A statewide grand jury sitting in Pittsburgh has returned a presentment against former state House Democratic Whip Mike Veon, D-Beaver, and his onetime top district aide, Annamarie Perretta-Rosepink, Attorney General Tom Corbett announced this morning.

Both Mr. Veon, 52, and Mrs. Perretta-Rosepink, 46, were charged last year in a wide-ranging presentment growing out of a probe into what prosecutors say was a scheme to defraud taxpayers by paying millions of dollars in state-funded bonuses as a reward to employees for working on House political campaigns.

Today's charges grow out of the operation of the Beaver Initiative for Growth, a Veon-organized economic development program that was funded through state grants.

In June of last year, the Post-Gazette reported that BIG was the subject of a state investigation by the attorney general and quoted one former director as saying he left after becoming uncomfortable with how state development grant monies were handled by Mr. Veon's staff.

"Money was just sort of seen as a kind of arbitrary commodity that could be shifted and flowed wherever needed, regardless of what kind of stipulations were put on it," said John Gallo, who Mr. Veon hired to run BIG between 1999 and 2003, when Mr. Gallo resigned, sensing an impending disaster.

At a press conference this afternoon, Mr. Corbett released details of the probe that backed Mr. Gallo's observations.

Among those giving evidence against the former lawmaker was Mr. Veon's former chief of staff, Jeff Foreman, who told the grand jury "that Veon viewed BIG as means of taking legislative grant money and amalgamating it through a single entity so that Veon could exercise control over disbursement of the money and take credit for the projects and money spent in his district."

Mr. Gallo told the grand jurors he initially wrote detailed budgets into BIG's grant applications with the state Department of Community and Economic Development. He said Mr. Veon's legislative staff, specifically Mrs. Perretta-Rosepink and Veon aide Colleen Kopp, told him to make the applications more general in nature.

Among allegations in the presentment was that BIG issued a $5,000 check to former state representative Terry Van Horne in February 2003. "Gallo knew of no work that Van Horne did for BIG," investigators said. "He questioned Perretta-Rosepink about it. Gallo quoted Perretta-Rosepink as replying, 'He worked on Mike's campaign and he was owed money and we needed to fund that.' "

Mr. Van Horne testified under a grant of immunity and acknowledged he never worked for BIG and was never given any assignments, investigators said.

In the Post-Gazette interview, Mr. Gallo said he applied for state grants for BIG, grants that he said carried specific purposes for the money.

"We would get the grant and there would be a lot of pressure put on from Mike to do something else with the money," Mr. Gallo said. "If I had money that was allocated for salaries or had money allocated for office costs. . . . If another group or another one of Mike's organizations needed money, they would typically come and just take a chunk of it, kind of shift it over."

Conflicts became more frequent, especially between Mr. Gallo and Mr. Veon's top district office aide, Mrs. Perretta-Rosepink, who also held a position at BIG.

Expenditures would go out, he said, and staff would resist providing a receipt to justify the outlay.

"They would say, 'It was for an expense we incurred,' " Mr. Gallo said.

Mr. Veon later had BIG relocated in the same space as his district office and Mr. Gallo said roles began to blend uncomfortably. At some points, he said, he sensed that some of the money shifts could create legal problems because the grants were specifically earmarked for other purposes.

Later, he said, his control of the BIG checkbook was taken from him and assigned to Mrs. Perretta-Rosepink.

"I didn't want my name on grants if I wasn't going to be able to disseminate the money the way I wrote them," he said.

He resigned in 2003 and left Pennsylvania.

"I was just so sick of sort of everything. I thought, 'If that's the way our elected leaders are, I don't want to live in the state,' " Mr. Gallo said.