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Fish Stinks from the Head
August 31, 2011
Former House Speaker John M. Perzel was trapped. Moments before, he had pleaded guilty to eight felonies, and now he was being pursued by a dozen reporters and several TV cameramen down a dingy hallway in the Dauphin County Courthouse. Microphones were thrust forward like weapons. Reporters continued to pepper him with questions. TV reporters in particular seemed to have a stock set of questions: “Are you sorry? What do you say to the taxpayers? How do you feel?” Perzel and his two attorneys, Brian McMonagle and Fortunato Perri, stood with their backs to the media, waiting for an elevator. When they shifted left, the pack shifted left. They were surrounded, and they were saying nothing. Finally, an elevator door opened across the hallway. The speaker and his lawyers made a dash for it. With the door still open, I locked eyes with Perzel for the first time. He looked like a wounded animal. His head was cocked slightly to the right. What I saw in his eyes was pain, an intense pain about his life’s turn.
Sure, I thought he should go to prison. But no human being should have to hurt like this. It was almost as if his entire life, all he had been, all he could have been, was lost in the moment.
I had known John Perzel since his rise to power and at his peak. He was the most powerful Republican lawmaker in Pennsylvania from 1995 through January 2007. He was cunning and ruthless. He was glib and spat words out faster than most humans can think. He worked hard for everything he had, including his job as a maitre d’ at an Italian restaurant in Philadelphia. His downfall came when he reached for even more.
Perzel oversaw the theft of $10 million in state money for computer equipment and programs designed to help Republicans including himself win re-election.
If a computer could do it, he wanted it. If the programs could apply to campaigns, he bought them. In all cases, the taxpayer paid for it. A former top aide would later tell me that the speaker saw no difference between John Perzel the candidate and John Perzel the public official.
“Guilty, your honor,” Perzel told Dauphin County Judge Richard Lewis, moments before the scene at the elevator on August 31, 2011. Perzel and his lawyers all wore dark, pin-stripe suits. The stripe was subtler in Perzel’s suit. He had on a white shirt and a blue tie with a light pattern. His once dark hair was now gray, whitened no doubt by the stress of the past three years when he was under investigation and indictment.
Perzel wasn’t putting money in his own pocket, though a statewide grand jury presentment said he had a scheme to do so. It was about power, pure and simple. It was about holding onto his office and keeping the majority at all costs. It was also about punishing his enemies, including Republican legislators who stood up to him. He also had a scheme to use the new gadgetry to run for governor.
Holding a majority in the 203-member House was key. The majority con- trolled the flow of legislation, committee assignments, and jobs. It meant the best offices. The majority equaled power.
There was a win-at-all-costs mentality among leaders in the highly partisan Pennsylvania General Assembly. Each political caucus in each chamber has its own staff, equipment, web pages, and re-election machine.
PLEA DEAL
Facing 82 criminal counts, John Perzel had reached a “cooperative” plea agreement with the Commonwealth of Pennsylvania. He was now a state witness against three remaining co-defendants. He would soon be on a very short leash held by his new handlers in the Attorney General’s office. Attorney Brian J. McMonagle realized that nothing should interfere with that. Nothing should jeopardize his client’s deal, least of all getting into an ugly exchange with reporters. Since he had been charged in November 2009, Perzel had harshly criticized the Attorney General’s investigation. If he went to trial, he was prepared to invoke a scorched earth approach to take down other Republicans.
The strategy employed by McMonagle, one of the best criminal defense lawyers in the state, was to say nothing to reporters. Perzel’s track record in dealing with media on the whole was not good. Since the 2005 pay raise he helped push through, it was disastrous. So nothing would be said. How much of the remainder of his life would be spent outside prison depended on it.
MASSIVE MISAPPROPRIATION
Perzel and the other crooks who stole a combined $14 million from Pennsylvania taxpayers deserved to be locked up for a long time. Still I was conflicted about them. I respected some of these men and admired their ability as legislators. A few I knew quite well. For better or worse, most of them were part of my life since 1983.
By 2012, eight top legislative leaders had pleaded guilty or been convicted at trial of crimes that essentially involved using public resources for campaigns. The convictions came over a span of four years, from 2009 to 2012, and resulted from prosecutions by the Pennsylvania Attorney General’s Office, the U.S. Attorney for the Eastern District of Pennsylvania, the U.S. Attorney for the Middle District of Pennsylvania, and the Allegheny County District Attorney’s Office. It was unprecedented in Pennsylvania history. At least in modern times, it was also unique among state legislatures across the nation.
