Pennsylvania Turnpike Officials in Hot Water Again: State Roundup

By PA Independent Staff

HARRISBURG — More Pennsylvania officials found themselves on the wrong side of the law this week.

A grand jury presentment alleges widespread corruption from former Pennsylvania Turnpike Commission officials, while the Philadelphia Traffic Court ticket-fixing scandal continues to unwind in court.

But for those who are operating business as usual, the legislative session is honing in on the key issues of budget negotiations. Lawmakers are still hammering out details of a potential solution to the pension problem, and liquor privatization debates are sure to steal headlines next week.

Eight charged in turnpike ‘pay-to-play’ scandal

Alleged corrupt behavior by management and associates of the Pennsylvania Turnpike has led to multiple charges from the Office of Attorney General.

Attorney General Kathleen Kane, who announced the charges at a news conference Wednesday, said the officials were engaged in a “pay-to-play” arrangement with engineering firms, insurance companies and banks that had contracts with the turnpike between 2000 and 2011.

In total, eight men have been charged with various counts of conspiracy, bribery, bid rigging, theft and several other charges.  Kane said the officials used their power to secure “secret gifts of cash, travel and entertainment, along with political contributions” from contractors doing business with the Turnpike Commission.

Former state Sen. Robert Mellow, D-Lackawanna, was the only elected official charged.

According to the grand jury presentment, he was “actively involved in steering Turnpike contracts to particular vendors,” securing political contributions from turnpike officials and vendors and personally benefited from gifts, including tickets to New York Yankees baseball games and trips paid for by Turnpike contractors, which he did not disclose on state ethics forms.

Charges were also filed against Mitchell Rubin, former chairman of the Turnpike Commission, Joseph Brimmeier, former CEO of the Turnpike Commission, and George Hatalowich, a former COO and contract administrator for the Turnpike Commission.

The grand jury presentment makes mention of other officials who may have been involved in influencing decisions at the Turnpike, including an anonymous “Senator No. 6,” who is likely former state Sen. Vincent Fumo, D-Philadelphia, already behind bars for using public money on his political campaigns.

The pension problem: A decades-long, billions-deep issue

Though this year might be the year lawmakers change pension benefits for state employees to help stave off pension debt, a recent presentation from the Office of the Budget gave some long-term context to just how dire the state’s pension problem really is.

No matter what reforms might be enacted this year, $42 billion in debt is the best shape the state’s two pension systems will be in at any point for the next two decades, according to charts from the administration.

Some officials have floated ideas to shift this problem in another direction, like with pension obligation bonds.

At a state budget hearing last month, lawmakers and the heads of Pennsylvania’s two major pension funds — the State Employees Retirement System, or SERS, and the Public School Employees Retirement System, or PSERS — discussed the possibility of selling bonds to pay off a portion of the combined $42 billion debt for the two systems.

In theory, the state could borrow up to about $10 billion on the private bond market and repay that at a lower interest rate compared to what it would pay into the pension funds.

But right now, state law says such maneuvers are illegal, and they bring great financial risk. Defaulting on the bonds can drive up debt even further.

“Generally speaking, we don’t favor borrowing to pay for debt,” said Jim McAneny, executive director of the state Public Employee Retirement Commission, which advises the Legislature on pension issues.

Hedgehogs could be legalized in 2013

Of Pennsylvania’s many rules and regulations, one is rather prickly for potential exotic pet owners: Hedgehogs are illegal to own in in the commonwealth.

But this year, some state lawmakers are looking at legislation that would legalize hedgehogs and other so-called pocket pets.

State Rep. Jeff Pyle, R-Armstrong was contacted by a family in his district after 13-year-old Josiah Edwards was shocked to hear that hedgehogs, his dream pet, were illegal in Pennsylvania.

Pyle is jumping on board with House Bill 575, from state Rep. Gary Haluska, D-Cambria. The bill is a rewrite of the state’s exotic wildlife possession law. It aims to eliminate the permitting process for exotic animals, outlawing future ownership for creatures such as lions and tigers. The move though, would legalize hedgehogs and other so-called pocket pets.

“My constituent asked me to try to enact on law on their behalf, and when you boil it all down, that’s my job,” Pyle said.

Liquor privatization debate intensifies

The House Liquor Control Committee will discuss on Monday proposals to sell off the state’s wine and spirit stores and switch to a private system. Those for or against the system will likely have strong words to say about the measure.

On Wednesday, a rally in the capitol offered something of a preview.

A video this week shows Wendell Young IV, president of the United Food and Commercial Workers Local 1776, at a pro-privatization rally voicing some strong opinions to the speakers.

UFCW Local 1776 represents the liquor store employees who work for the state, and their presence is sure to be felt as lawmakers continue to discuss the privatization plan next week and beyond.

Former traffic court judge pleads guilty to ticket-fixing

A third Philadelphia Traffic Court judge, Fortunato Perri, Sr., pleaded guilty to fraud and conspiracy charges Wednesday in connection with widespread ticket-fixing.

He faces up to six months behind bars.

Perri, who is retired, was charged separately from the indictment federal investigators released in a January crackdown on the court. But the charges against him stem from the same problem – dismissing or reducing tickets for friends and the well-connected.

The Philadelphia Inquirer reports Perri had received personal favors, like discounts on landscaping and a free patio, after fixing tickets for employees.

Crime still pays a pension in PA

State employees convicted of rape, grand theft auto and even murder can still collect lifetime pensions under Pennsylvania law.

An attempt to change that is hung up, for now, in the state House after being voted out of committee on Tuesday morning.  If passed, it would allow the state to revoke pensions from any current or former state employee convicted of a number of felony offenses and violent crimes, including homicide, rape, aggravated assault, arson, burglary, sexual assault, robbery and criminal conspiracy.

A conviction of any federal crime also would trigger pension forfeiture under the proposed law.

State Rep. Daryl Metcalfe, R-Butler, chairman of the House State Government Committee, said the law was the first step in pension reform.

“There is certainly a need to expand the law to ensure that when somebody commits these types of crimes, they are not allowed to take with them the taxpayer-funded portion of their pensions,” Metcalfe said.

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