Black Mass

by Dick Lehr

  With the information and documents that are available to us, it appears that Finnerty provided little or no substantive input, advice or services in return for his partnership interest in a multi-million dollar commercial real estate venture. In addition, the limited records and documents furnished to us pertaining to Finnerty’s law practice and his relationship with Bulger reveals [sic] a curious relationship in which Bulger appears to provide little or no substantive services in return for approximately one half of all fees generated by the Finnerty law firm. For example, during the last four months of 1985 the Finnerty law firm bank account records indicates [sic] that Bulger was paid over $50,000.00. In 1986 over $350,000.00 in checks payable directly to William Bulger were issued from law firm accounts. Copies of those checks payable to Bulger are attached to this memorandum. Of those monies paid in 1986 from the Finnerty law firm account, contrary to Bulger’s public statements, it appears that Bulger actually received less than half of the total legal fee paid by the Quirks ($280,000.00 dollars) in connection with the Data Terminal Systems and the South Boston Savings Bank mortgage. Analysis of the deposit of the Quirk legal fees into the Finnerty law firm account and subsequent withdrawals indicates that Bulger received approximately $110,000.00 dollars of the total Quirk fee while Finnerty received approximately $I00,000.00 of that fee with the balance ($80,000.00) being split between Richard McDonough ($70,000.00 “consulting fee”) and approximately $10,000.00 going to attorney James McDonough, an associate in Finnerty’s law firm who appears to have performed the bulk of the work relating to the litigation and the real estate closing. Besides those checks payable directly from the Finnerty law firm account to William Bulger, a series of other checks totaling in excess of $100,000.00 dollars during 1986 have been identified which appear to be paid to various investment firms which may also be for the benefit of William Bulger as well. In addition, at least $50,000.00 dollars in funds from the Finnerty law firm account were utilized to pay William Bulger’s one half share in the purchase of commercial property located adjacent to the Columbia Point project formerly owned by Mary Teebagy.

  As noted in the grand jury testimony of Richard McDonough, an example of Bulger’s apparent ability to obtain lucrative fees for little or no substantive service can be seen in the transactions with Herbalife of California during 1985. McDonough’s grand jury testimony and other materials provided by Federal authorities indicates [sic] that McDonough and Bulger were retained “consultants” by that firm to advise them on unspecified legislative and other governmental affairs issues outside of Massachusetts during 1985. In return, Bulger and McDonough were each paid approximately $50,000.00 dollars by that firm.

  IV. RECOMMENDATION

  A. 75 State Street

  To [sic] respect to Brown’s allegations concerning his payments to Finnerty concerning the 75 State Street project, it is recommended that counsel for Harold Brown, William Bulger and Thomas Finnerty be contacted and a request to interview their client be made regarding their respective roles in that project and the payments and ultimate disposition of $500,000.00 paid by Brown. Richard McDonough’s counsel (Earl Cooley) has thus far failed to reply to our prior requests to interview his client.

  A further recommendation regarding the appropriate follow-up action will be made after they have been contacted and responded.

  B. Other Aspects of the Finnerty/Bulger Relationship

  Further investigation is warranted regarding the payments made to Bulger through the Finnerty law firm accounts. In particular, the original sources of those funds should be identified and the true purpose through those payments should be ascertained including the precise nature of services provided in return for those payments. Identifying the source of those payments and ascertaining the person or persons having knowledge of those transactions will require the use of grand jury subpoenas for records and documents to trace the original source of those funds and obtain the testimony of persons having knowledge of those transactions.

  FBI INTERVIEW WITH MASSACHUSETTS STATE SENATE PRESIDENT

  WILLIAM BULGER, FEBRUARY 28, 1989

  William M. Bulger, Senate President, Commonwealth of Massachusetts, was interviewed at the Boston law office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, 1 Financial Center, Boston, Massachusetts. In attendance during the interview was Assistant United States Attorney (AUSA) Ralph Gants, AUSA Alexandra Leake, Attorney Robert Popeo, Attorney William Homans, and William Bulger, Jr. At the outset of the interview, Bulger was advised of the official identity of the interviewing individuals as well as to the nature of the interview. Thereafter, Bulger furnished the following information:

  Bulger advised that he and Thomas Finnerty grew up together in South Boston, Massachusetts. Bulger advised that he and Finnerty were close friends since early childhood. They both went to high school together and attended college together. Bulger advised that Finnerty was a 1960 graduate of the Boston College Law School and that he graduated in 1961.

