the SJC reaffirmed the "essentiality" re- 
quirement for issue preclusion; Onofrio v. Department of Mental 
Health , in which the SJC ruled that sovereign immunity bars the 
award of post- judgment interest against the Commonwealth in claims 
under the Tort Claims Act; American Bald Eagle v. Bhatti . in which 
the United States District Court denied a preliminary injunction 
against a deer hunt on Metropolitan District Commission land; and 
Gertel v. Brookline , in which the United States District Court 
ruled that 30-day statute of limitations applies to special educa- 
tion claims in federal court. 

2. Affirmative Litigation . 

In affirmative cases, the Division obtained one decision of 
the United States Supreme Court, and initiated another case in the 
original jurisdiction of the Supreme Court. In Franklin v. United 
States the Court rejected the Commonwealth's claim that the fed- 
eral government had violated applicable constitutional and statu- 
tory provisions in reducing Massachusetts' s allotment in the U.S. 
House of Representatives to ten seats. In doing so, the court re- 
versed the decision of a three-judge district court panel which 
had found that the apportionment decision violated the administra- 
tive procedure act in its allocation of foreign residents to par- 
ticular states. 

In Connecticut v. New Hampshire , the Division represents the 
Commonwealth, in cooperation with Connecticut and Rhode Island, in 
challenging New Hampshire's taxation of electricity generated in 
the state on the ground that it discriminates against interstate 
commerce. As of the end of the fiscal year, the Supreme Court had 
accepted jurisdiction of the case and referred it to a Special 
Master. 

The Division obtained decisions in two cases challenging fed- 
eral agency rulings regarding reimbursement in combined fed- 
eral-state funded benefit programs. In Commonwealth v. Madjgan 
the First Circuit rejected the Commonwealth's claim for additional 
reimbursement for the food stamp program, while accepting the 
Division's principal legal arguments regarding construction of the 
applicable statute. 



P.D.12 119 



In Commonwealth v. United States , the United States District 
Court rejected the Commonwealth's challenge to the imposition of 
reimbursement reductions based on excessive rates of error in 
eligibility determinations; an appeal is pending. 

The Division obtained a favorable Superior Court decision in 
a major affirmative case tried in the previous fiscal year, 
Planned Parenthood League v. Operation Rescue . The office had 
joined with the private plaintiff in that case to seek a permanent 
injunction, enforceable through criminal contempt proceedings, 
against obstructing access to abortion facilities. 

The Court found that Operation Rescue and the individual de- 
fendants had violated the Massachusetts Civil Rights Act, and en- 
tered the requested injunction; an appeal is pending. 

Administrative Law Division attorneys, in cooperation with 
the Civil Rights Division and with the various human service agen- 
cies, continued efforts to facilitate the siting of group homes 
for the disabled. As in previous years, these efforts included ne- 
gotiation with several municipalities regarding the application of 
zoning and related local regulatory requirements. Each of these 
matters raised during the fiscal year was resolved successfully 
without litigation. 

The Division also negotiated an agreement under which the 
former owner of Suffolk Downs racetrack was required to repay 
funds owed the Racing Commission in uncollected winnings. The 
Division obtained agreement by the Taunton Housing Authority to ob- 
tain health insurance through the Group Insurance Commission, as 
required by law, and to terminate its relationship with a private 
insurer . 

Division attorneys submitted briefs amicus curiae in six 
cases during the fiscal year, in courts at all levels: Associated 
Builders and Contractors v. MWRA (United States Supreme Court, in- 
volving issue of federal preemption of state labor policy in pub- 
lic construction contract); Montana v. Mosbacher (United States 
Supreme Court, reviewing reapportionment resulting from 1990 
Census); Bosse v. Bosse (SJC, regarding manner of service of sibuse 
prevention orders); Opinion of the Justices (SJC, regarding con- 
stitutionality of proposed legislation to admit in evidence re- 
fusal to submit to breathalyzer test); Opinion of the Justices 
(SJC, regarding constitutionality of proposed legislation limiting 
terms of elected officials); Boston Kenmore Realty Corp. v. Boston 
Rent Equity Board (Boston Housing Court, regarding constitutional- 
ity of city ordinance regulating conversion of single room occu- 
pancy housing) . 

3. By-Laws . 

Town by-laws, home rule charters, and amendments thereto are 
reviewed and must receive the approval of the Attorney General 
prior to becoming effective. The review function is performed by 
attorneys in the Municipal Law Unit within the Administrative Law 
Division of the Government Bureau. During the fiscal year ending 
June 30, 1992, the Municipal Law Unit reviewed 1,940 by-laws and 
14 home rule actions from over 300 towns. There were 89 disappro- 
vals or disapprovals in part making an error rate of 4.6 percent 
for the submittals involved. 



120 p.D.i: 



The by-laws received this year consisted of 907 general 
by-laws and 1,033 zoning by-laws. General by-laws pertain to town 
government and the exercise of municipal power. Zoning by-laws 
are a continuing exercise of local police power over the use of 
land. Zoning by-laws often generate the most local controversy 
since they affect what the landowner considers as his basic con- 
stitutional right, i.e., to own, use and enjoy his property. 

This year saw continuing attempts by municipalities to add- 
ress pressing environmental concerns, including the enactment of 
groundwater protection overlay zoning districts, sewage disposal 
restrictions, and strict stand alone local wetlands protection 
by-laws . 

4 . Opinions 

The Attorney General is authorized by G.L. c. 1, §§ 3, 6, and 
9 to render formal opinions and legal advice to constitutional of- 
ficers, agencies and departments, district attorneys, and branches 
and committees of the Legislature. Formal, published opinions are 
given primarily to the heads of state agencies and departments. 
Less formal legal advice and consultation is also available. 
Guidelines to the formal opinions process are available from the 
Opinions Coordinator, as is information about the informal con- 
sultation process. 

The questions considered in legal opinions must have an imme- 
diate, concrete relation to the official duties of the state 
agency or officer requesting the opinion. Hypothetical or ab- 
stract questions, or questions which ask generally about the mean- 
ing of a particular statute, lacking a factual underpinning, are 
not answered. 

Formal opinions are not offered on questions raising 
legal issues that are the subject of litigation or that concern on- 
going collective bargaining. Questions relating to the wisdom of 
legislation or administrative or executive policies are not add- 
ressed. Generally, formal opinions will not be issued regarding 
the interpretation of federal statutes or the constitutionality of 
enacted legislation. 

Formal opinion requests from state agencies that report to a 
Ccibinet or executive office must first be sent to the appropriate 
secretary for his or her consideration. If the secretary believes 
the question raised is one that requires resolution by the 
Attorney General, the secretary then requests the opinion. 

Between July 1, 1991 and June 30, 1992, one formal Opinion of 
the Attorney General was issued. An additional 77 written re- 
quests were considered and either resolved informally or declined. 

The formal Opinion appears at the end of this annual report. 

THE TRIAL DIVISION 

During Fiscal Year 1992, the Trial Division maintained sepa- 
rate contracts, torts, and real estate units, reflecting the 
former divisions devoted to these areas of specialization. 

The former Industrial Accidents Division was gradually phased 
out, as the office transferred responsibility for representation 
of state employers before the Industrial Accidents Board to the 
agencies themselves and to a newly created Workers Compensation 
Litigation Unit in the Executive Office of Administration and 
Finance . 



P.O. 12 121 



Attorneys formerly assigned to the Industrial Accidents 
Division were reassigned throughout the Government Bureau, and 
have contributed to the Bureau's ability to respond to its increas- 
ing demands despite limited resources. 

1. Contracts Unit . 

The contracts unit handles litigation involving contract and 
contract-related disputes. The largest category of contract cases 
involve construction contract disputes, including bid protests, in 
which bidders for a subcontract or general contract dispute the re- 
sults of the competitive bid prior to the award of the contract, 
and claims for cost increases, in which contractors seek addi- 
tional compensation due to delays, unexpected site conditions, and 
the like. 

