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State leaders' fund unchecked

Taxpayers provide $40 million for General Assembly 'expenses' but where does it go?

Sunday, August 06, 2000

By John M.R. Bull, Post-Gazette Harrisburg Correspondent

Four special expense accounts that received almost $40 million in taxpayer money this year are supposed to be used by leaders of the state House and Senate to cover expenses related to passing laws.

But a four-month Pittsburgh Post-Gazette investigation found that money from one House account helped incumbents in their bids to win re-election. The House accounts also included thousands of dollars in spending on food, entertainment, transportation and postage, expenses that were often included in other legislative budgets.

An Accounting in

'Secret' fund buys advice for politics

Taxpayers pick up tab for meals

Special Leadership Accounts: a sampling of ledger entries


In many cases, it was impossible to determine exactly how the money in these Special Leadership Accounts was used, especially in the House. The only details made public include cursory explanations for many of the expenditures.

The accounts have existed for decades and legislative leaders insist every expense is legitimate. Yet they declined to provide proof.

The Legislature has exempted itself from the state Open Records Law, preventing a review of the expense records for the accounts. Its own rules do not allow anyone outside the Legislature, including the Legislature's own independent auditor, to see the invoices, bills, contracts and credit card receipts from the accounts.

As a result, the state auditor general, the state treasurer, the media and the public have no legal right to see invoices. They can learn only what House and Senate leaders choose to reveal about how they spend this public money.

"Doesn't the public really have a right to know how its money is being spent?" wonders Barry Kauffman, executive director of Common Cause/Pennsylvania, a government watchdog group.

'Career on the line'

Taxpayers footed the $11,000 American Express credit card bill racked up by state House Democratic Leader H. William DeWeese in a single month last year.

Want to know what he bought?

Tough luck. DeWeese isn't saying, and no one can make him.

The bill was paid from his Special Leadership Account.

The only public records for these accounts include the date an invoice was paid, the person or business that got the money, the amount and a general explanation, such as "telephone bill," "caucus refreshments," "contractor," "salaries."

Some of those payments could be tracked down. But not the credit card payments, which amount to an expense account within an expense account.

DeWeese's monthly credit card bills of $1,800 to $11,000 were described as "legislative expenses."

"You don't know if it isn't for dancing girls," Kauffman said. "Can you imagine in private industry having an expense account and telling the boss, 'I'm not going to tell you what I spent it on?' "

DeWeese refused repeated requests to release the credit card slips that would have made clear how the money was spent. So did House Majority Leader John Perzel, R-Philadelphia.

Steve Drachler, Perzel's spokesman, said all House Republican leadership account expenditures were examined internally before being paid. That ensures the money is not used for political purposes and that all payments are for legitimate legislative expenses, he said.

The ultimate check and balance lies with the voters, he said. They have the chance to throw Perzel out of office every two years, when he faces re-election, Drachler said.

"There is incentive to being scrupulous in what you do," he said. "If you don't, you put your career on the line."

DeWeese said all his expenses were for legitimate legislative business. He said he saw no reason to change the system so that his contention can be verified.

"Every expenditure we have engendered is legal, moral and proper," DeWeese said. "We are fully audited and are fully compliant with the rules of the House. I have no reason to believe there are not enough strictures ... on the expenditures."

But the Post-Gazette found that independent audits of the accounts were limited by legislative rules.

Ernst & Young noted in its most recent audit, released in February, that auditors were prohibited from checking to determine whether individuals paid from the leadership accounts actually existed, whether any goods or services were received for payments, or whether the expenses were for legitimate legislative purposes.

"The Legislature exempting itself from standard accounting procedures is another example of betrayal of public trust," Kauffman said. "You absolutely have to have an independent audit. An audit is an audit. Nothing should be excluded.

"What they have now is a joke."

That financial review also said leaders didn't spend all the money appropriated to their accounts, which resulted in $23.5 million among the four legislative caucuses being carried over to the current year. Perzel had the largest carryover, $16 million.

Keeping the surplus is possible only because legislators exempted themselves from the law that requires other state departments to return unspent money to the General Fund at the end of the fiscal year.

House and Senate leaders say they need to be able to carry over funds in case a governor someday plays hardball over a budget and uses line-item veto power to threaten the Special Leadership Accounts.

Despite the $23.5 million cash carryover, legislative leaders pushed through a 2000-01 state budget last month that substantially increased their leadership account appropriations for this year.

The two Senate leaders each took an additional $400,000, a 5 percent increase that upped the appropriation to each of their accounts to $8.9 million this year. Perzel and DeWeese grabbed an additional $1 million apiece, a 10 percent increase that jacked their appropriations to $10.8 million this year.

By comparison, the Legislature increased state money for basic education 3.1 percent this year. The transportation budget was increased 3.4 percent. Welfare funding was boosted 4.9 percent.

The most recent consumer price index, which measured average price increases nationally through the end of June, showed an annual inflation rate of 4.2 percent.

House and Senate members established rules that give the leaders of each party's caucus sole discretion in determining what constitutes proper use of the Special Leadership Accounts for "leadership purposes."

Senate leaders Joseph Loeper, R-Delaware, and Robert Mellow, D-Lackawanna, used funds in their accounts mostly to pay salaries and fringe benefits for caucus staff members.

That allows them to keep a closer eye on salaries and to control raises that senators request from the accounts, said Stephen MacNett, general counsel for Senate Republicans. It also helps to keep Senate committee chairmen from hiring too many staffers, he said, by withholding funds for new hires.

Some mileage reimbursements for staff members also were drawn from the Senate leadership accounts. Mellow paid for his caucus communication department's newspaper subscriptions from his leadership account.

No details were released about which employees are paid from those accounts, making it impossible to determine if they actually come to work.

That lack of accountability shows the need for a new state Open Records Law that prohibits legislators from spending money without full disclosure, Kauffman said.

Such a bill was introduced by state Sen. Stewart Greenleaf, R-Montgomery, but is facing opposition from some lawmakers. The leaders of both parties have not said whether they would support the bill.

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