  Bulger advised that he and Finnerty formed a law partnership in either 1962 or 1963. Bulger advised that at that time, he had been elected as a State Representative. Bulger advised that the partnership lasted for approximately thirteen years until Finnerty was elected District Attorney for the County of Plymouth. Bulger advised that there was never a partnership agreement in writing between he and Finnerty.

  In regards to billings for the above law practice, Bulger advised that they split the profits during this period of the partnership. When Bulger left his partnership with Finnerty he became “of counsel” with Finnerty. Bulger advised that this required him to bring in his own law business and that Bulger would only be paid for the amount of work he generated. He advised that his arrangement with Finnerty was an oral agreement. Bulger advised that he was not salaried by Finnerty’s office during that period of time. Bulger was not required to cover any of the office overhead expense incurred by Finnerty. If Bulger brought in any clients which were not represented by him, during this period of time, he would receive a percentage of the income derived from the clients. Bulger could not be any more specific regarding this agreement.

  Bulger advised that he performed legal services for Robert and Bruce Quirk in their civil suit against Data Terminal Systems, Incorporated. This suit involved the ownership of property in Maynard, Massachusetts. Bulger advised that this particular client was brought to him by Richard McDonough who is an associate of Bulger’s. Bulger advised that he personally dealt with the matters regarding this civil case. Bulger advised that Finnerty did assist for a short period of time regarding this case. Bulger advised that James W. McDonough Jr., an associate of Finnerty’s law firm, also assisted in the work done on this case. Bulger advised that James McDonough accompanied him to all court appearances in regard to this case. Bulger advised that he does not keep records regarding the time he spent on this matter but feels that the fee that he charged the Quirk’s [sic] was fair for the effort put forth on their behalf by him. Bulger advised that he billed the Quirk’s [sic] on a sense of what was fair and had no documentation to support the charge.

  Bulger advised that he was very instrumental in the negotiations which settled the above case. Bulger attributed most of his work in regards to this case to the negotiations that he handled. He advised that the period of time that he worked on this case was considerable and that he was entitled to receive the fee which he charged the Quirk’s [sic].

  Bulger advised that Thomas Finnerty was aware of the fee that Bulger would be receiving from the Quirk’s [sic] in regards to this case. Bulger knew prior to his vacation to Europe in the Summer of 1985 the amount of money that Quirk’s [sic] would be paying him for services rendered. Bulger knew that he would be receiving $267,000. Bulger advised that he expected to get the entire $267,000 and there were no objections by anyone either associated with Finnerty’s firm or by Thomas Finnerty about Bulger receiving the entire amount. Bulger felt that he was providing 90% of the effort that went into this case resolution and fel
t that he was entitled to the entire amount. Bulger advised that the $267,000 was paid by the Quirk’s [sic] to the law firm of Thomas Finnerty. It was anticipated by both he and Finnerty that this amount would be received by the end of the year, 1985. Bulger advised that there was some discussion between he and Finnerty in regards to Bulger receiving 100% of this fee. Finnerty did not think it was fair and Bulger did. In any event, Bulger advised that it was resolved that he would receive the entire $267,000.

  Bulger advised that sometime in 1986, Richard McDonough requested $70,000 for his referral of the Quirk’s [sic] to William Bulger. Bulger advised that it was his feeling that McDonough did deserve some fee but this amount was exorbitant. Bulger recalled telling Finnerty that although he did not think it was fair to pay Richard McDonough $70,000 that he thought the firm should in order to make McDonough go away. Bulger advised that he and Finnerty decided to pay this amount to McDonough and that fee would be allocated to the firm’s office expenses. Bulger advised that McDonough’s claim for this $70,000 was not made until after the $267,000 in fees had been collected from the Quirk’s [sic]. Bulger advised that he certainly absorbed some of the $70,000 paid to McDonough because the McDonough charge was partially taken from incoming fees he expected from other clients during 1986.

