July 10, 2008
Attorney General Corbett announces charges in legislative bonus investigation - 12 suspects charged in 1st phase of the investigation
Attorney General Tom Corbett said the charges are part of an ongoing grand jury probe into bonuses paid to employees of the Pennsylvania Legislature along with the use of state resources for political campaigns. (Read the Harrisburg Grand Jury Presentment - Read the Pittsburgh Grand Jury Presentment) Among those charged are former House Democratic Minority Whip Mike Veon, Michael Manzo, the former chief of staff to Pennsylvania Democratic House Majority Leader H. William DeWeese and Beaver County State Representative Sean Ramaley.
Patrick J. LAVELLE
Also charged are former House Democratic Caucus employees Scott Brubaker, the former director of staffing and administration for the House Democratic Caucus and husband of Jennifer Brubaker; Brett Cott, a former analyst on Veon's Capitol staff; Steven Keefer, the former director of information technology for the House Democratic Caucus; Earl Mosley, the former director of personnel for the House Democratic Caucus and Annamarie Perretta-Rosepink, a former legislative assistant and district chief of staff in Rep. Veon's Beaver County office
Corbett explained that his office initiated the investigation after a series of newspaper stories revealed that millions of dollars of taxpayer funded bonuses were paid to employees of the Pennsylvania Legislature.
As part of the investigation, Corbett said, agents and prosecutors from the Public Corruption Unit interviewed hundreds of individuals and reviewed thousands of documents and e-mails. Grand juries in Pittsburgh and Harrisburg heard testimony and reviewed extensive documentary evidence from numerous current and former House Democratic Caucus employees, attorney general agents and other witnesses.
The Pittsburgh grand jury began receiving testimony in June of 2007 regarding Veon's use of his district legislative office for political purposes and the Harrisburg grand jury began receiving testimony in August of 2007.
The Harrisburg grand jury found that the award of bonuses was only one facet of the effort to use employee taxpayer funds and resources for campaign purposes. Additionally, the grand jury found that the actual diversion of resources and employees to campaigns and political endeavors was of no less importance. The theft of taxpayers' funds and resources was extensive and ranged from the obvious - directing public employees to conduct campaign work while paid by the taxpayers, to the subtle - issuing taxpayer paid contracts for campaign work disguised as legitimate legislative work.
The Habay Precedent
Corbett said the investigation, prosecution, conviction and prison sentence of former Republican Representative Jeff Habay in 2004 and 2005 by the Attorney General's Office for using his legislative staff for campaign and fundraising purposes should have put legislative leaders and their staffs on notice that the Attorney General's office and the courts take a stern view of such illegal activity.
Corbett said the grand jury used the guidance of the Pennsylvania Superior Court in its Habay decision, when the Court stated that an elected representative is "not allowed to direct state paid employees under his authority to conduct campaign and or fundraising related work, during state paid time, for his personal benefit." The court said such actions secure "a private monetary advantage" for an elected representative because, "by having state employees work for him on his campaign and or fundraising task while they were being paid by the state, he obtained the benefit of free campaign work funded by the taxpayers."
As part of the investigation, Corbett said, on Aug. 23, 2007, attorney general agents executed a search warrant on the Democratic Legislative Research Office and seized 20 boxes, the contents of which were reviewed by the grand jury. Corbett noted that the search warrant was executed after his agents obtained evidence that House Democratic staffers were destroying the contents of boxes.
Corbett said the grand juries heard former staffers and employees of Veon, the minority whip for the House Democratic Caucus from 1998 through 2006, who described a culture of employing taxpayer funding and resources for campaign purposes.
The grand jury found that to be an employee on Veon's staff, campaign work was expected. The illegal campaign work was directed by Veon's district chief of staff Annamarie Perretta-Rosepink in Beaver County and by Jeff Foreman in Harrisburg.
Brett Cott's title on Veon's staff was policy analyst, but according to numerous witnesses he was hired because of his campaign skills and was one of the lead promoters of the culture of using taxpayer funds for campaign purposes.
The grand jury also found that Michael Manzo, who was DeWeese's chief of staff, directly coordinated with Veon on the illegal use of taxpayer funds and resources.
2004 Election of Sean Ramaley
In 2004, when Ramaley ran for the 16th legislative district, which includes parts of Beaver and Allegheny counties, he left his job as a lawyer with the U.S. Department of Labor. After Ramaley won the Democratic Party primary, Veon offered him a position as a legislative assistant in his Beaver Falls district office. Ramaley started on June 25, 2004.
The grand jury found that Veon's hiring of Ramaley was never intended to serve his constituents, but was purely a "no-work job" which allowed Ramaley to run his campaign directly from Veon's taxpayer-funded district office with the assistance and direction of Veon's taxpayer paid political operatives.
