Legal fees double taxpayers' cost in bonus scandal

By Brad Bumsted and Debra Erdley TRIBUNE-REVIEW Wednesday, July 30, 2008
HARRISBURG -- Legal costs associated with the public corruption investigation of the Legislature have surpassed the cost of secret bonuses that prompted the probe. Taxpayers picked up the nearly $2 million tab the House Democratic Caucus paid private lawyers during the past 18 months, state records show. The caucus handed out $1.85 million in staff bonuses in 2006. "It appears to be an insatiable feeding frenzy for attorneys," said Eric Epstein, founder of Rock the Capital, a selfstyled reform group. "The worse things get, the better attorneys do." The bonuses paid by House Democrats, almost double those paid by any other caucus combined, piqued Attorney General Tom Corbett's interest and triggered an investigation. Corbett's office has charged 12 people, including the former House minority whip, a sitting legislator and 10 current and former Democratic aides, with allegedly scheming to divert millions of tax dollars to a sophisticated political operation. The investigation of Democrats and Republicans in the House and Senate continues, Corbett has said. The House Democratic Caucus, which spent $1,200 for private legal advice three years ago, paid private lawyers $751,000 between March 1 and June 30. House Republicans spent about $80,000 on private lawyers during the same four months. Stephen Miskin, a spokesman for House Republicans, said "almost all" of those fees were for counsel from Kirkpatrick & Lockhart -- renamed K&L Gates -- on the investigation or related issues. He said total investigationrelated legal fees for House Republicans during the past 17 months were $128,470. It's unclear exactly how much of the Democrats' legal fees stemmed from the criminal investigation. But, said William Chadwick, a Washington lawyer representing the House Democratic Caucus: "The caucus policy has been to provide counsel to any employee contacted by investigators to facilitate their truthful cooperation with the investigation." Chadwick declined to answer specific questions about law firms representing current and former staffers. It's not uncommon for state employees and elected officials to received taxpayer-funded legal aid for costs arising from questions associated with official duties. Typically, that support ends when an employee or official is charged criminally. For example, state Sen. Vincent Fumo, D-Philadelphia, billed taxpayers more than $1 million for attorneys' fees between 2003 and 2006 while federal authorities investigated him. His tax-funded legal aid ended in February 2007 when a federal grand jury issued a 139-count public corruption indictment against him. He is scheduled to go to trial in September. The corruption investigation headed by Corbett's office has consumed thousands of man-hours and involved three investigative grand juries. "The scope and magnitude of this investigation is hard to adequately describe," Corbett said in announcing the first round of charges. In its report, the grand jury alleged that some staffers were paid bonuses for campaign work. House Democrats spent $2.2 million on bonuses in 2005-06, nearly two-thirds of the total $3.6 million given out by all four caucuses over that period.

Corbett's investigators have questioned more than 100 House Democratic staffers, many of whom used lawyers the caucus provided. Among those receiving free legal help was Angela Bertugli, a former Greene County beauty queen who told investigators she was awarded a no-work job through a sexual relationship with a former top House aide charged in the scandal. Attorney Matthew Haverstick, of Philadelphia-based Conrad, O'Brien, Gellman and Rohn, represented Bertugli. Haverstick's firm, known for white-collar crime defense work, collected $320,000 from House Democrats between March and June 30. He boasts on his Web page that he "represented multiple witnesses in (the) grand jury investigation of political corruption in the state Legislature." "Unfortunately, I can't comment on whether we are working on any aspect of the bonus investigation, or anyone we may have represented," Haverstick said. Bertugli was not charged and remains in a $45,000-a-year state job in Harrisburg, where she moved last fall to attend law school. Michael Manzo, the former legislative staffer Bertugli said hired her after they had sex, is charged with multiple counts of theft, conspiracy and conflict of interest. Manzo, former chief of staff to House Majority Leader Bill DeWeese of Greene County, was fired in November along with six other top staffers. None of them received taxpayer-funded legal aid. The 12 individuals charged criminally haven't been provided state-paid legal aid since charges were filed. Records show House Democrats paid for private legal counsel from Philadelphia and Pittsburgh firms including Stradley, Ronan, Stevens & Young, $220,972; Obermeyer, Rebmann, Maxwell & Hippel, $182,215; Eckert Seamans, Cherin & Mellot, $82,840; and Thorp, Reed & Armstrong, $63,476. Those figures pale beside the fees Chadwick's firm has collected. The former Pennsylvania inspector general is president of Chadwick Associates, a firm DeWeese hired in March 2007 to advise the caucus on legal and ethical issues. As of June 30, taxpayers had paid the firm $833,000. Even some caucus members question such costs. "I certainly don't think taxpayers should be involved in providing counsel," said Rep. Matt Smith, D-Mt. Lebanon, who has called for DeWeese to resign his leadership post. "It just points to the fact the Legislature costs way too much. I really feel like there's got to be some level of accountability." Stephen MacNett, longtime counsel to Senate Republicans, said typically each caucus sets guidelines for paying legal fees for members or staffers. MacNett said Senate staffers who are subpoenaed would be covered, as would former staffers, when issues stemming from official duties are involved. Asked whether any Senate staffers have been subpoenaed, MacNett said: "I've moved to the stage where my answer is, we are simply cooperating fully with the investigation and whatever requests" are made by the attorney general.