  Bulger advised that he had many shared investments with Thomas Finnerty. He advised Thomas Finnerty was not his financial advisor but that he followed Thomas Finnerty’s lead on many investment opportunities. In regards to investments jointly made by Thomas Finnerty, Bulger advised that his first investment was in land purchased in the 1960s at the Fort Banks area of Winthrop, Massachusetts.

  Bulger recalled a second investment that Finnerty involved him in with the purchase of a share in a limited partnership in American Cable Systems Midwest in 1985. Bulger thought that Finnerty made this investment on his behalf while Bulger was vacationing. Bulger advised that Finnerty had Bulger’s permission to invest on Bulger’s behalf if any investment opportunity looked promising and Bulger was not available to authorize it. Bulger could not recall ever objecting to any investment made by Thomas Finnerty on his behalf. Bulger stated that it was common for Finnerty to put up the initial investment funds and then to be repaid later by Bulger. Bulger advised that he had a “sense” there were other investments with which he was involved with Thomas Finnerty around this same period of time. Bulger could not be more specific regarding these investments.

  Bulger advised that Finnerty brought to him the investment opportunity of purchasing a building on Mount Vernon Street in the Columbia Point area of Boston. Bulger’s recollection was that Finnerty brought this deal to him just prior to the actual closing date on the property in June, 1986. Finnerty put all the required money down on the purchase of this property and Bulger eventually repaid Finnerty with money Bulger and Finnerty had borrowed jointly from the South Boston Savings Bank (SBSB). Bulger and Finnerty borrowed $100,000 from the SBSB with the intention of using the proceeds to invest or purchase stock in Boston Telecommunications Group, Inc. Bulger eventually changed his mind regarding the above investment and decided to put the loan proceeds towards the joint purchase of the Mount Vernon Street property.

  Bulger advised that he does not possess a great deal of knowledge regarding the Mount Vernon Realty Trust (MVRT). Bulger explained that Finnerty established the MVRT and Bulger does not even know if he (Bulger) is a beneficiary of this trust. Bulger advised that he has never seen any trust documents regarding the MVRT. Bulger only knows that he is a 50% owner of the property located on Mount Vernon Street.

  Bulger advised that the purchase price on the Mount Vernon property was $I90,000. $90,000 of the $190,000 was back taxes due to the City of Boston. Bulger did not participate in negotiating the purchase price of this property. Bulger did recall being told by Finnerty that the back taxes could be paid in installments to the City of Boston. Bulger advised that he is still confused on how he paid for his share of ownership in this property but that he paid Finnerty $50,000 within thirty days of the closing date on the above property. Bulger also recalls that he has made installment payments to Finnerty and the St. Botolph Realty Trust regarding the back taxes owed on the above property. Bulger assumes Finnerty paid the real estate taxes from this account.

  Bulger reiterated that he depended on Thomas Finnerty to involve him in the above investments and that it was not unusual for Bulger to repay Finnerty for the investment at a later time after the purchase had been made. Bulger cannot recall ever extending any loans to Thomas Finnerty or receiving any loans from Thomas Finnerty other than for the short period of times [sic] for investment purposes.

  In regards to Harold Brown, Bulger advised that he has no recollection of ever meeting Harold Brown and has had no financial dealings with him.

  Bulger recalled that the first time Thomas Finnerty ever mentioned Harold Brown to him was when Finnerty mentioned he was having a business disagreement with Brown. Bulger believes that Finnerty mentioned this in late 1984 or early 1985. Finnerty also mentioned that the disagreement was over the Kilby Street Development [another name for 75 State Street]. At the time of Finnerty’s first mention of Harold Brown, Finnerty never disclosed to Bulger his business relationship with Brown or any terms of any agreement between Finnerty and Brown. The only knowledge that Bulger had of Harold Brown at that time was that Brown had a bad reputation as a large landlord in the City of Boston.

