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'Secret' fund buys advice for politics

Taxpayer-fed expense account, not subject to audits, is used to pay a political consultant and buy research

Sunday, August 06, 2000

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

HARRISBURG -- The top Republican in the state House of Representatives spent $25,000 of his taxpayer-funded expense account last year to pay a political consultant. The money was used to help a Republican legislator who is facing a tough election challenge this fall.

Majority Leader John Perzel of Philadelphia also tapped the fund for $1.1 million to pay a company to collect detailed voter registration data and to conduct phone surveys that even some Republicans say were designed to give incumbent Republicans an edge in their re-election campaigns.

"I think they're extremely offensive expenditures," said Barry Kauffman, executive director of the government watchdog group Common Cause/Pennsylvania. "This is public campaign-financing for incumbents only. It is obviously a violation of public trust. Those are political activities, not governing activities."

Perzel used the same fund to pay a Pittsburgh law firm $1.4 million, partly for legal research aimed at helping a Republican representative who had been convicted of a felony. The research was meant to bolster Republican arguments that the legislator could not be forced to resign without a vote to expel him, even though the state constitution requires expulsion.

The money came from Perzel's Special Leadership Account, one of four such expense accounts used by Democratic and Republican leaders in the Senate and House, ostensibly to pay legislative expenses of their party caucuses.

Details of how the money is used is shrouded in secrecy.

The Legislature exempted itself from the state Open Records Law and cannot be forced to reveal the particulars of payments from the accounts, each of which received appropriations of between $9 million and $11 million this year.

Nor have the accounts ever been fully audited. The Legislature prohibits its own independent auditors from examining account invoices or even determining if money was properly spent.

The records that are released are vague and sketchy. They include only the name of the person or company paid, how much, when and for what general purpose, such as "phone bill," "caucus refreshments," or the catch-all "legislative expenses."

For example, House Minority Leader H. William DeWeese, D-Waynesburg, racked up an $11,000 credit card bill in one month last summer that was paid from his leadership account. He said it was for office expenses, but refused to allow the Pittsburgh Post-Gazette to examine the American Express card slips or bill. His House credit card bill ranged from $1,800 to $11,000 per month.

Perzel's spending from his credit card account totaled $1,666 for the last half of 1999. The spending was recorded as being for "legislative meetings," or "legislative lunch and dinner meetings." He refused to release any invoices.

The Special Leadership Accounts are supposed to be used to cover legislative expenses, not to pay for partisan politics or campaigning. But the head of each party caucus has sole discretion in determining what expenses are appropriate.

A Post-Gazette investigation that examined six months of payments from leadership accounts last year raises questions about their use by Republican and Democratic caucuses in the state House.

Some expenditures seemed political in nature. Others seemed curious. For example:

DeWeese and Perzel each averaged $5,000 a month on food and drink at restaurants, although they and other legislators are paid $115 a day for food and lodging while they are in Harrisburg.

Perzel spent more than $300,000 for postage over six months, although the House has a $19 million account for legislative printing and expenses. Perzel wouldn't disclose the content of the mailings.

Perzel paid $42,000 to Venture Data, a Salt Lake City polling firm, in December. His spokesman said pollsters called 800 Pennsylvania residents and asked them "public policy" questions, but that spokesman would not release the actual questions.

Jeff Call, the company's general manager, did not return numerous phone calls seeking comment.

State Sen. Allen Kukovich, D-Manor, a longtime critic of Harrisburg pork-barreling, found the list of questionable expenditures by House leaders shocking.

"Wow. All that's unbelievable," Kukovich said. "On its face, there would be the appearance of impropriety. I have a sense that the separation between legislative business and political business is blurring."

Perzel would not comment directly, but his spokesman, Steve Drachler, said all of Perzel's payments from the fund were for legitimate legislative purposes and were not used for political gain.

"Political campaigns are run out of the campaign committee," Drachler said. "We try to make a very clear distinction. We try to build fire walls."

Retaining legislator

Separating legislative business from politics in the state Capitol is often difficult, and the rules that limit public oversight of the Special Leadership Accounts make it more so.

The Post-Gazette tracked down details of several expenditures from Perzel's Special Leadership Account that illustrate that point.

The Pittsburgh law firm of Kirkpatrick & Lockhart received $1.4 million from Perzel's account in the last six months of last year, even though House Republicans already have six lawyers on their caucus staff.

