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Headline at Drudge Report: Pennsylvania State Capital Mulls Bankruptcy as a Budget Option…

Harrisburg, the capital of Pennsylvania, will consider Chapter 9 bankruptcy protection along with tax increases and asset sales as options to address $68 million in debt service payments due this year, the chairwoman of a City Council committee said last night.

Every option, including tax and fee increases, bankruptcy and a state takeover through Pennsylvania’s Act 47 municipal oversight program will be considered, said Susan Brown-Wilson, chairwoman of the Budget and Finance Committee, which began a week of hearings last night to consider a 2010 spending plan.

The $68 million in debt service payments that Harrisburg faces in connection with the construction of a waste incinerator this year is four times what the city of 47,000 expects to raise through property taxes, and $4 million more than the city’s entire proposed operating budget.

Which political party runs the city of Harrisburg?

If you guessed Libertarians, you’d be wrong.

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WPVI:

The U.S. Nuclear Regulatory Commission says the small amount of radiation detected at the Three Mile Island nuclear power plant is not significant.

Specialist John White has told ABC News that there is no indication that radiation at the plant exceeded or even approached regulatory limits.

The commission sent investigators to the central Pennsylvania plant after a small amount of radiation was detected.

About 150 employees were sent home Saturday afternoon, but officials say there is no public health risk.

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Here’s your link for the streaming video.

Update: Perzel is the biggest name so far, former Rep Brett Feese.

Perzel is looking at 82 counts.

The other eight names are staffers.

Update: The picture:

Update: Charges are not for bonses, but a re-election campaign machine on taxpayer dollars.

Update: As expected, these indictments are painted as political opportunism by the indicted. Corbett did not respond.

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I swear I saw a movie just like this.

A man who worked for a dozen years as a nurse’s aide outside Washington, DC, and in Harrisburg is back home in the mountains of western Uganda — ready to be named king.

Starting Monday, Charles Wesley Mumbere will rule over Rwenzururu, a kingdom of 300,000 people.

Mumbere, in his 50s, lived in the United States for 25 years but kept his royal roots secret until July, when he was interviewed by The Patriot-News of Harrisburg.

His father led a secessionist movement in 1961 and was crowned king. Mumbere inherited the title at age 13 and took charge at 18.

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Rendell’s Taxes Would Kill Pennsylvania

BY CHRIS FREIND

Despite a constitutional requirement that a budget be in place by June 30, the impasse remains, giving Pennsylvania the distinction of being the only state without a fiscal plan.

After 67 days, why can’t our elected officials figure out a solution? If you’re told that it’s because of the complicated inside political minutiae that occurs in the state capital, you’ve been misled.

This rift between Democratic Gov. Ed Rendell and the Senate Republicans is as simple as is gets.

One side truly cares about the welfare of Pennsylvania citizens, and the other cares about his legacy.

The Senate, which happens to be the only Republican legislative body north of Virginia and east of Ohio, has done a stellar job of adhering to its Party principles by refusing to raise taxes. Period. Its leaders, including Sens. Pileggi, Scarnati and Orie, have stood stronger than most political analysts predicted, and continue to win the support of the people because of their convictions.

These leaders have articulated the position that government, just like Pennsylvanian families, must tighten its belt, especially when times are tough. Of course some cuts are tough to swallow, but in large part, many spending programs should have never been passed in the first place. Over-bloated budgets, increased bureaucracy, and reckless spending all have to be reigned in, and that’s exactly what the senate is doing. Its bottom line is that restoring fiscal sanity to Harrisburg must be the cornerstone of any budget deal.

Most important, the Senate innately understands that you cannot tax your way out of a recession and into prosperity.

Bingo! It’s that simple. And that idea, anathema to Ed Rendell, is why there is no budget deal.

Gov. Rendell sees it differently. His vision? To further burden his constituents by increasing tax rates (he wants to raise the personal income tax by 16%), expand existing taxes (he has proposed widely expanding the scope of the sales tax), and enact new taxes (he had proposed high taxes on natural-gas extraction of what could be Pennsylvania’s next booming industry – the Marcellus shale fields).

Oh, and he wants to increase revenue by allowing video poker and table games throughout the state.

What Mr. Rendell doesn’t get, and probably never will, is that the way to increase revenue for state coffers is by creating a business-friendly state. Instead of trampling on the backs of already-weary Pennsylvanians, which only causes more flight of our best and brightest people and companies, he should be pushing to attract business and the high-paying jobs that come with it.

