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Top pols' abuse of pet nonprofits should widen corruption probe

State investigators, if they haven't already done so, should conduct forensic audits of every nonprofit agency with close ties to a state lawmaker. The rationale for the targeted scrutiny is that there are signs that some top lawmakers in Harrisburg developed a scheme using nonprofits to allow them to skim state funds for their own benefit.

The latest red flag over corruption via a nonprofit came last week with state Attorney General Tom Corbett charging the wife of retiring state Sen. Gerald LaValle with theft from Voluntary Action Center, a nonprofit she headed in Beaver.

Voluntary Action, whose mission was to promote volunteerism and provide toys, clothes and medical equipment to needy children, received some of its funding from another nonprofit, the Beaver Initiative for Growth (BIG), which was co-founded by LaValle and former state Rep. Mike Veon, D-Beaver. Veon has been in the news recently as the most well-known of 12 people charged with theft related to the use of state funds for partisan, re-election efforts in the investigation that has become known as Bonusgate.

A Pittsburgh newspaper reported that Darla Lavalle was paid $122,343 by Voluntary Action in 2006, an amount that was more than one-third Voluntary Action's total revenues for the year and much more than leaders of similarly sized nonprofits.

The embezzlement charge against Darla LaValle comes just one week after a former aide to state Sen. Vincent Fumo, D-Philadelphia, pleaded guilty to conspiring with Fumo to erase all incriminating e-mail messages from various computers that related to a federal investigation into Fumo's alleged misuse of state funds and Senate staffers for his personal gain.

Fumo, like Gerald LaValle, has announced he will not seek re-election. Rather than campaigning for re-election, Fumo faces a 139-count federal indictment for using not only state funds, but also the resources of a nonprofit with which he was closely associated, for his own personal benefit.

Fumo helped direct state grants to Citizens Alliance for Better Neighborhoods. He also directed major corporate contributions to his pet nonprofit.

Federal investigators say Fumo had the nonprofit buy $75,00 worth of power tools, household appliances (including 19 Oreck vacuum cleaners, one for each floor of Fumo's four houses), and even vehicles that were intended for his personal use.

Citizens Alliance, which was run by Ruth Arnao, a former top staffer to Fumo, eventually became the owner of the building in which Fumo's Philadelphia office was located. And the nonprofit reportedly spent about $600,000 renovating the senator's office there.

The indictment alleges that Fumo misused about $1 million worth of the nonprofit's funds by directing them to be used for his own personal or political benefit.

Like Citizens Alliance, BIG had similarly close ties to a high-ranking state lawmaker. And for that reason, BIG is believed to be a target of state investigators.

Newspaper reports have revealed that Gerald LaValle and Veon, when he was a top-ranking Democrat in the House, directed some $10 million in state funds to BIG, but there was little evidence of how that money was spent to benefit the public. While BIG is now closed, for most of its existence Veon and LaValle were its only board members — another bright red flag, suggesting conflict of interest and potential for abuse.

It was reported that in addition to salaries, BIG spent money on consultants, some of whom were, concidentally, campaign contributors to LaValle,Veon and others.

A 2006 newspaper report revealed that six top state lawmakers, including Fumo and Veon, directed $29 million to their pet nonprofits that year. The article noted that the state Department of Community and Economic Development, which distributes the grants, is powerless to stop the practice of lawmakers shifting money to their favorite nonprofits — a practice that is conducted in secret by party leaders in Harrisburg.

Most nonprofits do good work and do serve the public. But some lawmakers in Harrisburg apparently discovered that creating a nonprofit and funding it with state dollars was a useful technique for having easy access to money and resources for their personal or political benefit.

Corbett is reportedly examining spending at BIG, and the questionable practices of Citizens Alliance already have been exposed in details of the federal indictment against Fumo and Arnao. But there could be other nonprofits created, or heavily influenced, by powerful state lawmakers that should be visited by state investigators wanting to see what's been done with the millions of dollars in taxpayer funds that they've received from Harrisburg.

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