The contracts unit also handles matters referred from the 
Department of Labor and Industries for enforcement of its orders 
regarding architect selection and bid protests, as well as matters 
referred for litigation from the Inspector General involving al- 
leged waste, fraud and abuse. 

The contracts unit vigorously defended a series of bid pro- 
tests during FY 1992; in each case. Assistant Attorneys General 
succeeded in forestalling all claims for injunctions against con- 
struction projects. For example, in Charles Anthony Construction 
Co. V. Peabody Construction Co. , the Superior Court rejected ef- 
forts to prevent the Massachusetts Highway Department from making 
progress payments for the construction of a replacement building 
for the Armed Forces YMCA in Charlestown Square. Similarly, in 
Waterbury v. DPW , a single justice of the Appeals Court vacated an 
injunction that would have prevented a Highway Department bridge 
replacement project on Route 28A in Falmouth; the Appeals Court 
ruled that MHD is specifically exempted from MEPA requirements on 
such projects. Finally, in Davison v. MDC , the Superior Court up- 
held the MDC's specifications for the qualifications required of 
sub-bidders on an ice rink project. 

Significant cases involving claims for cost increases in 
FY 1992 included Bonacorso Construction Company v. MDC , in which 
the Appeals Court rejected a contractor's attempt to prove in- 
flated damages by using a total cost theory; West End Iron Works 
V. Cardi Corp . . in which the Superior Court rejected a subcon- 
tractor's delay claim for $348,000 in extra costs; Eastern 
Contractors v. DCPO , in which Division attorneys settled a claim 
arising from the construction of the Hogan Regional Center for 
$450,000 less than claimed; Cardi Corporation v. Commonwealth , in 
which the Court rejected the plaintiff's claim for $65,000 in dam- 
ages arising from a road construction project in Mansfield; J.F. 
White Contracting v. DCPO . in which the Court upheld DCPO' s method 
of calculating the amount of compensation owed for construction at 
the Franklin Park Zoo in Boston; and Modern Continental 
Construction Co. v. Commonwealth . in which Division attorneys 
settled disputes arising out of the reconstruction of the General 
Lawrence Bridge in Medford for $450,000 less than claimed. 

The contracts unit has attempted to employ alternative dis- 
pute resolution procedures in construction cases whenever possible. 



122 P.D.12 



For example, in J. P. Construction v. DCPO . involving construc- 
tion claims arising from mortar repointing work at the Fernald 
School, mediation led to a settlement in an amount less than 25% 
of that claimed. 

Sixty-three (63) new contracts actions were commenced during 
the fiscal year and forty-four (44) files were closed. In the 
forty-four (44) cases that were closed, the Commonwealth realized 
a savings of approximately three million, five hundred thousand 
dollars ($3,500,000), based on amounts paid as compared to amounts 
claimed. As of June 30, 1992, there were approximately one 
hundred fifty (150) contract cases pending, representing a total 
dollar exposure to the Commonwealth of approximately fifty million 
dollars ($50,000,000). 

In addition to litigation, the contracts unit advises state 
agencies and officials with regard to contract matters. Issues 
raised involve formation of contracts, performance, bidding proce- 
dures, bid protests, contract contents, contract interpretation 
and other miscellaneous matters. The most frequent requests re- 
ceived during the fiscal year concerned indemnification clauses in 
contracts, procedural matters in employment contracts and advice 
in advance of anticipated construction contract litigation. 
Requests for advice and assistance come from the Massachusetts 
Highway Department, Metropolitan District Commission, Secretary of 
Transportation, Board of Regents of Higher Education, Department 
of Mental Health, Department of Mental Retardation, Department of 
Environmental Management, State Lottery Commission, Department of 
Public Welfare and Division of Capital Planning and Operations. 

The contracts unit also reviews contracts, leases and bonds 
submitted by state agencies for approval as to form. During the 
fiscal year, the unit received a total of 383 contracts for re- 
view. Approximately 40 were rejected and later approved after con- 
sultation with the agency involved to attend to matters of con- 
tract form. The contracts unit and the Comptroller's Office con- 
tinued to meet to coordinate and establish a uniform contract form 
for all 03 service contracts with the Commonwealth. Agency use of 
these new forms has resulted in substantially fewer rejections. 

2. Real Estate Unit . 

Trial Division attorneys in the real estate unit handle mat- 
ters involving real property interests of the Commonwealth. The 
vast majority of cases litigated involve the defense of petitions 
for the assessment of damages resulting from land acquisitions by 
eminent domain pursuant to G.L. c.79. The Commonwealth's agencies 
acquire land for a variety of purposes, including roads, colleges, 
recreation and par)c3, landfills, agricultural and conservation re- 
strictions and easements. Agencies involved in real estate mat- 
ters include Massachusetts Highway Department, the Metropolitan 
District Commission, the Department of Environmental Management, 
the Department of Environmental Protection, the Department of Food 
and Agriculture, the Department of Fisheries, Wildlife, and 
Environmental Law Enforcement, and the Division of Capital 
Planning and Operations. 



P.D.12 123 



Significant eminent domain cases resolved during the fiscal 
year included: 

Trapp V. Commonwealth , arising from OEM's 1987 taking of 22 
acres in Falmouth for an estuarine sanctuary program, which was 
settled for $1.9 million less than claimed. 

Bedoian v. Commonwealth , arising from MHD' s 1983 partial tak- 
ing of property for the rebuilding of Rte 146 in Sutton, Oxbridge 
and Douglas, which was settled for $362,000 less than claimed; 
Brewster Dunes II Cooperative Recreational Housing Inc. v. 
Commonwealth , a land deimage action arising from OEM's 1986 beach- 
front taking in Brewster, which was settled for $575,000 less than 
claimed; Striar v. Commonwealth , arising from DCPO' s 1989 taking 
of more than 770 acres of land in New Braintree for a new prison, 
which was resolved by a jury verdict in the amount $6.1 million 
($2.5 million more than the pro tanto payment approved by the 
Executive Council, and $5.2-$6 million less than the plaintiff's 
claims ) . 

Cashman v. Commonwealth , arising from the MDC s 1987 taking 
of land on the Weymouth Bank River, which was settled based on the 
claimant's assumption of responsibility for environmental cleanup. 

Alto V. Commonwealth , involving MHO's March, 1986, taking of 
a two-family home in Medford for highway improvements, which was 
settled for $170,000 less than claimed. 

Nelson v. Commonwealth , involving fee and temporary takings 
by the MHD for the widening of Route 20 in Marlboro, which was re- 
solved by a jury verdict for $135,000 ($47,000 more than the 
Commonwealth's appraisal, but between $282,000 and $365,000 less 
than the plaintiff's claims). 

Miczek v. Commonwealth , in which the Appeals Court ruled that 
the severance damages sought for the diversion of traffic volume 
as a result of a temporary partial taking for the construction of 
Rt . 9 improvements in Leicester were not compensable. 

Miseph v. Commonwealth , involving the partial taking of land 
in Colrain, which was settled for $146,000 less than claimed. 

Kastrlnakls v. Commonwealth , arising from MHO's taking of 
land in Salem for the Salem/Beverly Bridge relocation project, 
which was resolved by a jury verdict of $600,000 ($135,000 more 
than the Commonwealth's appraisal, but $275,000 less than the 
plaintiff's claims). 

Concord Elks Club v. Commonwealth . involving the taking of 
land in Concord for the Rt . 2 safety improvement project, which 
was settled for $245,000 less than claimed. 

Miller v. Commonwealth , involving the DPW s 1981 taking of in- 
dustrially zoned land adjoining Rt . 93 in Wilmington, which was re- 
solved by a verdict of $200,000, 25% of the amount claimed; and 
Allen V. Commonwealth , involving the improvement of the Braintree 
Five Corners interchange, in which the jury awarded damages of 
$7,000, 18% of the amount claimed. 

