Saturday, March 15, 2014

Brad Bumsted. Keystone Corruption: A Pennsylvania Insider’s View of a State Gone Wrong. Philadelphia, Pa.: Camino Books, 2013.

G. Terry Madonna notes that county and local political organizations used to play an important role in selecting state legislative candidates. As these political organizations lost political power, legislative leaders increased their influence as they could conduct centralized fund raising and disperse funds to those candidates who would ally with them. This shift in political power made legislative leaders more involved in various local legislative elections. The strong contests between the political caucuses as to which political party would have a majority intensified the political battles. Much of the recent corruption cases prosecuted were over matters where legislative leaders crossed legal limits in what they could do when campaigning.

It is interesting to note that much previous state corruption cases through Pennsylvania history involved matters such as improperly awarding state contracts or taking kickbacks in contracts. The type of corruption cases prosecuted have moved from the manner of governance to the manner of campaigning. This also caught many legislative leaders by surprise as they often argued their improprieties were part of past traditional campaigning that was done by both political parties. Yet these were legal violations that led to the state convictions of those were formerly were a Democratic House Speaker H. William DeWeese, a Republican House Speaker John Perzel, a Republican House Majority Whip Brett Feese, a Democratic House Minority Whip Mike Veon, a House Democratic Caucus Chairman Steve Stetter, a Democratic Senate President Pro Tem Robert Mellow, and a Republican Senate Majority Whip Jane Orie, In addition there was the Federal conviction of former Senate Democratic Appropriations Committee Chairman Vincent Fumo on matters beyond electioneering. Senate Republican Majority Leader Joseph Loeper was also convicted on tax evasion matters.

Madonna rightfully sees the beginning of the downfall tied to a July, 2005 vote by the legislature to increase their salaries as well as salaries of administrators and judges. In the past, these pay increases resulted in a few days of negative press and the pay raise issue traditionally had minimal impact in the general elections. This pay raise was different. For one, there were no prior public hearings and no chance for the issue to be publicly debated prior. Second, the press, especially at Bumsted’s Pittsburgh newspaper, and other papers around the state chose not to let the issue die. It was frequently revived as front page news. Public outrage was stirred and several incumbents lost reelection.

What also resulted was political panic as incumbents realized they were vulnerable. This panic motivated several to violate laws for political purposes. They were caught and convicted.

Bumsted compares the Pennsylvania corruption to political corruption in Columbia and elsewhere where politicians and candidates are murdered and pay-offs are rampant. While the Pennsylvania cases pale in comparison, Bumsted notes that the American system catches corruption at the lower political levels. The American public becoming enraged at these lesser crimes makes the American political system operate better than in countries where the citizens accept major corruption as a norm.

Former Speaker John Perzel was convicted of diverting $14 million in public funds into computer operations and other activities that included political purposes. His crimes, in this series of convictions, involved the greatest abuse of funds. Busted writes of his personal conflicting reactions to seeing someone he covered for years being sent to prison.

Bumsted is critical of grants legislators give to organizations in their districts. The theory is legislators better know which local groups are most deserving. It is also likely that awarding these grants help their reelection prospects. Busted is critical of legislators denying there is “walking around money”, which refers to the practices decades ago, no longer practiced, where legislative leaders gave funds to legislators for favored projects in return for security their votes on issues important to leaders. While that practice is illegal and legislators deny is still happens, the correct terms legislators use is “legislative initiatives”, which is their current practice of awarding grants to favored local groups.

Pennsylvania government has a history of corruption. While others state also have faced struggles with public ethics and laws violations, the Pennsylvania Capitol itself stands as a monument to over-billings and graft in its very construction. There was a highway construction graft conviction in the 1930s. Sun Oil and the Pennsylvania Railroad legally had seats for its lobbyists on the Senate floor until the 1960s. A Senate President Pro Tem reportedly took commissions in awarding state insurance contracts and used the funds for electing Republican Senate candidates, a practices that was then legal. In the 1970s, columnist Jack Anderson investigated state government and claimed organized crime was influential. 28 people were convicted for forcing employees to kick back part of their salaries to the Democratic Party. A leading prosecutor, Dick Thornburg, was elected Governor. Political corruption continued through the 2000s,  which also saw a key prosecutor Attorney General Tom Corbett then being elected Governor.

There were convictions, including of Auditor General Al Benedic,t in the 1980s of selling jobs and promotions in the Auditor General’s office. Even a man who couldn’t speak English bought a job. State Treasurer R. Budd Dwyer was convicted in illegally awarding a contract in return for campaign contributions and committed suicide in public.

