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Turnpike CEO Directs New Accountability Measures

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The head of the Pennsylvania Turnpike says the commission is making a clean break from any past offenses.  After reading the grand jury presentment that led to criminal charges being filed in a “pay-to-play” corruption scheme, CEO Mark Compton tells Radio PA that his emotions went from disappointment to outrage.

“The one thing that I can assure our traveling public, to them and to our employees, both of you deserve better and we are going to make darn sure that these things never happen again.”

On Monday Compton ordered the Office of Compliance to conduct a review of every contract awarded during the timeframe of the Attorney General’s investigation and called for a memo to be sent out to Turnpike vendors, explaining the commission’s revised procurement policies.  Compton’s also asking that all Turnpike employees sign their existing code of conduct. 

This is all coming less than two months on the job for Compton, who is taking action to ensure past mistakes aren’t repeated again. 

The new accountability directives at the Turnpike are in addition to the reforms Compton pointed out in a statement released immediately following last week’s grand jury presentment.

Charges Reveal Pay-to-Play History at Turnpike

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A years-long grand jury investigation finds that in order to get big Pennsylvania Turnpike contracts… you had to pay-to-play.  Eight men now face criminal charges: one former lawmaker, five former Turnpike Commission officials and two businessmen.  The biggest name in the bunch is former state Senate Democratic Leader Bob Mellow, who’s already serving a federal prison term on corruption charges.  Others charged include former Turnpike CEO Joseph Brimmeier and former Turnpike Commissioner Mitchell Rubin. 

The charges include: bribery, bid-rigging, corruption and theft.

The charges include: bribery, bid-rigging, corruption and theft.

“According to the charges, those who pay-to-play have sought and been rewarded with multi-million dollar Turnpike contracts and the public has lost untold millions of dollars,” says Attorney General Kathleen Kane who announced the grand jury’s findings on Wednesday. 

Kane says the Turnpike created its own fiefdom, whereby officials forced vendors to make hefty contributions to the political campaigns of their choosing.

Joining Kane in the Capitol Media Center was State Police Commissioner Frank Noonan, who encourages the public not to paint all state employees & officials with the same brush of corruption.  “There were numerous state employees who tried to stand up for the right things to do,” Noonan says.  “They were terminated.  They received poor evaluations and they were isolated.  They knew something was wrong but they couldn’t do anything about it.” 

‘The right thing’ is what the new CEO says the Pennsylvania Turnpike Commission is doing today.  In a statement, Mark Compton says he’s troubled by today’s news:

“If charges against former Turnpike employees are indeed proven, we certainly cannot – and will not – defend that.  But I can say these actions definitely don’t represent the hard-working men and women who keep our road open and safe for customers….”  Compton’s statement goes on to point to a number of accountability reforms enacted at the Turnpike in recent years. 

All eight defendants will be prosecuted in Dauphin County; the investigation is ongoing.

Radio PA Roundtable 02.22.13

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On this week’s Radio PA Roundtable, Brad Christman and Matt Paul bring you the latest from state legislative budget hearings, which included questioning on topics ranging from state pensions to guns. And, as budget season kicks into high gear, what’s the latest on the pension crisis?

Radio PA Roundtable is a 30-minute program featuring in-depth reporting on the top news stories of the week.

Click the audio player below to hear the full broadcast:

[audio:https://s3.amazonaws.com/witfaudio/radiopa/Roundtable02-22-13.mp3]

Lottery Debate Dominates Several Budget Hearings

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As Governor Tom Corbett mulls his next steps, Revenue Secretary Dan Meuser spent the bulk of his House budget hearing defending the recently-rejected Lottery contract.  Meuser remarked that the premise for much of the opposition is wrong.  “There’s no plan to sell the Lottery.  We cannot by federal or state law.  There is no plan to relinquish control of the Lottery.  We maintain full control of the Lottery,” he emphasized.

At issue is the private management agreement the Corbett administration negotiated with Camelot Global Services, in which the private company has guaranteed record profits over the next 20-years.  The administration has been working on this for nearly a year, because the demand for senior services is growing at a pace that’s too rapid for the Lottery Fund to sustain. 

On Valentine’s Day Attorney General Kathleen Kane called that contract illegal and unconstitutional, and she rehashed that decision in front of the Senate Appropriations Committee on Wednesday.  Kane’s main points were: 1) the contract infringed on the legislature’s authority, and 2) KENO is not an authorized game under the Lottery Act. 

“I am not an economist and I don’t pretend to be, I am a lawyer, and we went through the statutory construction of the Gaming Act, the Lottery Act, as well as the General Assembly’s authority,” Kane said as she told the panel this was not a policy decision. 

Revenue Secretary Dan Meuser

Revenue Secretary Dan Meuser

But Secretary Meuser disagreed with both of Kane’s major points at his House hearing one day earlier.  “The law clearly states – laws granted by the legislature – granting the Department of Revenue the ability to hire vendors for the effective and efficient growth of the Lottery, and to promulgate new games. 

Meuser also contends that KENO – which was rolled out in nearby Ohio a few years ago – falls within the scope of the Lottery’s terminal-based game regulation, not the “slot machine” definition of the Gaming Act.  He says KENO would us the same algorithm as some exiting Lottery games. 