  Bulger recalled being told by Finnerty at a later time that Finnerty was having some dealings with the Beacon Companies in regards to the Kilby Street Development. It is Bulger’s recollection that at some point Finnerty said he had worked out his disagreement with Brown and that Finnerty was currently attempting to define his ownership interest in the Kilby Street Development. Finnerty also mentioned that he would be selling his interest to the Beacon Companies. Finnerty described this interest as an asset.

  Sometime during the Summer of 1985, Finnerty mentioned to Bulger that he had received $500,000 from Beacon Companies as a buy out of Finnerty’s interest in the Kilby Street Development. Bulger said he was told this by Finnerty because Finnerty was just sharing his good news.

  Subsequent to Finnerty receiving this $500,000, Finnerty told Bulger that he had ideas about how both of them could benefit through various investments. Bulger recalled that it was Finnerty’s suggestion that the both of them invest in tax free bonds through the Fidelity Fund. Bulger surmised that Finnerty’s suggestion regarding these investments were [sic] made in light of Finnerty just receiving the $500,000 and Finnerty’s knowledge that Bulger would be receiving $267,000 for his legal work regarding the Quirk case. Sometime after this discussion, Bulger borrowed money from Finnerty in order to place it in the Fidelity Tax Free Bond Account. Bulger borrowed $225,000 from Finnerty in August, 1985, in the form of a check drawn on Finnerty’s St. Botolph Realty Trust Account at the Bank of Boston. Bulger said there was no written documentation regarding this loan and Bulger borrowed it with the understanding that it would be repaid after Bulger received the Quirk legal fee. At the time that Bulger received the $225,000, he did not know the source from which the funds originated other than it came from Finnerty’s account. Bulger said that the St. Botolph Realty Trust was Finnerty’s account and he had no knowledge at that time regarding the details of the trust including who the beneficiaries were.

  Bulger advised that in October, 1985, he borrowed another $15,000 from Finnerty for an investment opportunity. Bulger could not recall what investment the $15,000 was used for by him. He believes that it might possibly have been used to purchase stock in the South Boston Saving[s] Bank. Bulger advised that his real reason for taking the loans from Finnerty was to insure that he got the money in hand that he expected the Quirk’s [sic] to remit to the law firm of Thomas Finnerty. Bulger said that his logic for taking the advance was the fact that he would be in Europe and if anything ever happened to him this money would already have been put in his accounts and not retrievable by Finnerty or anyone else.
He assumed that Finnerty would use the Quirk fee as repayment of Bulger’s loan if anything ever happened to Bulger.

  Bulger advised that sometime around this period of time and after he had learned that Harold Brown had been indicted by the Federal Grand Jury in Boston, Massachusetts, Finnerty disclosed to him that the source of the St. Botolph Realty Trust Funds, which Bulger had borrowed from Finnerty, was from Harold Brown. Finnerty did not go into any great detail regarding Finnerty’s association with Brown but it was clear that the $500,000 had come from Brown in some indirect fashion. Bulger did not think he should be anywhere near or associated with Brown because of Brown’s reputation and in order to disassociate himself from Brown, Bulger decided to repay Finnerty the money he had borrowed. Bulger advised that he repaid the loans by issuing checks to the St. Botolph Realty Trust from his Fidelity Account. This repayment was done out of the principal borrowed plus interest after Bulger conferred with his Certified Public Accountant, Lee Hyler, who was responsible for calculating Bulger’s debt on the loan. Hyler assisted Bulger in determining the means Bulger would use to repay the loan and what assets of Bulger’s would have to be liquidated in order to make repayment. Bulger reiterated that he never received much in the way of detail from Finnerty regarding Finnerty’s interest or Finnerty’s receipt of money from the Kilby Street Development. Bulger could not recall specifics as to what Finnerty’s role was in the development.

  Bulger’s only knowledge regarding Edward McCormack and McCormack’s involvement with the Kilby Street Development was that McCormack represented Finnerty as his lawyer. This representation was needed by Finnerty in order to insure that he received his payment from Brown for the Kilby Street Development.