Government Ethics: Alaska vs. Pennsylvania

Amanda Carpenter writes about a report that Alaska Governor Sarah Palin may be cited (though no penalties would be attached) for ethics violations for ... wait for it ... using her fame to raise fund for her legal defense against other nuisance complaints.

Contrast that with the case of Vince Fumo, who not only did the same (using his status to raise legal defense funds), but also used his clout to get legions of politicos and business leaders to write letters to the judge, asking for lenience, since Fumo had done good when he other people's money legally. None of this is considered unethical in Pennsylvania. Of course, stealing millions of dollars is frowned upon in Pennsylvania, but only deserving of a slap on the wrist.

With little indication of a sense of irony, Rep. Mark Cohen has made a few comments on Twitter about Gov. Palin's ethics accusations (and about Mark Sanford). Naturally, the guy who spent $30,000 of taxpayer money for books for personal use would want to chime in on whether Palin may or have not benefited from her office. The guy who let taxpayers foot the bill for his trips to New York (even while other lawmakers paid their own way) sees fit to comment on Mark Sanford's travel habits. Of course, Cohen also sees no need to adopt good-government reforms in Pennsylvania.

Another Pennsylvania House Democrat staffer also saw fit to post on the Palin story, again with an amazing lack of self reflection. After all, it is his caucus (two members and several staff) who have been indicted in "Bonusgate" for using tax dollars for bonuses for campaign work, political polling, and no-work jobs for candidates and mistresses. And one of those indicted members - Mike Veon - has implicated his boss and others for doing the same sort of illegal activity. Of course, they aren't merely using "fame" to raise money to defend these charges, they are using taxpayer dollars.

And I'd be remiss if I failed to point out that former Pennsylvania lawmaker Frank LaGrotta - also a convicted felon - is now blogging about Pennsylvania politics. In his latest, he longs for the good old days, when folks like Fumo, Veon, and he ran the show.

Pennsylvania may not be the most corrupt state in the union (what will Illinois having back-to-back Governors heading off to prison), but it's got to be close. Could you imagine what Pennsylvania would be like with Alaska's ethics laws?

PA Ranks Low on Ethics Disclosure, Ask Bob Mellow

The Pennsylvania legislature got a "F" from the Center for Public Integrity in a national report on lawmakers disclosing information about assets, holdings or connections to special interests. In this study which looks at accountability, performance, professionalism, efficiency, cost-saving and disclosure of information by the legislature, the PA legislature dropped two slots to 35th among states. So what do other states do that PA does not:

• State lawmakers here are not required to describe any outside employment nor the range nor value of income from it.
• Our lawmakers are not required to disclose a spouse's employment or even a spouse's name. Other states, 28 of them, see such a requirement as a good way to avoid conflicts of interest or appearances of conflict.
• Our lawmakers are not required to describe entities for which they serve as officers, board members or directors - same for spouses. The only requirement is listing "any office you hold" in a business entity.
• Our lawmakers are not required to provide information on real property they or a spouse own, nor its value, unless such property "was involved in transactions" with the state or other governmental bodies.
• They are not required to report financial interest in any business unless they own more than 5 percent of its equity or assets, nor describe any for-profit business in which they hold interest above that threshold.

The need for more disclosure is imperative as top Democrat senator Robert Mellow is embroiled in of misuse of taxpayer dollars. Senator Mellow spent more than $200,000 in tax dollars to rent office space he owned. Mellow has continued to maintain that he has been compliant with the state ethics codes.

Will Fumo Conviction Deter Public Corruption?

Alex Charyna mocks Governor Rendell's ridiculous statement that Sen. Vince Fumo (sentenced to 55 months in prison, or about 12 days for each felony conviction), should only spend one year in prison, because that "would have been a sufficient warning to any potentially corrupt politician."

Truly, any observer of Harrisburg, or Philadelphia, or Luzerne County politics must find that laughable.  As Alex notes,

I’m curious though…. have one year sentences in the past deterred any political corruption?

How many Pa politicians were in jail ahead of Senator Fumo?

He’s not the first, and he wont be the last.

Judicial Selection Revisited

John Baer has an interesting column on judicial elections, noting that, when looking at a list of yesterday's election winners, that "Nobody's heard of these people" and cites a few instances of judicial corruption.  He thus argues for judicial selection.

The argument that no one knows much about judges rings true, until I consider the logical conclusion of that reasoning, which is that since we don't know much about school board members, county row offices (or even commissioners), township supervisors, municipal tax collectors or auditors, or even state legislator, we shouldn't elect those positions either.

