Briefcase

State IG Report: Dobelle ‘Violated the Public Trust’
WESTFIELD — A long-awaited report from the state inspector general’s office claims that former Westfield State University President Evan Dobelle improperly used hundreds of thousands of dollars from school accounts to pay for personal expenses, including a number of trips, and then covered these actions by filing false reports. “Dobelle knowingly disregarded university policies, misled the WSU board of trustees, abused his authority, and exploited public funds for personal benefit,” Inspector General Glenn Cunha wrote in his scathing, 60-page report. “Dobelle’s self-characterization as a ‘visionary’ does not absolve him from the obligation to follow the rules … Dobelle violated the public trust.” The report detailed dozens of incidents where Dobelle charged personal expenses to university credit cards, including more than $63,000 for 17 trips to San Francisco where, he told school officials, he was meeting potential donors and tech-sector business executives. However, the IG’s report found he was mostly attending social events. Dobelle resigned from the university in November 2013 amid a firestorm of criticism concerning his lavish spending. The Boston Globe reported that Cunha’s report raises the prospect that Dobelle could face criminal investigation. The paper quotes a spokesperson for Attorney General Martha Coakley saying, “this report raises serious concerns and allegations about the use of Westfield State resources by its former president. We have been conducting our own investigation into this matter and anticipate additional action soon.” In a prepared statement, WSU Interim President Elizabeth Hall Preston said, “while this has been a difficult period for all of us, the faculty and staff at the university have persevered and focused on the work of providing our students with an outstanding education. We approach the start of our new academic year with a sense of excitement and new momentum.”

State Economy Bounces Back in Second Quarter
BOSTON — Massachusetts real gross domestic product grew at an estimated annual rate of 4.9% in the second quarter of 2014, according to the MassBenchmarks Current Economic Index, released Wednesday by MassBenchmarks, the journal of the Massachusetts economy published by the UMass Donahue Institute in collaboration with the Federal Reserve Bank of Boston. In contrast, according to the U.S. Department of Commerce, national real gross domestic product grew at an annual rate of 4.0% in the second quarter, based on the advance estimate of the U.S. Bureau of Economic Analysis. State and U.S. economic growth bounced back from the surprisingly weak first quarter as labor markets gained strength both locally and nationally. Based on the most recent data available, MassBenchmarks now estimates that, in the first quarter of 2014, the state’s economy contracted at an estimated annual rate of 0.3%, while the U.S. economy declined at an annual rate of 2.1%. “The steep downward revision in the estimate of Massachusetts economic growth for the first quarter (originally reported as positive 2.6%) is primarily due to the correspondingly large downward revision in U.S. economic growth in the first quarter, originally reported as positive 0.1%,” noted Alan Clayton-Matthews, MassBenchmarks’ senior contributing editor and associate professor of Economics and Public Policy at Northeastern University, who compiles and analyzes the Current and Leading Indexes.

“The downward revisions in U.S. GDP reflect large reductions in two components — consumer spending and exports — that were most affected by the unusually harsh winter weather. This sharply lowered estimates of national and state productivity growth, meaning fewer business sales per employee and thus a significant reduction in the first quarter estimates of economic growth.” Massachusetts payroll employment grew at a 1.7% annual rate in the second quarter, up from 1.2% in the first quarter, while U.S. payroll employment grew at a 2.2% annual rate in the second quarter up from 1.5% in the first quarter. During the second quarter, the unemployment rate in Massachusetts fell from 6.3% (in March) to 5.5% (in June), while the U.S. unemployment rate fell from 6.7% to 6.1% during the same period. Year to date (through June), the state’s unemployment rate has fallen 1.6%, while the national unemployment rate has fallen 0.6%.

Nominations Sought for ACCGS Super 60
SPRINGFIELD — The Affiliated Chambers of Commerce of Greater Springfield is seeking nominations for its annual Super 60 awards program.  Now in its 25th year, Super 60, formerly the Fabulous 50, celebrates the success of the fastest-growing privately owned businesses in the region that continue to make significant contributions to the strength of the regional economy. Each year, the program identifies the top-performing companies in revenue growth and total revenue. Last year, one-third of the winners in the revenue-growth category experienced growth in excess of 50%, with the average growth of all the honorees in that category at more than 49%. Total revenue winners combined for revenues of more than $1 billion, with an average revenue of more than $35 million. To be considered, companies must be based in Hampden or Hampshire county or be a member of the ACCGS, have produced revenues of at least $1 million in the last fiscal year, be an independent and privately owned company, and have been in business for at least three full years. Companies are selected based on their percentage of revenue growth over a full three-year period or total revenues for the latest fiscal year. Companies may be nominated by financial institutions, attorneys, or accountants, or be self-nominated. Companies must submit a nomination form and provide net operating revenue figures for the last three full fiscal years, signed and verified by an independent auditor. All financial information must be reported under generally accepted accounting principles and will be held and considered confidential and not released without prior approval. Nomination forms are available by contacting Kara Cavanaugh at [email protected] or (413) 755-1310. Nominations must be submitted no later than Sept. 5. The Super 60 awards will be presented at the annual luncheon and recognition program on Nov. 7, from 11:30 a.m. to 1:30 p.m. at Chez Josef in Agawam.

Bribery Probe Costs Smith & Wesson $2M
SPRINGFIELD — Gun maker Smith & Wesson has agreed to pay $2 million to settle civil charges by federal regulators that it bribed foreign officials to sell firearms in other countries. The Securities & Exchange Commission (SEC) said the company violated the Foreign Corrupt Practices Act by making improper payments as it sought to sell guns overseas to police and military groups from 2007 to 2010. In 2008, according to the SEC, Smith & Wesson hired a third-party agent in Pakistan to help secure a sale with a Pakistani police department. Company officials also authorized the agent to provide more than $11,000 worth of guns to Pakistani police officials as gifts and to make additional cash payments to them. Smith & Wesson eventually won a contract to sell 548 pistols to the Pakistani police for a profit of $107,852, the SEC said.

