Pittsburgh Tribune Review

June 4, 2006 Sunday

HEADLINE: More checks than balances

BYLINE: Brad Bumsted and Debra Erdley

State House Speaker John Perzel used campaign

cash to treat his chief of staff and both men's

sons to Super Bowl trips the past two years.

Campaign money also paid for the powerful

Philadelphia Republican and his chief, Brian

Preski, to take their wives on Las Vegas trips;

almost $1,350 worth of liquor for a Supreme

Court committee meeting in Philadelphia; and

Chinese takeout and pizza for Preski's children

and their baby sitters so Preski and his wife

could attend campaign events, receipts and

vouchers show.

Pennsylvania's election law is so broad it

allows legislators to spend money on just about

anything, a study by the Pittsburgh Tribune-

Review found.

A candidate needs only to show that an

expenditure influenced the outcome of an

election to justify it. Perzel -- who oversees

the largest campaign fund in the General

Assembly and raised $500,000 last week in

Pittsburgh -- argues his expenditures meet that

standard.

The thousands of dollars spent on trips and

entertainment "contributed to and will continue

to contribute to the outcome of my elections,"

Perzel and Preski said in response to written

questions from the Trib.

What's unusual about Perzel's campaign is the

amount -- $700,000 -- in reimbursements to

legislative staffers assisting his campaign.

They assisted on their own time, Perzel said.

Preski, an attorney, is paid $160,000 by state

taxpayers to oversee Perzel's legislative staff.

In 2005, the campaign paid him a $56,000 salary,

and in 2004 and 2005 reimbursed him a combined

$264,000 for expenses ranging from bottled water

to the Vegas trips and the Super Bowls.

Preski's reimbursements, documented in more

than 2,300 receipts reviewed by the Trib, far

exceed those paid by campaigns to aides of other

legislative leaders in Pennsylvania.

The receipts provide a rare look inside a

financially flush, high-profile campaign -- one

that cut more than $700,000 in reimbursement

checks to family, friends and legislative

staffers as some Republicans across the state

were beginning what would become a struggle for

survival.

Perzel, who helped orchestrate last year's

later-repealed legislative pay raise, escaped a

primary election challenge May 16, when voters

defeated 11 of his House Republican colleagues.

To John Kennedy, a former Republican House

member from Cumberland County who served with

Perzel, the campaign's spending is "mind-

boggling" and "an abuse of power."

Some highlights from the 2004 and 2005

campaign reimbursements Preski received:

= $9,000 for lodging and meals and air fare to

Jacksonville and Houston, so Perzel, Preski and

their sons could attend the Super Bowls.

= $34,000 for six trips to conferences in Las

Vegas for Perzel, Preski and assorted guests,

including their wives and fellow lawmakers.

= $1,800 for a long weekend at an Atlantic

City luxury hotel casino during the 2005 July

4th holiday.

= $1,349 for drinks at Davio's, a pricey

Philadelphia waterfront restaurant where Preski

paid for liquor for members of the Supreme Court

Rules Committee.

= $41,109 for meals and food in Philadelphia,

where Preski and Perzel live. The receipts show

spending ranging from almost $15,000 for 26

trips to LaVeranda, another upscale restaurant

in Philly, to $1,900 in Chinese food and pizza

delivered to Preski's home on 52 occasions.

= Outsized gratuities, including a $100 tip

for a $58.75 tab at a Harrisburg watering hole.

That's just a slice of the $3.9 million

Perzel's campaign spent.

Legislative staffers often perform campaign

work on what they say is personal time. Yet,

experts were stunned at the $700,000 Perzel's

campaign funneled through staffers.

"That's incredible to me," said Robert Stern,

director of the nonprofit Center for

Governmental Studies in Los Angeles, and co-

author of California's strict campaign spending

guidelines.

Other legislative campaigns reimbursed

staffers far less during the past two years.

Sen. Vincent Fumo, D-Philadelphia, whose

campaign spent $3.9 million, reimbursed one

staffer $1,785 for expenses and a second, $552.