We have debated the issue of merit selection on these pages before and held a forum on the topic.  There wasn't much of a conclusion to that, other than that their is wide disagreement, and that the devil may be in the details of the merit selection process.

Paying for Criminals' Pensions

Yesterday, the PA House passed an amendment making it illegal for public employees to request lump-sum pension payments after they have been convicted of a crime related to their duties.

The policy is a response to former Judge Mark A. Ciavarella Jr.’s request of nearly $234,000. Ciavarella is eligible for a monthly pension payment of at least $5,150 until sentencing, but a pension payment is protected from forfeiture.

Revoking Ciavarella's pension will do little to address the billions of dollars taxpayers are expected to shoulder in unfunded retirement benefits. Then again, given Pennsylvania's record of convicting civil servants, perhaps the law would make an impact.

But if lawmakers are seriously concerned about criminals hosing taxpayers they should reform SERS and PSERS by moving to a defined contribution plan instead of current defined benefit plans.

Big Government, Big Corruption

Dan Mitchell from the Center for Freedom and Prosperity links the connection between government growth and corruption in this clip. He notes that rather than promoting honest dealings, government intervention and regulation actually encourage corrupt behavior.

Schroder Bills to Save PA Taxpayers Over $600 Million

State Rep. Curt Schroder has unveiled a number of legislative proposals which, by his estimates would save Pennsylvania taxpayers well over $600 million annually.

House Bill 1056 would essentially return Pennsylvania to a part-time legislature, saving taxpayers $12.8 million. ...

 

House Bill 1057 would achieve additional savings through the elimination of cost of living increases, meritorious raises or other salary increases for members of the General Assembly. Schroder said the wage freeze would save the state as much as $3.5 million this year alone. ...

 

House Bill 1058 would annually transfer unspent or uncommitted funding contained in legislative accounts to the state Treasury. These accounts currently contain surpluses of about $200 million. House Bill 1059 would eliminate discretionary grants, also known as walking around money or WAMs. It is estimated this move would save taxpayers up to $600 million annually.

 

House Bill 1061 would change the pension system for state legislators who take office after Dec. 1, 2010, to a defined contribution plan.

We have written on the looming crisis in state pensions and the need to move to a defined contribution plan frequently, support eliminating WAM programs (as well as all corporate welfare), and have discussed the merits of a part-time legislature.

You can follow all these bills at PennsylvaniaVotes.org   

Pennsylvania's Lawsuit Racket

The Wall Street Journal has a scathing piece on pay-to-play politics in Harrisburg, specifically in relation to Gov. Rendell and his ties to another law-firm (HT John Lott):

Rather, what's at issue is the fact that the civil action against Janssen is being prosecuted on behalf of the state by Bailey, Perrin & Bailey, a Houston law firm. And it turns out that Pennsylvania Governor Ed Rendell's Office of General Counsel was negotiating this potentially lucrative no-bid contingency fee contract with Bailey Perrin at the same time that the firm's founding partner, F. Kenneth Bailey, was making repeated campaign contributions totaling more than $90,000 to the Democratic Governor's 2006 re-election bid.

Janssen's motion seeks to invalidate the contingency-fee arrangement and lays out a detailed timeline of Mr. Bailey's political contributions and the subsequent actions of the Governor's office. Here it is in part:

- On February 23, 2006, Mr. Bailey contributed airplane travel valued at $9,200 to Governor Rendell's re-election campaign.
- On March 3, 2006, Mr. Bailey contributed $50,000 to the Rendell campaign.
- On May 12, 2006, Mr. Rendell's office submitted a "request of delegation" to the state Attorney General, a Republican, that would allow the Governor's office to handle the case against Janssen.
- On May 24, 2006, the request was granted.
- On June 30, 2006, Mr. Bailey contributed $25,000 to the Democratic Governors Association (which gave Mr. Rendell more than $1 million for his campaign in 2006).
- On August 14, 2006, Mr. Bailey signed a no-bid contingency-fee contract with the state.
- On September 15, 2006, Mr. Bailey contributed airplane travel valued at $6,900 to Mr. Rendell's campaign.
- On October 23, 2006, the Governor's Office of General Counsel mailed the contingency fee contract to Mr. Bailey.
- On October 30, Mr. Bailey contributed another $25,000 to Mr. Rendell's campaign.
- On February 26, 2007, Bailey Perrin filed the initial complaint against Janssen on behalf of the state.