Eminent domain cases handled in the Western Massachusetts of- 
fice included: 

Moccia v. Commonwealth , involving land in Agawam, taken for 
an improvement of Route 57, which was settled in an amount $40,000 
less than claimed. 

F.L. Roberts & Company v. Commonwealth , involving land taken 
for improvements to the intersection of Routes 5 and 10 in 
Northampton, which was settled for $68,000 less than claimed. 



124 P.D.12 



During the 1992 fiscal year, the Division disposed of 
thirty-four land damage cases, nine by jury trial and twenty-five 
by settlement. The disposition of these cases resulted in a sa- 
vings to the Commonwealth of approximately $5,200,000, based on 
amounts paid compared to amounts claimed. Fifty-four new land dcim- 
age cases were opened in the real estate unit; a substantial 
number of these new cases arise from takings related to the 
Central Artery/Third Harbor Tunnel Project. 

The real estate unit also handled other types of real estate 
related cases. For examiple, real estate unit attorneys intervened 
in Shawmut Bank v. Bresnahan , to defend the constitutionality of 
the Massachusetts prejudgment real estate attachment statute. 
After the Superior Court declared the ex parte procedures constitu- 
tional, the plaintiff in Sarcucci v. Multibank Service Court 
agreed to dismiss similar claims it had raised in federal court. 

In Brimmer Chambers Condominium Trusts v. MDC , approximately 
60 property owners on Beacon Hill alleged that the MDC caused 
their buildings to subside by improperly lowering groundwater and 
exposing the buildings' wood pile supports to rot. Aftei media- 
tion, the Trial Division settled the case for substantially less 
than the amount claimed. 

Real estate unit attorneys also have the responsibility of 
protecting the Commonwealth's interests in all petitions for regis- 
tration of land filed in the Land Court, and for reviewing as to 
form rental agreements, pro tanto releases, general releases, 
deeds, taking orders, and other conveyance documents relating to 
transfers from or to any of the State's departments or agencies, 
when required by statute or requested by the agency. 

3. Torts Unit . 

The torts unit defends tort and civil rights cases brought 
against the Commonwealth and its employees. Most of these cases 
arise under the Massachusetts Torts Claims Act, M.G.L., c. 258, 
and federal and state civil rights statutes. Continuing the ef- 
forts of the preceding fiscal year, the torts unit made signifi- 
cant strides in reducing case backlog by hiring additional attor- 
neys, re-evaluating open case files and actively preparing cases 
for trial or other disposition. All matters were transferred to a 
Management Information System in order to insure better docket and 
file control. 

Significant torts cases resolved by the Trial Division during 
the fiscal year include cases resolved by jury trials ending in de- 
fense verdicts, including: 

Kolb V. Commonwealth (claim of sex discrimination in employ- 
ment against DEP); Allen v. Fair (prisoner's claim of violations 
of 8th and 14th Amendments) . 

Galvln v. Commonwealth (claim by prisoner's wife of injury 
from fall on waxed floor while waiting for visit) . 

Kregor v. MDC (skater claimed injury from fall into hole at 
MDC rink); Costa v. Commonwealth (claim by student of injuries 
from assault by other students at hockey jaunboree held at DEM skat- 
ing rink) . 

Wlczvk V. Commonwealth (claim of wrongful death of pedestrian 
killed by automobile driven by state employee) . 



F.D.12 125 



Rodriguez v. Coimnonwealth (claim for injuries incurred during 
attempted escape from state hospital); Tate v. Hardy (claim of in- 
tentional torts and civil rights violations arising from search by 
Capitol Police Officers in state office building) . 

Other cases terminated in court rulings granting dismissal, 
summary judgment, or directed verdicts for the defense. 
Examples include: 

Fredyma v. Commonwealth (civil rights claim alleging health 
risks from work-site energy conservation programs); Adamor v. 
Tammaro (civil rights claim against state trooper arising from sei- 
zure of money at Logan Airport) . 

Eisenberg v. Nixon (civil rights claims against judge and 
bail commissioner arising from prosecution of criminal trespass 
charge); Witkowaki v. Commonwealth (claim for negligent release of 
prisoner) . 

Dean v. EOTC (damage claim arising from an automobile acci- 
dent allegedly caused by oil on Route 2 in Florida) ; Frenkle v. 
Webber (claim of police brutality during arrest) . 

Berson v. Lamb (claim by terminated employee for sick and 
vacation pay) ; Keidel v. MDC (traffic accident claim) ; Forte v. 
Hanson (prisoner' s claim against appointed counsel for refusal to 
appeal); Robertson, Adm. v. Worcester State Hospital (wrongful 
death claim alleging medical malpractice) . 

Pacillo v. Gutensohn (claim of discrimination in employ- 
ment). Another case in this category, Monahan v. Dorchester 
Counseling Center , resulted in a decision of the United States 
Court of Appeals for the 1st Circuit holding that a mental patient 
voluntarily in state care lacks any constitutional right to serv- 
ices . 

Trial Division attorneys negotiated settlements in other tort 
cases, resolving these disputes for amounts substantially less 
than claimed. Examples include: 

McDonald v. Fair , (concerning care for pregnant inmates at 
MCI-Framingham, settled without monetary payment, based on an 
agreed injunction); Martin v. Commonwealth (claim for improper dis- 
charge, settled for less than the plaintiff s costs and filing 
fees ) . 

Llpson. Adm. v. Commonwealth (civil rights claim arising from 
death of state hospital escapee, settled for less than half the 
amount claimed based on agreement to esteiblish task force) ; 
Gilmore v. Commonwealth (claim for negligent infliction of emo- 
tional distress by survivors of murder victim, settled for less 
than 25% of claim) . 

Hurley v. MDC (claim by skater for injuries allegedly caused 
by rut in ice at MDC rink, settled after a jury verdict) . In 
Hopper V. Fair , the use of a neutral mediator resulted in an expe- 
ditious and satisfactory settlement. The case involved civil 
rights and negligence claims arising from the death of a state hos- 
pital patient, held in seclusion, due to an undetected ectopic 
pregnancy . 

Two significant cases, in which juries returned verdicts 
against the Commonwealth during the fiscal year, are presently on 
appeal . 

Mohr V. Commonwealth , a claim of wrongful adoption, raises 
the question of what duty the Department of Social Services has to 
disclose to prospective adoptive parents information eibout the 
child's natural parents. 



126 P.D.12 



Chackrabarti v. Mulligan involved the discharge of a state 
hospital psychiatrist; both sides have appealed from a $75,000 dam- 
age award. 

4 . Industrial Accident Unit . 

Until the end of Fiscal Year 1992, the industrial accident 
unit defended the Commonwealth in administrative proceedings on 
workers' compensation claims filed by state employees, as well as 
in enforcement actions in Superior Court and appellate matters be- 
fore the Appeals Court and Supreme Judicial Court. The unit also 
defended the Commonwealth in "line of duty" and "assault pay" 
cases pursuant to M.G.L. c. 92, §63B and c. 30, §58. 

During Fiscal Year 1992, state employees filed 13,337 first 
reports of injury. Unit attorneys appeared in approximately 2,000 
cases before the Department of Industrial Accidents. Total dis- 
bursements by the Commonwealth for state employees' workers' com- 
pensation claims in FY '92, including accepted cases, lump sum set- 
tlements and orders of payment pursuant to Administrative and 
Court decisions were as follows: 

Incapacity Compensation $52,639,941.27 

(including Attorneys fees 

of $1, 156,857.63 and 

penalties of $13,669.96) 

Medical Payments 14.871. 534.50 

Total Disbursement $67,511,475.77 

On December 23, 1991, the new Workers' Compensation Act was 
signed into law. The amendments to the Act represent a comprehen- 
sive overhaul of the workers' compensation system implementing 
changes at all levels of the administrative process. The new 
amendments assign responsibility to defend the Workers' 
Compensation Trust Fund, M.G.L. c. 152, §65, against administra- 
tive claims for reimbursement made under c. 152, §§37 and 37A to 
the Office of the Legal Counsel to the Department of Industrial 
Accidents. The Workers' Compensation Trust Fund and related sec- 
tions encourage employment of handicapped and diseibled workers. 
Tlie Fund relieves the insurer from the burden of paying compensa- 
tion for an employee' s disability due to the combined effect of a 
previous injury and one received later. 