But when a state has the reputation of having one of the worst business and legal climates in the country, the facts speak for themselves.

Pennsylvania was once the leading industrial powerhouse in the country, a magnet for companies to locate here, and with them, the best and brightest workforce America had to offer. Our children were educated here—and actually stayed in Pennsylvania because of the jobs that were created by a booming economy.

But now our biggest export is our children. How many recent college graduates stay in Pennsylvania? How many parents have to make a long distance call to talk with their children? Healthcare costs for employers and employees have skyrocketed. In many cases, employers simply cannot continue to offer health care benefits and remain competitive.

Too many of our nation’s finest doctors come to Pennsylvania for an education only to flee to other states when they discover how heavy the burden of malpractice insurance is here.

In much of Pennsylvania, the manufacturing economy is little more than a distant memory. Our hostile legal climate has increased the cost of doing business in Pennsylvania to the point that we are virtually dead last in America for job creation.

The number of companies—and jobs—moving away from Pennsylvania speaks for itself. In too many parts of Pennsylvania, the economic lights have already dimmed, and may soon go out altogether.

Our economic decline can’t simply be shrugged off as the unfortunate consequences of the transition to a twenty-first century economy. Left unchecked, it has the potential to turn much of Pennsylvania into an economic backwater shaped only by the sad ghosts of the past.

If Rendell’s tax plans were to pass, that will be a stake through the heart of the Commonwealth, a final last gasp for Pennsylvania.

By contrast, if Pennsylvania is to regain its once proud position, it must aggressively rebuke the Democrats’ motto of loving jobs but hating employers.

With the senate holding the line, that might just happen.

Chris Freind, author of “Freindly Fire,” is an independent columnist and investigative reporter whose home newspaper is The Philadelphia Bulletin. Readers hail from six continents, thirty countries, and all fifty states. He can be reached at CF@FreindlyFireZone.com

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York Daily Record

“I think prayer is talking to God, so when I pray, I try to talk to him,” said Stoltzfoos, the pastor of Freedom Valley Worship Center in Straban Township, Adams County.

However, that principle clashed recently with a new policy of Pennsylvania’s Speaker of the House, Keith McCall, D-Carbon County.

Stoltzfoos had been invited by state Rep. Will Tallman, R-Reading Township, Adams County, to open Tuesday’s session of the House with a prayer as guest chaplain.

The pastor declined the invitation after someone on McCall’s staff told him he could not use Jesus’ name in the prayer.

“First of all, I don’t see how Jesus is denominational. The whole Christian world is called after him,” Stoltzfoos said. “I just feel like, if you want me to pray, then I have to pray to the one thing I know. I only know one God personally. I only serve one God. How do I do something that dishonors him?”

The policy — not yet three months old — requires guest chaplains to first submit their prayers in writing and then, if deemed necessary, agree to change their words to meet “nondenominational” guidelines established by McCall’s [D-PolitcalCorrectness] staff.

It is not an attempt to silence religious leaders, McCall [D-1stAmendmentHuh?] spokesman Bob Caton said, but rather an effort to prevent taxpayers from having to foot the bill of a lawsuit if someone objects to a prayer’s contents and chooses to sue the state.

A building full of lawyers and they’re afraid they’ll be sued?

Somehow I think that fear will come true.

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Hah!

A retired police chief said he was robbed by “probably the dumbest criminal in Pennsylvania,” at a police officers’ convention on Friday morning. John Comparetto said as he came out of a stall in the men’s room, a man pointed a gun in his face and demanded money. There were 300 narcotics officers from Pennsylvania and Ohio at the gathering.

Comparetto gave up his money and cell phone. But when the man fled, Comparetto and some colleagues chased him. They arrested a 19-year-old man as he was trying to leave in a taxi.

(tip to JWF)

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Some video from the ‘tube.

(tip to theJazzDiva via Twitter)

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Inquirer’ Bailout Talks Raise More Questions
Publisher, Governor Make Conflicting Statements
By Chris Freind, The Bulletin

The Bulletin and other media outlets have recently disclosed ongoing discussions between Pennsylvania Gov. Ed Rendell, D, and Philadelphia Media Holdings (PMH) Publisher and CEO Brian Tierney. A possible taxpayer bailout of the struggling media company stands at the heart of the issue.

