Boston Business Journal – by Edward Mason Journal Staff
This article originally ran in The Boston Business Journal, Friday, September 26, 2003
In nearly six years in the Legislature, Sen. Andrea F. Nuciforo Jr., a Pittsfield Democrat, earned a reputation as a quiet legislator skilled in retail politics and versed in legislative minutiae.
In recent weeks, however, Nuciforo’s visibility has grown after inserting himself into high-stakes probes of brokerages and mutual funds, filing legislation to toughen state securities law.
Now, his proposal has been assailed by the man it was meant to help — Secretary of State William Galvin — leaving the 39-year-old senator, widely believed eyeing a run for Congress, deflecting criticism of political opportunism. But for Nuciforo, filing the legislation was more about doing the right thing than staking a claim to an issue capturing headlines.
“It’s pretty clear to me that there are abuses going on in the securities market that needed to be addressed,” Nuciforo said in an interview in his modest, second-floor State House office. “The DDi situation added fuel to that fire.”
The state pension fund lost $349,000 in DDi Corp., a company in which the state invested after a Lehman Bros. analyst was pressured by bankers at the firm to give the stock a favorable rating. As the state Treasury weighed its legal options, Nuciforo, along with Sen. Jarrett Barrios, a Cambridge Democrat, filed a bill that garnered the support of 17 Beacon Hill colleagues. Galvin, however, came out against the bill the day it was unveiled in August.
“We value his interest, but we think this loosens, not tightens, the law,” Galvin said in an interview with the Boston Business Journal.
The bill would eliminate the requirement that investment fraud be willful, which Nuciforo, a lawyer by education, said would make it easier to make civil and criminal cases stick. Eliot Spitzer, the New York attorney general who has been at the forefront of securities and mutual fund industry probes, has not had to prove willfulness, Nuciforo noted.
But Galvin, whose office has worked closely with Spitzer’s, said the Bay State has “had no difficulty bringing securities cases” under the present law, citing recent investigations into fraud at Morgan Stanley and Prudential Securities.
That might change if Nuciforo and his allies succeed, Galvin said. The Republican Congress, under the guise of seeking uniformity in investment regulation, wants to strip states of their decades-old role overseeing securities and place that authority entirely with the federal government. Nuciforo’s efforts would give ammunition to that cause by signaling that state regulation is inconsistent, Galvin said. It’s a position shared by securities lawyers such as Michael Unger, a lawyer with Boston’s Rubin & Rudman LLP and a former top state securities regulator under Galvin’s predecessor, Michael Connelly.
Nuciforo responded, “It’s a specious argument because not all of the states are in lock-step now.”
The struggle is about political turf, some say, noting Nuciforo’s proposal shifts power away from Galvin and to the attorney general.
“Given Galvin is high-profile, he’s trying to protect what has been an asset to him,” said Lou DiNatale, senior fellow at the McCormack Institute. For Nuciforo, it is a way to take an issue the Legislature certainly would have taken up and making it his own, DiNatale said.
Politics has been part of Nuciforo’s life since childhood. His father, Andrea Sr., was a state senator from 1964 to 1973, before being elevated to a judgeship by Gov. Francis Sargent. The younger Nuciforo won the first race he ever ran, filling the Senate seat vacated by Jane Swift when she challenged U.S. Rep. John Olver in 1996.
“He does a lot of nonsexy things you don’t see a senator do,” said North Adams Mayor John Barrett. As a freshman, Nuciforo pushed through the Senate a $4 million request Barrett said will help North Adams pay for a court-ordered water-filtration plant.
If Nuciforo’s next step is Congress, as is rumored, he would have a leg up not just for his bringing money back to the district but for his ability to straddle consumer and business interests, experts say. Since 1998, Nuciforo has chaired the Senate Banking Committee, taking the pro-consumer stand against mutual banks going public, while siding with banks on automated teller fees and modernizing state bank law.
“I don’t see ourselves as on opposite sides,” said Daniel Forte, president of the Massachusetts Bankers Association. “He has an open-door policy.”
As he moves to protect “mainstream U.S.A. investors,” Nuciforo can expect to be on the opposite side of the aisle from Galvin when his bill is heard by the Legislature in the coming weeks.
“We’ll make our views known,” Galvin said.