Mohegan Sun Ending Lease of Site in Palmer
PALMER — The Republican reported that Mohegan Sun is ending its 99-year lease with Northeast Realty for the former casino site off Thorndike. The casino giant cited an inability to find a major retailer to anchor a proposed development there as the reason for its action. In a prepared statement, Northeast Realty said the move comes as no surprise and “confirms Northeast’s position that Mohegan Sun never intended to legitimately pursue non-gaming development” at the site. Former town councilor Paul Burns agreed with that sentiment. In a strongly worded statement e-mailed to BusinessWest, he said, “the statement today from Mohegan Sun regarding their desire to abandon Palmer is hardly surprising to those of us who have followed the trail of broken promises and misstatements since Mohegan entered into negotiations with Suffolk Downs in October, well before Palmer’s voters had even had their say.” He continued, “the premise, however, that Mohegan Sun has spent any significant amount of time trying to find a tenant is laughable. As recently as April, Mohegan Sun reps, in response to a request from three Palmer town councilors, indicated that they simply did not have time to pursue development in Palmer, as they were busy with the Revere project. Now barely three months later they have somehow completed an extensive search for a partner and came up empty? Clearly Mohegan Sun had no interest in developing this site for any purpose other than a casino. I believed, when they initially claimed interest in non-gaming development, that they were simply attempting to hold onto the site to prevent another company from building there should MGM not be awarded the Western Mass. license. Now, barely 30 days after MGM secures that license, Mohegan Sun’s actions speak loud and clear.  From where I sit, it is clear — they had no intention of building here. Obviously Mohegan Sun is not the ‘good neighbor’ they claimed to be.”

Community Foundation Issues $1.2M to Nonprofits
SPRINGFIELD — The Community Foundation of Western Massachusetts is awarding more than $1.2 million in competitive grants to local nonprofit organizations. A total of 99 Pioneer Valley projects will receive funding, with awards ranging from $2,000 to $52,500. The Community Foundation awards competitive grants each year, with funds targeting projects addressing community needs inclusive of arts and culture, education, the environment, health, housing, and human services for residents of Hampden, Hampshire, and Franklin counties. More than 60 of the projects funded were supported by trusts administered by Bank of America. The Community Foundation receives and reviews grant applications on behalf of Bank of America for four charitable trusts for which the bank serves as a trustee. “This substantial investment in our community is made possible through the generosity of our donors, the commitment of our many volunteers, and the hard work and dedication of the nonprofits that we are privileged to support,” said Community Foundation Vice President for Programs Nancy Reiche. Funding for the grant program comes from distributions from 47 funds established by various individuals and groups committed to supporting local nonprofits. These donors rely on the Community Foundation’s volunteers and staff to focus their funds for effective use by nonprofit agencies in Hampden, Hampshire, and Franklin county communities. Thirteen volunteer members of the Community Foundation’s distribution committee and 21 project reviewers evaluated 109 applications for funding requests totaling nearly $1.5 million.

Retail Trade Group Lowers Annual Sales Forecast
WASHINGTON, D.C. — The nation’s largest retail trade group has lowered its annual sales forecast because of slower-than-expected growth during the first half of the year tied to winter storms and some lingering economic woes. The National Retail Federation said Wednesday that it now expects retail sales to rise 3.6% this year to $3.19 trillion, instead of its original projection of a 4.1%, released in early February. The figures include sales in stores and online, but exclude automotive sales and sales at gas stations and restaurants.

Construction Industry Added 6,000 Jobs in June
WASHINGTON, D.C. — The U.S. construction industry added 6,000 jobs in June, according to the July 3 report of the Bureau of Labor Statistics (BLS). However, non-residential construction added only 700 of those jobs, and the heavy and civil engineering sector lost 700 jobs. “Although non-residential construction’s performance is somewhat disappointing, the general tenor of today’s employment report is upbeat. It is worth noting that non-residential construction tends to lag that of the overall economy,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Today’s jobs numbers are largely a reflection of the softer growth recorded by the U.S. economy for much of last year and during the initial months of 2014. Given that the economy added over 200,000 jobs for the fifth consecutive month in June, there is some optimism about improvement in the second quarter; however, the lack of monthly construction employment growth, particularly in the non-residential sector, is troubling.” Although the national construction unemployment rate stands at 8.2% on a non-seasonally adjusted basis, there are parts of the nation in which unemployment is far lower, Basu added. “In fact, there are emerging shortages of industrial construction workers in growing segments of the south, which will trigger large increases in wages and per diems during the year ahead. By contrast, there are communities in which construction unemployment remains well above the 8.2% average, suggesting that wage inflation will be meaningfully experienced only in certain communities.” According to the BLS household survey, the national unemployment rate fell to 6.1% in June, reaching its lowest level since September 2008. The civilian labor force expanded by 81,000 in June. Individual sectors saw the following changes:
• Non-residential building construction employment increased by 2,100 jobs for the month, but is up by 22,200 jobs, or 3.3%, since June 2013.
• Residential building construction employment rose by 4,500 jobs in June and is up by 50,600 jobs, or 8.3%, on an annual basis.
• Non-residential specialty trade contractors lost 1,400 jobs for the month, but employment in that category is up by 29,500 jobs, or 1.4%, from the same time last year.
• Residential specialty trade contractors gained 2,100 jobs in June and have added 55,700 jobs, or 3.6%, since June 2013.