PMH bought the Philadelphia Inquirer and Daily News in 2006 for $562 million, and approximately $400 million remains in debt. The company is in default because it has not made a payment on its loan since June of last year.

There has been significant public opposition to a media entity seeking financial support from the government, including a Wall Street Journal editorial labeling it “the worst bailout idea so far.” 

Despite this, the governor’s press secretary, Chuck Ardo, stated earlier this week that Mr. Rendell is still open to continuing the bailout discussions.

Complicating the matter are contradictory statements made by Mr. Ardo and Mr. Tierney. 

According to a story on KYW News Radio, Mr. Ardo said there were discussions about state agencies renting space in the newspapers’ building.

Additionally, Mr. Ardo stated that some bailout conversations involved two of Pennsylvania’s large state pension boards, the State Employees Retirement System (SERS) and the Public School Employees Retirement System (PSERS).

“I don’t know the specifics of the conversations, but the governor did suggest that Mr. Tierney speak with the pension boards to see what kind of arrangements could be worked out,” Mr. Ardo was quoted as saying on KYW.

Mr. Tierney made a contradictory statement, according to the news radio website, by claiming that discussions did not involve the use of pension fund dollars to buy any of the papers’ debt. 

Yet according to a Jan. 31 article in the Inquirer, “Gov. Rendell said he arranged a recent meeting between the publisher of The Inquirer and Daily News and the two largest state employee pension funds in hopes of helping the newspaper company lessen its large debt burden.”

The article elaborated on the bailout discussion timeline, stating that Mr. Tierney “…said that he first sought Rendell’s help about a year and a half ago. He wanted to see if there were any state agencies interested in moving into The Inquirer and Daily News Building.”

Mr. Tierney then approached the governor “to determine what, if any, economic-development funds were available from the state. As a result of those discussions, Rendell set up a meeting last autumn between the publisher and the pension funds.”

A spokeswoman for PSERS told The Bulletin that the pension board did not invest in companies such as Philadelphia Media Holdings, and was unaware of a leasing arrangement of PMH office space.

State Rep. Robert Godshall, R, Montgomery, who serves as a Board Member of SERS, told The Bulletin he too was not aware of any investment in PMH.

The Inquirer declined to comment, while calls from Ardo were not returned as of press time.

Chris Freind can be reached at cf@thebulletin.us

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Rendell To Veto No-Bid Contract Reform?

By Chris Freind, The Bulletin
Wednesday, February 11, 2009

The Pennsylvania Senate recently introduced 10 bills aimed at reforming state government. Senate Bill 102, sponsored by Majority Whip Jane Orie, R-40th, of Allegheny County, deals with how no-bid state contracts are awarded. The proposed legislation would eliminate no-bid contracts for consulting services, including legal and bond work, instead requiring an open bid process.

Secretive no-bid contracts doled out under the administration of Pennsylvania Gov. Ed  Rendell, D, have come under intense scrutiny by legislators, grassroots organizations and the media. This is largely due to the frequency and high-dollar amount of contracts being awarded to the governor’s close friends and political contributors, including Mr. Rendell’s former law firm, Ballard Spahr.

A similar bill reform bill passed the senate 50-0 during the last legislative session, but languished in the Democratic-controlled House of Representatives.

The Bulletin discussed the proposed no-bid contract legislation with Gov Rendell’s Press Secretary Chuck Ardo.

The Bulletin: If the legislation reforming no-bid contracts were to make it to the governor’s desk, do you think he would sign it?

Chuck Ardo: He is not likely to sign it. 

TB: What would be the rationale?

CA: Well, for instance, take professional contracts. You wouldn’t want to hire a surgeon by determining the lowest bidder. You’d want to find the most qualified surgeon for the procedure. The same is true for lawyers and other professional services providers.

Also, sole-source contracts have saved the commonwealth significant money over the last several years. There is political gain to be had by advocating the end of sole-source contracts, but that’s not necessarily in the best interest of the commonwealth or its people.

TB: Would the governor be in favor of no-bid contracts that had a capped amount, such as $100,000?

CA: The problem is that some legal proceedings could require significant investment by the commonwealth. You want the best representation possible, not necessarily by those who submitted the lowest bid.

TB: In that regard, caps or not, would the governor be in favor of no-bid contracts being either approved or rejected by the state attorney general?

CA: We’ll have to see what the specifics of the legislation might be.  It’s hard to answer a hypothetical question like that until we know exactly what the language requires.

