AG should target spending at lawmakers' pet nonprofits
Former state Sen. Vincent Fumo, D-Philadelphia, now serving time in federal prison, taught Pennsylvanians at least two important lessons. First, through testimony in his federal corruption trial, Fumo familiarized taxpayers with the term OPM — Other People’s Money — that he reportedly said was always his first choice when it came to spending.
Second, Fumo’s trial also revealed how a powerful lawmaker can use a pet nonprofit organization with which he has close ties to benefit favored people, including himself, yet keep the spending mostly hidden.
A similar situation appears to be emerging again in Philadelphia, where Democratic state Rep. Dwight Evans has, in the past three years, shifted about $3 million in taxpayer money to the Ogontz Avenue Revitalization Corporation (OARC), a nonprofit he founded.
Newspaper reports of OARC spending reinforce a troubling pattern involving nonprofit groups with close ties to powerful state lawmakers. If state Auditor General Jack Wagner hasn’t already begun looking at these agencies and their patron lawmakers, he should now begin a sweeping investigation.
During Fumo’s trial in 2009, it was revealed that his pet group, called Citizens Alliance for Better Neighborhoods, often was used by the powerful lawmaker to benefit himself politically and personally.
Not long after the Fumo trial, it was the legal troubles of former state Rep. Mike Veon, D-Beaver, that raised concerns about tax dollars flowing through a powerful state lawmaker’s pet nonprofit. In Veon’s case, the group was called Beaver Initiative for Growth (BIG).
While Veon has been convicted of misuse of funds related to the Bonusgate scandal in Harrisburg, a full accounting of how BIG spent the nearly $10 million in state funds shifted to it by Veon has not yet been presented. Veon’s trial related to alleged abuses at BIG has been postponed until next year.
Reports from more than a year ago suggest most of the taxpayer funds given to BIG were spent on overhead, including staff, rent and consultants — many of whom happened to be campaign contributors to Veon or otherwise politically connected people. Taxpayers should know how much benefited Beaver and how much benefited Veon and his friends.
Last week, the Philadelphia Inquirer wrote about how Evans’ OARC has quietly kept alive a restaurant called Relish through $1.1 million in state funds. Relish is reportedly an Evans favorite for social and political gatherings.
OARC also reportedly produced a neighborhood jazz festival that received more than $1 million in state funding, thanks to Evans, who has, in recent years, served as chairman of the state House Appropriations Committee. The Inquirer reported that, despite the big taxpayer-funded marketing budget, attendance at the event was poor.
Accountability for this spending is nowhere to be seen.
Wagner, like anybody else paying attention, must see a pattern of abuse linking pet nonprofits funded by Fumo, Veon and Evans. Based on what’s already known and what’s been reported by newspaper investigations, Wagner should begin a detailed probe of spending at every nonprofit organization either founded by a state lawmaker or with a state lawmaker serving on the board of directors.
As the state’s financial watchdog, Wagner’s staff should pore over the spending by all groups with similar links to state lawmakers as was found at Citizens Alliance, BIG and OARC. Wag-ner should start with a full, public accounting of the money that flowed through BIG and OARC, then dig into the spending of any other group with close ties to a state lawmaker.
Also, quasi-governmental groups, such as commissions (including the Turnpike Commission) or authorities (such as the Port Authority of Allegheny County and the Delaware River Port Authority) that spend public dollars should be examined by the auditor general or the state attorney general.
There are too many opportunities for misuse of OPM — usually taxpayers’ money. Wagner’s office is needed to provide accountability — and the courts have a role to play where abuses have occurred.