Attorney General Ernie Preate was charged with promising to not prosecute illegal video poker operators in return for campaign contributions. Hw pled guilty to mail fraud for not reporting the $20,000 he received from them and resigned. Preate served his time. He later became an advocate against the mandatory minimum sentences he had previousl supported, claiming too many people were being imprisoned who should not be..

State Rep. Thomas Druce was convicted of vehicular manslaughter and insurance fraud for a hit and run accident which killed a man.

State Rep. Frank Gigliotti was convicted of taking bribes in assisting people bidding on public contracts.

State Sen. Joseph Loepper was convicted of supporting legislation that helped a tax colleciton agency that employed him He pled guilty to obstructing an investigation into his hiding taxable income. The plea agreement allowed him to keep his state pension, a penalty that occurs when convicted of a crime committed against the public as the income was considered his private income.

State Sen. Daniel Delp was convicted for hiring two underage prostitutes. He used his state expense account during the transaction.

State Rep. Frank Serafini was convicted of lying about campaign contributions regarding his landfill company.

State Sen. William Slocum pled guilty in a matter where he illegal dumped over 3.5 million pounds of raw sewage into a river.

State Rep. Tracy Seyfert was convicted of improperly obtaining a generator meant for use in firefighting for her personal use and for intimidating a witness in the case

The pay raise legislative vote that happened in 2005 happened at 2 am. It included a pay raise for Judges that Supreme Court Justice Ralph Cappy had advocated. This provided a nod to legislators that the courts would uphold a court challenge to the pay raise bill. Governor Rendell had indicated he would sign a pay raise bill if the legislature also approve his legislative agenda..There was public outcry as the legislature had previously approved an automatic cost of living adjustment to their salaries which then was thought was no longer require a pay raise legislative action.

As a legislative pay raise during the current legislative term is against the state Constitution, what was approved was an unvouchered expense account. This meant legislators received the money for expenses yet they did not need to provide a public record for what was spent.

The legislature also supported created slots casinos, a measure supported by Governor Rendell and Sen. Vincent Fumo. Some theorize this was part of the agenda the Governor sought in return for supporting a pay raise bill.

The public outcry make legislators nervous about their reelection chances. The House Democratic Caucus provided bonuses paid with state money in return for staff who volunteered. It is noted that some staff volunteered without any prior knowledge that bonuses would be paid.

Democratic Leader Bill DeWeese removed as committee chairs those Democrats who had voted against the pay raise. DeWeese claims he thought Speaker John Perzel was going to do the same with Republican chairs who opposed the pay raise. Perzel saw the resulting public outcry and did not so act.

Senate President Pro Tem Robert Jubelirer saw polling data indicating his reelection prospects were in trouble due to the pay raise vote. Jubelier proposed revoking the unvouchered expenses. Lt. Gov. Catherine Baker Knoll made her first business to call upon Sen. Sean Logan was proposed a complete repeal of the pay raises. The pay raises were repealed with only Rep. Mike Veon voting against the repeal. The Supreme Court struck down the repeal and the pay raises continued. Jubelirer still would be defeated in the Republican Primary by eventual winner John Eichelberger.

State Rep. Jeff Habay was accused of forcing his state paid employees to work in his political campaign. His conviction established a court rule that a person benefitted personally by having a public employee working for personal advancement.

Despite this, other legislative offices continued using state paid employees for campaign work during working hours. Mike Veon’s Chief of Statt Jeff Foreman was later convicted for recruiting legislative employees for such purposes. For disclosure, this reviewer worked as a policy specialist for the legislature. I was never approached by Foreman or anyone else to volunteer for campaign purposes  My knowledge of what happened comes from press accounts and this book. Ironically, long after the conviction of Veon, Foreman, and others, I was finally requested to volunteer legally for campaign work by being requested to provide my home email to volunteer after work. I left employment there shortly after this without engaging in any of this political work. While all appears legal, indeed, it is all presented as happening in legal means, I do fear that this apparent continued, and now seemingly expanded, desire to get employees to do campaign work could eventually lead to people once again cutting corners. Hopefully people are now aware of what is legal and what is not and this will not occur.

If I have any concern I have observed about the legislature, it is not campaign work yet a seeming increased reliance on lobbyists along with sharp increases in campaign contributions, especially from interests such an businesses and insurance, that could cause the most potential harm to the legislative process.