Asked about the timing of Mr. Bailey's political donations, Rendell spokesman Chuck Ardo says Bailey Perrin was selected because of "their experience in these kinds of legal matters." Mr. Ardo says the Governor was aware of the campaign contributions but "had nothing to do with the selection." Asked why the Governor thought the case should be handled by his office rather than by the state AG, Mr. Ardo says, "the suit involves agencies directly under the Governor's control, and the General Counsel's Office believed it could eliminate a lot of unnecessary work by dealing with those agencies directly." Readers can decide if they buy that one.

PA House GOP Leader Offers Gov't Reform Plan

Pennsylvania House Republican leader Sam Smith unveiled a 12-point government reform plan which he calls Pennsylvania’s Agenda for Trust in Harrisburg (PATH).

The proposals are:

1. No staff allowed to campaign during office hours.
   
2. Public officials cannot start nonprofit organizations while in office.
3.  Dollar one reporting of campaign contributions, lobby disclosure and ethics statements.
4. State grant accountability.
5. Searchable database for all state spending.
6. General Assembly audits by independent auditors.
7. Strengthening whistleblower protections.
8. End Pay-to-Play mentality in Pennsylvania by enacting state contracting reform:
9. Banning public official from simultaneously working for a lobbyist firm.
10. Create an Ethical Code of Conduct for executive branch.
11. Strengthen the state Sunshine Law.
12. Limits on state contractors ability to use non-public information for their own gain.

As a package, these reforms seem quite strong, and would be a huge improvement in "business as usual" in Harrisburg.

While I’m not overly excited about additional campaign finance reporting requirements (in fact, I'd be concerned that making every single campaign donation public information would lead to political and social intimidation against donors), some of the other reforms are among those we have recommended. 

We have called for a spending database previously, and ending Pay-to-Play and independent audit of the General Assembly should also rank among the top priorities for government reform.

Repeal Salary Increases?

As of Friday, 89 members of House and 31 members of Senate have either given back their 2.8% pay increase to the Treasury Department or to charity.

Senate Majority Leader Dominic Pileggi, R-Delaware County, has been paying back $137.18 monthly to the Treasury since December. Even Governor Rendell turned down his $4,764 increase and encouraged cabinet members to do the same.

Rather than pay back an increase, which counts towards pension credits, requiring a vote on pay increases would at least end the ability of the legislature to give themselves a raise.

Eric Epstein explains, "I think the governor and legislators once again demonstrate they don't get it. These guys skip dessert and want to be called a hero."

"Full-Time" Lawmakers Earn Plenty of Outside Income

Team 4 Reports uncovers that Pennsylvania legislators, who earn about $80,000 per year in salary for their full-time job, also earn plenty of outside income (HT Grassroots PA).

Some examples of how the game is played -- and remember, it's all perfectly legal:

• Bucks County Sen. Robert Wonderling sits on the Game and Fisheries Committee and lists himself as a paid employee of a company that landed a software contract with the Pennsylvania Fish and Boat Commission.
• Uniontown Rep. Tim Mahoney opened a new district office last month in Chalk Hill, Fayette County. Rent checks are going to one of the men Mahoney lists as a business partner in his annual statement of financial interest. Mahoney tells Team 4 the company was recently disbanded.
• For years, taxpayers have been sending rent checks for Lackawanna County Sen. Robert Mellow's district office to a company owned by his wife. But Mellow never reported that until he got a divorce and assumed 50 percent ownership in the company. He didn't have to report it under the state's ethics law.
• Rep. Mark Longietti sits on the House Local Government Committee and also is solicitor for Delaware Township, Mercer County, which applied for and received a state grant last year.
• Lancaster County Sen. Michael Brubaker is owner of Team Ag, a company that advises agricultural firms about government regulations. Brubaker also is Chairman of the Senate Agriculture Committee.
• Mechanicsburg Rep. Glen Grell lists himself as an attorney of counsel with Buchanan Ingersoll Rooney, a law firm with no fewer than 35 registered lobbyists in Harrisburg. There's no law against that either, even though Rep. John Maher tried and failed last month to get it outlawed.

Personally, I think lawmakers should earn most of their income from "outside" sources, and less from taxpayers - i.e. they should become part-time legislators, who also have real jobs in the private sector.

But taking payment for sitting on boards, commissions, local agencies, etc. because you are a lawmaker - particulary when those groups come to the General Assembly for funding and favorable regulations - is clearly a conflict of interest.

