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

  

November 12, 2009

Attorney General Corbett announces criminal charges in second phase of legislative investigation; 10 suspects charged

HARRISBURG - As part of an ongoing public corruption investigation into the Pennsylvania Legislature, agents from the Attorney General's Public Corruption Unit today filed criminal charges against Representative John Perzel and former Republican Representative Brett Feese.   Also charged are eight current or former aides to Perzel and Feese.

Attorney General Tom Corbett said the charges are part of an ongoing grand jury investigation into the misuse of public resources and employees for campaign purposes in the Pennsylvania Legislature.
(Review the grand jury report:  Part 1,  Part 2  &  Part 3)

Corbett said the grand jury issued a 188 page presentment recommending that he file criminal charges against the defendants.

Among those charged, in addition to Perzel and Feese, are Perzel's former Chief of Staff, Brian Preski; his current Chief of Staff, Paul Towhey; Perzel's brother-in-law and former House employee, Samual "Buzz" Stokes; Perzel legislative aide John Zimmerman; Perzel campaign aide Don McClintock; Feese aides Jill Seaman and Elmer Bowman; and former House Republican Information Technology Deputy Director Eric Ruth. 

The defendants are each charged with numerous theft, criminal conspiracy and conflict of interest charges.  Additionally, Perzel, Feese, Seaman, Towhey and Zimmerman are each charged with obstruction of justice.

Corbett said that in the first phase of the investigation his agents charged 12 defendants in July of 2008.  Trials are scheduled for December and January 2010.

As in the first phase of the investigation, Corbett said, the grand jury uncovered a concerted plan to use taxpayers' funds, employees and resources for political campaign purposes.

Corbett said during this phase of the investigation, millions of e-mails, faxes, contracts, letters, memos and other documents were acquired and thousands of pages of testimony have been presented to the grand jury.  Additionally, hundreds of interviews were conducted.

Evidence was recovered from various locations in the United States. Agents and attorneys traveled to New Orleans and Washington, D.C. as part of their efforts to reconstruct the extensive amounts of pertinent evidence that was reportedly missing from the House Republican Caucus.  

Republican Caucus Investigation Chart

Obstruction of the Investigation
Corbett said the review and analysis of this huge volume of material, in a criminal investigation of this magnitude, was an extremely time consuming but necessary process.  He noted that the criminal obstruction by some in the House Republican Caucus, as well as a determined effort by some in the House Republican Caucus not to cooperate with the investigation, played a large part in the length of the investigation.

Corbett said his office, as well as the grand jury, experienced a series of deliberate acts by House Republican members and employees to obstruct and hinder the investigation.  As a result of their impediment to the investigation, significant amounts of time and resources had to be spent in litigation, investigating the absence of certain evidence and testing the accuracy of information provided in response to the grand jury process.

Corbett said that these efforts to obstruct the investigation have resulted in significant delays in the grand jury's efforts to define potential crimes, identify those who committed the crimes and to protect those who are innocent of criminal wrongdoing.

Corbett said that while some charges of obstruction of justice have been filed today, an obstruction of justice investigation within the House Republican Caucus continues.

Habay Precedent
As mentioned in the prior phase of the investigation, 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 tasks while they were being paid by the state, he obtained the benefit of free campaign work funded by the taxpayers."

Representative John Perzel
The grand jury found that John Perzel was the architect behind a sophisticated criminal strategy that ultimately spent more than $10 million of taxpayers' money purely for campaign work.  Once the foundation of Perzel's illegal scheme was in place, the grand jury found Perzel went to great lengths to maintain control and expand his power through illegal means. 
 
The grand jury heard testimony on John Perzel's rise to power and his plan to maintain and expand his power.

John Perzel was elected to the House of Representatives by the voters from Northeast Philadelphia in 1978, he was elected by the Republican House members as Chairman of the House Republican Caucus in 1990, and then House Majority Leader in 1994 when the Republicans won the majority in the House of Representatives.  Perzel served as Majority Leader until 2003, when he was elected Speaker of the House by the members upon the death of Representative Matthew Ryan.  Perzel remained Speaker until the Democratic Caucus regained the majority status of the House of Representatives in 2006.

The grand jury found that Perzel was aggressive in the acquisition and retention of power.  He demanded obedience and loyalty and punished those, whether they were elected officials or employees, who challenged his power.

Contrary to prior practices as speaker, Perzel retained a virtually unprecedented degree of power over the resources of the House Republican Caucus, including funding for various caucus departments such as Research, District Operations, Printing and Information and Technology. 

Republican House members and employees who were favored by Perzel, such as former Representative Brett Feese, were rewarded with prominent positions in the Republican Caucus.  Brian Preski, who served as Perzel's Chief of Staff from 2000 to 2007, was arguably the most powerful person in caucus short of Perzel himself.

