Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

  _ Click for the Spanish Translation audio_white

March 25, 2009

Attorney General Corbett announces public corruption charges against former House member and staffer

PITTSBURGH - Agents from the Attorney General's Office today filed numerous theft charges, as well as criminal conspiracy and conflict of interest charges, against former House Democratic Minority Whip Mike Veon and one of his staffers. Big chart

Corbett said that the investigation centered on the Beaver Initiative for Growth (BIG), which was a non-profit entity created by Veon in 1991. 

Evidence and testimony regarding the case was presented to a statewide investigating grand jury, which recommended the criminal charges being filed today. (Click here for the grand jury presentment.)

The grand jury determined that BIG was established primarily for the personal and political benefit of Mike Veon.

The grand jury found that during BIG's existence, every dollar received and spent by BIG was from the taxpayers of Pennsylvania.

The grand jury found that the majority of the taxpayer money BIG received was generated through legislative grants that Veon directed through the Department of Community and Economic Development (DECD).

The grand jury found that BIG, and the taxpayer money flowing through BIG, was tightly controlled by Veon, who allegedly spent the taxpayer money at his own discretion without any oversight by BIG, DCED, or any other government agency.

One of his legislative staffers, Annamarie Perretta-Rosepink also worked for BIG, serving as a fiscal director. 

Corbett said that the efficiency of non-profits is often measured by the percentage of its budget that goes to programs or projects.  Of the $4.7 million spent by BIG from 2004 to 2006, only 23 percent (less than $1.1 million) was used toward actual program expenses.  The other 77 percent went to salary, consultants and administrative costs.

According to the grand jury BIG operated an office in Midland, Beaver County and an office on the South Side in Pittsburgh. The offices were never staffed by a BIG employee and were allegedly used as satellite legislative offices for campaign purposes. Approximately $84,000 in BIG funds was misappropriated for the rents.

Although Veon formed BIG in 1991, it wasn't until 2003 that BIG began receiving large amounts of taxpayer money. Between 2003 and 2006 BIG received approximately $9.9 million in grant money.

BIG money for bonuses

The grand jury found that Veon used BIG's bank account to reward his legislative staff who helped during political campaigns.

Corbett said that employees wrote bonus checks at Veon's direction through Beaver Valley Community Support Services, a payroll holding company created by Veon, to simplify writing payroll checks for Veon's non-profits.

The charges state that BIG offices were primarily staffed by legislative assistants, who were expected to spend a significant amount of time campaigning for House Democrats. In total $20,000 in BIG funds was paid as bonuses for campaign work.

According to the grand jury, large amounts of BIG's funding, all from taxpayer funded grants, were directed to "consultants" or "consulting companies."  These consultancies were allegedly selected and paid without any bid or competitive process at the sole discretion of Veon.

The grand jury found that between 2003 and 2007 Delta Development, a well-known Democratic contributor, received more than $1 million from BIG funds. During that same period of time, Delta Development made significant political contributions to Veon and other House Democratic candidates.

Corbett said that Delta Development allegedly provided little to no work for the funds they received from BIG.

According to the grand jury, Veon arranged a position for his brother, Mark Veon, at Delta Development that paid him more than $100,000 a year. On May 3, 2004, BIG signed a $20,000 a month contract with Delta and one month later Veon's brother began working for the consultants for $160,000 a year.

The defendants will be prosecuted in Dauphin County by Senior Deputy Attorney General Anthony Krastek of the Attorney General's Public Corruption Unit.

Below are the charges against Veon and Perretta-Rosepink.

--Mike Veon, 51, 2527 N. 2nd St., Harrisburg, is charged with six counts of theft by unlawful taking or disposition, six counts of theft by deception, six counts of theft by failure to make required disposition of funds received, six counts of misapplication of entrusted property, two counts of conflict of interest, one count of theft of services and one count of criminal conspiracy. He faces a maximum penalty of up to 162 years in prison and a $350,000 fine.

--Annamarie Perretta-Rosepink, 46, 1421 5th Ave., Beaver Falls, is charged with one count of conflict of interest, one count of theft by unlawful taking or disposition, one count of theft by deception, one count of theft by failure to make required disposition of funds received, one count of misapplication of entrusted property and one count of criminal conspiracy. She faces a maximum penalty of up to 35 years in prison and a $75,000 fine.

# # #

(A person charged with a crime is presumed innocent until proven guilty.)