In June 1991, the Attorney General initiated a review of the 
Office's participation in the defense of state employees' claims 
for workers' compensation benefits at the administrative level. 
The Attorney General determined that the defense of these claims 
in the course of administrative proceedings before the Department 
of Industrial Accidents could be handled more efficiently by the 
agencies where the employees work and where the claims arise. 
Beginning in February 1992, six agencies, representing approxi- 
mately 65% of claims, began defending their own employees' 
workers' compensation claims. As of the end of the Fiscal Year, 
plans were in place for the imminent transfer of the remaining 
cases to the Workers' Compensation Litigation Unit, within the 
Executive Office of Administration and Finance. 



P.D.12 127 



5. Affirmative Litigation . 

The Trial Division has continued its traditional responsibili- 
ties of seeking damages and other relief on behalf of the 
Commonwealth for injuries to its property and personnel, includ- 
ing, but not limited to, counter-claims, cross-claims, and third 
party claims for indemnification or contribution in appropriate 
cases. In addition, for the first time, the Trial Division drew 
on its real estate expertise to initiate an affirmative case 
solely in the name of the Commonwealth, for the purpose of protect- 
ing vulnerable citizens. 

In Attorney General v. Dime Savings Bank . filed in the 
Supreme Judicial Court, Division attorneys obtained a declaration 
that tenants in foreclosed residential properties may be removed 
from possession only through summary process, with its attendant 
procedural protections. As of the end of the Fiscal Year other 
similar afirmative initiatives were under consideration. 



FAMILY AND CX3M4DNITT CRXMES BUREAU 

The Family and Community Crimes Bureau is responsible for 
oversight as well as policy and program development including leg- 
islative initiatives and community outreach in four areas: 

1. Issues affecting children and youth. 

2. The elderly 

3- Persons with disabilities. 

4. Domestic violence and victims of crime. 

The Victim Compensation and Assistance Division comes under 
the supervision of the Family and Community Crimes Bureau. The 
Family and Community Crimes Bureau works closely with the 
Government Bureau and the Consumer Protection Division of the 
Public Protection Bureau in regards to these issues affecting 
elders, persons with disabilities, and children including the regu- 
lation of long-term care facilities, access to the criminal jus- 
tice system, and violence in the schools. 

In addition, the Bureau works closely with state agencies in- 
volved with these vulnerable populations including the Executive 
Office of Elder Affairs and the Department of Education. 

1992 ACCOMPLISHMENTS 

A. THE ELDERLY 

An issue of critical importance to the Attorney General is 
the quality of life for our most cherished citizens, the elderly. 
It is for this reason that, the issues of elder abuse and neglect, 
consumer frauds and financial exploitation of the elderly is a 
major focus of the Family and Conmiunity Crimes Bureau. 

Established in the spring of 1991, the Elder Issues Group of 
the Attorney General continued to meet throughout 1992 to address 
issues affecting the elderly from institutional abuse and the up- 
date of our nursing home regulations to the misuse of guardian- 
ships, conservatorships and powers of attorney. 



128 P.D.12 



Within the Attorney General's office, the Family and 
Conununity Crimes Bureau in conjunction with the Consumer 
Protection Division of the Public Protection Bureau and the 
Medicaid Fraud Division of the Criminal Bureau continued to focus 
on patient cibuse and mistreatment in long-term care facilities as 
well on consumer frauds directed against the elderly. 

In addition, a successful application was made to the 
Massachusetts Committee on criminal Justice for funding to develop 
a police training curriculum and program on elder abuse which is 
expected to be completed in 1993. 

In May, 1992, the Family and Community Crimes Bureau pre- 
sented the first annual Attorney General's elder issues conference 
on empowering elders and persons with disabilities which featured 
model programs for financial protection of the elderly, support 
systems for caregivers and health care decisionmaking. 

B. DOMESTIC VIOLENCE 

The Attorney General's efforts to address the issues of domes- 
tic violence were continued and expanded in 1992. The Family and 
Community Crimes Bureau drafted and successfully lobbied the legis- 
lature for the passage of a Stalking bill making it a felony in 
Massachusetts for someone to repeatedly follow or harass someone 
and make threats which place the other person in fear of bodily 
harm or death. 

The luncheon series cosponsored with the Harvard School of 
Public Health featured presentations on several topics including 
child abuse in domestic violence cases, clemency for battered 
women imprisoned for killing their batterers, and the effective- 
ness of batterers' treatment progrcims . This series will continue 
in 1993 in an effort to formulate a system-wide coordinated re- 
sponse which will be effective over time in stopping the violence. 

1992 marked the presentation of the Attorney General's second 
annual Domestic Violence Training Conference for Police. Over 300 
police officers attended the training in October, 1992, which fo- 
cused on the issues beyond the limits of the legal procedures man- 
dated by Chapter 209A, including the enactment of the statewide do- 
mestic violence registry as well as a panel featuring innovative 
police progrcims in domestic violence and presentations by clini- 
cians regarding the myths which surround battering relationships. 

Finally, in cooperation with the Massachusetts Medical 
Society and the Massachusetts Hospital Association, a domestic vio- 
lence working group was formed which provided domestic violence 
training and education for health care professionals. 

C. CHILDREN AND YOUTH 

In 1992, the Attorney General's Office worked to establish 
collciborative relationships with the Department of Education and 
local school districts through the Superintendents' Advisory 
Committee and through that Advisory Committee, to facilitate the 
development of cooperative relationships between the schools and 
local law enforcement officials. 



F.D.12 129 



The Family and Community Crimes Bureau provided the staff sup- 
port for these efforts by offering technical assistance and train- 
ing in areas of mutual concern to law enforcement and the schools 
including drug and alcohol education and violence prevention pro- 
grams . 

As an adjunct to this effort, in 1992, the Attorney General 
expanded the SCORE (Student Conflict Resolution Experts) program 
to five additional school districts including Lawrence, Fall 
River, Springfield, Boston, and Holyoke. In addition, for the 
first time, peer mediation training was provided to youths in the 
custody of the Department of Youth Services. (See Local Consumer 
Division report of the Public Protection Bureau.) 

The Children's Issues Group formed in 1991 continued to meet 
under the auspices of the Family and Community Crimes Bureau and 
the Government Bureau. This group meets periodically to review is- 
sues of concern to children's advocates in hopes of resolving some 
issues short of litigation and to foster a better understanding be- 
tween the advocates and the Office of the Attorney General in 
these areas . 

In 1992, there were significant reform efforts underway in 
the area of foster care as well as the processing of care and pro- 
tection cases in the district courts. 

In the latter instance, the Family and Community Crimes 
Bureau played a central role with the Government Bureau in the es- 
tablishment of the Supreme Judicial Court's Juvenile Justice 
Commission to address these issues in a comprehensive and system- 
atic matter. 

In the area of juvenile justice, the Family and Community 
Crimes Bureau prepared and presented a statewide educational semi- 
nar and manual for prosecutors on the legal implications of the 
1991 amendments to the juvenile transfer law. In conjunction with 
this, the Family and Community Crimes Bureau became involved in 
system-wide issues and efforts regarding the future of the juve- 
nile court and the preservation of the integrity of our nationally 
acclaimed juvenile justice system. 

