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Legal fees double taxpayers' cost in bonus scandal

By Brad Bumsted and Debra ErdleyTRIBUNE-REVIEWWednesday, July 30, 2008

HARRISBURG -- Legal costs associated with the public corruption investigation of the Legislature have surpassedthe 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 18months, 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 self-styled 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 AttorneyGeneral 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 currentand former Democratic aides, with allegedly scheming to divert millions of tax dollars to a sophisticated politicaloperation. 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 thesame four months.

Stephen Miskin, a spokesman for House Republicans, said "almost all" of those fees were for counsel fromKirkpatrick & Lockhart -- renamed K&L Gates -- on the investigation or related issues. He said total investigation-related 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 WilliamChadwick, 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 arisingfrom questions associated with official duties. Typically, that support ends when an employee or official is chargedcriminally.

For example, state Sen. Vincent Fumo, D-Philadelphia, billed taxpayers more than $1 million for attorneys' feesbetween 2003 and 2006 while federal authorities investigated him. His tax-funded legal aid ended in February 2007when a federal grand jury issued a 139-count public corruption indictment against him. He is scheduled to go to trialin September.

The corruption investigation headed by Corbett's office has consumed thousands of man-hours and involved threeinvestigative grand juries.

"The scope and magnitude of this investigation is hard to adequately describe," Corbett said in announcing the firstround 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 thatperiod.

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Corbett's investigators have questioned more than 100 House Democratic staffers, many of whom used lawyers thecaucus provided.

Among those receiving free legal help was Angela Bertugli, a former Greene County beauty queen who toldinvestigators she was awarded a no-work job through a sexual relationship with a former top House aide charged inthe 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 betweenMarch and June 30. He boasts on his Web page that he "represented multiple witnesses in (the) grand juryinvestigation 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 wemay 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 attendlaw school. Michael Manzo, the former legislative staffer Bertugli said hired her after they had sex, is charged withmultiple 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 alongwith six other top staffers. None of them received taxpayer-funded legal aid. The 12 individuals charged criminallyhaven'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 includingStradley, 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 ispresident of Chadwick Associates, a firm DeWeese hired in March 2007 to advise the caucus on legal and ethicalissues. 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, whohas called for DeWeese to resign his leadership post. "It just points to the fact the Legislature costs way too much. Ireally 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 payinglegal fees for members or staffers. MacNett said Senate staffers who are subpoenaed would be covered, as wouldformer 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 answeris, we are simply cooperating fully with the investigation and whatever requests" are made by the attorney general.