Veon Fallout: An End to WAMs

Yesterday, Pennsylvania Attorney General Tom Corbett announced additional charges against former Rep. Mike Veon and staffer Annamarie Peretta-Rosepink for their role in directing state funds to the Beaver Initiative for Growth. 

Veon and former Sen. Gerald LaValle, D-Rochester, funded the nonprofit with more than $10 million in state grants over a decade.

Most of that funding came from Community Revitalization program, also known as Walking Around Money or WAMs).  Former Sen. Vince Fumo, convicted last week of 137 counts, also directed WAMs to a nonprofit organization he controlled, which he then used for personal gain.  These funds are controlled by legislative leaders, to be dolled at their discretion to rank-and-file members upon request (Veon and Fumo were both members of leadership).

Is it time to eliminate WAMs?  We think so, and have highlighted not only the egregious spending from that program, but also the process by which funds are doled out.  Other reform groups are also concerned about how these funds are used, and the complete lack of oversight.

A number of House Republicans have also called for the elimination of WAMs and "discretionary funds." And now Senate Pro-Tem (and Lt. Governor) Joe Scarnati admits this indicates "evidence of a breakdown in the state's grant system." (HT Grassroots PA).

Amazingly, Democrat leaders defend WAMs:

"We believe the system works," said Bob Caton, a spokesman for House Speaker Keith McCall, D-Carbon. "A few aberrations aren't enough to condemn the good work that these dollars do in communities all across the state."

Senate Minority Leader Robert J. Mellow, D-Lackawanna, said the grants are given like any other state check to people who are expected to have honesty and integrity, such as local school districts. [emphasis added]

When they misuse the money, it is up to investigators and auditors to catch them, Mellow said.

How many more of their colleagues need to go to prison for them to see the light of day?

More Taxpayer Money Wasted on Promotions and Marketing

I'm not sure if readers are aware of this, but Congress recently passed something called a "stimulus" bill a few weeks ago.  In order to publicize the stimulus funding, Governor Rendell spent $100,000 to hire an outside public-relations consultant.   (HT: Grassroots PA).

Surely, given the budget shortfall and hiring freeze, they hired the best person they could find for the lowest cost, through competitive bidding.  The Governor wouldn't just hire someone with numerous political ties from doing "public-relations and political-campaign work for high-profile public officials including Rendell, former Mayor John F. Street, and former State Sen. Vincent J. Fumo."  Oh, right.

On a related note, John Micek notes that House Democrats are producing - at taxpayer expense - clips for the radio meant to sound like authentic news stories.   This comes from the tens of millions of dollars the General Assembly has for self-promotion (including things like "public service announcements", glossy newsletter, calendar give-aways, and the like).   Sen. Mike Folmer has legislation that would require all such advertising to state "paid for at taxpayer expense."

Pay to Play Culture in Harrisburg

ABC 27 has a story/video highlighting the "pay-to-play" cronyism in Harrisburg, specifically the $11 million in outside legal fees (despite hundreds of lawyers on staff) going to Ballard Spahr - a law firm with deep ties to Governor Rendell.

An end to cronyism in state government?

The Pennsylvania House GOP has unveiled several proposals to end "pay to play" - including cracking down on the ability of the administration to award of no-bid contracts. 

In our Government on a Diet report, released today, we identify almost $5 billion in wasteful government spending, highlighting cronyism among a myriad of other items.  However, these are things that Rendell refuses to cut -a Rendell spokesman has stated the governor would veto any legislation revoking his ability to grant no-bid contracts, such as those to his former law firm.

Pennsylvania Legislature’s growing girth

Robert Swift has a good article on the "professionalization" of the Pennsylvania legislature, including  breaking down the cost of a legislator:

At $78,314, the annual salary for rank-and-file Pennsylvania lawmakers is the fourth-highest in the nation. The total cost for taxpayers to support each lawmaker runs higher — from $125,000 to $150,000 annually depending on lawmakers’ expenses. ...


In addition to salary, House lawmakers receive an average $11,349 toward health insurance, an average $5,351 for prescription drugs with a co-pay, dental and vision benefits and a number of per-diem payments. Pensions and life and disability insurance benefits also count as individual benefits.

Support costs for House lawmakers include a $20,000 office expense account, a $7,800 vehicle expense reimbursement and $4,000 postage account. House lawmakers can use a car from the state government’s fleet of more than 16,000 or be reimbursed for driving their own cars.