Finally, the Family and Community Crimes Bureau also pre- 
sented the first annual Attorney General's ceimpus security confer- 
ence in cooperation with the Higher Education Coordinating Council 
and the Office for Public Safety. The issues covered at the 
April, 1992, sessions included jurisdictional, administrative, and 
procedural law and policies affecting campus police. 

D. VICTIMS ISSUES 

1 . Victim Witness Assistance Board 

The Attorney General continued to personally chair the victim 
Witness Assistance Board. In 1992, a major reorganization and re- 
structuring of the support agency for the Board, the Massachusetts 
Office of Victim Assistance (MOVA) , was undertaken following a 
drastic cut in the Board's funding in the FY, 92 budget. 

Under the leadership of Executive Director Heidi Urich, MOVA 
downsized its staff, consolidated its responsibilities, stream- 
lined its data information systems, and redesigned its oversight 
of the Victims of Violent Crimes federal grants. 



130 P.D.12 



By the end of 1992, MOVA and the Board had stabilized and 
were able once again to begin the slow process of rebuilding serv- 
ices for victims and victim programs across the state. 

With a small increase in the budget in FY 193 and a grant 
from the Massachusetts Committee for Criminal Justice, MOVA was 
able to resume its outreach and training efforts in cooperation 
with the District Attorneys' victim witness program directors and 
the VOCA providers in the areas of multicultural sensitivity and 
advocacy services for domestic violence victims. 

In addition, in an effort to reach out to the citizens of 
urban communities, the Family and Community Crimes Bureau along 
with the Executive Office participated in the review and promulga- 
tion of a citizen handbook regarding civil and criminal legal is- 
sues for adults and juveniles. 

2 ■ Victim Compensation And Assistance Division 

The Massachusetts Victims of Violent Crime Compensation Act., 
G.L. c. 258A, provides financial compensation to victims of vio- 
lent crime for out-of-pocket losses they sustain as the direct re- 
sult of physical injury or death. Claims for compensation are 
filed in a district court. 

An eligible claimant is entitled to receive up to $25,000 for 
out-of-pocket expenses including medical and counseling bills, 
lost wages, loss of support, homemaker services, and up to 
$2,000.00 for burial services. 

The Division is required to investigate all claims, submit a 
written recommendation to the court on whether the claimant is 
legally entitled to receive compensation, and represent the 
Commonwealth in all court proceedings involving victim compensa- 
tion claims. 

During 1992, the Division opened 1055 cases and closed 965. 
The closed cases represent payments totalling $2,545,841.00, the 
largest expenditure of funds to crime victims in the Division's 
history. 

A. Policy Develolpment 

The Division developed and implemented a number of policies 
regarding payment of claims. Although G.L. c. 258A authorizes pay- 
ment for "homemaker services", it provides no guidance on how the 
Division should evaluate, investigate and pay such claims. 
Division staff conducted a survey of homemaker services agencies 
in Massachusetts through the Massachusetts Rate Setting Commission 
to obtain rates for these services. Based on the data collected, 
they established criteria for determining eligibility for home- 
maker services and a formula for calculating compensation. 

Similarly, G.L. c. 258A SS 3(a) permits rape victims to re- 
ceive payment for emergency housing costs but does not provide 
criteria for paying these claims. As a result, eligible claimants 
were not receiving compensation for this expense. Division staff 
developed a definition of emergency housing and established verifi- 
cation requirements, thereby enabling rape victims to be compen- 
sated for these costs. 

During the past year, the Division received a number of 
claims filed by executors and administrators of estates. 



P.D.12 131 



The Division has determined after careful research, that the 
intent of the victim compensation statute is to relieve the finan- 
cial hardship of surviving dependents and fcunily members of inno- 
cent crime victims; thus, executors or administrators are not eli- 
gible "claimants" as defined by c. 258A. 

Finally, pursuant to G.L. c. 258A SS 5, payment for lost 
wages must be based upon the victim's net weekly wage at the time 
of the crime. The Division has reviewed both the federal and 
state tax rates to estsiblish a simple formula for calculating net 
wage figures . 

B . Outreach and Training 
The Division's staff has maintained a close working relation- 
ship with victim-witness advocates in District Attorney's offices 
across the state. Throughout the year. Division advocates con- 
ducted trainings for victim-witness advocates in Bristol, Essex, 
Hamsphire and Franklin counties. During the trainings, advocates 
explained case processing and answered questions pertaining to 
eligibility, availeible amnounts of compensation, and the types of 
compensable expenses. Furthermore, staff members increased their 
outreach efforts by attending meetings and trainings, as well as 
memorial and dedication services sponsored by a wide range of vic- 
tim support groups. 

Commonwealth v. R.H. McKnight, Inc., et al 

During 1992, the Division defeated a Motion to Dismiss 
brought on behalf of Robert H. McKnight, individually, in this de- 
ceptive solicitation case. Defendant R.H McKnight, Inc. is a 
professional solicitation company which conducts fundraising for 
various police and fire organizations throughout the country, by 
the telephone sale of advertising space in publications or ad 
books it publishes. This action, which alleges that in the course 
of telephone solicitations McKnight employees falsely led donors 
to believe they were law enforcement personnel and that funds ob- 
tained would benefit local police departments, also names as de- 
fendants the corporation's president and a supervisory employee. 

ESTATES AND TRUSTS 

Fuller Trust. Ing. 

Settlement reached in this matter resolved a dispute with the 
Attorney General concerning the trustee' s expenditure of almost 
all of the Fuller Trust's liquid assets on predevelopment costs, 
including sizeable legal fees paid to law firms to develop a life 
care community on property owned by the Trust. The Division ob- 
tained the resignation of two trustees, both lawyers with promi- 
nent Boston area firms, and repayment by those attorneys of 
$250,000, each, to the Trust. Established under the will of 
Caroline Weld Fuller, the Trust's original purpose was to provide 
housing for women in need of a home at a reasonable expense. In 
1988, the trustees obtained 



132 P.D.12 



ELECTIONS DIVISION 

The Elections Division is responsible for providing legal rep- 
resentation to the Secretary of State, the Office of Campaign and 
Political Finance and The State Ballot Law Commission regarding 
election and campaign finance related issues. 

In fiscal year 1992, the Division was involved in several 
elections related litigations. In the consolidated cases of Black 
Political Task Force. et al. v. Secretary of State of 
Massachusetts and Massachusetts Republican Committee, et al. v. 
Secretary of State of Massachusetts , the Division, before a 
three-judge panel of the United States District Court for the 
District of Masssachusetts , successfully defended against plain- 
tiffs' constitutional challenge to the Commonwealth's state and 
federal redistrict ing plans. Plaintiffs contended that the 
Commonwealth's practice of deferring legislative redistricting 
until the 1994 election. 

In light of the availability of 1990 census data, violated 
the Fourteenth Amendment mandate of "one-person one-vote" as well 
as section 2 of the Voting Rights Act. Plaintiff's preliminary in- 
junction on the one-person one-vote issue was denied by the court. 

Accordingly, the court refused to order Massachusetts to re- 
apportion its legislative districts at this time. The court also 
denied plaintiffs' motion for a preliminary injunction, under 
their Voting Rights Act claim, which, if allowed, would have pre- 
vented the Commonwealth from distributing ballots on the existing 
districts . 

In Tiernan v. Connally , the Division successfully defended 
the Secretary of State's refusal to place plaintiff's name on the 
presidential primary ballot where plaintiff filed his nomination 
papers ten minutes past the statutorily set filing deadline. The 
Suffolk Superior Court ruled that compliance with statutory provi- 
sions regarding ballot access is mandatory and that there is no 
doctrine of "equitable filing". 

A similar holding was rendered in Carson v. Co 11 and upheld 
by the Appeals Court upon plaintiff's appeal. 

