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March 19, 2013 | By | Posted in Features

Problems run deep at PA Turnpike Commision

By Eric Boehm | PA Independent

HARRISBURG – Charges against eight men involved in alleged bid-rigging and “pay-for-play” schemes at the Pennsylvania Turnpike Commission may be only the surface of problems at the state agency.

KANE THROWS THE BOOK: Attorney General Kathleen Kane announced charges against eight men last week. But the problems at the turnpike run deeper.

KANE THROWS THE BOOK: Attorney General Kathleen Kane announced charges against eight men last week. But the problems at the turnpike run deeper.

Last week, Attorney General Kathleen Kane announced charges against former state Sen. Bob Mellow, D-Lackawanna; former Turnpike Commissioner Mitchell Rubin; former Turnpike CEO Joe Brimmeier; former Turnpike COO George Hatalowich; two lower ranking turnpike employees and two longtime turnpike vendors.  The men were charged with running a complex “pay-for-play” scheme in which campaign contributions and gifts were paid by vendors to favored politicians in return for contracts with the turnpike.

Though only eight were charged, the grand jury presentment paints a compelling picture of a much wider-ranging scam, with former state Sen. Vince Fumo, D-Philadelphia, and former Gov. Ed Rendell also implicated, though not named or charged.

The full report puts down in black-and-white what has been whispered about for years: that the Pennsylvania Turnpike Commission was deeply involved in political patronage and served as a conduit for powerful political actors in Harrisburg to steer contracts to favored firms and those that agreed to contribute heavily to campaign accounts.

The gifts of campaign donations, cash, free travel and entertainment “have tainted and thoroughly corrupted the system,” while resulting in the “manipulation, misdirection and theft of millions of dollars of public monies meant to support, repair and maintain an important and major roadway system,” the grand jury concluded.

There is plenty of detail in the report about the alleged crimes, but there is also a good deal of information about the culture of the Turnpike Commission during the years that the alleged crimes of Mellow, Rubin, Brimmeier and the rest took place.

One man quoted, but not named, in the grand jury report is described as a “West Point graduate” and a former chief engineer for the turnpike.

He described his frustration with “an apparent inability to get the turnpike to focus on the right issues” and told the grand jury the turnpike was “sensitive to the election times.”

CAPTION

POLITICS CAME FIRST: “It seems like running a road is more like a public utility than it is something that ought to be, you know, a political environment,” one testifier told the grand jury.

“It seems like running a road is more like a public utility than it is something that ought to be, you know, a political environment,” he said, according to the report.

A former chief operating officer of the Turnpike testified to the grand jury that high-ranking members of the commission would indicate “firms that we are looking for” during the bid process.

That “we” was communicated to the commissioners “through the staff from other political entities, either the governor’s office or political leaders in the legislature,” the former COO explained to the grand jury.

Carmen Marrone, a former regional director at the turnpike who testified in exchange for immunity, said she experienced the same influence-peddling.

During informal meetings with Hatalowich, Marrone said she was told who would be awarded contracts and how to vote at commission meetings.

A former special assistant to the commissioners whose name was withheld from the grand jury report described his participation in political fundraisers as “that’s the way it is.”

The political relationships superseded attempts by some members to report the illegal activity or bring an end to it, the grand jury wrote.

CAPTION

CH-CH-CH-CHANGES? The new CEO of the Turnpike Commission, issued a statement this week detailing changes that have taken place in the last two years to make the turnpike’s bidding process more transparent and accountable.

State Police Commission Frank Noonan agreed with that assessment.

He said the investigation was aided by former employees of the turnpike who tried to “do the right thing” and were reassigned or terminated by the commission for speaking out about the criminal activities.

On the bright side, the men charged with the alleged crimes last week are no longer members of the state Senate or the Turnpike Commission.

Mark Compton, the new chief executive officer of the Turnpike Commission, issued a statement this week detailing changes that have taken place in the last two years to make the turnpike’s bidding process more transparent and accountable.

In addition, Compton said he was ordering an immediate review of every professional-services contract cited in the attorney general’s presentment and all contracts awarded during the investigation that remain active.

He said all employees and vendors will be reminded of the turnpike’s internal code of conduct and their obligation to come forward if they witness inappropriate activity.

Compton also said he will convene a “special advisory group” to review the turnpike’s operations.

“I want to make it perfectly clear to every employee and to all customers and stakeholders: The four measures introduced today — along with the changes made over the past two years— signify a clean break from any past offenses,” Compton said.

Senate Minority Leader Jay Costa, D-Allegheny, who holds the post once maintained by Mellow, gave assurances on Monday that corruption in that office was a thing of the past.

Costa said the new chiefs at the agency were on the right track by changing the bidding process to make it more transparent.

“I think ‘change in culture’ is a good way to describe it with the new leadership of the turnpike,” he said.

The criminal allegations unveiled last week come on the heels of a report from former Auditor General Jack Wagner, who in January released an audit of the Pennsylvania Turnpike Commission showing poor financial management and a complete lack of oversight of the expense accounts for high ranking members of the commission.

For example, commissioners frequently rang up meals of several hundred dollars but did not file expense reports stating the purpose for the banquets.  And members of the commission received brand new cars valued at more than $28,000 each the week before tolls on drivers using the turnpike were hiked for the fifth time in five years.

State Rep. Donna Oberlander, R-Clarion, has introduced legislation to abolish the Turnpike Commission entirely by rolling its duties into the state Department of Transportation.  As the state moves towards addressing transportation funding, “it must eliminate inefficiencies and excesses,” she wrote in a memo to lawmakers.

Her bill would shift all of the Turnpike’s operations, maintenance, construction and reconstruction powers and duties to PennDOT and the issuance and payment of bonds to the State Treasurer’s office.

Merging the turnpike with PennDOT is generally viewed as an impossibility in the short term, since it would require the state to also take on the turnpike’s $8 billion in debt.

In the grand jury report, one witness pointed the finger directly at the legislature for failing to correct the problem for years.

“The turnpike is what it is because the General Assembly wants it to be that way,” the grand jury report quotes the anonymous source as saying. “Over the years, despite all of these audits and newspaper articles, despite all the desires to make it better, it continues. It persists.”

Boehm is bureau chief for PA Independent. He can be reached at Eric@PAIndependent.com

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Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com or at (717) 350-0963.

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