“I am not aware of any state that got rid of its leaders because of corruption, as Pennsylvania has,” said Robert Stern, former president of the Center for Governmental Studies in Los Angeles. But Stern and other ethics experts say there is no single place or institution that keeps statistics on the number of convicted leaders. Certainly, some states with FBI sting operations had more legislators charged at one time.
It is difficult to compare because Pennsylvania has more legislative leaders (30) than most other states, given the size of its House and Senate (253 members), noted Alan Rosenthal, professor of public policy at the Eagleton Institute for Politics at Rutgers University. Each political party in the House and Senate has seven leaders (28 in total), and each chamber has a presiding officer, the speaker and president pro tempore.
In all, 38 public officials with ties to the capitol were charged with public corruption by federal, state, and local prosecutors from 2007 through mid-2012. Thirty-one people pleaded guilty or were convicted at trial. These were largely ex-law- makers, a few sitting legislators, and legislative aides, but also included allegations against a Supreme Court justice. The common theme was using public resources for campaigns.
Separately, in Northeastern Pennsylvania, 29 local officials, judges, and contractors were charged with crimes stemming from public corruption investigations since 2009. Bribery-related charges were a common thread. (In addition, two senators were charged, and they are counted among the 37 above with ties to the capitol.)
LEGAL THIEVERY
In Pennsylvania, the crimes that leaders committed from approximately 2000 through 2006 would make just about anyone furious. But the legal thievery they were never charged with was even more maddening. Pennsylvania legislative leaders over the past decade had squandered millions more on high-end restaurant meals, luxury cars, drivers, political polls, catered dinners for rank-and-file members, and liberal policies for lawmakers to collect per diems (averaging $162 in mid-2012) for food and lodging even when they were wined and dined by lobbyists or ate catered meals. In 2007–08, the House Clerk’s Office spent almost $250,000 on catered meals, from elaborate spreads to pizza. They had redundant print shops for the Republicans and Democrats to publish constituent newsletters adorned with their pictures and tantamount to campaign mailers. They had TV studios to put out look-alike news shows for cable TV.
Legislators spent untold millions of taxpayers’ dollars on legal incumbency protection programs — including glossy news releases, newsletters, blast email, and a special legislative office catering to constituents who needed documents from the state Department of Transportation. Millions more were spent over the past decade on “public service announcements” — slick TV spots featuring the incumbents. They spent about $100 million a year on WAMs (walking around money outlays) — a program that allowed legislative leaders to earmark lawmakers’ pet projects for goodwill in their districts. Depending on how you defined it, discretionary money totaled $300 to $400 million.
In the 1990s, former Republican governor Tom Ridge swore he’d get rid of WAMs. But they came raging back like a stage-four cancer. Even while he was governor, a new strain of WAMs surfaced that were called “Ridgies.”
The top leaders — John Perzel; Philadelphia Senator Vincent Fumo, ranking Democrat on the Senate Appropriation Committee; and another powerful Philly leader, Representative Dwight Evans, a Democrat — each controlled millions of dollars a year for projects. There was a $1 million WAM for Evans’ jazz festival at a time when his spokeswoman was denying there were any WAMs in the budget, according to a July 2010 column by Philadelphia Inquirer columnist Karen Heller. Fumo obtained $2.2 million in grants in 1992 for a Columbus Day festival, which included a trip to Italy for Fumo and other officials to bring renowned tenor Luciano Pavarotti to Philadelphia. This was reported in a 2004 Tribune-Review story by Richard Gazarik.
A $900,000 grant was awarded to the Business Institute for International Development in Allegheny County. No one had ever heard of it. There was no phone number and no staff for the institute. It turns out that the institute’s address was the home address of former Democratic senator Mike Dawida, then a lame duck Allegheny County commissioner, as revealed by Tribune-Review reporters Debra Erdley and Rich Gazerik in 1999. Apparently, the ex-senator was planning a start-up company. Dawida turned down the grant after a public outcry. Lawmakers played this cute game, often claiming they didn’t know the term, asking “What are WAMs?”