Click on images for larger photo

John Perzel
 

Brett Feese
 

Brian Preski
   

Paul Towhey
 

Samuel "Buzz" Stokes
 

Elmer "Al" Bowman
 

Jill Seaman
 

John Zimmerman
 

Eric Ruth

Don McClintock

Perzel's 2000 Election and the Rise of Technology
The grand jury found that Perzel's 2000 election campaign became a defining moment and the impetus for much of the criminal activity that the grand jury investigated.  On election eve in 2000, after the initial vote count, Perzel was losing his re-election in his Northeast Philadelphia legislative district.  After the absentee ballots were counted, he won by fewer than 100 votes.

The grand jury found that Perzel vowed to never experience another close electoral challenge and instilled that mindset in his staff and employees of the Republican Caucus. Perzel put everyone on notice that everything possible would be done to prevent another close election.

The grand jury found that after the 2000 election, Perzel, who had always been interested in the use of technology in campaigns, made technology a priority and forcefully related his mantra to his campaign staff, his legislative staff and other key employees of the caucus. 

Perzel traveled to many different technology conventions and shows around the nation as part of his quest for ideas and equipment to realize his ambitions.  He also attended campaign seminars and returned to the caucus with ideas.

Corbett said that through the use of a small, but loyal and close-knit group, Perzel embarked on his plan to use technology to gain a competitive advantage in campaigns, for himself and other candidates throughout the state in order to maintain and increase his power.

The grand jury found that as time went by, campaign work became so pervasive that it was institutionalized.  The conduct of campaign work through the Republican Information Technology (RIT) and public resources became so commonplace that such efforts were largely treated as normal assignments by the staff.  Virtually every employee of RIT became aware of Perzel's interest and direct involvement in the acquisition, development and use of technology for campaign purposes.

Perzel's BlueCard Program
The grand jury found that after Perzel's close election in 2000, he initiated the creation of a program that would maintain accurate data about the individuals in each household in his district.  A data card would be filled out for every individual in a household and would contain important information about each individual including birthdates, phone numbers, e-mail addresses, who they planned on voting for and whether they would like a yard sign for the candidate. The purpose was to determine whether an individual in a household was for Perzel, against Perzel, undecided or refused to talk.  The information was contained on blue cards and became known as the "BlueCard" system.

The BlueCard program was a two piece system; the first piece included sending campaign employees to every door in Perzel's district to fill out the information on the BlueCard, while the second part was the creation of a database.

Perzel's idea was not simply to keep the BlueCards in a file drawer for manual reference during campaigns, but to align all the information on the cards with technology to make it more easily accessible and deployable for campaign purposes.

Perzel put Samual "Buzz" Stokes, his brother-in-law and campaign manager, in charge of the BlueCard program.  The grand jury found that despite the control of the BlueCard program by the campaign, little or no Perzel campaign funds or resources ended up being used in the creation and development of the BlueCard program.  The BlueCard effort was achieved at the expense of the Pennsylvania taxpayers.

The grand jury found that the RIT staff spent countless hours working on programs to make the BlueCard system more efficient.  The grand jury found that Perzel and his campaign personnel became frustrated that the improvements the RIT staff were making did not meet their standards.  To help solve this problem Perzel hired his wife's nephew, Eric Ruth, to be the Deputy Director of RIT.  Ruth spent most of his time ensuring that Perzel's BlueCard program took priority over everything else the staff did.

The grand jury found that in January of 2002, despite the efforts of RIT, the responsibility of the BlueCard program was shifted to a private vendor, GCR & Associates in New Orleans, Louisiana.

The grand jury found that Perzel abhorred chance and uncertainty and, as a result, aggressively sought to build redundancy and safety nets into projects he viewed as essential to his success.

The grand jury found that Perzel's campaign staff wielded a tremendous amount of power and authority within the Capitol and that their requests took priority even over Republican Representatives and their staffs.

In 2003, the grand jury found that another vendor, Aristotle International Inc. from Washington DC, had been retained by the caucus and was heavily involved in improving and modifying the BlueCard program at taxpayers' expense.  Aristotle's work modernized the program and made it faster and more user friendly.  The grand jury found that Aristotle spent more than $80,000 on the BlueCard program.

The grand jury found that with the success of the BlueCard program in his own district in 2002, Perzel directed the RIT staff to create the BlueCard system for numerous other House districts in the 2004 election cycle.  It was also created for a state senate district and congressional district.  The grand jury found that this was part of Perzel's effort to expand his campaign influence all across the state.

In 2005, the BlueCard program was used in a special election in the 131st legislative district.  Additionally in 2005, Perzel established the BlueCard system citywide in Philadelphia.

Telstar/Election Day Complete
As part of his effort to ensure his re-election, the grand jury found that Perzel directed the development of a sophisticated computer system to ensure that his supporters went to the polls on election day.

The traditional way in which candidates accomplished this was having the campaign check off the names of voters at the polling places as they came in to vote and then taking the list back to campaign headquarters.  They would then call or drive to the homes of the people that did not vote.  Perzel wanted to use technology to make this system much more efficient and employed the staff of the RIT help to accomplish this.

