Boston Area News

BOSTON (WBZ) ― The former head of the state's Transportation Department inaccurately certified his office was doing a safety review of Big Dig tunnels in bond statements a year before faulty ceiling panels collapsed and killed a Jamaica Plain woman.

John A. Cogliano, who steps down as chairman of the Massachusetts Turnpike July 1, said in an Aug. 15, 2005, letter to two state officials that bond statements claiming the Massachusets Highway Department was conducting a safety review of the troubled project tunnel was correct. In fact, no such review was taking place.

Cogliano headed the Executive Office of Transportation at the time he wrote the letter to Treasurer Timothy P. Cahill and Eric A. Kriss, a top official for former Gov. Mitt Romney.

Both Cogliano and his spokesman John Carlisle declined comment on the letter, citing an ongoing U.S. Securities & Exchange Commission inquiry.

"What we can say is that we're working very closely with Federal Highway and the new (Gov. Deval) Patrick administration and a host of others to ensure that safety is first and foremost," Carlisle said.

The SEC is probing whether Romney administration officials intentionally misled potential investors by inaccurately stating in four separate bond statements between August, 2005 and April, 2006 they were reviewing the safety of the mammoth project.

The statements appeared even though only one study of the tunnels was completed in July, 2005 with the Romney administration vouching for its safety.

Romney officials, blaming a lack of legal power over the project, did no further reviews of tunnel safety until after Del Valle's death when the Legislature gave the governor expanded authority over the Big Dig.

At his last Turnpike board meeting June 19, Cogliano stressed the importance of the project's safety.

"The sudden ceiling collapse in the I-90 Connector Tunnel underscored the need to maintain and inspect our infrastructure as diligently as possible," Cogliano said.

The innacurate bond language appears under the section labeled "MassHighway Safety Review." Cogliano ran MassHighway, a division within EOT, at the time he wrote the letter to Cahill and Kriss. The incorrect information was removed following last July's collapse.

Romney last year labeled the mistatements a mistake that resulted from a miscommunication between two departments.

However, two sources with knowledge of the bond-writing process during 2005 and 2006 told the I-Team administration officials insisted on keeping the invalid language in the prospectuses over the objections of state bond lawyers who felt it was not necessary.

Erroneous information contained in bond prospectuses can be a serious violation of SEC rules since potential investors rely on the accuracy of the statements when purchasing state bonds.

The Big Dig was sternly warned by SEC officials in 2003 to be vigilant about the accuracy of information in bond prospectuses when then Pike Chairman James J. Kerasiotes was cited for misleading investors in three 1999 bond offerings about $1 billion in cost overruns.

Kerasiotes was not charged with deliberate fraud, but SEC officials indicated they expected scrupulous attention to accuracy in future project-related bond offerings.

"A misrepresentation is a misrepresentation no matter how you color it," said SEC Boston district administrator Juan Marcel Marcellino at the time.

Former Pike Board member Christy Mihos, long a critic of the problem-plagued project, said Cogliano and other Romney advisors should be held accountable for their errors.

Mihos's sharpest criticism was for Romney, who he believes has escaped accountability for the project's many financial and construction failures.

"Cogliano is low hanging fruit," Mihos said. "Mitt Romney was the governor. Mitt Romney is a lawyer. Mitt Romney has dealt with the SEC before. His senior people understand what a statement in a bond disclosure means, especially when we're dealing with a flawed project and we're talking about safety inspections."

"If they didn't do it. It's a material mistatement and that's fraud," Mihos said.

SEC spokesman David Bergers declined comment.

(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)