A Birthday-Party Hangover

In Boston, corruption probes shadow the city’s administration

Boston’s Mayor Kevin White, the feisty Irish Democrat, was the picture of livid indignation. He jabbed a finger toward the bold headlines in the Boston Globe, which charged that another scandal had been uncovered in the mayor’s administration. Fumed White: “I shouldn’t be sitting in this chair if that’s true, not even for five minutes.”

Despite the embattled performance, White did not, and could not, deny last week that a number of federal agencies and four U.S. grand juries are looking into allegations of financial misconduct by city officials. The probers include the FBI, the IRS, the U.S. Department of Housing and Urban Development, the Postal Service and U.S. Attorney William F. Weld, a Republican whom White accuses of being politically motivated. While the mayor has not been directly implicated, 13 city employees in the past two years have been indicted on various charges, including fraud and corruption. Two are doing federal time.

All of these developments, taken together, have cast a distinct pall over White’s administration. After occupying office for 15 often tumultuous years, the liberal mayor may face his roughest fight ever if he seeks re-election to a fifth term next November. “I will not retreat an inch,” insists White. “I will be heard.”

Boston is certainly all ears now. One serious problem for White is a birthday party for his wife Kathryn that was scheduled for March 27, 1981, then hurriedly canceled. Some 400 individuals, many of them city employees and businessmen holding contracts with the city, had contributed at least $122,000, which was to be used to celebrate Mrs. White’s 45th birthday.

White had told the Massachusetts ethics commission that he had no knowledge of who had donated the money or how much they had given. But, in a public letter, the ethics commission scolded White: “Individuals who never met your wife gave amounts greater than they would be expected to give their own wives . . . and in some occasions gave the equivalent of almost a month’s salary.” The commission said White’s “hands-off” attitude was “unacceptable and insensitive” and that he had violated the state’s standards of official conduct.

The party was canceled, and White agreed to have the donations returned to the generous givers. But more party problems have arisen: last week the Boston Globe reported that one federal grand jury is looking into the possibility that some party donors, unwittingly or not, may have been participating in a sophisticated money-laundering scheme designed to conceal the true source of the money. Investigators found that 64 people who gave money to the birthday fund also made identical cash deposits in their personal bank accounts at about the same time, which suggested that they might have been reimbursed.

Another federal criminal investigation, this one by HUD, was reported by the New York Times to be delving into Boston’s management of money received from Washington to rejuvenate deteriorating neighborhoods. A highly critical audit released by HUD this month claimed that the city had run up “excessive, unreasonable and improper costs” in a block-grant program, while failing to accomplish the intended goals.

The city, charged the HUD report, spent $5,015,572 from July 1980 to February 1982 on housing repairs but improved only 554 of the 3,498 homes scheduled for work in that period. The city also budgeted $4,893,248 to insulate and in other ways weatherize 3,142 houses but managed to fix up only 507. According to HUD, the city spent $4,138 a building on administrative costs alone. Also charging that contracts had sometimes not been based on open bids, HUD disallowed or questioned some $5.6 million of the more than $23 million in block-grant funds that Boston had received. The auditors further contended that $1.9 million given to the city for community development was actually used for other purposes, including unrelated municipal salaries.

While scandals and rumors of graft are far from new in Boston, the current round of allegations has the White team reeling. Admits one of the mayor’s aides: “We’re really under fire this time. It’s coming from all sides.” Summed up White last week airily: “I’d like this to be resolved. It affects our reputation.”