Drachler wouldn't comment on the purpose of hiring the firm, except to say that a portion of the fee paid for court arguments last year when Republicans sought to prevent the expulsion of Rep. Frank Serafini, R-Lackawanna, after he was convicted of lying to a federal grand jury.

The state constitution prohibits a lawmaker from serving if convicted of felony perjury or bribery charges or other "high crimes." Another constitutional clause, however, allows the Legislature to set the membership standards of its members. Perzel argued, and sought legal opinions to support his position, that Serafini's expulsion should, therefore, require a majority vote of the House. And he refused to allow such a vote, effectively preventing Serafini's expulsion.

Perzel's Republican Party held a slim 103-100 majority over the Democrats at the time.

Democrats in the House condemned that argument as a specious attempt to keep Serafini in his seat and the House in Republican hands. Serafini eventually stepped down on his own in February. A Democrat won the vacant seat in a special election in June.

Because there was a legal question on the constitutional powers of the House, paying a law firm was a legitimate expense, Drachler argued. The law firm, citing attorney-client privilege, refused to comment.

But even Republican Gov. Ridge and Republican Attorney General Mike Fisher found Perzel's arguments a stretch at the time. They urged Serafini to resign.

'Professional services'

Mike Pincus is the affable co-owner of Pincus Mowday Communications of West Chester, Chester County, and has a 28-year history of political work. State corporation records show his company was incorporated in 1997 with the stated purpose of "political campaign management."

He can be found these days in the campaign headquarters of state Sen. Richard Tilghman, R-Montgomery, running Tilghman's re-election campaign.

From his Special Leadership Account, Perzel paid Pincus $5,000 a month for five months last year for "professional services."

Perzel's spokesman, Drachler, said Pincus was hired to boost the profiles of some House Republicans by helping them with their image and communications skills. Drachler would not release the contract that Pincus signed specifying what work was to be done.

Pincus, who was reached at Tilghman's headquarters, said he counseled Republican Rep. Pat Browne of Lehigh County on how to better communicate. Pincus would not name the other lawmakers he counseled.

Browne's seat is considered critical by Republicans who want to keep their current House majority, which is 101-100 with two seats open because of resignations. And Browne has problems. His district comprises almost equal numbers of registered Democrats and Republicans. He was arrested for drunken driving last year. Democrats figure he is beatable.

Pincus said he helped Browne improve his public speaking and his handling of questions from the media. Browne did not return Post-Gazette phone calls seeking comment.

Pincus said he had extensive discussions with Perzel about pure politics -- in particular, which state legislative districts were vulnerable for Republicans in this year's elections.

The talks centered on which incumbents needed cash, how much cash could be raised, whether the Republican Party should ditch some incumbents in favor of better candidates, and which issues should be stressed for the candidate's gain, Pincus said.

"We were looking at targeting ... what seats we had to make sure we kept," Pincus said. "They didn't specifically hire me for that. I was brought in for general communications consulting. They asked me informally about the campaign. They asked me my opinions."

During one of those meetings, Perzel asked Pincus if he would run Republican Tom Parry's campaign in Scranton to fill the seat vacated by Serafini when he resigned in February, Pincus said. Pincus said he would, but Perzel never hired him. Parry lost the special election last month, and the seat went to the Democrats.

"I think this helps explain why people are so turned off to politics," said Larry Frankel, executive director of the American Civil Liberties Union of Pennsylvania, when told about the way the fund is being used. "I think voters see through it and say, 'We don't care about any of you.' I'm not surprised. I'm not pleased. To me, it's just another chapter in the saga."

'Totally inappropriate'

Even some Republican lawmakers question the legitimacy of Perzel's $1.1 million in payments last year to Precision Marketing of Easton.

Precision Marketing used phone solicitors to call thousands of Pennsylvania voters to explain the wide range of constituent services their Republican state representatives could provide.

Critics such as state Rep. John Lawless, R-Montgomery, say the program, dubbed the "Calling Plan," often is conducted in districts where the incumbent faces a re-election challenge. The phone calls are designed to give the incumbent good public relations that might translate to votes on Election Day, Lawless said.

Lawless said Precision Marketing's work was a massive incumbent protection machine fueled by tax dollars.

"You'll find they're doing these in the toughest seats," where Republican incumbents are in danger of being defeated, Lawless said. "Why isn't it done for every member? If it is so important to them, why aren't they making the calls themselves? Why hire someone to do it?"