Perzel's idea was to use handheld computers which had each of the registered voters in the precinct or division in Philadelphia loaded onto it.  The campaign workers at the polling places would simply click a name on the handheld computer and have that information electronically transmitted to a common database.  Perzel believed that this was a way that he could maximize limited resources on Election Day. 

The original handheld computer idea was called Telstar, however the grand jury found that as the program became much bigger, more complicated and interconnected to many other technological endeavors, over time it became known as Election Day Complete.  The key to making this program work was the purchase of handheld computers, which were completely paid for by the Republican Caucus.

The first-full scale deployment of the Telstar/Election Day Complete system took place in the April 2002 special election in Monroe County.  Telstar was viewed as largely successful in this election.

Anthony Painter, who was the director of the RIT, testified before the grand jury that after elections in which the Telstar/Election Day Complete system was used, the RIT staff made improvements to the system for Perzel's re-election campaign.

As the system was further refined and improved, Telstar/Election Day Complete was used in the 2002 general election in Perzel's district as well as in the 148th and 153rd legislative districts.

The grand jury found that Perzel shared the technology with the House Republican Campaign Committee (HRCC), which is the outside campaign arm of the Republican Caucus.  John Hanley, the Executive Director of the HRCC, testified before the grand jury that the system became a part of their election day activities and it was used extensively from 2002 through 2006.

Hanley also stated that Perzel was very protective of the system, but also wanted the credit for helping candidates by allowing them use Election Day Complete.
 
In addition to handheld computers, the system also required high-quality servers and other equipment such as modems, laptop computers and stand-alone printers, all paid for by the taxpayers. Additionally, all of the data was put onto the handheld and other computers by the RIT staff. 

Prior to its implementation on election day, the RIT staffers would physically transfer the equipment from the Capitol and set it up at the candidates campaign headquarters.  However, the first thing the RIT staff would do is remove all property tags identifying the equipment as the property of the Republican Caucus. 

As the system evolved, Perzel insisted that the vendor GCR work on improving the system and eventually Aristotle also worked on the program, all at taxpayers' expense.

Ironically, the grand jury found that the Telstar/Election Day Complete system was used in the April 2006 special election held to replace former Representative Jeff Habay, who was leaving office because he was arrested and convicted by the Attorney General's Office for criminal use of public resources for campaign purposes.  One of the RIT employees testified before the grand jury "how truly 'weird' it was to prepare to use all of these public resources to fill the seat of a guy who just went to jail for illegal campaign activities."

Enterprise Database
The grand jury heard testimony from campaign experts that stated that next to money, information about voters is fundamental to a campaign's success.  Accurate and accessible voter information enables campaigns to effectively convey their messages through political mailings, political phone calls, door to door efforts and election day activities.
 
Perzel and his co-conspirators entered into a $4 million contract with GCR specifically designed to fulfill the dual purpose of storing information useful for elected Republican representatives as part of their constituents' service programs and storing information about Pennsylvania voters to fuel campaigns. 

The data included maps of voting districts, results of all major Pennsylvania elections since 1992, a statewide voter information file of all registered voters, their locations and past voting histories, a profile of all voting precincts in Pennsylvania and voting patterns by the precincts and political affiliations.   GCR named the project the Enterprise Database.

The caucus provided GCR with huge amounts of data, with well over seven and half million records at a time being sent by the RIT staffers to start the data warehouses.  The grand jury found that Perzel campaign workers Stokes and McClintock were very interested in being able to access the Enterprise Database for Perzel's BlueCard system. 

The grand jury found that the primary user of the Enterprise Database was the House Republican Campaign Committee (HRCC).

As part of his fixation for redundancy, the grand jury found that Perzel employed Aristotle to produce a separate and superior version of Enterprise Database.  Aristotle called their database ODS and promised they would develop it faster and make it larger and more efficient than the GCR's Enterprise Database.

The Edge
The grand jury found that one of the primary campaign programs that Perzel directed GCR to produce for the caucus was called "The Edge," because it was designed to give Republicans the edge in elections.

The Edge was fundamentally designed as a web-based tool to "mine" or "model" the Pennsylvania voter data to give it functionality.  A user could access the voter database and determine political party, sex, jurisdiction, religion, etc.  The Edge also contained data about favorable voters, e-mail addresses and voter preferences. 

The grand jury reviewed numerous e-mails and other documents that clearly demonstrated that The Edge was created and used solely for campaign purposes.

The Edge was frequently used by the HRCC and was recognized as one of their primary campaign tools.  Neither the HRCC, nor Perzel's campaign ever paid for any of The Edge, which was entirely paid for by taxpayers.

Aristotle later created a similar program for the caucus called DataCon.

Click here to continue with Part 2 of the press release

(Review the grand jury report:Part 1,Part 2&Part 3)