February 5, 2009 - Arthur Winn - Winn Companies, Boston MA

Boston developer Arthur Winn said he gave $10,000 to former state senator Dianne Wilkerson in 2004 to help a "close friend" with her tax debts, and not because he wanted her assistance getting public funds for his troubled $810 million Columbus Center project.

Developer arthur Winn defends giving Wilkerson money

	"Close Friend Dianne Wilkerson"

Boston developer Arthur Winn said he gave $10,000 to former state senator Dianne Wilkerson in 2004 to help a "close friend" with her tax debts, and not because he wanted her assistance getting public funds for his troubled Columbus Center project.

Winn spoke for the first time about his long relationship with Wilkerson because he said disclosure of the payment threatened to tarnish his reputation and overshadow the $810 million development he is trying to build over the Massachusetts Turnpike in Boston. Winn's firm was subpoenaed by federal investigators who have brought unrelated bribery charges against Wilkerson.

The 69-year-old developer said he gave Wilkerson money because he did not want to see her career cut short by financial problems. And he vehemently denied the payment had anything to do with Wilkerson's efforts almost two years later to try to get public subsidies for Columbus Center.

"There was never a quid pro quo between Dianne and me," he said.

Speaking from the Faneuil Hall offices of WinnCompanies, Winn also said he would not be pushed out of the Columbus Center development by his partners, a California state pension fund and its real estate manager MacFarlane Partners, who own a controlling interest in the condo, hotel, and retail project. After The Boston Globe disclosed Winn's payment to Wilkerson last month, the California partners issued a statement saying the arrangement could constitute a "serious breach" of the partnership agreement. Such a violation could be grounds for removing Winn from the project.

"I'm not going to be booted out by this salacious attack on my reputation by the Globe," Winn said, his voice rising. "I've been at this . . . for 11 years. I've sunk a lot of time and effort in it, and I'd hate to see it die for many, many reasons, not the least of which is ego."

MacFarlane and the California fund declined to comment.

Wilkerson was arrested in October by federal agents and charged with taking thousands of dollars in bribes from a Roxbury nightclub operator who wanted a city liquor license and from an undercover FBI agent posing as a developer interested in building on state property.

Wilkerson could not be reached for comment, and her attorney did not return a call for comment.

Despite her history of financial problems, Winn said he remained a staunch fan of Wilkerson, who in 1997 was convicted of tax evasion and had two separate settlements with the Massachusetts attorney general for campaign finance violations. The two share an interest in affordable housing - his firm manages 4,000 apartments in her former district. Winn was an enthusiastic fund-raiser for her political campaigns, and Wilkerson emerged over the years as one of the most vocal supporters of Columbus Center.

"She's an accident looking for an intersection all the time," Winn said, adding that Wilkerson was also one of the most articulate politicians he'd ever met. "I thought she was terrific. I was always a big fan."

It was her tax conviction that led to the $10,000 payment from Winn. Faced with owing $100,000 in back taxes, Wilkerson told the Globe, she sought and obtained approval from the State Ethics Commission in 1997 to solicit donations to help with her personal finances. A fund was set up at the Boston law firm Foley Hoag to collect the donations.

"When I heard this was available," Winn recalled, "I said, 'Boy, whatever the powers that be, who knows what happened to get it set up that way.' But I sent my check to a very prestigious attorney, made out to Dianne." He said he did not recall when he learned of the fund's creation.

Even in hindsight, Winn said he never thought the gift would pose ethical or legal problems, and his own lawyers who reviewed the donation told him it was legal.

"I don't spend time studying the rules," he said. "I ask my attorneys, 'Can I give this gift? I'd love to.' And they say, 'Yes, it's been totally vetted at the ethics commissions.' The lawyers all looked at it and said I could do it."

Winn was one of several business executives who donated to the fund, but his payment appears to violate a key restriction the ethics commission placed on Wilkerson's fund raising: That she not take money from anyone with business before the Legislature. If someone later did have business before the Legislature, she was required to disclose it to the commission.

