Up to 10,000 percent return on campaign contributions

Bond counsels who contract with the state Office of General Counsel can expect between a five and 10,000 percent return if the counsel’s firm contributed more than $1,000 to Gov. Ed Rendell’s election campaign.

The Office of General Counsel’s website states law firms “shall be compensated for services provided pursuant to any appointment letter in such amounts and at such times as may be specified in the appointment letter.” That compensation is subject to a fee schedule which relates to the initial, or principal, value of the bond the firm draws up.

The fee schedule shows for the first $25 million in the bond, the firm is paid 50 cents per thousand, so a raw $25 million bond would lead to $25,000 against 50 cents, or $12,500. For the second $25 million in a bond, the firm is paid 35 cents per thousand, and for any remaining value in the bond above $50 million, the firm is paid 10 cents per thousand.

For the most recent January 2010 series of bonds issues in the Commonwealth, valued at $900 million, the bond counsel firm would be paid $106,250. If the counsel contributed as little as $1,000 to Mr. Rendell’s campaign, there would be a 10,525 percent return on their ‘investment.’ The return is calculated based on how much the law firm contributed in campaign funding, and how much they could earn on a bond sale.

Of the 37 bond counsels listed on the Office’s website, only 13 did not make any contributions to Mr.

Rendell’s campaign(s). Given the constraints of the fee schedule, however, the larger a contribution a firm made to Mr. Rendell’s campaign, the lower the return on the investment. For example, Ballard Spahr Andrews & Ingersoll LLP, which contributed in excess of $500,000 to Mr. Rendell’s campaign, could actually receive a negative return on their ‘investment.’

Of the 24 law firms which did contribute to Mr. Rendell’s campaign(s), only three contributed more than $100,000. With the lowest bond series sale in the past eight years being Bond Series B of 2007 valued at $23 million, the return for a $1,000 contribution would be over one thousand percent.

While fee breakdowns by bond counsels were requested, the Office of General Counsel said they were “unaware of the existence of any other responsive records” and that “fees for all other bond counsel transactions are negotiated on a case-by-case basis.”

Rodney Akers, spokesperson for the Office of General Counsel, declined comment and passed the PA Independent’s questions on to Gov. Ed Rendell’s press office, which did not return calls for comment on pool structure and campaign contribution limits.