The grand jury heard testimony from one of Veon's political operatives assigned to work with Ramaley, stating that he and Ramaley typically began their campaign work around 9 a.m. by making fundraising telephone calls in an office they shared at Veon's Beaver Falls taxpayer-funded district office. After fundraising calls, they knocked on doors until dark and followed-up by compiling voter data in Veon's district office for the remainder of each day. Ramaley used Veon's district office equipment, including the computers, phones, printers and copier.
The grand jury found that Ramaley, in agreement with Veon, used taxpayer funded resources for campaign purposes, accepted a salary as a taxpayer funded legislative assistant in Veon's office, provided no work in return for the benefit of the people of Pennsylvania but instead, used the job as a taxpayer-funded base of operations for his own political campaign.
The Birth of the Illegal Bonus Program
The grand jury found that in 2004, Veon and Manzo directed Eric Webb, a House Democratic Caucus employee, to maintain a list of all House Democratic Caucus employees who assisted with political and campaign related work.
Webb was directed to track campaign work performed by "volunteers" in the field and also to track all manner of other campaign work as directed by Veon, Manzo and others. Webb was instructed to classify the type of work performed and also to monitor and critique the efforts and time committed by the House Democratic Caucus employees. Webb's list formed the basis of who would receive taxpayer bonuses.
The grand jury found that the political culture created by Veon consistently sought to promote and reward, with taxpayer monies, those staffers engaged in political endeavors and campaign work, as opposed to those engaged solely in work on behalf of the taxpayers, such as legislative and constituent work.
Webb, who testified before the grand jury under a grant of immunity, stated that it was clearly understood by all of these employees that campaign work was part of their public employment and not something done after work hours or on personal time. Webb also detailed to the grand jury how the "volunteer" list that he maintained was specifically designed to act as a foundation for an "incentive" structure to entice House Democratic Caucus employees to commit greater efforts and time on political endeavors and campaigns.
The grand jury found that Webb's 2004 list cataloged 458 House Democratic Caucus employees by using a computer program that noted the various efforts and campaign activities of the "volunteers." The 2004 list, like all subsequent lists, detailed the type and amount of campaign work performed by public employees.
Webb's 2004 list cataloged, to name a few, efforts such as: the number of days each employee spent on campaigns or campaign activities; whether employees worked on the special election in the 109th Legislative District; assisted on the petition challenge to Green Party Presidential candidate Ralph Nader; conducted opposition research; circulated nominating petitions; made campaign contributions to DeWeese, Veon or the House Democratic Campaign Committee and, if so, the amount contributed. The list also noted whether employees worked on overnight trips, when they worked on day trips and whether they worked on Election Day.
The grand jury found not a single entry on Webb's 2004 list, or his lists for the following years, for legitimate legislative work or constituent services. Webb testified that such work was completely irrelevant to the purpose of the list or to those who directed its creation.
Following the 2004 general election, at Michael Manzo's request, Webb provided a breakdown of those who excelled on the selected campaigns and political endeavors. Webb provided a list of those who he described as "superstars" and forwarded it to Michael Manzo and Veon. The grand jury found that, subsequently, a number of other names were added, such as those individuals who worked in Veon's Harrisburg and district offices. After Webb complied, highlighting those who had done the most, Manzo told Webb that these people were going to receive an award for their campaign efforts. In 2004, a total of $188,800 of taxpayer funds was paid to these staffers as a reward for their participation in political endeavors and campaign work.
The grand jury found that Webb continued the tracking of "volunteers" by creating a new list in 2005. Webb created new rankings of Rock Stars, Good, and OK for the employees on his list. The list revolved largely around two special elections, one held in July of 2005 in a legislative district in the Allentown area between Linda Minger and Karen Beyer and another in a legislative district in Allegheny County.
The grand jury heard numerous witnesses testify that by the time of the Minger - Beyer special election in July of 2005, the word had spread among House Democratic Caucus employees that working on campaigns was the best method to obtain a bonus.
The grand jury found that in 2005, despite being an off-year for legislative elections, the House Democratic Caucus produced more volunteers than it had in the 2004 legislative election year. For example, the Minger-Beyer race alone drew more than 170 "volunteers" from the House Democratic Caucus.
More than $106,000 in taxpayer funded bonus checks were issued to all the employees on Webb's list who performed campaign work in 2005. An additional $61,500 in taxpayer funds was paid in December 2005 in the form of "executive bonuses" to those supervisors in the House Democratic Caucus who were most intimately involved in the conducting and promoting of campaign work.