"The fact that she didn't do that is terrible, because it could get me into trouble," Winn said. "That would be the one thing that would make me angry about Dianne: She didn't do the right thing by the people who gave her the gift, because she didn't report it."

Winn's payment was made in January 2004. Then, 22 months later, in November 2005, Wilkerson successfully lobbied the state Senate to support a $4.3 million appropriation for Columbus Center, which needed help paying for a deck over the turnpike. The Legislature did not approve the funding.

Winn said there was never a "stated or unstated" understanding with Wilkerson surrounding his $10,000 payment, and that at the time he made it, he had no inkling Columbus Center would need help from the state.

"I don't follow those things," added Winn, who said he left issues involving public subsidies for the project to subordinates at his company. "And if I needed (Wilkerson's) vote, I wouldn't ask for it anyway."

Nonetheless, Winn said he and Wilkerson spoke frequently about Columbus Center, usually with the senator calling to ask how she could be helpful. Winn said he knew that whenever he would broach the topic of state financial help, Wilkerson would insist that, in turn, his project include jobs for her constituents.

"Dianne would give and get," Winn said. "Once she would get some money" for a development project, "she would associate it with a set-aside for minority employees, which is always what I expected."

Winn would not discuss the federal investigation into Wilkerson or his contact with authorities. Shortly after her arrest, his firm was among those receiving subpoenas asking for communications with Wilkerson and other individuals involved in her political dealings.

He said her arrest - and accompanying FBI surveillance images of her accepting wads of cash - was a "disgrace."

"It was a terrible, terrible day," he said. "I'm just very sad for her. I'm sad for many things. I'm sad she was the sole supporter of her family. I'm sad she never had any money. I'm sad she didn't have the support that many of the people on the hill have. It's a tragedy."

Original Story - Boston Globe

Message From Arthur Winn - PDF

March 29, 2009 - Update

Columbus Center a curse - and a cause

Amid funding woes, political flap, developer Arthur Winn presses on

During his down moments, Arthur Winn curses the day he conceived of Columbus Center.

Over the past 12 years, he has run a political gantlet trying to build it, straining to sculpt a plan to unite two of Boston's most exclusive neighborhoods with a towering complex over the Massachusetts Turnpike.

He visited with neighbors and city officials. He battled through more than 120 community meetings. He hired top-flight lobbyists to secure public money from the mayor, lawmakers, and two governors. At one point, his efforts even reached the Bush White House.

But lately, Winn, one of the nation's most successful developers of affordable housing, has found only controversy and misfortune in Columbus Center, with its troubles often plunging him into bouts of introspection. When asked about his reasons for wanting to build it, Winn spoke not about the project's mission or profit, but about his state of mind.

"I would have to be lying on a couch to give you an appropriate answer," he said.

"I had a chance years and years ago to buy the Celtics. I probably should have. And all these years later, I had a chance to build what I thought was the most exciting job in the history of Boston. Certainly, I didn't want to lose money on it, but maybe making money was not the first priority."

Winn's campaign for Columbus Center has fed a political drama that is remarkable even for Boston, where development is something of a blood sport. The project had high-powered enemies, including former House Speaker Sal DiMasi, who used his leverage to repeatedly block Winn's attempts to get public funding.

Although DiMasi left Winn damaged, it was Winn's friends and unfortunate timing that hurt Columbus Center the most. He got backing from governors Deval Patrick and Mitt Romney, but they proved unwilling to help at critical moments.

And then came the debacle with a former state senator, Dianne Wilkerson, a top supporter whose arrest on bribery charges has made her one of the project's most visible liabilities.

The controversy has left Winn fighting to preserve his reputation. It has also left him trying to rescue a project that has become a political taboo, incapable of attracting a supporter who will defend it in the light of day.

"There is nobody in the city who picks up the phone and says, 'Before you step up against this, know I'm going to smack you if you do,' " Winn said.

"They say it in New York. In Boston, it's an intellectual exercise between governing and insanity. There are so many different currents of motivation."

