HARRISBURG -- The former top aide to House Majority Leader Bill DeWeese has implicated his old boss in a scheme to distribute taxpayer-funded bonuses as rewards for campaign work.
Michael Manzo, who worked alongside Mr. DeWeese for more than a decade and helped execute the bonus scheme, took the stand yesterday in Dauphin County Common Pleas Court as a surprise witness during a preliminary hearing for two of the defendants accused in the scandal.
Cross-examined by a defense attorney, Mr. Manzo testified that he believed Mr. DeWeese knew that the bonuses were compensation for campaign work. The testimony added a new element to an already volatile scandal less than a month before House members, including Mr. DeWeese, face voters in the general election.
Mr. DeWeese, 58, of Waynesburg, has not been charged with any wrongdoing in the Bonusgate case.
Mr. DeWeese's staff was quick to point out the precise wording of Mr. Manzo's answer to the question: "I believe he did, yes." They said Mr. Manzo clearly was attempting to link Mr. DeWeese to the scandal without risking perjury by accusing his ex-boss outright, only saying he "believed" Mr. DeWeese knew.
While Mr. Manzo offered no specific proof, his lawyer, James Eisenhower, said that Mr. DeWeese directed that bonuses go to certain people.
Mr. Eisenhower said that Mr. DeWeese "had full knowledge of the bonuses."
Mr. DeWeese has been adamant that he thought the payments were Christmas bonuses of a few hundred dollars. Actually, they were as high as $25,000 and, Mr. Manzo and others testified, they were rewards for campaign work.
"I did nothing wrong," Mr. DeWeese said during a brief news conference yesterday.
"Mike Manzo's speculation that I knew about his criminal acts is absolutely false and there is no evidence to support his opinion," he said. "Manzo is a desperate, disgruntled former employee whom I fired last year for dishonesty and self-dealing. ... Now he and his wife [co-defendant Rachel Manzo] are confronted with serious criminal charges and long prison sentences, and he is telling a story that conflicts with the evidence and findings of a yearlong grand jury investigation."
Meanwhile, in Dauphin County Common Pleas Court yesterday, President Judge Richard Lewis ordered the cases of two defendants bound over for criminal trial. State Rep. Sean Ramaley, D-Economy, and Anna Marie Perretta-Rosepink, a longtime district office staffer of former Minority Whip Mike Veon of Beaver County, were the only defendants to face a preliminary hearing.
Their 10 co-defendants, including Mr. Manzo and Mr. Veon, waived their right to the hearings. Formal arraignments for all of the defendants are expected next month.
Yesterday, Mr. Manzo signed a plea agreement with the attorney general's office in which he concedes guilt in connection with illegal bonus schemes dating to 2004. The document means Mr. Manzo could face more than two decades in prison.
On the stand yesterday, Mr. Manzo described a highly organized effort to keep track of the hours staffers spent working on campaigns.
"We would have people tracking the number of days and hours that people were doing different [political] tasks in the field, whether it was knocking on doors, whether that was making phone calls from Harrisburg," and that data would be used to determine the amount of bonuses for legislative staffers, he said.
The Pittsburgh Post-Gazette revealed the bonus scheme in a series of stories last year. Those led to an investigation by state Attorney General Tom Corbett and the arrests of 12 current and former Democratic lawmakers and staffers.
Mr. Manzo testified yesterday that Mr. DeWeese and Mr. Veon in 2004 began to make a concerted effort to get more staffers to take on campaign duties.
That effort, he said, included the bonus scheme, which, investigator Mike Carlson testified yesterday, cost taxpayers $1.6 million from December 2004 to January 2007.
"It was designed, in my judgment, to [give incentive to] those folks who may not have been participating before to come out the next time and work on campaigns," Mr. Manzo testified. "There was not a whole lot of very explicit [talk of] 'If you go out and do this, you're going to get this,' but we did it well enough that it was understood that if you worked hard on the campaigns, you were going to get rewarded."
Prosecutors said the scheme extended throughout the caucus and many people are culpable.