The grand jury heard testimony from a Democratic House staffer who testified about his understanding that the bonuses were tied directly to campaign work. He stated that in 2005 there was an extremely large push to get volunteers to go to Allentown to work the special election on behalf of Linda Minger, the Democratic candidate.
The House staffer testified that he traveled to the Minger campaign office with two other House employees who brought their fishing gear. Upon their arrival, they were given campaign literature and directed to distribute it. Instead, they went to breakfast, threw away the campaign literature and went fishing. About a month later, the three employees got identical $250 bonuses. The employee stated to the grand jury that, "we joked when we got the bonuses - we're not idiots - we figured out what it was for, we all joked that we are professional fishermen now."
The election year of 2006 would prove to be the largest effort yet undertaken as part of the incentive scheme. Eric Webb testified that in 2006 the pay raise vote had "changed the whole map." He testified that there were many "more seats in play" requiring more volunteers to do everything from opposition research to campaign work in the field. It was also a unique year because both caucus leaders, Veon and DeWeese, had serious challengers. As a result of these factors, the campaign efforts started in earnest very early in the year.
Whether measured by the effort expended in tracking the campaign work of caucus employees, the number of bonus recipients or the dollar amounts expended on bonuses, 2006 far exceeded the prior years. Webb told the grand jury that after everyone who worked on the special election in 2005 got bonuses, "it became very apparent" to the caucus employees that "if they volunteer, they get a bonus." As a result, when the election cycle of 2006 started, Webb stated: "more and more people are volunteering that I haven't seen before because of the incentive structure."
By the end of 2006, two waves of bonuses had been issued for campaign work - one in August and one at the end of the year. A total of $1,285,250 was paid in public funds for secret bonuses in 2006.
The grand jury found that around August or September 2006, Michael Manzo approached Eric Webb and told him that his wife, Rachel Manzo, was bored with her $78,000-a-year job as the executive director of the House Tourism Committee and would be helping Webb out on the volunteer list effort.
Webb testified that Rachel Manzo kept her own duplicate copy of the volunteer list and was assigned to monitor specific legislative races. Webb testified that he and Rachel Manzo were in constant contact for several months, exchanging the list back and forth with updates and additions. He explained this was the only way to ensure that accurate records of the "volunteer efforts" were being maintained. Webb also discussed how Rachel Manzo had prepared her own variation of the list during the 2006 Veon primary race, where she traveled to Beaver County and worked at least four to five weeks as the volunteer coordinator on Veon's race.
The grand jury found that after the 2006 Veon primary election, in addition to maintaining the "volunteer" list with Webb, Rachel Manzo was involved in various campaign activities over the summer and fall, assisting with opposition research, petition challenges and the recruitment and assignment of "volunteers" for campaign work. In October she was dispatched to assist Representative Rick Taylor's campaign in Montgomery County.
Veon's Capitol Campaign Organization
The grand jury found that Veon, who had one of the largest Capitol and legislative staffs of any member, ran an illegal campaign organization from his offices which included fundraising, opposition research, the preparation and distribution of campaign mailings, blast e-mail messages and nomination petition challenges.
The grand jury found that Veon, through Foreman and Cott, directed Veon's employees to "volunteer" for work on specific political campaigns. Veon's employees accumulated days or weeks of fraudulent comp time so they could spend time away from their legislative offices and still be paid their taxpayer-funded salaries while they worked on campaigns.
The grand jury also heard how Veon turned his Beaver County district office into a campaign machine. The office equipment including the copy machine, computers and printers were all used to create and print campaign material.
The grand jury found that Veon created and operated a massive fundraising operation within an office suite in the Capitol, which was fueled almost exclusively by personnel and resources paid for by the taxpayers.
The operation was led by Veon, who put Patrick Lavelle in charge. Witnesses testified that Lavelle was simply known as the "fundraiser" for Veon and appeared to have no other duties beyond fundraising. Many of those who worked around him everyday testified that they had never seen him do anything but fundraising.
The grand jury found that Lavelle worked closely with and received direction from Veon, Foreman, Cott and Peretta-Rosepink. The grand jury found that virtually every aspect of the fundraising operation was orchestrated out of Veon's Capitol offices. Lavelle built extensive campaign donor lists and all of Veon's fundraisers were meticulously planned and organized from the Capitol. Veon's staff booked locations, prepared menus, established guest lists and assembled the invitations for Veon's fundraisers. All of these efforts were conducted under the direct supervision of Veon and Foreman.
Campaign and Fundraising Mailings
The grand jury found that another significant operation of Veon's Capitol staff involved the writing, printing and folding of tens of thousands of fundraising and campaign mailings, all completed at taxpayers' expense. Keefer performed most of the graphic design work on the mailings and the bulk of this illegal operation took place behind closed doors of Veon's Capitol suite.