House Minority Leader H. William DeWeese, D-

Waynesburg, who spent $827,480, reimbursed a

staffer $47,300 for campaign expenses. Sen.

Robert Jubelirer, R-Altoona, who spent $400,100,

paid a single staffer $5,684. Sen. Robert

Mellow, D-Lackawanna, spent $453,467,

reimbursing two staffers $5,555 and $7,282.

Edward D. Feigenbaum, an Indiana attorney who

wrote the Federal Election Commission's guide to

state election laws, said the amount of money

changing hands raises questions about the

Perzel-Preski arrangement.

"When you're looking at amounts that high it

also calls into question what master they are

serving. Are they serving the candidate first,

or the elected official?" Feigenbaum said.

Preski said all reimbursements to staffers

paid for work performed on their personal time.

Asked about reimbursements to Preski, Perzel

said: "Many of our campaign volunteers and staff

are of limited means. Mr. Preski volunteered to

advance many of the campaign expenses incurred

by my campaign and its volunteers, in part so as

not to impose a burden on the campaign's

volunteers, and as an accommodation to my

campaign treasurer, who reconciles the receipts

directly with Mr. Preski."

 Campaigns in Pennsylvania can bundle many

costs into a single entry on their campaign

finance forms as "reimbursement for expenses."

The receipts aren't available at the Department

of State. The Perzel campaign, as state law

requires, granted the Trib's request to review

receipts for Preski's reimbursements at the

campaign accountant's office in Merchantville,

N.J.

Although campaign money comes from private

contributors, Pennsylvania law stipulates that

all campaign expenditures must go toward

"influencing the outcome of an election."

Mary Heinlen, who recently retired after 21

years as director of the campaign finance

division of the Pennsylvania Department of

State's election bureau, was surprised by what

she found when reviewing documents the Trib

compiled detailing Preski's reimbursements.

 "I've not seen as many expenditures that were

as questionable as these. This is voluminous,"

Heinlen said. "There are clearly a lot of

entertainment expenses here."

One of those expenses occurred just 16 hours

after the 2 a.m. legislative pay raise vote in

July -- when Perzel's campaign paid the tab at a

Philadelphia riverfront restaurant.

The bill for dinner at LaVeranda: $955 -- of

which $400 went for liquor and wine, including

two $150 bottles of wine. Records reviewed by

the Trib don't reveal who celebrated at La

Veranda. Preski's credit card charges indicate

four guests were served.

The dinner followed a marathon legislative

session during which lawmakers worked through

the July 4th weekend. Campaign vouchers show

Preski also picked up the tab for a retreat at

LaBorgata, an upscale Atlantic City casino hotel

that weekend. Perzel's spokesman, Robert

Philbin, said Perzel and Preski couldn't attend

the New Jersey trip, which was planned to form a

finance committee for Friends of John Perzel. So

the room at LaBorgata was for Preski's wife,

Kelly, who went on campaign business, Philbin

said.

Heinlen questioned whether all of Preski's

reimbursements met the standard of influencing

the outcome of an election.

In written responses, Preski and Perzel

insisted they did.

The Super Bowl trips, Perzel said, "helped

cement my strong personal relationships with the

Steelers' owners, who have been and are

contributors to my campaigns." He and Preski,

who attended both Super Bowls with tickets given

to them by the Steelers, were introduced to

others who later donated to his campaign and the

House Republican Campaign Committee, Perzel

said.

They attended with their sons "because I

understood that these outings were to be family-

oriented events," Perzel said.

The Rev. Sandra Strauss, director of public

advocacy for the Pennsylvania Council of

Churches, which belongs to a group pushing for

reform in state government, questioned some of

the Perzel campaign's spending.

"It's hard for me to see how trips to the

Super Bowl and Vegas are going to win elections

in Pennsylvania," she said, emphasizing that she

was speaking for herself and not the council.

But that's exactly what Perzel maintains those

trips did.

Perzel said the Las Vegas trips included

computer shows and gatherings of political

consultants and legislative leaders that he

attended "to either review election-specific

technology for use in my re-election campaign,

or to meet with experts and colleagues regarding

my re-election campaign."

