State AG accuses former lawmaker, top aide of misusing development grants
March 26, 2009 8:00 AM
State Attorney General Tom Corbett, right, outlines the charges against Mike Veon and Annamarie Perretta-Rosepink, whose photos are mounted on the board, during a news conference yesterday.
By Dennis B. Roddy Pittsburgh Post-Gazette
The Pennsylvania Attorney General yesterday charged former House Democratic Whip Mike Veon, D-Beaver, and his onetime top district aide, Annamarie Perretta-Rosepink, with multiple counts of theft, criminal conspiracy and conflict of interest charges, saying they abused millions of dollars in state economic development grants through a nonprofit agency Mr. Veon created.
"This is far from a completed investigation," said Attorney General Tom Corbett, who announced the charges against Mr. Veon, 52, and Mrs. Perretta-Rosepink, 46, who ran Mr. Veon's district office.
The pair were among a dozen current or former state officials and employees charged in a massive presentment in July by a state grand jury in Harrisburg as part of the criminal probe into the payment of millions of dollars in state bonuses to employees who worked on political campaigns.
Grand juries in Pittsburgh and Harrisburg continue to look into both the Democratic and Republican House and Senate caucuses, but Mr. Corbett was unable to give any indication if and when further charges might come.
Yesterday's charges broadened the look into how Mr. Veon, once one of the most powerful members of the Legislature, used state funds to promote his political fortunes, prosecutors said.
A statewide grand jury sitting in Pittsburgh said the pair essentially used the Beaver Initiative for Growth, ostensibly an agency designed to improve communities in Mr. Veon's district, as a cash reserve from which they paid bills for political work, gave bonuses to state employees who worked on Mr. Veon's campaign and directed millions of dollars in salaries and contracts to family and associates of Mr. Veon.
In all, grand jurors found that of more than $4.7 million in state grants spent by Beaver Initiative between 2004 and 2006, 77 percent of it went to salaries, administrative costs or consultant contracts.
The grand jury report described Mr. Veon using Beaver Initiative funds as if they were his personal cash, at one point paying a man $150 per month from the organization's checking account to clean Mr. Veon's office and a room where the legislator smoked his cigars. At another point, Beaver Initiative paid $1,500 a month for a private office above a South Side cigar store where Mr. Veon could "freshen up" before meetings in the city.
Among the allegations:
• Former State Rep. Terry Van Horne was paid $5,000 from Beaver Initiative's coffers for political work he billed to Mr. Veon's campaign. Testifying under a grant of immunity, Mr. Van Horne acknowledged he never did any work for Beaver Initiative. He did not return a phone call seeking comment.
• Mr. Veon told John Gallo, Beaver Initiative's onetime executive director who resigned over expenditures he viewed as illegal, that "since Edward Rendell had just taken office as governor there were going to be millions of dollars coming to BIG." After Mr. Rendell took office, the grand jury said, Beaver Initiative received more than $9.9 million in grant money from the state.
• Beaver Initiative officials signed a $20,000-per-month, no-bid contract with Delta Development, a Harrisburg consulting firm after it agreed to hire Mr. Veon's brother, Mark, for $160,000 a year. Mr. Corbett said yesterday that Delta Development did little or no work of value for Beaver Initiative. The co-chair of Beaver Initiative, then-state Sen. Gerald LaValle, was not charged in the scheme. The grand jury said Mr. LaValle's role was largely titular and he played little or no role in its operations.
• Using a Beaver Initiative subsidiary, Mr. Veon and Mrs. Perretta-Rosepink paid a series of $2,500 bonuses to Veon legislative office workers despite the fact that they did no work for Beaver Initiative. One of the aides, Dennis Pietrandrea, "specifically conceded that the $2,500 check was obviously a reward for legislative and political work."
Mr. Veon is charged with 28 counts, most of them theft charges relating to the abuse of state monies funneled to Beaver Initiative through the Department of Community and Economic Development.
Mrs. Perretta-Rosepink is charged with six counts, including criminal conspiracy, conflict of interest and theft.
Mr. Veon's attorney could not be reached for comment. Michael Palermo Jr., counsel for Mrs. Perretta-Rosepink, said his client was aware of the newest charges.
"She intends to plead not guilty and address the charges," Mr. Palermo said.
State Rep. Craig Dally, R-Northampton, has been questioning state grants to Beaver Initiative for at least two years.
During a February 2006 budget hearing in Harrisburg, Mr. Dally expressed concerns about reports that several Beaver Initiative employees also worked for the state, and that the organization was registered as a 501(c)(6), a federal tax code designation for nonprofit organizations that engage in politics. He also said that the millions of dollars in Community and Economic Development grants that went to Beaver Initiative instead should have gone to organizations that create jobs.
Dennis Yablonsky, then secretary of Economic Development, said Beaver Initiative has been "a good partner" and that he had "already verified they're a valid recipient."
Rendell spokesman Michael Smith and Community and Economic Development spokesman Mark Shade said the governor has no role in awarding grants.
DCED receives about 7,000 applications a year for community revitalization grants and funds about half of them, Mr. Shade said. Applications must detail how the money will be spent, he said.
Grantees commonly spend money on consultants, office rent and staff salaries, so BIG's spending in those areas would not have raised concerns, Mr. Shade said.
"BIG presented us with proper applications and we deemed the applications were for eligible uses, so the money was awarded," he said.