Patronage, far-flung roles hinder Massport mission

By Brian C. Mooney, Sean P. Murphy, Liz Kowlaczyk, & Stephanie Ebbert, Globe
Staff, 9/25/2001

The following special report was written and researched by Brian C. Mooney,
Sean P. Murphy, Liz Kowalczyk, and Stephanie Ebbert of the Globe Staff.

East Boston Airport opened in 1923 on a spit of land across from downtown
Boston.

In 1956, with the birth of the Massachusetts Port Authority, the airport
became connected to a seaport, a bridge, and a small secondary airfield.

In the last decade, the authority has become something much bigger and more
unwieldy: an airport, two secondary airports, a seaport, a bridge, a
conference center, a tourism board, an international consulting firm, and a
real estate office.

These extra businesses, added by governors seeking to draw on Logan
International Airport's revenue stream, represent a serious drain on airport
finances and a distraction for those charged with overseeing New England's
most important transportation center.

Last year, Logan Airport collected $44 million in profits through its
airline and passenger fees, parking, concession, and taxi surcharges - but
at least $30 million of it went out the door in Massport losses on other
businesses. That's $30 million that some other airports around the country
would have used to ensure the safety, modernity, and efficiency of core
airport functions.

Now, as Massport prepares to dramatically ramp up its security system after
the Sept. 11 hijackings, people in the aviation industry and at the agency
itself are wondering whether the airport's management is capable of making
necessary changes.

Interviews with scores of current Massport employees, former Massport
leaders, and officials at other airports reveal a troubling tale of an
authority that has strayed from its core mission and may require a major
overhaul to get back on track. Among the findings:

Massport's other businesses represent a serious drag on Logan Airport. Port
and maritime activities cost the authority $26.5 million in losses. The
Tobin Bridge lost $1 million. Hanscom Field lost $1.3 million. Worcester
Airport lost an estimated $1.2 million. And an international consulting
division, intended to persuade airlines to fly out of Logan, cost $5.8
million.

Intended by its founders to be insulated from politics, the authority's
board is dominated by political loyalists to the governor. They pay out
millions of dollars in salaries to political appointees lacking serious
credentials for their jobs and, in some cases, having jobs created for their
benefit.

The scores of former political operatives preside over a culture marred by
infighting. ''Backfilling,'' what Massport workers call the process of
hiring trained professionals to assist political appointees, helps ensure
that core functions are performed, but wreaks havoc on morale.

The aviation division, run by airport professionals, is respected by many
inside and outside observers. But that hasn't prevented some airport
functions from being hampered by Massport's culture. Security, which reports
directly to the executive director, is an example: The State Police patrol
Logan's terminals, but the two key access areas to the tarmac are patrolled
by nonpolice ''gate guards,'' members of the Teamsters union. Unarmed and
lacking police training, they are the last line of defense for the airfield.

Massport's deficiencies, while shared by some other port authorities, are
not common or inevitable in aviation circles. Managers at other airports
confirm that Massport is known in the industry as being buffeted by
political winds and distracted by its other missions, including its mandate
to promote tourism.

While most did not agree to speak on the record, Lou Turpen, president of
the Greater Toronto Airport Authority and a former director of the San
Francisco airport, said that Massport's other businesses ''bring confusion
to the essential mission of the airport. Safety and security - that's what
we should focus on, not flying over to Germany to see how many flights
Lufthansa is making to Boston.''

Turpen, a career airport manager, is especially disdainful of Massport's
history of appointing politically connected people to management: ''If one
of those politicians were in one of Boston's hospitals for an operation, and
I came in and said, `My brother likes the mayor and I'm your new brain
surgeon,' they'd say, `Time out.'''

Payroll, expenses up

Created by a Legislature anxious to separate vital government functions from
political patronage, Massport combined the operation of the airport, the
Mystic River (now Tobin) Bridge, the port of Boston, and Hanscom Field in
Bedford under a board appointed to staggered terms, so no governor could
replace its members all at once.

But governors have tended to view that system more as a challenge than an
obstacle: By the mid-1990s, it was well-known that once a governor appointed
a majority of the seven-member board, Massport came under the control of the
executive branch.