Rep. Greg Vitali, D-Delaware, believes these kinds of expenditures are "totally inappropriate. That's wrong. It strikes me as clearly over the line."

Perzel's spokesman defended the expenditures.

The phone surveys are legitimate constituent services, available at the request of any Republican House member, Drachler said. He would not identify which incumbents benefited from the "calling plan."

If someone in the public wants to know, he or she can call all 101 House Republicans to see if they'll say whether they used Precision Marketing phone banks in their districts, Drachler said.

"We use a script that we've carefully prepared ourselves and then had our counsel go over," Drachler said. "This is cost-effective. It is less expensive than having staff people do this. I'm proud to be one of the architects of this program."

Drachler released an edited copy of a script used by the telemarketers working for one House Republican. The name had been blacked out. It could, however, be read if held up to the light -- state Rep. Julie Harhart, R-Northampton.

She is in the midst of a tough re-election campaign with a man who had held her seat for more than a decade, Democrat Frank Yandrisevits.

The script uses her name four times in four paragraphs.

State Rep. John Pippy, R-Moon, used the "Calling Plan" in 1998 when he was up for re-election and faced concentrated opposition from the Democratic Party, including a challenge over whether he'd lived in his district long enough to legally represent it in Harrisburg.

The calling plan was a success, he said. "We literally got hundreds of constituent service requests."

Pippy is up for re-election this year, but he said the calling plan wasn't necessary for him now.

"I think my name is out there now and what my office can do," he said.

Democrats say they have no program that is similar to what Precision Marketing does.

Precision Marketing also was paid by Perzel to collect detailed voter registration data on a county-by-county basis, including the ages, addresses, phone numbers, sex and voting history of voters across the state.

The information is needed to better target constituent mailings, some of which may be more important to the elderly or to women or to other constituencies, Drachler said.

That kind of detailed voter registration information also could be beneficial to Republicans when legislative district boundaries are redrawn next year, which occurs after the census is completed, said Kauffman, of Common Cause.

Districts will be redrawn to reflect changes in population. Knowing where Democrats and Republicans are concentrated helps political parties configure boundaries in ways that favor their candidates. If Republicans maintain their control of the Legislature, they will control most of the redistricting decisions.

Aiming legislative mailings only at registered voters seems suspicious, said Frankel, of the ACLU.

"It seems to me they should be trying to contact all their constituents," he said. "That voter registration information could be used for all sorts of things political. Do they turn that over to their re-election campaigns?"

The data is not turned over to campaign committees, Drachler said.

$300,000 on postage

Other Perzel expenditures could have been for political purposes, but it was impossible to determine because he would not release records.

Perzel spent more than $300,000 on postage from his account during the last six months of last year, which at bulk rates could equal up to 3 million pieces of mail.

Each representative gets $4,000 a year for mailings. The remainder of the $19 million is split among the House chief clerk's office, and the two caucus leaders.

The leaders wouldn't say how that pie is divided, but both have millions of dollars to dole out to rank-and-file members, spokesmen for both leaders said.

Perzel would not reveal specifics of the $300,000 for mailings he allocated from the leadership account. Without those records, it is impossible to determine if those mailings went to districts where the incumbent faces a re-election challenge.

"There's nothing inherently wrong with newsletters and the like. They can be very informative," Kauffman said.

"But it could be nothing but a self-promotional, pure political puff piece. It's like a hammer. It can be very useful but it also can be used in the wrong way. It depends on what was mailed."

Appropriate or not, Perzel's payments may not violate any law.

"You don't find overt, clear political activity," said Fred Voigt, executive director of the Committee of Seventy, a Philadelphia-based public policy and election law advocacy group. "It's hazy. There are lots of easy ones to call. These are not easy."

The State Ethics Commission has no jurisdiction to investigate inappropriate expenditures unless those expenditures personally benefit the legislator who authorizes the payments, or his or her direct family members, said John Contino, commission director. That means that Perzel's payments of tax dollars to benefit another politician, or Republican incumbents in general, does not fall under state ethic laws.

Fisher, the state attorney general and a Republican, has the authority to investigate violations of state election laws.

"If we receive a complaint ... we can investigate," Fisher spokesman Sean Connolly said. "Every case is unique. We would have to look at the circumstances."

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