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Ex-official fined for taking bribes from high-tech firms
He promised them grants in exchange
Thursday, July 06, 2006

HARRISBURG -- A former state government official received kickbacks for helping high-tech firms obtain money designed to help companies relocate or expand in Pennsylvania, the State Ethics Commission said yesterday.

Thomas McGraw was ordered to pay $403,000 in restitution and fines for misusing his authority as technology initiatives manager with the Governor's Action Team within the Department of Community and Economic Development.

In a 61-page report, the commission detailed how Mr. McGraw sought and received payments from grant applicants that he recommended for funding; took beach and ski vacations without using vacation days; and spent bonus points earned on state business for his private lodging.

"McGraw saw his position with the commonwealth as a means of bankrolling himself with large amounts of money through the subversion of his duties and responsibilities to the commonwealth and the public trust," the commission said.

Mr. McGraw promised applicants they would be funded if they paid him a percentage of the grant and solicited money improperly under the guise of providing the companies with consulting, marketing or investor advice, according to the commission.

"McGraw was relentless in his approach, contacting principals of each company on numerous instances in order to receive payments," the commission found.

Mr. McGraw was fired in August 2004 after state inspectors began looking into a $20,000 payment he received.

"It's not as simple as it looks, and there's not a lot more I can say right now," Mr. McGraw's lawyer, Joe Metz, said yesterday.

Mr. McGraw received $96,500 in payments from four companies, the commission said: TriTech of York, which developed and maintained software for schools; Eschoolmall.com, a Horsham software company that helps schools streamline purchasing; USTAAD Systems Inc., a Harrisburg software developer that specializes in business processes; and MirTech Consulting, a York information-technology company.

The four companies received a total of $925,000 in state funds through the Opportunity Grant Programs, funding that Mr. McGraw was responsible for initiating, the commission said.

TriTech president Michael S. Butler yesterday denied the commission's account that McGraw was instrumental in the company obtaining a $200,000 grant.

"We did not pay a bribe to Tom McGraw," Mr. Butler said. The $20,000 payment to McGraw was for a variety of services, he said.

Mr. Butler also denied the commission's charge that he also helped Mr. McGraw "launder" the $4,000 payment from Eschoolmall.com through Mr. Butler's former York law firm. Mr. Butler declined to say whether TriTech is still in business.

Mr. McGraw has 30 days to pay $101,000 -- the payments from the companies, the cost of the vacation time and the hotel lodging -- plus penalties of $302,000.

The case against Mr. McGraw also will be referred to the Pennsylvania attorney general, the U.S. Attorney's Office and state and federal tax agencies, the commission said.

First published on July 6, 2006 at 12:00 am
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