In lieu of a protracted legal debate, some Democratic lawmakers are calling on Governor Corbett to work with the General Assembly to maximize Lottery revenues in-house.  Also, one Republican lawmaker plans legislation to authorize KENO while barring online, interactive Lottery games.

Radio PA Roundtable 02.15.13

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On this week’s Radio PA Roundtable, Matt Paul catches us up on the Attorney General’s disapproval of the controversial lottery management contract. He’ll also chat one-on-one with State Rep. Scott Conklin (D-Centre) about all of the latest developments in the Penn State scandal. Plus a Pennsylvania Bishop discusses Pope Benedict XVI’s big announcement.

Radio PA Roundtable is a 30-minute program featuring in-depth reporting on the top news stories of the week.

Click the audio player below to hear the full broadcast:

[audio:https://s3.amazonaws.com/witfaudio/radiopa/Roundtable02-15-13.mp3]

Reactions to Lottery Decision Pouring in

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The contract to privatize Pennsylvania Lottery Management has failed Attorney General Kathleen Kane’s “form and legality” test.  Reactions abound from stakeholders and elected officials, and their statements are providing a few hints as to what’s next.  Check them out for yourself:

Governor Tom Corbett:

“I’m deeply disappointed. I don’t agree with the attorney general’s analysis and decision, and we will review our legal options.

My job is to protect Pennsylvania’s seniors, and we will continue to do that.

We have a growing population where one in four Pennsylvanians will be over the age of 65 by 2017. My goal is to ensure that funding for senior programs keeps pace with that growth.”

(note that in his public comments in Pittsburgh, Governor Corbett said that one in four Pennsylvanians will be over the age of 60 in the next 17-years)

Camelot Global Services:

“We are disappointed with Attorney General Kane’s decision to reject the private management contract. We guarantee our proposal will produce unprecedented profits for senior programs and we have backed our investment in Pennsylvania with $200 million – transferring all risk from state taxpayers. Camelot has indicated it would headquarter in Pennsylvania, pay all taxes required of any commonwealth business, and keep all lottery jobs in the state. We have also publicly stated we would not oppose union organization by our employees. We have no further comment at this time.”

Speaker of the House Sam Smith / House Republican Leader Mike Turzai:  

“The administration’s interest was always about growing Lottery proceeds to increase funding for programs, thus helping the state serve its expanding senior population. We also realize many may feel this action by the attorney general ‘saves the Lottery.’ However, given that the Lottery has contracted out significant portions of its current operations, and has done so for many years, we hope the attorney general’s decision does not set the current operations back.   

“The legislature passed the lottery law in 1991, giving broad powers to the Secretary of Revenue to manage the operations. Right or wrong, it’s the legislative branch of government that should decide if the governor has too much say.  Consequently, we expect that the legislature will be reviewing the attorney general’s determination with great interest.”

House Democratic Leader Frank Dermody:

“The effort to outsource management of the Pennsylvania Lottery to a foreign corporation was done largely out of public view and it was wrong. In confirming the legislature’s authority in this matter, the attorney general made the right decision and followed the law.

“Because of her decision, lottery proceeds will continue to benefit older Pennsylvanians rather than being sliced up to benefit corporate shareholders.

“The governor is wrong when he claims the rejection of this improper contract will cost seniors money. I will push during the upcoming budget process to provide even more money than the governor proposed for senior programs and it can be done with the lottery’s current revenue.”

Treasurer Rob McCord:

“I commend the Attorney General for her independent review and subsequent rejection of the administration’s attempt to expand gambling through the state contracting process.

“The administration was repeatedly warned, as early as last year, that the proposed contract would permit new forms of gambling not currently authorized by the Legislature and not regulated by the Gaming Control Board

“Expanding the Lottery is a policy decision that should include the General Assembly, not be done through a closed-door contracting process.  Beyond the legal issues, this proposal also raised serious questions about how best to serve seniors efficiently with the programs that the Lottery pays for.”

Auditor General Eugene DePasquale:

“While I have not opposed all privatization, in the case of the Pennsylvania Lottery, Attorney General Kane and her team of lawyers made the right decision after identifying the legal flaws in the contract that would have led to an unprecedented expansion of gambling without legislative and public input.

“I am concerned that the benefits from the private management agreement would not meet or exceed what the current, very well run Lottery could produce in the same time frame. That concern, and the decision to expand gaming, need to be addressed with input from the public and Pennsylvania General Assembly before we go any further.

“I suspect today’s decision will not be the end of this story, but I hope Gov. Corbett will carefully weigh the cost to taxpayers before he decides to pursue this matter further. My office will continue to monitor the situation and be prepared to conduct and fair and independent audit should the contract eventually be implemented.”

 

Attorney General Rejects Lottery Contract

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Like thousands of state contracts every year, the Professional Management Agreement with Camelot Global Services is subject to review for “form and legality.”  But Attorney General Kathleen Kane says it failed that test.  She says it’s in violation of both the law and the state constitution. 

Kane addressed the media for about five minutes this afternoon.  Listen to her entire statement by clicking below:  KaneLottery

Governor Tom Corbett entered into the contract in hopes of generating billions of additional dollars, over the next 20-years, for state programs that benefit senior citizens. 

A recent Franklin & Marshall College Poll found that 64% of Pennsylvanians oppose the move.