A RIGGED SYSTEM
All of this was in addition to the $10 million that House Republicans were using illegally in state tax money to pay for campaign computer programs aimed at boosting their chances at the polls. We did not know about it until it was uncovered by a grand jury. And then there was the $1.4 million bonus program by House Democrats to reward staffers who worked on campaigns with illegal bonuses. Or the estimated $2 million in tax money spent illegally by Senate powerbroker Vincent Fumo for his personal and political needs, such as hiring a private detective to spy on his enemies, using state workers to develop his gentleman’s farm, and put- ting friends on the state payroll who did little or no work.
Former House Democratic Whip Mike Veon, from Beaver County, and former House Speaker Bill DeWeese, Democrat of Greene County, had state-paid staffers whose primary duty was to raise campaign money. Fumo had several people raising money on staff. Pennsylvania had never enacted publicly financed campaigns. But they might as well have because legislative elections in Pennsylvania were rigged in favor of the incumbents.
John Perzel would later brag in court about his fund-raising prowess. From 2000 to 2007, he raised $17 million in campaign money for himself, the state Republican Party, and the House Republican Campaign Committee. Despite that pile of cash, he used tax money to pay for sophisticated computer programs to help Republican House candidates. Why? Because it’s hard to raise money, but it’s easy to charge an account at your fingertips. And stockpiling the campaign cash pro- vided a sense of security for incumbents.
There were other methods. From 2005 to 2011, the legislative payroll increased 22 percent to $119.5 million, a Tribune-Review investigation found. People who worked on campaigns often landed state jobs with legislators. The huge staff came into play in Bonusgate, in which Veon and his minions used House Democratic staffers to work on campaigns and rewarded them with secret bonuses. Republicans and Democrats illegally sent House staffers to work on a special election in the Lehigh Valley. The Democrats outdid themselves with 170 staffers in that one election, according to a grand jury finding.
The real crime was the hostile environment created for hundreds of challengers and people who didn’t even bother to run for the state House and Senate because they knew the odds were too steep. About nine of 10 incumbents typically won re-election until leaders reached too far with the middle-of-the-night, 16 to 54 percent pay boost in 2005.
“These kinds of cases where public officials have been found to use government- paid staff, facilities, funds, and equipment in aid of manipulating or trying to control the electoral process is basically a fundamental assault on the whole democratic process,” John Contino, executive director of the State Ethics Commission, testified at a federal court hearing for Fumo in 2011. Challengers would tell you “if the incumbent has an army of government-paid campaign workers to assist them, it’s virtually impossible to challenge them in a democratic process,” Contino added.
In reapportionment every 10 years, politicians further insulated incumbents of their own party and increased the already long odds for challengers by drawing district lines to their liking. A close call for John Perzel in the 2000 election prompted him the following year to draw a Northeast Philadelphia district that would appear to make him legislator for life. That narrow election victory sparked the paranoia that led to Perzel’s constant need for the latest computer gizmos he thought would institutionalize the Republican majority. Only being led off in handcuffs ruined his winning streak at the polls that began in 1978 and ended in 2010.
Without ever giving their consent, Pennsylvanians paid for all of the incumbency protection and perks lawmakers used to reward themselvesThat really made me angry.
GOLDEN PARACHUTES
Under a legislator-friendly state pension law — which legislators hiked by 50 percent for themselves in 2001 — lawmakers with lengthy service typically retired with annual pensions from $50,000 to more than $100,000. John Perzel’s was almost $86,000. He had engineered the 2001 pension boost that went bust when the markets crashed in 2008 and 2009.
Vincent Fumo, a multi-millionaire, was slated for more than $100,000 annu- ally in state pension money, based on 30 years’ service, until the time of his convic- tion. Lawmakers’ base salary, aided by automatic annual cost-of-living increases, was $82,012 in 2011. It was typically one of the top two or three legislative base salaries in the nation. Legislators could retire at age 55, whereas most other state workers reach full benefits at 65, according to a 50-state survey by USA Today in September 2011. It was an insurance policy. The elections were made as uncompetitive as possible. But if the worst happened and legislators lost their seats, they would be rewarded well. In 1968, the year I graduated from high school, lawmakers’ salaries were $7,200. In those days, they had no secretaries or phones.
Perks piled up over the years. While their constituents struggled through the worst recession since the Great Depression, legislators retired with free lifetime health care. In fact, health care for still-serving legislators was free until 2006 in the Senate and 2011 in the House, when members were required to pay one per- cent of their salary toward their state-provided health care costs. One percent.
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