In Socialist Workers Party v. Boston Election Commission & 
State Secretary , .plaintiff alleged that the Boston Election 
Commission failed to certify valid signatures on its candidates' 
nomination papers and sought a preliminary injunction ordering the 
Secretary of State to place candidates' neimes on the ballot. The 
Election Division successfully defended against plaintiff's motion 
for preliminary injunction because no Socialist Party candidate 
filed sufficient signatures with the Secretary to obtain ballot 
placement. A motion to dismiss plaintiff's complaint was subse- 
quently allowed. 

The Division represented the State Ballot Law Commission in 
The Appeals Court in Garrison v. Merced and the State Ballot Law. 
There Merced, a candidate for state representative in, a state pri- 
mary election, failed to designate on one of his nomination papers 
the political party whose nomination he sought. 



P.D.12 133 



At issue was whether that failure to comply with G.L. c. 53, 
SS 45, was fatal to having his name printed on the ballot at the 
primary election. The State Ballot Law Commission ruled that, e±)- 
sent proof that the voters who signed the nomination papers were 
misled, it was no't fatal. 

The Appeals Court affirmed the Superior Court's ruling that 
the name of the political party was necessary and its omission was 
not a mere technicality. 

The Elections Division, working with the Government Bureau, 
advised the Secretary of State on February 14, 1992 that Chapter 
462 of the Acts of 1991, "An Act Providing for Certain Optional 
Student Fees" was subject to referendum under Amendment Article 48 
of the Massachusetts Constitution. The proponents of the peti- 
tion, however, did not file sufficient additional signatures to 
place the matter on the statewide elections ballot. 

Also in conjunction with the Government Bureau, 25 of 44 ini- 
tiative petitions filed on the first Wednesday of August, 1991 
were certified, 9 were denied certification, and 10 were withdrawn 
pursuant to Amendment Article 48. 

The Division also brought suit against over 80 Candidates and 
treasurers of political committees who had failed to file the re- 
quired campaign finance disclosure forms with the Office of 
Campaign and Political Finance. In March 1992, the Division sent 
warnings to all non-filers asking them to file. 

PUBLIC RECXJRDS, FAIR INFORMATION PRACTICES 
ACT AND OPEN MEETING I.AR 

The responsibility for the enforcement of the Public Records 
Law, the Fair Information Practices Act, and the Open Meeting Law 
belongs to the Elections Division. 

The Division advised state agencies and the public on the re- 
quirements of the Public Records Law and the Fair Information 
Practices Act. The Division worked with the Supervisor of Public 
Records in the Secretary of State' s Office to resolve disputes re- 
garding the responsibility of public agencies to make documents 
available to those requesting public records. 

The Elections Division is also responsible for advising state 
agencies and the public on the requirements of the State Open 
Meeting Law. In fiscal year 1992 the Division mediated an Open 
Meeting Law dispute involving the Massachusetts Aeronautics 
Commission without resorting to litigation. 

WESTERN MASSACHUSETTS DIVISION 

The Western Massachusetts Division of the Office of the 
Attorney General is responsible for legal matters in the four west- 
ern counties of Berkshire, Franklin, Hampden and Hcimpshire. The 
Division is located in Springfield and is staffed by assistant at- 
torneys general, investigators and support staff. During fiscal 
1992, the division was responsible for Approximately 500 cases. 



134 p.D.i; 



The office litigates a wide range of cases, including tort, 
contract, eminent domain, worker's compensation, enviromental, con- 
sumer protection, civil rights, adminstrative appeals and victims 
of violent crime compensation. The division also prosecuted fraud 
cases for the Division of Employment and Training and the Criminal 
Bureau's Insurance Fraud Division. 

FY 192 saw the expansion of the Medicaid Fraud Control Unit 
in Western Massachusetts and the successful conclusion of several 
prosecutions. Additionally, the office joined with the Western 
Massachusetts District Attorney, the Enviromental Police, and the 
T'epartment of Environmental Protection to form a Western 
Massachusetts Environmental Task Force. 

As part of the Western Massachusetts efforts to educate and 
inform, personell from the office participated in a number of con- 
ferences, radio shows, speaking engagements and interviews on a 
whole range of topics. 

In cooperation with the Division of Capital Planning and 
operations new and larger office space is being constructed at our 
present location. This space once completed will provide a profes- 
sional space appropriate for a law enforcement office and provide 
greater access to the people of Western Massachusetts consistent 
with Attorney General Harshbargers commitment to the area. 



P.D.12 135 



October 24, 1991 
Joseph D. Malone 
Treasurer and Receiver General 
State House, Room 227 
Boston, Massachusetts 02133 

Dear Treasurer Malone: 

You have asked for my opinion on a question regarding com- 
pensation of the ex officio members of the Emergency Finance 
Board created by G.L. c. 10, § 47 (1990 ed.) ("section 4711). 
Specifically, you ask whether you as Treasurer and current chair- 
man of the Board, and the other ex officio members of the Board, 
may be compensated for meetings that you attend through desig- 
nees. Your request arises because you and the other ex officio 
members send designees to Board meetings, as authorized by the 
Legislature under section 47, but are unsure whether you may be 
compensated for doing so or whether you may only be compensated 
for meetings that you attend in person. ^^ 

For the following reasons, I conclude that the Legislature, 
under section 47, has authorized ex officio members to be compen- 
sated at the applicable statutory rate (seventy-five dollars per 
meeting) for meetings to which they send designees. I further con- 
clude, however, that the special statutory one-hundred-dol- 
lar-per-meeting rate for the chairman of the Board applies only to 
those meetings that the chairman attends in person. The chairman 
may only be paid seventy-five dollars for meetings that he or she 
attends through a designee. — ' 



The Emergency Finance Board is responsible for overseeing cer- 
tain aspects of the spending and indebtedness of cities, towns, 
and reaional school districts. See generally G.L. c. 40, § 5B; c. 
44, §§' 7t 8, 10; c. 71, §§ 14B, 16(n), 16H; c. 121B, § 22. 
Pursuant to G.L. c. 10, § 47 ("section 47"), the Board consists of 
five members. Three members serve ex officio (the Treasurer and 
Receiver General, the State Auditor, and the Director of Accounts 
for the Department of Revenue) and two members are appointed by 
the Governor. The Governor selects one of these five members to 
serve as chairman; currently, you 



^ In keeping with the practice followed by previous Attorneys 
General, this opinion is confined to an interpretation of existing 
law and does riot set forth my own views or any suggestions for 
amendments of the relevant statutes. I have in a separate letter 
made such suggestions to the Senate President and the Speaker of 
the House. 

^' You have also inquired as to the Legislature's original inten- 
tion in providing for the compensation of Board members. The 
Legislature' s precise reasons for providing compensation cannot be 
ascertained from the relevant statutes, and it is not necessary to 
do so in order to interpret section 47. 



136 P.D.12 



serve in this position. Section 47 permits each ex officio 
member, but not the appointive members, to "designate an officer 
or employee in his department who shall, without additional com- 
pensation therefor, perform [Board] duties during (the ex officio 
member's] cibsence or disability." 

Section 47 makes different provisions for compensating the ap- 
pointive members, the chairman, and the ex officio members, as fol- 
lows : 

[1] Each appointive member shall receive as compensation 
for each day's attendance at board meetings, when act- 
ing as a member of the board as provided by law, the 
sum of seventy-five dollars. 

[2] The chairman of the board, shall receive as compensa- 
tion for each day's attendance at board meetings the 
sum of one hundred dollars. 

[3] The state treasurer, the state auditor, the director of 
accounts and the assistant ^' shall receive as compensa- 
tion for each day's attendance at board meetings, when 
acting as a member of the board or attending as pro- 
vided by law, the sum of seventy-five dollars. 

