Bonus probe charges looming

Sunday, June 22, 2008

BY CHARLES THOMPSON
Of The Patriot-News

A time bomb is poised to go off in the state Capitol.

Attorney General Tom Corbett's yearlong probe of the state House Democratic caucus could soon yield criminal charges against one or more former lawmakers and staffers, said sources familiar with the investigation.

If any lawmakers are charged, they could be damaged in a fall campaign. It could hurt the Democrats' chances to retain their one-seat majority in the House.

"If this involves several current members or staff ... the ramifications can be pretty big," said Terry Madonna, a political science professor at Franklin & Marshall College.

A grand jury panel meeting in Harrisburg could recommend criminal charges as early as this week, which would follow more than 100 interviews with current and former staffers and months of testimony.

If charges are issued in the coming days, it could complicate efforts of lawmakers and Gov. Ed Rendell to finish the $28 billion state budget for 2008-09. If a budget isn't in place by the beginning of the fiscal year on July 1, more than 25,000 workers could be furloughed, Rendell has said.

Charges against lawmakers could be a distraction from issues facing the General Assembly. Lawmakers are wrestling with proposals to expand health care, to invest more in energy alternatives and to turn the Pennsylvania Turnpike over to a private operator to raise money for roads, bridges and mass transit.

Some people who have worked with Corbett said he might wait until the Legislature finishes its work on the budget and breaks for the summer before announcing any criminal charges.

A widening investigation:

The investigation began with the question of whether legislative staffers were paid bonuses -- out of taxpayer dollars -- for performing campaign work. But the investigation has gone beyond the payment of bonuses.

It has evolved into a probe examining the use of state employees and resources for political campaigns, attempts to destroy evidence, forays into contracting, campaign finance and intimidation of witnesses, sources said.

It is not clear when or what charges will be filed. A grand jury's report only contains recommendations for criminal charges. Prosecutors decide if charges will be filed, but because they draft the presentments in the first place, they almost always follow through with charges.

Whatever happens, this investigation at the Capitol "is precedent-making, certainly" in terms of its scope, said Robert Butera, a Republican from Montgomery County who served in the state House from 1963 to 1977.

Butera said that, while he had four or five colleagues convicted of major crimes, those were always "investigations of individuals."

The biggest and longest-lasting changes might occur in caucus operations with regard to elections, possibly including stronger rules regarding the separation between politics and government for legislative staffs, he said.

"Any investigation which results in the exposure of excesses, whether it leads to convictions or not, is cleansing," Butera said.

Democrats feel heat:

Corbett's investigation, ostensibly of all four legislative caucuses, focused most intently on House Democratic caucus operations since last summer.

Interviews with a number of caucus employees and attorneys familiar with the probe said the initial phase of the investigation is drawing to a close.

Corbett, a Republican who is up for re-election this year and is a possible gubernatorial candidate in 2010, has subpoenaed records from House and Senate Republican caucuses.

But it is not clear if any GOP staffers have been questioned or subpoenaed.

Democrats have railed against what they call an imbalance. But Corbett's spokesman, Kevin Harley, insisted that all caucuses have been or will be looked at evenly, and that state attorneys are simply "following the evidence."

Seven Democratic staffers were forced from their jobs in November.

House Majority Leader H. William DeWeese said information uncovered by the caucus's legal team in response to subpoenas from Corbett made their continued employment "untenable."

DeWeese, who declined requests for an interview for this story, has denied personal knowledge that the bonus program had been adapted for political rewards.

"I knew about Christmas bonuses," DeWeese told The Patriot-News last year. "I was not aware of bonuses for campaign work at all."

Sources close to the probe said they believe charges will be filed against some of the dismissed Democratic staffers. At least two have been granted immunity and are believed to be cooperating with investigators.

In December, a handful of e-mails were published in the Pittsburgh Post-Gazette that appeared to show a link between bonuses and campaign work. House Democratic bonuses skyrocketed from $435,000 in 2005 to more than $1.8 million in 2006, when they regained majority control of the House.

The e-mails appeared to implicate former Rep. Mike Veon, a Beaver County Democrat widely seen as the field general of caucus operations; Mike Manzo, DeWeese's former chief of staff; Scott Brubaker, the Democrats former director of administration; and Eric Webb, former director of member services.

Separately, the newspaper obtained information that appeared to show that two other staffers might have been doing campaign work out of the Capitol: Steve Keefer, the caucus's former information technology director; and Brett Cott, a former staffer for Veon and DeWeese.

Former and current staffers said they have had their lives on hold until prosecutors make their decisions.

"Nothing I ever did ... ever hurt anybody," said one of the dismissed staffers, who asked not to be identified because of the investigation.

The Harrisburg probe has dovetailed with a separate grand jury investigation based in Pittsburgh, an investigation that sources said has been probing Veon's involvement with the Beaver Initiative for Growth.

The initiative is a nonprofit development organization Veon formed in his home county with Sen. Gerald LaValle, D-Beaver, that some people have alleged served as a sort of holding bank for $11 million in state grant money that Veon had sway in disbursing.

Veon and LaValle, according to published reports, were the sole directors of the nonprofit before Veon lost his legislative seat in 2006. After the election, LaValle and a new board decided to start to dissolve the organization.

Veon declined repeated requests for comment.

Changes at the Capitol:

At the Capitol, Democratic House members and staffers said they look forward to getting some answers.

"Whatever [Corbett] feels like doing, get it done, get it over with, so that we can move on," said Rep. David Levdansky, D-Allegheny.

State Rep. Nick Kotik, D-Allegheny County, said everybody's waiting for a resolution.

"It's been a big distraction, and the sooner it's over the better," he said.

Russ Eshleman, a journalism professor at Penn State University and a former Capitol reporter for The Philadelphia Inquirer, said it was a grand jury report in the 1990s that led to major reforms in the operations of what had come to be widely seen as a dysfunctional Pennsylvania Supreme Court.

"I would hope that if the investigation finds that lawmakers and legislative employees were using government funds for political purposes, and that that was done in a significant way... that it would be a watershed moment," Eshleman said.

CHARLES THOMPSON: 705-5724 or cthompson@patriot-news.com

AT A GLANCE

Attorney General Tom Corbett's office is investigating whether any of $3.6 million in taxpayer-funded bonuses paid to legislative staffers in the 2005-06 session were rewards for campaign work, which would be illegal. The probe is looking at Democrats and Republicans in the Senate and House, Corbett's office has said. No charges have been filed.

Source: The Patriot-News