In 1993, then-Governor William F. Weld, a believer in entrepreneurial
government, assumed control of the board. His former aide and handpicked
director, Stephen P. Tocco, launched a series of initiatives designed to
broaden the mission of Massport and promote tourism in Massachusetts. Now
head of a lobbying firm and chairman of the state board of higher education,
Tocco was ambitious, territorially acquisitive, and determined to extend
Massport's reach.

His successors - former US representative Peter I. Blute, who washed out
after the infamous 1999 Massport-paid ''booze cruise'' with lobbyists, and
Virginia B. Buckingham - made some efforts to retrench. But Tocco's vision
of an inflated mission survives, basically intact.

Under Tocco, Massport's payroll ballooned by 30 percent. He went
international, adding new departments of foreign trade and tourism
marketing. The operations extended to Mexico, Singapore, Taiwan, Korea,
Israel, Japan, Ireland, and China.

Today, Massport has a $239.3 million operating budget and 1,207 employees,
44 of them earning more than $100,000 a year.

Tocco and his aides rolled up big travel tabs, and the agency spent lavishly
on overseas promotions of tourism and trade, some of them exotic or
frivolous. Once, the authority spent more than $100,000 to wine and dine
French travel agents. On another occasion, it tried to develop an eel farm
in Western Massachusetts for a Taiwanese food shipper.

Money spewed from Massport - $288,000 to the National Music Foundation,
which was supposed to build a museum and retirement home for musicians in
Lenox, 100 miles from the nearest Massport facility. The plan never
materialized. Massport spokesman Jose Juves said the agency has not
recovered the money.

Tocco also launched a $7.2 million restoration of the old New England Fish
Exchange at the edge of the Boston Fish Pier. It became known as ''Tocco's
Taj Mahal,'' an elegantly appointed conference center that a state audit
found was a money-loser being used mostly for social events.

Massport expanded cruise line traffic into its Black Falcon Terminal in an
effort to boost a port that has been dying for decades. The new intiatives
failed to stop the port's flow of red ink, however.

Through it all, Logan remained the agency's revenue generator. Even with the
cost of the current $4.4 billion modernization project, it netted $44
million last year, on $270 million in revenues, 80 percent of Massport's
total.

The business development division, which markets Massport's holdings on the
waterfronts of South Boston and East Boston, helps offset some seaport
losses. Long-term ground leases now produce $6.5 million, and if all the
land is built out, Massport estimates, they could generate another $10
million.

But this initiative, like others, is undermined by political deal-making.
Two of the major developers to win Massport parcels are clients at Tocco's
ML Strategies: Manulife Financial of Toronto, breaking ground soon on a
14-story, $135 million US headquarters in South Boston; and Roseland
Properties of New Jersey, which is planning a $95 million apartment complex
plus a marina and shipyard restoration on and around East Boston's Pier 1.

Massport officials say the developers won fair competitions last year.
Buckingham, the current executive director, said she has never spoken to
Tocco about any of his clients.

All the extra functions - planning real estate deals, overseeing the port,
promoting tourism - take a toll on the amount of attention top executives
can devote to the airport, insiders say: Massport officials not only promote
Massachusetts tourism, but they also offer themselves as consultants to
foreign airlines, promising to help clear regulatory hurdles for new air
routes to Boston.

John Donahue, a policy specialist at Harvard's John F. Kennedy School of
Government, sees benefits in the independence of agencies like Massport, but
warns that they can spin out of control.

''The thing about independent authorities is, they're given some running
room,'' he said. ''That makes sense. But it does mean a lot hinges on them
using their discretion correctly. It does give them a little bit more
discretion and autonomy over spending resources. It does mean there is a
risk - you're counting on these folks to use their discretion the right way.
So the caliber of the people matter a lot.''

Patronage runs deep

Every governor has leaned on Massport. Patronage hires from the 1970s are
still layered into the bureaucracy. But during the Weld, Cellucci, and Swift
administrations, a new standard was set in the shuttling between the State
House and Massport.

''I was never asked to hire an unqualified person until Tocco and Blute came
along,'' said one former manager. ''People would literally come out of the
woodwork who were friends of various people.''