Senators receive an average $13,791 toward health insurance and dental and vision benefits. Since 2007, senators pay 1 percent of their salary to participate in the health care plan. They receive per diems, pensions and life and long-term care insurance as well.

Support costs for senators, who have larger constituencies, include a $25,000 expense account and $26,500 postage account. They can use a state car or claim mileage, currently at 55 cents a mile.

House and Senate lawmakers can claim a $143 per diem to cover costs of lodging and meals. The per diem amount fluctuates annually based on federal guidelines. Estimates of total annual per-diem costs are in the $2 million range. House members can claim per diems for voting and nonvoting session days, attending committee meetings, the day after the last weekday of a session and for overnight stays. ...

Lawmakers are assisted by nearly 3,000 staffers. Pennsylvania ranks behind only New York in size of the legislative staff, according to a 2003 NCSL study, the most recent available.

Thirty-nine House employees were paid more than $100,000 last year, according to records. Thirty Senate employees were listed with salaries more than $100,000 as of Dec. 31.

Deforming the Pennsylvania House?

Democracy Rising Pennsylvania has an alert about proposed rules changes in the Pennsylvania House of Representative, that would undo much of the reforms of 2007. The changes including easing the time rule (allowing legislation to be enacted after 11 pm), ending the 24-hour waiting period to vote on final legislation - both of which would restrict the ability of the public to read the legislation, or for the Commonwealth Foundation to input it into Pennsylvania Votes, before it gets passed into law.

The changes would also revert back to allowing the Rules Committee to amend legislation, which was an old trick used to "gut-and-replace" bills with leadership derived bills (the Pay Raise was created in such a manner).

Ironically, the House Democrats cited these changes to the rules in 2007 as one of their great accomplishments in the spirit of reform.

Cut Legislature First

The Philadelphia Inquirer editorializes that the first item to be cut from the budget should be the legislature's budget, noting this is the source of funding for bonuses, no-work jobs for mistresses, and Fumo's posse (not to mention the legal fees tied to Bonusgate and legislators' promotional calendars).

For the past two months, the public has been treated to daily allegations in federal court of how State Sen. Vincent J. Fumo (D., Phila.) spent "other people's money" - including taxpayer dollars - on himself. Prosecutors say he misused more than $2 million in Senate funds.

Attorney General Tom Corbett is prosecuting a dozen current and former House Democratic staffers and officials in a scheme that allegedly paid aides $1.3 million of taxpayers' money for campaign work. One aide, the former chief of staff to House Majority Whip Bill DeWeese (D., Greene), earned $42,000 in bonuses over three years while allegedly hiring a beauty queen with taxpayer money so she could become his paramour.

Republicans also spent hundreds of thousands of dollars from state coffers on staff bonuses, although apparently not for campaign work. Either way, the habit was an extravagant use of tax money. And a grand jury is examining whether the House GOP improperly used a $9 million taxpayer-funded database for political purposes.

The Inky could have added that the legislative leadership accounts currently have an estimated $250 million in reserve that they are sitting on, and that Sen. Fumo and Rep. Mike Veon have also, allegedly, been illegally using the several hundred million in legislative-controlled WAMs.

Full-Time Legislators still not the norm

The National Council of State Legislatures has some new data on occupations of state legislators.

Here in Pennsylvania, 77.5% reported their occupation as "full-time legislator" (even though PA has a full time legislature, some members consider something else their occupation, either what they do outside the days in session, or what they did before entering office).  Nationally, only 16% consider themselves "full-time legislators" - while this is a sharp rise from less than 3% in 1976, and now tops lawyer as the top profession, it means that an overwhelming majority are not full-time legislators.

Regionally, full-time legislators remain extremely rare in the South (5%).  Coincidently, the Southern states also tend to have lower taxes and less regulation.

Corruption and Potential for Reform in State Contracts

Chris Freind has a five part series in The Bulletin on conflicts of interest, corruption, and the inability to get reforms passed in how state contracts are awarded.  The articles describe the connection of Gov. Rendell to his former law firm Ballard Spahr, with ties to the Delaware River Port Authority, the Philadelphia Regional Port  Authority, GTECH, and the PA Turnpike, among others.  

• Ballard and Rendell:  Attached at the Wallet
• Ballard's Estey Teaches "Legal Ethics"
• Political Contributions and Gov't Contracts: A Fine Line
• Rendell and GTECH--- State Awards Contracts to Company With "Checkered Past'
• Legislators Introduce Bills Aimed at Reforming State Contracts