His wife, Sheryl, and the Preskis "are my

closest campaign advisers," Perzel said,

explaining why the campaign covered the costs

for his traveling companions.

Perzel's guests apparently enjoyed the

campaign's hospitality. On trip after trip,

Preski billed the campaign for the low-cost

libations that are a Las Vegas casino specialty.

Timed receipts from the Casino Royale show

Preski paid for 41 glasses of beer and mixed

drinks in 29 minutes, between 10:47 and 11:16

p.m., on Sept. 28 at the National Speakers

Convention. Again, it's not known who consumed

the drinks.

Paul Ryan, an attorney with the Campaign Legal

Center in Washington, said the use of campaign

funds for such expenses speaks to the enormous

amount of money campaigns can raise in

Pennsylvania's absence of contribution caps.

"If a candidate can send family and friends on

nice trips to places like a Super Bowl and

Hawaii, there is virtually no disincentive to

not accept huge contributions from special

interests, regardless of appearance of

corruption, or actual corruption, that may take

place," Ryan said.

"As far back as 1976, the U.S. Supreme Court

recognized that avoiding the appearance of

corruption is a compelling government interest.

Even the appearance of corruption is a serious

government matter, because it poses serious

potential of undermining public confidence in

government."

Campaign spending, once rarely scrutinized,

has gained increasing attention across the

nation.

In Illinois, former Gov. George Ryan recently

was convicted on federal fraud charges, in part

for diverting campaign money for personal use

and then failing to pay taxes on the money.

Idaho recently enacted a law that specifically

bans using campaign money to attend sporting

events.

At the Center for Governmental Studies, Stern

said legality is not the only question Preski's

reimbursements raise.

"I don't think the point is, 'Is it illegal?'

Who writes the law in Harrisburg, but the

Legislature. The point is, 'Is it ethical?

Should it be illegal?' " he said.

Perzel said the $1,349 Preski billed the

campaign for drinks at Davio's on Oct. 1, 2004,

was an important campaign expenditure. It

followed a meeting of the Criminal Rules

Committee of the Supreme Court, on which Preski

served.

"My campaign benefits from the knowledge of

the issues affecting criminal justice policy in

our commonwealth. ... Mr. Preski is able to gain

important insight into these matters during the

give-and-take between members of this committee,

during the meals that take place when the

committee is in recess," Perzel said.

The $100 tip Preski left for a $58.75 bill at

the Firehouse Restaurant in Harrisburg on Oct.

17, 2005, also was campaign-related, Preski

said.

He said that he, Perzel and GOP colleagues

were engaged in an "intense" conversation at the

restaurant just two weeks before the election. A

waitress allowed them to stay past closing time,

Preski said. "We thanked her for her hard work

and the extra hours with a large cash tip," he

said.

The take-out meals delivered to Preski's

Philadelphia home also were essential to the

campaign, Perzel said.

"In addition to being my chief of staff, Mr.

Preski is my campaign manager. These expenses

are related to one, food costs for campaign

meetings that were conducted at his home; and

two, the costs of food for his children and baby

sitter when he and his wife attend fundraisers

or other campaign-related meetings on my

behalf."

Indeed, Preski's job as Perzel's campaign

chairman puts him at the head of essentially a

small business.

A Trib analysis of records on file with the

Department of State revealed a two-year campaign

committee payroll of $350,000. Its accounting

costs and taxes totaled $167,000. Postage paid

to the Philadelphia postmaster ate up $53,800.

Private investigators cost the campaign $3,250.

And like small businesses sometimes do, the

campaign contributed to a number of Philadelphia

charities, ranging from $500 to the St. Matthews

Swim Team, to $6,600 to the New Foundations

Charter School in northeast Philadelphia,

founded by Sheryl Perzel. The bills also

included $38,000 for holiday celebrations.

Perzel's campaign records also listed $74,500

in petty cash expenditures in 2004 and 2005. One

staffer in Perzel's district office received

$71,500 over two years, in 47 checks marked only

"petty cash."

The money was for "out-of-pocket" expenses and

represents an "insignificant" portion of overall

spending, Preski wrote in his response to the

Trib.