TB: Many eyebrows were raised when Ballard Spahr performed $773,000 of legal work for the turnpike privatization initiative — with no contract.  No-bid contracts are one thing, but how does the governor address this “no-contract” type of situation?  How was the turnpike lease issue “urgent”? 

(With no contract in place, Ballard was required to sign a  “Compromise, Settlement and Release” to get retroactively compensated.)

CA:  The needs that the turnpike lease was meant to address were urgent, and continue to be urgent.  There is very little doubt about the urgency of transportation funding needs.

TB: But was it urgent to the point where Ballard billed 2,300 hours over 84 days, utilizing 55 attorneys? Could the firm not have taken the necessary time to execute a no-bid contract?

CA:  I think that everybody was relatively assured that a contract could be worked out.

TB:  Not to seem like we are beating a dead horse, but…

CA:  You choose Ballard Spahr, but there are lots of law firms that have done work for the commonwealth.  There are law firms across the width and breadth of the state that have various relationships, which provide such services.

TB: Many people have inquired about a comparison of no-bid contracts between the Rendell and past administrations.  But it has been reported that such records were “lost” during a computer transition.  Is there any update on the lost records?  Is there any possibility the records might be found?

CA:  I didn’t know they were lost.  Let me find out.

Chris Freind can be reached at cf@thebulletin.us

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A Recap Of Ballard’s $773K No-Contract Legal Work
By Chris Freind, The Bulletin
In 2007, Ballard Spahr, Gov. Ed Rendell’s former law firm, performed $773,000 of state legal work without a contract.

Normally, a contract must be negotiated and executed before any work for the commonwealth can be performed. Because no contract was in place,  however, the firm had no way of receiving compensation. Consequently, it had to sign a  “Compromise, Settlement and Release” agreement initiated by the state Department of Transportation to receive payment retroactively.

While state law allows for work of an urgent nature to be performed without a contract, questions have been raised as to how the turnpike privatization initiative qualified an “urgent” matter, especially since the governor’s plan had been met with resistance in the legislature and had little chance of passage.

The hourly rates of Ballard’s no-contract legal work varied based on seniority. Firm Chairman Arthur Makadon billed $637.50/hour, with partners Ken Jarin and Adrian King Jr. billing $531.25/hour and $403.75/hour, respectively.

Mr. Makadon, a close friend of the governor, has contributed $87,500 to his campaigns. Mr. Jarin is listed as the “relationship partner” on the $773,000 project.  He is a longtime confidante and fundraiser to Mr. Rendell, having contributed $90,000 to the governor’s coffers.  He also serves as treasurer to the Democratic Governor’s Association, an entity that has contributed over $1.5 million to Mr. Rendell.

Mr. Jarin is married to Robin Wiessmann, who at the time of the Turnpike leasing project was serving as state treasurer.  Her office issued payments for the Ballard invoices. Adrian King Jr., served as the governor’s deputy chief of staff and as a cabinet member prior to rejoining Ballard as a partner.

The Ballard firm, a Limited Liability Partnership (LLP), contributed $481,000 to Gov. Rendell’s campaigns. The Philadelphia Future Political Action Committee (PAC), registered at the Ballard offices in Philadelphia and whose treasurer is David Cohen, former Ballard chairman and former chief of staff to then-Mayor Rendell, contributed $470,000.  Mr. Cohen donated $80,000, and his wife, Rhonda, contributed $156,000 to Rendell campaigns. Ballard associates contributed nearly a half million more dollars to Mr. Rendell.

There is no limit to how much an individual or an LLP can contribute to state candidates.  The majority of law firms are LLPs.

Additionally, on Pennsylvania Department of State campaign filings, the address of Gov. Rendell’s campaign treasurer is the 51st Floor of 1735 Market St. in Philadelphia.  The floor is occupied entirely by Ballard Spahr.

Chris Freind can be reached at cf@thebulletin.us

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Reaction To Inquirer Bailout Discussions Draws Ire

BY CHRIS FREIND

On Dec. 29, the publisher of the Philadelphia Inquirer and Daily News wrote a column entitled “Papers Matter More Than Ever.”

In his essay, Brian Tierney stated, “Our original news reporting sets the table for the entire region’s news output, much of which derives from the work we do. No other news medium – television, radio or Web – can compare to the daily coverage (we) produce.”