Section 47 limits the total compensation in any one year to seven 
thousand dollars for members and ten thousand dollars for the 
chairman. The compensation received by the ex officio members, in- 
cluding the chairman if he or she is a state official, is to be in 
addition to their regular compensation as state officials. ^' 

Significantly, the circumstances in which ex officio members 
may be compensated are different from those in which appointive 
members and the chairman may be compensated. Appointive members re- 
ceive compensation only "for each day's attendance at board mee- 
tings, when acting as a member of the board as provided by law," 
and the chairman receives compensation only "for each day's attend- 
ance at board meetings. 



— ' The "assistant" is not mentioned elsewhere in section 47 but 
was originally named by the Director of Accounts from within his 
or her division of the Department of Revenue. See St. 1933, c, 
366, § 1. Since 1986, however, language in the annual appropria- 
tion line item for the Board (line item 0630-0000 of section 2 of 
each general appropriation act) has barred any Department of 
Revenue employee (which would include the Director of Accounts) 
from receiving compensation for their work for the Board. See St. 
1986, c. 206; St. 1987, c. 199; St. 1988, c. 164; St. 1989, c. 
240; St. 1990, c. 150; St. 1991, c. 138. 



1/ 



This has been the case since 1933, the year the Board was 



created. See St. 1933, c. 366, § 1, 1 2 (providing that each ex 
officio member would receive, "for each day's services rendered in 
connection with the work of the board . . . thirty dollars in addi- 
tion to his regular compensation . . . .") 
(emphasis added) . 



P.D.12 137 



In contrast, ex officio members receive compensation "for 
each day's attendance at board meetings, when acting as a member 
of the board or; attending as provided bv law .... 

This phrase permitting compensation when the member is "attending 
as provided by law" is included only as to ex officio members and 
not as to appointive members or the chairman. As I discuss below, 
my opinion turns on the correct interpretation of the phrase "at- 
tending as provided by law." 

II. 

The phrase in section 47 permitting compensation for "each 
day's attendance at board meetings" is sufficient to make clear 
that some form of "attendance" is required for purposes of com- 
pensation. Therefore, the additional phrase "attending as pro- 
vided by law," because it cannot be presumed to be redundant, must 
mean something different than the phrase "each day's attendance at 
board meetings . . . . " — ' . The phrase "attending as provided by 
law" must qualify or explain in some manner the requirement that 
ex officio members may only be compensated for each day' s attend- 
ance at board meetings." 

In interpreting the phrase "attending as provided by law, " I 
look first at the words of section 47 and then at the legislative 
history of section 47 and its predecessor statutes. My interpreta- 
tion is guided by the principle that "'a statute must be inter- 
preted according to the intent of the Legislature ascertained from 
all its words construed by the ordinary and approved usage of the 
language, considered in connection with the cause of its enact- 
ment, the mischief or imperfection to be remedied and the main ob- 
ject to be accomplished, to the end that the purpose of its fra- 
mers may be effectuated."' Board of Education v. Assessor of 
Worcester, 368 Mass. 511, 513 (1975) (citations omitted); see 
Commonwealth V. Fall River Motor Sales. Inc., 409 Mass. 302, 316 
(1991) (same) . 



A. 

The phrase "attending as provided by law, " standing alone, 
indicates that the word "attending" is not to be given its 
ordinary dictionary meaning but instead is to be understood in 
some particular legal sense. 



— ' It is a basic principle of statutory construction that wherever 
possible, every word of a statute must be given some meaning, and 
no word should be considered redundant or superfluous. Risk 
Management Found of the Harvard Medical Insts.. Inc. v. 
Commissioner of Ins. . 407 Mass. 498, 503 (1990); International 
Org, of Masters. Mates & Pilots v. Woods Hole. M.V. & N. S.S. 
Auth. . 392 Mass. 811, 813 (1984). A statute should not be con- 
strued in a manner that nullifies one of its provisions unless 
there is no reasonable alternative. Ben Elfman & Sons. Inc. v. 
Home Indem. Co. . 411 Mass. 13, 18 (1991). 



138 P.D.12 



The phrase suggests that there is a special manner of attend- 
ance permitted or prescribed by law. ^^ That "law" appears to be 
section 47 itself, which, as noted cibove, permits ex officio mem- 
bers to perform their duties through designees. 

This interpretation is confirmed by the circumstance that 
both the power to name designees and the right to be compensated 
for "attending as provided by law" are confined to ex officio mem- 
bers and do not apply to appointive members. If only ex officio 
members may send designees to meetings, and only ex officio mem- 
bers may be compensated for "attending as provided by law, " then 
the logical conclusion is that ex officio members may be compen- 
sated for attending meetings through designees. In short, the 
phrase "attending as provided by law, " viewed in the context of 
section 47 as a whole, — ' appears to mean "attending either per- 
sonally or through the designee permitted by law." 

B. 

The legislative history of the statutes governing the Board 
supports this interpretation. -' Although the development of 
these statutes since the creation of the Board is complex and in- 
volved, it sheds important light on the questions you have posed. 
I will therefore review these statutes in some detail. 



i/ See Black's Law Dictionary 1224 (6th ed. 1991) (defining "pro- 
vided by law, , as meaning "prescribed or provided by some stat- 
ute"); Oginion of the Justices, 303 Mass. 615, 619 (1939) (defin- 
ing "provided by law" as meaning "in the manner fixed by the 
Constitution for the enactment of statutes generally"). 

— ' The applicability of a statutory provision may be unclear 
when the sentence stands alone, but more clear when that provision 
is viewed in its statutory context. See, e.g.. James J. Welch & 
Co. v. Deputy Comm' r of Div.of Capital Planning and Operations . 
387 Mass. 662, 666 (1982); see also Attorney General v. School 
Committee of Essex. 387 Mass. 326, 337 (1982) (noting that every 
word or phrase of a statute must be read in context) . 

— ' When a statute is clear, there is no need to resort to legis- 
lative history as an aid to construction. Boston Neighborhood Taxi 
Ass'n v. Department of Pub. Utll. . 410 Mass. 686, 690 (1991); 
Salem Hospital v. Commissioner of Pub. Welfare . 410 Mass. 625, 629 
(1991). The phrase "attending as provided by law," however, is not 
clear, and legislative history is therefore relevant. Ambiguous 
statutes "are to be interpreted not based solely on simple, strict 
meaning of words, but in connection with their development and his- 
tory, and with the history of the time and prior legislatiori . " 
Quincy City Hosp. v. Rate Setting Common . 406 Mass. 431, 443 
(1990) (construing word "appeal"). 



P.D.12 139 



When the Board was created in 1933, only the appointive and 
not the ex officio members were entitled to compensation, and only 
"for each day's attendance at board meetings." St. 1933, C. 49, § 
1. Later in 1933, however, the Legislature enacted a statute per- 
mitting the ex officio members to be compensated "for each day's 
services rendered in connection with the work of the board, " whe- 
reas appointive members could still be compensated only for "each 
day's attendance at board meetings." St. 1933, c. 366, § 1. 

The Legislature thus plainly directed that ex officio members 
be compensated for their services rendered in connection with the 
work of the board, including work outside of meetings, rather than 
merely for their actual attendance at board meetings. As noted 
above, this compensation was in addition to the ex officio mem- 
bers' annual statutory salaries. 

Between 1933 and 1963, the Legislature enacted a series of 
statutes expanding the functions 9/ of the Board and providing 
for compensation to Board members when performing those functions. 
These statutes, few of which were codified in the General Laws, 
created a hodge-podge of different provisions governing the com- 
pensation of Board members in different situations, i^' 

In 1963, the Legislature enacted "An Act Revising Statutory 
Salaries, " which raised the statutory compensation levels for a 
broad range of state officials and members of state boards and 
commissions. St. 1963, c. 801. As a part of this Act, the 
Legislature directed that both appointive and ex officio members 
of the Emergency Finance Board be compensated for each day's at- 
tendance at board meetings "when acting as a member of the board 
as provided by law." Id. § 87. 



