First-term Democrat Diana DiZoglio released an audit of the Massachusetts Growth Capital Corporation, or the MGCC, in late August.
“The Mass Growth Capital Corporation actually gives out grant opportunities on behalf of the state to various businesses across the state," she told WAMC. "They are there as a support for our small business community.”
The audit covered the MGCC’s handling of the COVID-19 Small Business Relief Grant Program during the period of March 2020 to June 2022 under the administration of then-Governor Republican Charlie Baker.
“There were some deficiencies in how they were actually processing some of the grants that needed to go out on behalf of the state to our small business community during that pandemic shutdown period, where we know a lot of folks were really struggling, needed access to resources, and needed access to those resources really quickly,” said the auditor.
Founded within the Massachusetts Executive Office of Economic Development in 2010, DiZoglio says the MGCC was found to have inappropriately distributed funding in a number of ways.
“The MGCC did not consistently apply priority scoring for sector specific applicants in accordance with its contractual obligations, and this means that sector specific applicants, and this includes, but is not limited to, those serving Gateway Cities, those businesses owned by people of color, women and veterans, that those applicants might not actually be receiving their grants earlier as they were supposed to under the terms of their contract and given that priority during that time period," said DiZoglio. "So, they should consistently apply their priority scoring.”
The MGCC was also found to have awarded grants to candidates not intended to receive the funding.
“That means that ineligible candidates and applicants were receiving funds when, obviously, eligible candidates should be the ones receiving funds, because if you've given out money to ineligible candidates, that's less funding for eligible candidates, and it's also a potential misuse of tax dollars," DiZoglio continued. "We also found that the entity distributed grants in excess of what was actually allowed under their contracted amount. So, they had said to us that they rounded up their numbers from time to time, or they rounded to the nearest $10,000. We pointed out that that's not what their contract stipulated. It's not stipulated they were to round out their numbers to the nearest $10,000th, but that they were to follow their contract allowed amount.”
A spokesperson tells WAMC that the MGCC “values the Auditor’s office’s review and recommendations for process improvements to the COVID-19 Small Business Relief Grant Program,” and said it was making internal improvements in line with DiZoglio’s findings.
DiZoglio says her office also found pressing issues with the Massachusetts Convention Center Authority after a recent audit.
“Their new Executive Director, Gloria Larson, has committed to fully implementing the changes that we recommended to the state entity, and those changes will include taking a very serious look at their procurement process, where we found unlawful activity regarding state contracting and procurement, potential destruction of records," said the auditor. "We referred these matters to both the Secretary of State and the state's Attorney General Office for further investigation and review. We also found significant challenges with their employee complaint process under the previous administration. We know that we had heard about some very serious allegations regarding racial discrimination at the Convention Center Authority, that was last year, and our office did look into some of those challenges and uncovered that a $1.2 million nondisclosure agreement was unlawfully executed to conceal allegations of racial discrimination and retaliation. That is unacceptable.”
The Massachusetts Convention Center Authority did not respond to a request for comment on this story from WAMC.
“We need to take bold and meaningful action," said DiZoglio. "I have subsequently drafted for this administration's review a potential executive order that this administration could sign directing all state agencies in the executive branch to stop allowing for these non-disclosure agreements to continue to be abused to hide illegal activities. Right now, there are no repercussions for using these nondisclosure agreements, and there is very little oversight, if any, in many state entities. So, I put that executive order out there for the administration's review. I hope [Democratic Governor Maura Healey] will sign it, and look forward to working with her office on that draft language that we did send over, but it is beyond past time for us to take action to stop the abuse of our tax dollars to fund that fund the silencing of victims and cover up potential misdeeds, abuses of power, and even potential illegal activities in our own Commonwealth.”
The auditor is also continuing to campaign for Question 1 on the Massachusetts ballot on November 5th, a measure that would allow her to fully audit the state legislature.
“I talked about the need to audit the state legislature when I was campaigning for state auditor," DiZoglio told WAMC. "That was actually a request that came from voters who were trying to decide on who to vote for. They continually raised that they wanted me to audit the state legislature if I became the state auditor. That was for about two years. Fast forward, I got elected, the state legislature is refusing to be audited. So, for the last year and a half plus, I have been campaigning to get this issue on the ballot so that you, the voters, can make the decision of whether or not you believe the Massachusetts legislature, which is frequently been ranked as one of the least transparent in the nation, the least effective in the nation, whether or not they should be subjected to the same audits that we conduct of every other state entity.”
Her fellow Democrats on Beacon Hill – including both legislative leaders in the state House and Senate and Attorney General Andrea Joy Campbell – have decried the effort as an unlawful overreach on the part of DiZoglio.