He added, “This is a tremendous responsibility, and we take it seriously. Without the Daily News and Inquirer, who would be exposing corruption and incompetence…and covering our city and region so thoroughly?”

Mr. Tierney concluded his article by stating, “Our local owners know that it’s more than a business; it’s a public trust.”

Not mentioned in the column was that Mr. Tierney had been in discussions with Pennsylvania Gov. Ed Rendell, D, for several months regarding a potential government bailout of Philadelphia Media Holdings, the entity that owns both newspapers.

In a discussion with Chuck Ardo, the Governor’s press secretary, The Bulletin was informed that “the governor and Brian Tierney have had a number of conversations over the course of the last several months (regarding a possible bailout). The governor has made no commitment as a result of those conversations.”

When asked if a bailout of the newspaper was still on the table, Mr. Ardo responded that the governor, “would certainly be open to discussions with Brian.”

Reaction to a possible taxpayer-funded bailout of a news entity was one of consternation by elected officials, media watchdog organizations and newspaper readers.

“Where does one start?,” asked Brent Bozell, III, President of the Media Research Center, a media watchdog organization in Washington. “I would submit that if there were a bailout, it would prove the end of the free market system in America. There’s no such thing as free enterprise when everything is government owned. It’s called socialism,” he said.

Mr. Bozell stated that the last thing a journalist should want is to be controlled, even in the slightest, by the government. “When a media outlet proposes a bailout, it proposes to put itself under the authority of the entity bailing it out. Therefore, if it’s a government, the media entity proposes to become an arm of the government,” he explained.

“I guess my first reaction would have to be, ‘Are you kidding me?,’ ” stated State Representative Doug Reichley, R, Lehigh. “Mack Trucks in Allentown could use a bailout, but I haven’t seen the governor’s office soliciting them to see how much aid they need,” he said.

The legislator, a leader in the effort to reform no-bid contracts, said that had a “better idea” for a bailout. “Maybe the governor’s office could make the best out of two bad situations by placing slot machines in all the Boscov’s stores. That would be a way of drawing shoppers into the failing retail chain he is trying to prop up, and would assist the declining slots revenue until the two Philadelphia slots locations are done with litigation,” he said.

Boscov’s Inc. received a $35 million bailout to rescue the department-store chain from bankruptcy, courtesy of Gov. Rendell’s maneuvering.

Mr. Boscov contributed $139,000 to Mr. Rendell’s campaigns, and other Boscov family members gave an additional $25,000. Questions posed to the governor regarding this connection were repeatedly dismissed.

A concern of many is that the objectivity of the Inquirer and Daily News is now irreparably compromised because of the bailout discussions, regardless of whether money ever changes hands.

“If ‘Papers Matter More Than Ever,’ as Brian Tierney has written,
then how is it that journalistic integrity and editorial independence
apparently matter less than ever?” asked Colin Hanna, President of the public policy organization Let Freedom Ring.

Mr. Hanna added, “There’s some small difference between moral compromise and the outright selling of one’s soul. This request from The Philadelphia Inquirer seems to me to be the latter. ”

A lack of substantive content from the Inquirer was the primary concern of Kevin Kelly, founder of The Loyal Opposition in Philadelphia.

“If the Inquirer didn’t alienate 50 per cent of its potential customer base with left-wing nonsense masquerading as news, it wouldn’t be in
Harrisburg with a cup in its hand. If I cut my customer base in
half, I’d be out of business in a week,” he said.

Matthew Brouillette, President of the think-tank Commonwealth Foundation in Harrisburg, cited the historical importance of an independent American media in expressing his opposition to the possible bailout.

“Thomas Jefferson understood the importance of a free press in a free society when he said, ‘Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.’ “

“The Inquirer’s request for a bailout and Governor Rendell’s entertainment of it must have Jefferson and Franklin rolling over in their graves, and Lenin and Hitler cheering them on,” Mr. Brouillette added.

Jay Miller, a newspaper reader from Wallingford, Delaware County, expressed his contempt that tax dollars would potentially be used to bail out the Inquirer. “Maybe Ed Rendell will take some notice that not everyone thinks he’s God’s answer to Pennsylvania. I will be letting my representative and senator know of my displeasure with even thinking about a bailout!”

“How in the world can this paper propose to be a watchdog for the public when it’s had conversations about being bankrolled by the government? Period!,” Mr. Bozell stated. “When you are bankrolled, you are then beholden. There is no way around that proposition. No way,” he added.

