A state authority whose spending was highlighted in a FOX Undercover report is now being targeted for elimination, but the authority is fighting back with a furious Beacon Hill lobbying campaign.
Leading that lobbying campaign is Benson Caswell, executive director of the Massachusetts Health and Educational Financing Authority, the quasi-public authority that’s slated to be eliminated.
Caswell is one of the highest paid people in state government. A FOX Undercover investigation last year found his salary and benefits total $334,000, plus he enjoys other perks like meals out and membership to the Boston College Club.
“You have a membership to the Boston College Club. Isn't that excessive?” FOX Undercover reporter Mike Beaudet asked in the 2009 investigation.
“No,” replied Caswell.
“I also noticed you got a book called ‘Strategic Planning for Dummies.’ Has that been helpful for you?” Beaudet asked.
“I don't know what you're talking about,” Caswell replied.
“You expensed it, Sir,” Beaudet said.
Caswell expensed it to HEFA, a state authority which arranges low-cost financing for non-profit organizations like hospitals and universities. But similar work is done by another state authority, MassDevelopment.
The work is so similar that Gov. Deval Patrick wants to get rid of HEFA. Doing so, the administration says in a statement, would get rid of "unncessary duplication", lead to "cost savings" and have other benefits.
But HEFA is not going down without a fight.
The authority this year spent $30,000 a professional lobbying firm to make its case on Beacon Hill.
And Caswell is doing some lobbying of his own.
He’s written to the non-profits who are his customers, asking them to urge their state representative to "vote to maintain HEFA's independence".
He even gave out his cell phone number for anyone to call with questions. So after a spokesman for HEFA turned down our request for an interview, we called Caswell’s cell phone.
“Can you still justify all those perks given the economic realities of what's going on right now?” Beaudet asked.
“Well you prefer to call them perks. I prefer to call them benefits and they're in line with other benefits of not only other authorities but the private sector from which we draw our professionals,” Caswell replied.
“Why does it make sense to have two authorities doing the same thing?” Beaudet asked.
“The competition has resulted in lower fees and improved efficiencies for the borrowers, and the borrowers like that,” Caswell replied.
The borrowers may like that, but the Patrick administration says the way HEFA's doing business isn't good for the state.
Supporters for getting rid of HEFA say HEFA's fees are benefitting giant non-profits like Harvard and Mass General but hurting smaller non=profits that should be getting more help finding low-cost financing.
As for HEFA’s lobbying, FOX Undercover asked HEFA what its lobbyist has been up to and whether the authority is complying with a new ban on public authorities and agencies paying for lobbying.
HEFA’s response was to ask for a public records request, which FOX Undercover has since done.
Statement from Jay Gonzalez, secretary for the Executive Office for Administration and Finance
Governor Patrick has been focused on reforming our quasi-public agencies in order to achieve maximum efficiencies and savings and provide Massachusetts businesses with the resources they need to succeed in today’s economy. There is no question that the status quo is good for the large, wealthier non-profit institutions that receive hundreds of millions of dollars of government subsidies through HEFA and MassDevelopment for discounted fees at the expense of smaller, community-based non-profits that need assistance. The House’s merger proposal would result in reforms that are in the best interest of the state by eliminating unnecessary duplication and generating cost savings; establish financing fees that are fair, equitable and transparent; and making low-cost financing available to more the small, community-based non-profits that really need help.
Statement from Benson Caswell, executive director of the Massachusetts Health and Educational Facilities Authority:
Shuttering HEFA would not save the state one dollar and would, instead, transfer MassDevelopment's higher operating costs to nonprofit institutions as a back-door tax. That is why HEFA and many of its nonprofit partners oppose this provision. For more than 40 years, HEFA's sole focus has been providing low-cost capital to nonprofits at the lowest possible fee. In that time, HEFA has provided more than $40 billion to nonprofits, saving these institutions more than $8 billion in debt service costs and allowing them to re-invest in their important missions. The publicly stated purpose of dissolving HEFA is to enact a back-door tax on Massachusetts' nonprofit institutions, increasing fees to nonprofits to fund economic development of for-profit organizations and cities and towns. It is clear that many non-profits who will be most impacted by this are opposed, as evidenced by the public comments and letters to legislators in opposition to dissolving HEFA from hospitals, colleges and cultural institutions. HEFA does not take one dollar of state or taxpayer money so there are no savings to be found by dissolving HEFA. In fact, HEFA operates with a highly-skilled, dedicated and professional staff of only 15 employees, its fees to nonprofits are far less than MassDevelopment’s and its operating budget per employee is less than half that of MassDevelopment, which does receive significant taxpayer funding each year. HEFA and its nonprofit partners remain hopeful the Senate-approved bill, which retains competition among lenders and is in the best interests of the nonprofits we serve, will prevail.