Some of the hires were qualified, or learned quickly on the job, the manager
said. Others required a lot of ''propping up.''

''The political appointees are distrustful of the people who have been there
a long time and really care about the job,'' said another longtime former
Massport worker. ''So they put them into a corner, ignore them, go around
them.''

Dramatic changes accompanied Tocco's arrival in August 1993. Within days,
Tocco cleaned house, installing politically connected loyalists in key
spots, among them State Trooper Joseph M. Lawless, Weld's driver and
security chief, as head of public safety at Massport.

The multiple layers of patronage and protection had some comical
ramifications: When a new Tocco hire set up meetings with longtime
employees, one of them misunderstood and immediately declared an allegiance
that still carried weight: ''I think before you start, you should
understand, I'm a Gus guy. Gus Serra put me here,'' he said, referring to
the influential former state representative from East Boston. The Tocco hire
recalled: ''What this guy was saying was, `You can't fire me.'''

Tocco brought along longtime pal Ralph Cox, a former minor-league hockey
player, who served under Tocco in the Weld administration, heading the
business development office at the State House. The office became a tool for
Weld's campaign apparatus by turning over lists of businesses it helped to
Weld fund-raisers.

At Massport, Tocco installed Cox as maritime director. Cox had real estate
qualifications and eventually revised the port's patchwork property
management system, but he had zero maritime experience. Moreover, Cox, the
last man cut from the 1980 US Olympic gold-medal winning hockey squad, was
moonlighting as a part-time scout for the Pittsburgh Penguins throughout his
Massport tenure. Michael Leone, a former Coast Guard commander, served as
Cox's number two, providing much of the day-to-day management. In Massport
parlance, he was widely described as ''backfill'' for Cox.

Cellucci's chief aide, Stephen J. O'Neill, was relentless, even belligerent,
in his insistence that Massport hire connected individuals, said several
officials who dealt with him.

The handiwork of O'Neill, who was Cellucci's patronage secretary and later
chief of staff, is apparent. In August, 1997, his brother, James O'Neill,
and sister-in-law, Julie McDonnell, each landed Massport jobs, as
firefighter and deputy finance chief at the port, respectively. O'Neill did
not return phone calls requesting comment.

And the number of politicians and political operatives rewarded for
supporting the governor - a list that includes former Revere mayor Robert J.
Haas and Serra himself - easily reaches into the double digits.

When Swift became acting governor in April, O'Neill's deputy, Kristen
Lepore, 32, departed for Massport as a $97,200-a-year assistant deputy
executive director to Buckingham.

Buckingham describes her as ''extraordinarily talented.''

Lepore typifies managers Buckingham has imported from Beacon Hill. They're
young, have scant experience outside the State House, and, at best, had
indirect involvement in transportation. Like Buckingham, they came directly
from the governor's staff.

Besides Lepore, they include Catherine M. McDonald, 37, who has since moved
to Massport's legal office, and Russell D. Aims, 40, now Buckingham's
deputy.

The only careerist in Buckingham's top echelon of central staff is Leonor M.
Filipe, 42, an assistant deputy director, a Massport employee since 1985.

Buckingham dismisses criticism of her team's experience.

''My role and part of theirs in the governor's office was similar to what it
is now,'' she said. ''It was for Cabinet agencies of the governor to develop
an agenda and manage implementation of that agenda through those
departments.''

Meanwhile, Buckingham's boss in the first Weld administration, Raymond
Howell, has a firm, Howell Communications, now well into its third annual
$120,000 contract from Massport to ''assist in creation, implementation, and
maintenance of a public relations strategy'' for a new runway.

While much of the bureaucracy exists at the level of central management,
above the daily functions of the airport, many people at Massport say the
culture of politics and infighting is pervasive - even in the critical
security operation.

When Lawless got into an ill-advised flap with the US marshal's office two
weeks ago, rejecting federal help in implementing security procedures, one
insider called it typical. ''He's obsessed with turf above all else,'' he
said. Lawless was unavailable for comment last night.

Lucrative police jobs

But turf - and the deals and contracts and traditions that go along with
it - has long defined security at Logan.