When asked how the public, and in particular the Inquirer’s readers, might view bailout discussions, Mr. Bozell said “as long as the people who even considered this are involved with that newspaper, it has no credibility.”

He stated that non-Inquirer readers would be incensed that their taxes could be used to fund an enterprise like this. “And I think readers of the Inquirer would be outraged that they could no longer rely on the paper for objective truth. It now becomes a propaganda arm of the government bankrolling it,” he said.

“If the media wasn’t trusted before, just where do you think the trust factor will be for this newspaper now?,” he asked.

Whether the deal goes through or not, Mr. Bozell said, “the reputation of the paper is sullied forever. That a newspaper would even consider prostituting itself like this…is outrageous.”

Calls to Philadelphia Media Holdings went unreturned.

Chris Freind can be reached at CF@TheBulletin.us

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Legislators, Citizens React to Ballard’s “No-Contract” Work

By: Chris Freind

Pennsylvania state legislators and community activists expressed outrage this week in response to the Bulletin’s Jan. 9 revelation that the politically connected Ballard Spahr law firm performed $773,000 of legal work for the Pennsylvania Turnpike privatization plan without a contract.

Chester county Republican state legislator Curt Schroder stated, “I can’t understand what was so urgent to the public’s interest that the attempted privatization of the Turnpike suddenly merited that a large no-bid contract be awarded. And that prior to that, why 2300 hours of work was done by Ballard with NO contract.” Mr. Schroder added, “At the very least, the Administration owes the public a complete explanation. Leasing the Turnpike has been a politically dead issue, regardless of its merits or lack thereof.”

Wally Zimolong, a center city attorney and Republican activist, was equally skeptical, stating that questions need to be answered about why Ballard performed work without a contract, and how they knew they would receive compensation.

“This whole thing reeks. I see several red flags. First, no reasonable business, particularly top notch attorneys like those at Ballard, performs work without a contract, unless they know they are getting paid, especially when the work performed is worth close to a million dollars,” Mr. Zimolong said. “So the question is how did Ballard know it would get paid? Was it the result of some back room deal with Mr. Rendell?,” he asked.

Companies performing state work normally negotiate a contract before commencing any activity. Without a contract, Ballard could not be compensated for its work, and was therefore required to sign a “Compromise, Settlement and Release” agreement initiated by the state Department of Transportation to receive payment retroactively.

Authorization to pay Ballard in this manner was justified “due to the extreme urgency of the work required,” according to the document.

The Bulletin has repeatedly illustrated the intimate relationship between the Governor and Ballard (see sidebar).

“The Bulletin article describes an incestuous and tangled web of relationships that can only be helpful in attracting no bid contracts from the administration,” Mr. Schroder added.

The legislator explained that this situation exemplifies the need to prevent big donors from obtaining no bid contracts. “I will be re-introducing legislation to place strict limits on campaign contributions for those who receive such government contracts. Anyone exceeding the low limits would not be eligible to receive such contracts,” he said.

Reform legislation sponsored by Republican Majority Whip Jane Orie, Allegheny, will be introduced in the state Senate next week; a similar bill passed 50-0 last session, but it was stifled in the Democratic-controlled House.

The Pennsylvania General Assembly should do all it can to eliminate the appearance of impropriety in regards to “Pay-to-Play” in Commonwealth government. This can be done by creating an open bid process and providing for transparency in regards to who is receiving state contracts and their political contributions,” Senator Orie said. “This issue is receiving an enormous amount of national coverage at the current time and there is no better time than now to adopt legislation to restore integrity as to how public dollars are spent,” she added.

Mr. Zimolong questioned the fiduciary duty the Governor owes to the taxpayers. “Ballard could have run up the bill as much as they wanted to, as this was open-ended. Theoretically, nothing prevented them from doing that, unless there was a gentlemen’s agreement of which we are unaware. Also, the hours worked are absurd,” he said. “Remember this was proposed legislation. Essentially, the Commonwealth paid to set up an outside law firm with 55 attorneys working 27 hours per 24 hour day, for 84 straight days, to perform due diligence for proposed legislation,” he added. “Setting aside that it is doubtful these Ballard attorneys worked 24/7, doesn’t the Commonwealth have a large number of attorneys among all state agencies? What do they do?,” he asked.

