How did the state bonus scandal happen?

The million-dollar 'bonusgate' was fueled by politics and a breakdown of the Democratic caucus' managerial system



HARRISBURG -- The payroll bonus scandal, which boiled down to state employees being dragooned into working political campaigns on state hours, then being rewarded with millions of dollars in year-end pay bonuses from the state coffers, also unfolded as a textbook case of fevered political atmospherics amid a breakdown in the managerial system that oversaw the operation of the Democratic caucus, say insiders now assigned to fix what is broken.

One clear example, according to Richard Dario, a former director of administration who was brought in after the November firings to reconfigure the operation of the caucus, was the role of Scott V. Brubaker. In title, Mr. Brubaker was the director of administration for the caucus -- the manager who was to see that bills were paid, contracts reviewed, and offices staffed and kept running.

"You can't be in that job and have a political bent to you," said Mr. Dario. "That's a job you can't have if you are afraid to lose it."

In reality, Mr. Brubaker was heavily influenced by both Michael R. Veon, then the Democratic whip, who had taken over much of the day-to-day operations of the caucus, and Michael L. Manzo, chief of staff to Democratic Leader H. William DeWeese.

   
Profiles of key figures

Scott Brubaker, former Democratic Caucus official

Jennifer Brubaker, research office director

Brett Cott, political operative

Jeff Foreman, high-level House staffer

Stephen A. Keefer, director of information technology

Patrick 'P.J.' Lavelle, research analyst

Michael Manzo, high-level House aide

Rachel Hursh Manzo, House aide

Earl Mosley, Democratic House staffer

Annamarie Perretta-Rosepink, district office manager

Rep. Sean Ramaley, D-Economy

Michael R. Veon, former House Democratic Whip

Closer Look: Recommended charges, Maximum sentences




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How the bonus scandal unfolded

   

Mr. Veon took over the duties of administering the caucus, say House insiders, while Mr. Manzo, upon rising to chief of staff under Mr. DeWeese, consolidated power by having people who should have reported to Mr. DeWeese instead report to him.

By extension, this recentered power in the caucus on Mr. Veon. As Mr. Manzo put it last year, "If you worked for Bill, you worked for Mike." Outsiders called in last November to sort through the mess discovered an organization chart that put Mr. Manzo above Mr. Brubaker -- a formula that essentially put Mr. Manzo in charge of clearing contracts, pay raises and, ultimately, the bonuses prosecutors say were awarded for blatantly political work.

Mr. Brubaker admitted as much when his wife, Jennifer, who headed the Democratic Legislative Research Office, wrote to Mr. Manzo advising him against a 3 percent pay bump for Michele Borlinghaus, a researcher Mrs. Brubaker complained was incompetent at her state job.

Mr. Manzo e-mailed Mrs. Brubaker and said Mr. Veon was pleased with Miss Borlinghaus' political work -- she had volunteered on numerous campaigns.

Scott Brubaker followed up with an e-mail to his wife putting it bluntly: "It is crazy from a management standpoint. It sends the signal that sub par performance is accepted." Miss Borlinghaus got the bonus.

Associates say Mr. Brubaker enthusiastically joined in the political side of state government, helping to organize volunteers, push forward their bonuses and help to orchestrate state-financed ballot challenges to third-party candidates.

When the House Democratic Information Technologies office, which runs the caucus computer system, let contracts, they bypassed internal controls and did not run the contracts through Mr. Brubaker.

Employees were freely signing the name of Mr. DeWeese, the titular leader of the caucus, on contracts and memos that he never saw.

"One of the issues was that there was a separation so to speak of responsibilities when I was there before, to the point where my relationship with DeWeese was a direct one," said Mr. Dario, who said he could recall approaching Mr. DeWeese in years past to halt such acts.

When Mr. Brubaker was called in Nov. 13 to be fired, two people inside the room at the time said he apologized for letting Mr. DeWeese down, but that he gave a clear signal that he felt himself answerable to Mr. Veon.

"He told DeWeese, 'I determined that the risk of getting caught was less than the risk of getting fired by Veon,'" said one person present in the room.

In the wake of the scandal, Mr. DeWeese has aggressively argued that the system already in place had been circumvented -- and that he would never have approved of nor condoned the conduct of his aides. He began a system of caucus reforms that, at times, have been a hard sell to other members, who are concerned that too drastic a shift in standards of conduct somehow signals that the Democratic caucus was in serious disarray.

A series of talking points assembled by the leader lists 24 changes ranging from a newly created code of conduct for caucus employees to a reorganization of the staff. Among the major changes are those applicable to Mr. Brubaker's old job.

"Director of Administration, responsible for budget, finance and staffing, now reports directly to the Majority Leader rather than to the Chief of Staff," reads one point.

Similarly, in IT, where former director Stephen Keefer is accused of siphoning state money for outside political services disguised as state work, contracts must now be approved by the director of administration rather than the chief of staff and the contracts must be reviewed by legal staff.

The DeWeese camp thinks that alone would have prevented the approval of a $10,000 monthly contract given to Govercom, a private firm started by former caucus technology employee Eric Buxton. Grand jurors found that the contract, which later rose to $16,875 a month, was for services "completely unnecessary to the caucus."

None of the caucus officials interviewed for this article -- almost all of whom spoke only if they were not identified -- believes that any system of reforms is likely to prevent a group of people determined to circumvent the rules. One points to a recent scandal in the District of Columbia, where six employees of the Office of Tax and Revenue pilfered nearly $50 million under the nose of its chief financial officer.

Complicating matters in the legislature is a 1966 ruling by an attorney general, later put into code in 1970, that prohibits the state's Auditor General from conducting audits of the House and Senate.

When Harrisburg activist Gene Stilp attempted to organize an audit of the general assembly, it was rejected on constitutional grounds, keeping Auditor General Jack Wagner from reviewing the books now and in the foreseeable future.

"In media interviews on this subject, Jack has always said that if the law were changed to permit the auditor general to audit the general assembly, he would do so," said Wagner spokesman Steve Halvonik.

Until then, say observers, even strong systems are the mercy of Harrisburg's longstanding political culture, exemplified, grand jurors would later say, by Brett Cott, a lifelong political operative whose breakneck style quickly elevated him on the staff of Mr. Veon.

Skittish, perhaps a little angry at being buttonholed, he was asked in October about the apparent mixture of government and politics, a blurring of the line that prosecutors now say crossed into the criminal -- eventually landing him with 42 criminal counts in a case prosecutors say reflected a political culture in which Mr. Cott was "one of the lead promoters."

"Look," he said, "a pox on everybody's house. A pox on everything that's going on here." But, as would many of the 11 others eventually charged with using state resources to underwrite political campaigns, Mr. Cott saw even the prosecution as just another extension of the Harrisburg culture.

"There may be a culture here. There may be campaigning going on. Whatever. But for a systematic, focused effort to look at just one party, one house, one chamber -- it's very disappointing," he shrugged.


Dennis B. Roddy can be reached at droddy@post-gazette.com or 412-263-1965. First Published July 12, 2008 4:00 AM


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