"We're not simply talking about one individual and a theft. We're talking about a years-long, carefully planned out, subtly planned out, discreetly planned out conspiracy to steal [from] the people of Pennsylvania," said Anthony J. Krastek, senior deputy attorney general. "The scheme doesn't work by Mike Veon alone sitting in an office thinking about it. It doesn't work alone with Mike Manzo thinking about it. It has to work with [co-defendants and former staffers] Jeff Foreman and Brett Cott getting people to do it, and in the district office it was Anna Marie Perretta-Rosepink ... providing the information without which this scheme doesn't take effect."
Attorneys for Ms. Perretta-Rosepink, 46, and Mr. Ramaley, 33, portrayed their clients as underlings who did as they were told. Mr. Veon and Mr. DeWeese are the ones who provided direction and should be held accountable, said Cynthia Eddy, the attorney for Ms. Perretta-Rosepink.
"The people that are truly responsible for the resources should step up to the plate and take responsibility," Ms. Eddy said after the hearing. "It's clear from the testimony by Mike Manzo that DeWeese has some questions to answer."
Sources connected to the probe said Mr. Manzo had been working on a deal to reduce the charges against his wife, Rachel, 28, who was implicated for her alleged role in the bonus scheme. Neither Mr. Eisenhower nor Mr. Krastek would confirm that.
"[Mr. Manzo] is extremely remorseful for his conduct and ready to cooperate with the government ... and the government has agreed to let his cooperation be known to the court at the time of sentencing," Mr. Eisenhower told reporters during a break in yesterday's hearing.
Sources close to the probe say Mr. Manzo, 39, of Harrisburg, has been cooperating in the investigation for weeks.
He has offered up a wealth of details about Mr. DeWeese, the sources said. The details include allegations that, like Mr. Veon, Mr. DeWeese employed a full-time campaign fund-raiser on the state payroll. That staff member, Kevin Sidella, was among the recipients of the largest bonuses in 2006. He left Mr. DeWeese's staff last year.
Mr. Sidella has not been charged. His attorney, Nick Rodriguez, said his client testified before the statewide grand jury investigating the bonuses, but cautioned against drawing conclusions.
"This is something that's really going to have to be explored by the AG's office," Mr. Rodriguez said. "How far it went up or where it went down, I can't comment."
Mr. Krastek said Mr. Manzo's cooperation will be valuable as the case goes to trial.
His testimony yesterday contradicts statements he made last year to investigators, when he indicated that Mr. DeWeese was unaware of staffers getting bonuses for campaign work.
The revelation of Mr. Manzo's cooperation comes at a bad time for Mr. DeWeese. The veteran legislator is in a difficult race to keep his seat representing the state's southwestern corner. Unopposed in the primary, he nonetheless had to contend with more than 1,000 write-in votes for someone else in the Democratic primary, a sign of discontent among his base.
He has taken to door-knocking and seemingly constant campaigning to fight off a challenge by Republican Greg Hopkins, who came close to unseating him two years ago.
Also taking the stand yesterday was Patrick Lavelle, another former caucus staffer, who said he spent his time raising funds -- $2.5 million over three years -- for Mr. Veon's political campaign. All the while, taxpayers were paying his $58,000 annual salary and, in 2006, his $17,565 bonus.
Mr. Lavelle, 30, of Harrisburg, said his official title was "research analyst" but he testified it was clear from the start of his employment with Mr. Veon in 2003 that he was to be "primarily a fund raiser."
He sent invitations, planned menus, collected footage for a video tribute to Mr. Veon and more, all at taxpayer expense.
Like Mr. Manzo, Mr. Lavelle's testimony came as part of a plea deal. Prosecutors agreed to drop four charges against him in exchange for his testimony and guilty pleas on the remaining charges of conspiracy and conflict of interest.
Correction/Clarification: (Published Oct. 10, 2008) Michael Manzo is the former aide to House Majority Leader Bill DeWeese who testified at a preliminary hearing Oct. 8, 2008 in Harrisburg for two defendants in the state's Bonusgate scandal. Mr. Manzo's last name was misspelled in one reference in this story about the hearing as originally published Oct. 9, 2008.
Harrisburg Bureau Chief Tom Barnes contributed. Tracie Mauriello can be reached at firstname.lastname@example.org or 1-717-787-4254. Dennis B. Roddy can be reached at email@example.com or 412-263-1965.