“While it’s true the Procurement Code allows services to be obtained in urgent cases without competitive bidding, the Code does require a written basis for the emergency, and why the particular party was selected for the work, to be included in the contract file. Taxpayers should demand to see that written basis in this case,” Zimolong said.

“Whether or not ‘pay to play’ can be proven in any particular situation, the appearance is certainly a big problem and continues to erode trust in government. It is time we take a strong stand against this continued practice,” stated Rep. Schroder.

Chris Freind can be reached at CF@TheBulletin.us

The Bulletin has published an ongoing series detailing the frequency and high-dollar amounts of no-bid state contracts doled out to Gov. Rendell’s political donors and friends. Please see the website for reference. www.thebulletin.us

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Ballard’s $773,000 “No-Contract” Work for PA

Gov. Rendell’s Former Firm Went Beyond “No-Bid” Contracts

By: Chris Freind

Pennsylvania Gov. Ed Rendell (D) has recently come under fire as more information emerges regarding the frequency and high-dollar amounts of no-bid state contracts doled out to his political donors and friends. The Bulletin has published an ongoing series on this issue, much of which centers on the Governor’s intimate relationship with his former law firm, Ballard Spahr. (See recap sidebar).

Many eyebrows have been raised on these lucrative no-bid contracts, especially since the records from past Administrations were “lost” under Rendell’s tenure—- ostensibly the only way to compare the frequency, amounts and recipients of these types of contracts.

The state Senate passed a reform bill 50-0 last session amending how contracts are awarded, but it was stifled in the Democratic-controlled House. The legislation, sponsored by Republican Majority Whip Jane Orie, Allegheny, will be re-introduced early this term.

While conflicts of interest abound, the awarding of no-bid contracts to political donors is not illegal, so long as no quid pro quo arrangement exists.

But in 2007, the ethical line was taken to a whole new level when Ballard performed $773,000 of state legal work with NO contract at all, leaving many questions unanswered.

On March 1 of that year, the firm began work on the proposal to privatize the Pennsylvania Turnpike. Over the next 83 days, Ballard utilized 55 attorneys (more than 10% of its legal staff), and billed the state for 2300 hours, which equates to an average of 27.38 hours per 24 hour day. The hourly rates varied based on seniority, with firm Chairman Arthur Makadon billing $637.50/hour, and partners Ken Jarin and Adrian King, Jr. billing $531.25 and $403.75 per hour respectively.

Mr. Makadon, a close friend to the Governor, has contributed $87,500 to his campaigns. Mr. Jarin is listed as the “relationship partner” on the $773,000 project. He is a longtime confidante and fundraiser to Mr. Rendell, contributing $90,000 to the Governor’s coffers. He also serves as Treasurer to the Democratic Governor’s Association, an entity which has contributed nearly $1.5 million to Rendell. Jarin is married to Robin Wiessmann, who until this week was state Treasurer. Her office approved and issued payment for the Ballard invoices. Adrian King, Jr., served as the Governor’s Deputy Chief of Staff and in a Cabinet position prior to rejoining Ballard as a partner. According to the Ballard press release at the time of Mr. King’s return, Mr. Makadon was quoted as saying, “Adrian was a star here at Ballard and has been a star for the governor. Upon his return, we expect him to play a large role in the future of the firm representing important clients and managing key client relationships.”

The Ballard firm, a Limited Liability Partnership (LLP), contributed $481,000 to Gov. Rendell’s campaigns. The Philadelphia Future Political Action Committee (PAC), registered at the Ballard offices in Philadelphia and whose Treasurer is David Cohen, former Ballard Chairman and former Chief of Staff to then-Mayor Rendell, contributed $470,000. Cohen donated $80,000, and his wife, Rhonda, has contributed $156,000 to the Rendell campaign efforts. Ballard associates contributed nearly a half million more dollars to Rendell. There is no limit to how much an individual or an LLP can contribute to state candidates. The majority of law firms are LLPs.

Additionally, on Pennsylvania Department of State campaign filings, the address of Gov. Rendell’s campaign treasurer is the 51st Floor of 1735 Market Street in Philadelphia. Ballard Spahr occupies the entire floor.

When performing work for the Commonwealth, the normal procedure is to negotiate and execute a contract before commencing any activity. But since the Ballard firm jumped headlong into the project without a contract, it had no way of receiving compensation for its work. Consequently, it had to sign a “Compromise, Settlement and Release” agreement initiated by the state Department of Transportation to receive payment retroactively.