S/ 



Such a statute was enacted nearly every year between 1933 and 



1963. Examples include St. 1936, c. 81, § 2; St. 1945, c. 74, § 1; 
St. 1945, c. 124 (inserting G.L. c. 40, § SB); St. 1949, c. 638, §1 
(inserting G.L. c. 71, § 16H); St. 1955, c. 730, § 42 (affecting ap- 
pointive members only); St. 1958, c. 70, (simending G.L. c. 44, § 
8(8)); St. 1959, c. 329, § 2; St. 1960, c. 330, § 14; St. 1962, c. 
704, § 14; and St. 1963, c. 490, § 14. 

i^/ The 1936, 1945, and 1959 statutes set compensation rates for 
Board members only "when acting under this act" or "when acting 
under this section" rather than when performing all Board func- 
tions. See St. 1936, c. 81, § 2; St. 1945, c. 74, § 1; St. 1945, c. 
124; St. 1959, c. 329, § 2. In addition, the first of the 1945 stat- 
utes compensated ex officio members "for each day's service ren- 
dered in connection with the work of the board under this act, " 
whereas the 1959 statute compensated ex officio members only for 
"each day's attendance at board meetings." See St. 1945, c. 74, § 
1; St. 1959, c. 329, § 2. Also, the 1959 statute set a different 
rate for appointive members (thirty-two dollars) than for ex offi- 
cio members (thirty dollars). St. 1959, c. 329, § 2; See also St. 
1955, c. 730, § 42. For no apparent reason, the 1960, 1962, and 
1963 statutes ignored this differential and instead incorporated 
the compensation standards set forth in the first 1945 statute. 
See St. 1960, c. 330, § 14; St. 1962, c. 704, § 14; St. 1963, c. 490, 
§ 14. 



140 P.D.12 



The rates were increased to forty dollars for appointive mem- 
bers and thirty seven dollars and fifty cents for ex officio mem- 
bers. This marked the first appearance of the key phrase "when act- 
ing as a member of the board as provided by law" in the statutes 
governing the compensation of ex officio Board members, ii'' The 
phrase was evidently intended to make clear that the pay raise ap- 
plied to Board members regardless of which of the uncodified stat- 
utes they happened to be acting under at any particular time. This 
replaced the previous system, under which Board members would be 
compensated differently depending on what matters were before the 
Board, with a uniform system of compensation. It is important to 
note, however, that nothing in the "Act Revising Statutory 
Salaries" superseded the provisions permitting eA officio members 
to be compensated not only for actual attendance at meetings but 
also "for each day's services rendered in connection with the work 
of the board." St. 1933, c. 366, § 1; St. 1945, c. 74, § 1. These 
provisions remained in place. 

Finally, in 1980, the Legislature enacted a statute esteiblish- 
ing a new Emergency Finance Board to succeed the old Board. 
St. 1980, c. 552. That statute is essentially the same as the cur- 
rent G.L. c. 10, § 47, the only subsequent change being that the 
Auditor was made an ex officio member of the provisions were super- 
seded, however, the Legislature was careful to change the control- 
ling phrase to provide that each ex officio member would be compen- 
sated "when acting as a member of the board or attending as pro- 
vided by law. " 

This legislative history confirms that the phrase "attending 
as provided by law" was intended to preserve, in part, the right 
of ex officio members to be compensated not only for personal at- 
tendance at Board meetings but also for other services performed 
in connection with the work of the Board. The right was only par- 
tially preserved; gm officio members could not be compensated for 
all of their work for the Board, but only for each day's attend- 
ance at board meetings" when "attending as provided by law," i.e., 
attending either personally or through designees. 

If ex officio members are to be compensated at all, then this 
limitation makes sense. See School Committee of Greenfield v. 
Greenfield Education Association . 385 Mass. 70, 79-80 (1982) (not- 
ing that statute should be given a reasonable construction) . An 
ex officio member might spend a significant amount of time outside 
of Board meetings in reviewing matters to be decided by the Board. 
But unless the member actually attends Board meetings to communi- 
cate his or her views and to vote on these matters, either per- 
sonally or through a designee, then the time spent outside of 
Board meetings would contribute little to the work of the Board. 



ii/ An earlier "Act Revising Certain Statutory Salaries," 
St. 1955, c. 730, § 42, included this phrase, but only as applied 
to appointive members. The phrase appears to have served the same 
purpose for such appointive members as the statute described in 
the text served for ex officio members. 



P.D.12 141 



Accordingly, the Legislature apparently intended that ex officio 
members' compensation should depend on their participation, per- 
sonally or through designees, at meetings of the Board. 

C. 

Although I conclude that ex officio members may receive com- 
pensation for meetings that they attend through designees, this 
right does not extend to the Board's chairman when acting as such. 
Section 47 provides that "[t]he chairman of the board, shall re- 
ceive as compensation for each day's attendance at board meetings 
the sum of one hundred dollars. Unlike ex officio members, there 
is no provision for the chairman to receive this level of compensa- 
tion when "attending as provided by law," i.e., when attending 
through a designee. Nor should such a provision be inferred. — ' 
Personal attendance at meetings is therefore required in order for 
the chairman to receive the special one-hundred-dollar-per-meeting 
rate. 

This does not mean, however, that the chairman may never re- 
ceive any compensation under section 47 unless he or she actually 
attends Board meetings. Since 1933, the Legislature has evidently 
felt that the ex officio members of the Board should be compen- 
sated for their Board-related work even if they did not personally 
attend meetings. There is nothing in section 47 to indicate that 
an ex officio member forfeits this right to compensation for work 
outside of meetings if he or she is appointed chairman of the 
Board. Put differently, if the chairman is an ex officio rather 
than an appointive member, then he or she may be compensated at 
the seventy-five dollar rate for attending Board meetings through 
a designee. 

Therefore, in your current role as chairman, you may not re- 
ceive one hundred dollars per meeting for meetings that you do not 
attend. 

But, because you are the Treasurer, you continue to fall 
within section 47' s language permitting "the state treasurer [to] 
receive as compensation for each day' s attendance at board mee- 
tings, when acting as a member of the board or attending as pro- 
vided by law, the sum of seventy-five dollars . . . . " 

Although it might be suggested that you are not entitled to 
compensation under this clause because you are not "acting as a 
member of the board as provided by law" but are instead acting as 
chairman, I do not adopt this interpretation. As noted above, the 
phrase "acting as a member of the board as provided by law" was in- 
troduced not to distinguish members from the chairman, but in- 
stead to refer to all of the various laws under which persons 
might act as members of the Board. 



— ' If specific language appears in one portion of a statute but 
not another, the absent language should not be read into the provi- 
sion from which it is missing. Boston Neighborhood Taxi Ass'n . 410 
Mass. at 689; Beeler v. Downey . 387 Mass. 609, 616 (1982). 



142 



P.D.12 



The phrase was first inserted by St. 1963, c. 801, § 87, at a 
time when there was no separate compensation rate for the chair- 
man. Therefore, when inserted, it applied to the chairman as well 
as the other members. 

Nor did the phrase take on any different meaning when re- 
enacted as a part of section 47; it is a basic principle of statur 
tory construction that when language is reenacted, no change is in- 
tended in its meaning or scope. Risk Management Foundation . 407 
Mass. at 503. Therefore, the phrase "acting as a member of the 
board as provided by law" does not serve to distinguish members 
from the chairman. 



III. 

In sum, I conclude that the Legislature, under section 47, 
has authorized ex officio members to be compensated at the appli- 
cable statutory rate (seventy-five dollars per meeting) for mee- 
tings to which they send designees. I further conclude, however, 
that the special statutory one-hundred-dollar-per-meeting rate for 
the chairman of the Board applies only to those meetings that the 
chairman attends in person. The chairman may only be paid se- 
venty-five dollars for meetings that he or she attends through a 
designee named in accordance with section 47. 



Sine 




•tshbarqer