With Columbus Center, Winn proposes a 35-story condominium tower, stores, and hotel on 7 acres between Arlington and Clarendon streets. The $810 million project would connect Boston's Back Bay and South End neighborhoods over the open scar of the turnpike.

Wilkerson was the project's chief supporter in the Legislature, saying it offered the promise of thousands of jobs for her constituents. Winn said she was a longtime friend whose support was welcome, until the day of her arrest.

The former Roxbury senator was accused in October of accepting $23,500 in bribes associated with a nightclub and a development site in Roxbury. None of the charges were related to Columbus Center, but Winn was among the executives and officials who received subpoenas.

A few months later, Winn acknowledged he was one of a number of supporters who gave her money to pay off a large federal tax debt. His gift was $10,000; it came 22 months before Wilkerson sought $4.3 million for Columbus Center in the Legislature.

Winn has vehemently defended the donation, saying he gave it because he wanted to help a friend in trouble, not because he wanted to influence the public process surrounding Columbus Center. "There was never a quid pro quo between Dianne and me," he said.

Well before the Wilkerson controversy, however, Winn was struggling to get the project off the ground.

Between 2003 and 2007, its price tag doubled, to about $800 million, causing Winn to launch a lobbying blitz to secure millions of dollars in public subsidies. His main targets were economic development officials in the Romney and Patrick administrations.

"Arthur was all over the agencies. He was asking for substantial amounts of money," said Douglas Foy, who was secretary of Commonwealth development under Romney. "Our response was that he was welcome to apply for any help, but his requests were well beyond the normal operating boundaries of our grant programs."

The requests included $6 million from the Executive Office of Transportation; $15 million from the Department of Housing and Community Development; and $15 million in low-cost loans from the Massachusetts Housing and Finance Agency, according to public records.

The lobbying prompted Romney on Nov. 2, 2004, to file a letter with the state Ethics Commission because Winn was such a big political supporter - donating along with his relatives more than $46,000 to Massachusetts Republican committees during Romney's tenure.

The governor's ethics disclosure stated that Romney would play no role in reviewing Winn's funding requests. Such disclosures are filed to protect against conflict-of-interest allegations.

Still, at one point Romney made a high-level intervention on Winn's behalf: The governor called Andrew Card, then chief of staff to President George W. Bush, to press Winn's case for financial assistance from the US Department of Housing and Urban Development and from the government-chartered mortgage giant Fannie Mae, according a handwritten memo about the call that was filed in state housing records.

"Mitt called Card who called HUD to get FNMA [Fannie Mae] to stand by for Columbus Center," stated the memo, which the Globe obtained through a public records request. It is unclear from the memo when the call was made.

Romney said through a spokesman that he did not recall making the call. Card did not respond to requests for comment.

Columbus Center did receive $32.5 million in tax-exempt bonds from HUD, but nothing from Fannie Mae. And despite Romney's support, Winn only got $2 million from the Massachusetts housing agency.

A lifelong Republican, Winn initially fared better with the next governor, Democrat Deval Patrick, who is still in office. The Patrick administration approved a $20 million package of grants for Columbus Center that allowed Winn to begin construction in October 2007.

But the global credit crunch promptly undid that. Negotiations with Winn's primary lender, Anglo Irish Bank, collapsed, leaving him without a needed $430 million loan, and forcing Winn and his investment partner, the California state pension fund, to halt construction in March 2008. Weeks later, Patrick withdrew the state funding.

The project's management was trying to regroup in October when news broke of Wilkerson's arrest, leading to the subpoena, the ethical cloud, and more delays.

Today, Winn is a minority partner in Columbus Center, with a marginal role in the decision-making. The pension fund and its real estate consultants are now in charge of the project's finances.

Still, Winn said he intends to protect his $40 million investment and will continue to advocate for the project's construction.

"Whatever happens, I think for Boston the project should be completed for many reasons. It's so clear what the upsides are," Winn said, his voice rising. "I've been at this [expletive] for 11 years. I sunk a lot of time and effort in it, and I'd hate to see it die for many, many reasons, not the least of which is ego. But that's just no reason to go into a deal."

Update Story - Boston Globe