The State Police long ago struck a deal with Massport to make the airport
theirs, and theirs alone. In doing so, they turned the airport into the
steadiest source of extra income for police anywhere in the state - a fount
of overtime and detail earnings strictly off-limits to Boston police and
other law enforcement agencies.

State Police at the airport average over $40,000 a year in overtime and
details - about five times as much as other state troopers. That means most
take home about $100,000 per year. To get assigned to the airport, troopers
need seniority or a commander's intercession. As a result, the 84 members of
Troop F at Logan are among the oldest, averaging age 50, compared with the
statewide average age of 41.

For any trooper long on the road, the airport is a welcome salve to a
thousand car wrecks at 2 a.m. There's virtually no street crime to chase,
and the surroundings are those of an international airport.

All of which contributes to a don't-rock-the-boat attitude at the airport,
according to state troopers who asked not to be identified. While the State
Police lend their spit-and-shine appearance to the front of the terminals,
the serious security work in the gate areas is delegated to low-wage workers
from private companies hired by airlines - a standard practice at airports
across the country. Massport has never put in place its own procedures to
test these workers' skills and training, even as airports in Miami and San
Francisco have taken it upon themselves to monitor these security personnel.

The lack of general standards extends to the two vehicle gates to the
airfield. Everyday, hundreds of the workers drive through those gates to
directly service the planes.

But the guards there, while wearing police uniforms and badges, are not
police officers at all. They are part of an old deal that gives those jobs
to the Teamsters, who also represent parking workers, cab starters, and
others at the airport.

Today, the 20 gate guards are hardly a crack unit. Their average age is 51,
only a few have any police training, and most qualified for the job through
working in other Teamster positions.

The Federal Aviation Administration has documented at least one breach of
security at an airfield entrance. And today, the gate guards are joined at
their posts by three state troopers.

''There's talk that we should have guns,'' said one gate guard at his post
last week.

More likely, the guards will be replaced with police, according to Massport
officials who acknowledge the need to upgrade security at the gates. If so,
Massport already has its own 40-member trained and armed police force. But
to assign those officers to the gates would potentially antagonize not only
the Teamsters, but also the State Police.

''It's one of the biggest problems at the airport, the way responsibility
for security is diffused,'' mused one Massport official.

Modest savings made

When she took over in September 1999, Buckingham vowed to change the culture
of Massport, blackened by press exposes of globe-trotting junkets and
expense-account abuses under Tocco and Blute. She clamped down on expense
accounts, travel, and, in her words, ''led by example.'' Unlike her
predecessors, she has not taken overseas ''trade missions.'' And the liquid
lunches and workday golf outings have been halted, insiders say.

Her initiatives spared Massport damaging headlines, but actual savings have
been modest. Spending in travel and expense accounts was down about
$330,000, to about $1 million.

Any employee overhaul has been less apparent. Buckingham forced out Joseph
Luca, the administration and finance chief and a Tocco crony. So, too, went
Blute deputy Matt Trant. But most of the others remain, including Serra, who
pulls down $125,000 per year in a job created for him.

Buckingham may not have a chance to make many further changes. Swift has
promised to review Massport as soon as an investigation into the hijackings
is completed. And the acting governor has been cool in discussing the
current Massport leadership. Many state officials expect a shake-up.

But nor has Swift been aggressive in condemning the culture.

After all, she herself was appointed to a Massport make-work job in 1997
after giving up her state Senate seat in a losing bid for Congress.

Swift had sought Massport's international marketing post, which offered
worldwide travel. But that job was already held by another Weld appointee,
Charles Yelen. So then-director Blute created a job for Swift as director of
regional aviation, coordinating airports in Manchester, N.H., Providence,
and Worcester, and Hanscom Field. She started in February 1997, making
$78,000, and won an unusual contract reimbursing her for health insurance
before she was on the payroll. By several accounts, she impressed many with
her natural savvy.

But 10 months later, she was out: Cellucci made her director of Consumer
Affairs. Six-and-a-half weeks later, he tapped her to be his running mate.
And nearly four years later, her Massport job has never been filled.

This story ran on page A1 of the Boston Globe on 9/25/2001.
Copyright 2001 Globe Newspaper Company.
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