The grand jury also found that under the direction of Veon, opposition research was conducted by Democratic Caucus employees. Opposition research is an extensive investigation into the personal and professional life of political opponents and details the strengths and weaknesses of an opponent in an attempt to find general and specific campaign strategies for defeating the opponent. These opposition research reports are detailed, often taking weeks to prepare and are frequently more than 100 pages in length. This was all done at taxpayers' expense for the benefit of campaigns.
Corbett noted that the boxes that his agents seized from the Legislative Research Office contained hundreds of instances of opposition research and reports dating back to 1990.
The grand jury found that employees and resources of the House Democratic Caucus were historically and routinely used to conduct petition challenges against candidates who were opponents of Democratic House candidates or the Democratic Party. This effort was typically led by Michael Manzo or Cott. Employees were not required to, and did not, take leave for the time spent during their regular work hours on challenging nominating petitions.
These efforts were by no means limited to House races. Two outstanding examples of misappropriation of taxpayers' resources on petition challenges were the Ralph Nader for President of the United States in 2004 and the Carl Romanelli for the United States Senate in 2006.
The grand jury found that as many as 50 Democratic House Caucus staff members participated in the Nader petition challenge and contributed a staggering number of man-hours. A House Democratic employee testified before the grand jury that "everybody was working on this." It was virtually a caucus wide endeavor and many of the employees spent an entire week on the Nader petition challenge.
Upon the successful challenge to the Nader petition, Veon sent an e-mail to his staff stating:
"FYI ?great job by our staff! This would have never been successful without your work. You have given John Kerry an even better opportunity to win this state?one of the 5 most important states to win this year."
"This is a very significant fact and significant contribution by each one of you to the Kerry for president campaign?you should take great pride in your efforts."
The Romanelli petition challenge was led by Cott, who announced it was very important to "leadership" that Romanelli not appear on the ballot. Staffers were told "not to worry about leave," but to focus on getting the petition challenges done as soon as possible.
Leader's Communication Office
The grand jury found that in 2003, Veon and Michael Manzo established the Leader's Communication Office (LCOMM), directed by Stephen Keefer. The supposed purpose of the office was to communicate to the residents of Pennsylvania about legislative efforts and agendas, through internet websites and blast e-mails. The reality proved to be quite different.
One of the people who worked in the Leader's Communication Office was Eric Buxton, who testified about the extensive campaign work performed by the LCOMM office. For example, he detailed about how he set up the entire House Democratic Campaign Committee website in 2004, while he was employed by the taxpayers. Buxton also detailed how campaign e-mails were written and sent from inside the Capitol by use of an offsite server, located in Michigan, which masked the true origin of the e-mails.
Buxton testified before the grand jury that he began negotiations in 2005 with Michael Manzo and Keefer that he should leave the caucus and start his own company to do work for the caucus on a contract basis. They agreed and Buxton formed a company called Govercom, and the House Democratic Caucus paid him $10,000 a month from September 2005 through the end of 2005 and $16,875 a month from Jan. 1, 2006 through the end of September 2007.
Buxton testified that his contract appeared to be for legitimate legislative work performed by his company, but that the contract was for services completely unnecessary to the Caucus and was a vehicle for the House Democratic Caucus to pay for campaign e-mail communication.
From subpoenaed contracts, invoices and Buxton's records, the grand jury found that the House Democratic Caucus paid $420,000 to Buxton's company between August 2005 and October 2007. Additionally, the grand jury discovered a second vendor, Gravity Webb Media, who was engaged in campaign work by providing candidate websites and mass e-mails. This cost the taxpayers more than $82,000 in 2006. This amounted to more than a half million dollars in taxpayers' funds used solely for campaign work.
Jeff Foreman's Private Law Practice
The grand jury found that Foreman, while employed as Veon's chief of staff, was paid $103,408 in 2004 and received a bonus of $8,315. In 2005 his salary was $118,352 and received a bonus of $5,565. In 2006 he was paid $126,204 and received a bonus of $14,815. Additionally, Forman worked at his own private law firm, Foreman & Foreman, and billed clients at the rate of $200 per hour. He often claimed to work a full day for the taxpayers, claimed multiple additional "compensatory" time for the taxpayers and claimed significant hours for his private legal practice. Sometimes, these totals exceeded 24 hours in a day.
Corbett said the grand jury found that while he was physically present at his legislative job in the Capitol, Foreman was actually doing work for his private law firm. Thus, the taxpayers paid Foreman, in salary, bonus, and compensatory time, to work on his private law firm business.
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