Mike Veon ironically had been elected to the legislature defeating an incumbent Barry Alderette over accepting a pay raises. As the only legislator defending the pay raise at the end, he was defeated for reelected by Jim Marshall. Rep. Todd Eachus, who headed the House Democratic Campaign Committee (HDCC) sent Rep. Veon’s campaign $40,000 to pay off its debts. Eachus did so without informing the HDCC Treasurer or other members of HDCC.

The story of the illegal bonuses in return for political work was leaked to the press. While the press rightfully declines who leaked the story, I note that every rumored name was someone who had run afoul of Bill DeWeese. The press learned that three of the four causes also paid bonuses, with some suspicions some were based upon campaign work. The Senate Democrats did not pay bonuses yet the author suspects some received higher salaries for political and personal work, especially for Senator Fumo. Sen. Eichelberger requested the Attorney General investigate as he witnessed Senate staff people campaigning for his opponent, then Sen Jubelirer. Rep. Veon and several House Democratic staff members were indicted and later convicted.

Sen. Vincent Fumo was Democratic Chairman of the Senate Appropriations Committee. He was convicted of having staff attend to several personal tasks including house cleaning, home repair, and tending to his farm. The author writes his case had the most “breadth of criminal activity”. Fumo earlier was a leader in getting slots casinos legalized in Pennsylvania.

Former Rep Frank LaGrotta pled guilty to having arranged with Rep, Veon to put his sister on the public payroll in return for their performing little work.

Rep. Sean Ramaley was charged and found not guilty of working on the state payroll for little work while campaigning to be elected to the legislature. He did appear at his part time job yet prosecutors were unable to prove to the jury if was campaigning during work.

Rep. Veon was convicted again in a separate trial on misusing state funds provided to some non-profit organizations he established. A former legislator testified the organization paid him $5,000 for no work in return. Other irregularities of improperly spending state funds were presented including payments to staff members, hiring a State Senator’s wife with an annual salary that peaked at $122,000, renting an office outside the area the organization was meant to serve, serving as an office for a lobbying organization. As the author discovered in his own research, there are few records as to what these groups spent about $10 million of state funds

Rep. DeWeese cooperated with the Attorney General’s investigator. He turned over evidence leading to convictions of Rep. LaGrotta and his own Chief of Staff. To DeWeese’s surprise, Attorney General Corbett indicted him on matters not related to those investigations. The author believes DeWeese’s had an informal commitment to immunity on the Bonusgate investigation, which the Attorney General upheld, Ignoring the advice of his attorney, DeWeese voluntarily appeared before a Grand Jury. DeWeese was later charged and convicted of having staff members illegally perform campaign activities.

Rep. Perzel was convicted of abusing $10 million of state funds in computer work for campaign purposes. Staff testified they did political work during time they should be working. Perzel’s Chief of Staff had an annual state salary of $160,000 and also received $56,000 in 2005 to manage Perzeo’s reelection campaign.

Former Rep. Brett Feese was also convicted in the misuse of computer funds for political purposes.

It is noted the Senate Republicans gave large bonuses to some of their employees who also did campaign work. Critics of Corbett argue he did not go after current leaders of his political party. The author believes it was more difficult to gather evidence on Senate Republicans as they did not use emails as much, which was a primary source of evidence in other cases. The author also speculates that the Habay case drove the Senate Republican Caucus to act more responsibly. Northampton County District Attorney John Morganelli, who was defeated by Corbett for Attorney General, speculates that timing and resources could have made an important difference in how cases were handled. The focus began on the House Democrats and the other causes could have had time to prepare for their investigations. He also notes the focus on political corruption could have claimed resources that were not as available to investigate and convict Jerry Sandusky of child sex abuses at Penn State University.

Sen. Jane Orie was convicted of using state staff in her political campaign. She was prosecuted by the Allegheny County District Attorney Stephen Zapalla. Orie claimed that prosecution was payback for her Senate inquiry into the Pennsylvania Casino Association which employed Zapalla’s sister and into the “Kids for Cash” scandal where Zapalla’s brother had an ownership interest in one of the involved juvenile detention centers. Her first trial was declared a mistrial when it was discovered that Orie altered documents in the case.

Former Sen. Robert Mellow was convicted of illegally using his influence on awarding state contracts from bidders who rewarded him with gifts and travel.

The author provides recommendations on how to reform Pennsylvania politics to avoid future corruption. Readers may determine which they favor. It is my recommendation that they seek reforms that make institutions more ethical rather than reforming for the sake of reform. It is my observation that the increased costs of campaigns and greater reliance on campaign contributors with deep pockets is the greatest threat to public integrity. Avoid reforms that will only strengthen the role of contributors and focus on ways to make elections more democratic that most closely involve the general public.


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