The document specifies that authorization to pay Ballard in this manner was due to certain “circumstances”, among them that on March 1 the firm “was directed by the Office of General Counsel to provide professional services as special counsel to the Commonwealth of Pennsylvania in connection with the Pennsylvania Transportation Funding initiative.”

The document continues, “due to the extreme urgency of the work required, work began immediately at the Office of General Counsel’s direction prior to having a fully executed contract document in place.”

The Settlement also states that, ” the Commonwealth cannot otherwise pay the Law Firm for services performed during the period of March 1, 2007 and May 23, 2007 because no agreement was in place prior to performances of such services.”

A no-bid contract was executed on May 24, 2007 for future services on the privatization initiative. To date, Ballard has billed the state over $2 million in legal fees relating to the project.

While state law allows for work of an urgent nature to be performed without a contract, questions have been raised as to how the Turnpike privatization initiative qualifies an “urgent” matter. The Turnpike, the nation’s first, was in no danger of disappearing or being unable to continue operations. Additionally, the legislative process is typically slow, preventing political issues from moving with any sense of speed and urgency in Harrisburg. Since the Governor’s plan had been met with resistance in the legislature and had little chance of passage, why Ballard rushed into the project with no contract remains a question on many political observers’ minds.

On numerous occasions, Mr. Rendell has been asked if he has played a role in the selection of no-bid contract recipients, especially when political donors are involved. The answer typically given is that the Governor has no involvement in the process, and that firms are chosen based on their particular expertise, with no consideration being given to large dollar political donors.

However, legislators, political experts and the media have been increasingly questioning the close relationship of the Governor to these no-bid contract recipients, especially the Ballard firm and its partners. In particular, questions have been raised regarding the role of John Estey, Mr. Rendell’s former Chief of Staff and currently a partner at Ballard.

While he was not involved in the $773,000 project, Mr. Estey still maintains a position of enormous influence with Rendell. He is Chairman of the Philadelphia Regional Port Authority, an agency of the Commonwealth that in June of 2008 chose Ballard Spahr to be its outside counsel. In addition, Mr. Estey still chairs board meetings of the Delaware River Port Authority (DRPA), of which Gov. Rendell is the self-appointed Chairman. Ballard is the largest recipient of DRPA legal fees, receiving nearly $3 million since Gov. Rendell’s election in 2002. As a point of comparison, Ballard had received only $25,000 in the three years preceding Gov. Rendell’s election. As a board member, Mr. Estey receives and votes to approve DRPA legal bills, including those going to his own firm.

Many questions have also been raised as to why the state is utilizing outside counsel to such an extent, especially on the Turnpike project, given that that the Pennsylvania Department of Transportation (PennDot) has a large in-house Legal Department. Ballard’s 55 attorneys working on the project are larger than the entire roster at many firms, which some believe is akin to the state renting a high-value law firm for several months. Calls to PennDot revealed that there are 49 attorneys on staff. The Pennsylvania Turnpike Commission currently has five attorneys serving as in-house counsel, and had several more at the time of Ballard’s work.

The public’s cynicism and mistrust of government has become exacerbated by the numerous scandals and pay-to-play investigations on the state and national level. The debate surrounding whether there is a need to reform how no-bid and “urgent” non-contracts are awarded will intensify as the Senate reform bill is reintroduced.

The Bulletin will continue to seek responses from the Governor and legislative leaders to questions this investigative report raises.

Chris Freind can be reached at CF@TheBulletin.us

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Are you shitting me?

From the “News of the Weird” (that is the Patriot News local section) is the report that bobblehead’s of Harrisburg mayor Stephen Reed are being sold for $75 apiece to raise money to build a national sports museum.

If only Mayor Reed could sell 10 million of them.

He wouldn’t need the bailout.

But more seriously, how big of a market is bobblehead dolls for a Harrisburg mayor?

Not to knock the fine city of Harrisburg, but really… I dont think I’d buy a bobblehead of Fast Eddie or W, I wouldn’t buy one of the mayor of H-burg.

Does he have a vanity issue?

Tip to Nathan Benefield via Twitter….

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Joe, thanks to President Bush, Congressional Democrats and the President-Elect, $700 million is no longer considered “a lot of money.”

So it’s not really that big a deal.

For my money, there’s more “bang for the buck” (pun intended) in bailing out Harrisburg instead of say, pornography.

We’re all getting screwed on this deal.

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