In less than three years
The state Office of the Attorney General(OAG) paid more than $3.4 million to private collection agencies between August 2007 and June of last year for assistance in collecting delinquent state taxes.
The OAG did not respond to calls attempting to determine how much was actually collected during the 35-month period.
The OAG agreed in court documents last year that commissions to private vendors collecting state debts run from 19 to 29 percent of collections. If correct, the amount collected by the private agencies for the OAG’s Financial Enforcement Section (FES) totals between $12 million and $17 million over the nearly three year period.
By comparison the state Department of Revenue (DOR) collected about $260 million in back taxes last year through its tax amnesty program, which forgave interest penalties on unpaid state taxes.
The FES is the DOR’s collection agency of last resort and tax delinquencies that appear uncollectible are turned over the FES by the Revenue Department.
The operations of FES are also the center of an ongoing federal civil rights suit against outgoing Attorney General Tom Corbett and his senior staff. Mr. Corbett will be sworn in as Pennsylvania’s governor on Jan. 18.
The suit brought by former Deputy Attorney General Thomas Kimmet alleges gross mismanagement of FES and Mr. Kimmet, prior to his dismissal by Mr. Corbett in August 2008, was thwarted in his efforts to reform the system.
The position of Mr. Corbett and his team is that Mr. Kimmet is a disgruntled former employee.
Most of the invoices covering the $3.4 million in payouts are signed by Sherry Bellaman, a joint plaintiff with Mr. Kimmet in his suit, and many are countersigned by Deputy Attorney General Michael Roman and FES Manager Jill Keiser, both named as defendants in the suit.
The biggest recipient of tax dollars for tax collections during the period reviewed was the firm of Linebarger Groggan Blair and Sampson of Dublin, Ohio. The firm reaped $1.78 million.
The other firms listed by FES were Penn Credit in Harrisburg ($736,480); Alliance One in Trevose ($560,799); Accounts Recovery Bureau, Inc. in Wyomissing ($97,880); Diversified Collection Services of Livermore, California ($98,379); Unifund Government Services of Cincinnati ($81,999) and Pioneer Credit Recovery of Arcade, New York ($55,674).
The only collection firm showing a record of contributions to Mr. Corbett’s political campaigns for attorney general or governor appeared to be Penn Credit, where two employees gave a total of $5,000 to Mr. Corbett’s gubernatorial run last year.
