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Republicans Charged in $10 Million Scandal

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By Brad Bumsted and Debra Erdley
TRIBUNE-REVIEW
Friday, November 13, 2009

HARRISBURG — Former House Speaker John Perzel, one of the most powerful members of the General Assembly since 1994, was charged Thursday with 82 felonies for allegedly masterminding a “sophisticated criminal strategy” to spend more than $10 million of taxpayers’ money on political campaigns, Attorney General Tom Corbett said.

Most of that money paid for computer technology to help Perzel, a Republican who represents a Northeast Philadelphia district, and other House Republicans win elections, a statewide grand jury concluded. Perzel is charged with theft, conspiracy, obstruction of justice and conflict of interest.

“By all accounts, Perzel was aggressive in the acquisition and retention of power,” the grand jury report said. “He demanded obedience and loyalty, and punished or eliminated those, whether elected officials or employees, who challenged that power.”

Perzel, 59, was charged with nine other Republicans, including a former legislator and Perzel’s former chief of staff, based on recommendations of the 188-page grand jury report, said Corbett, a Republican candidate for governor.

Through his attorney, Brian McMonagle of Philadelphia, Perzel released a statement saying he is innocent and questioning Corbett’s motives.

“I never used public funds for my personal or political gain. … It smacks of political opportunism at the expense of my reputation, and I am going to fight very aggressively to prove my innocence.”

Corbett denied any conflicts in handling the case because he’s a gubernatorial candidate. “I’m not running against any members of the House or Senate,” he said. “I have a job to do, and we’re doing that job.”

Brian Preski, 44, a Philadelphia lawyer who headed Perzel’s staff when he was House speaker, was charged with theft, conspiracy and conflict of interest. Corbett said Perzel gave Preski authority to implement his plan, making Preski a principal conspirator and “arguably one of the most powerful” Republicans in Harrisburg.

“It’s clear Brian will be exonerated once he has a day in court,” said his lawyer Hayes Hunt.

Former House Appropriations Chairman Brett Feese, 55, who resigned Nov. 3 as chief counsel for House Republicans, is accused of theft, conspiracy, conflict of interest and obstructing justice. His attorney, Joshua Lock of Harrisburg, could not be reached for comment. Feese, of Lycoming County, attempted to thwart the investigation by hiding evidence and manufacturing misleading notes, Corbett said.

Investigators conducted hundreds of interviews and reviewed millions of e-mails, faxes, contracts, letters, memos and other documents, before presenting thousands of pages of testimony to the grand jury, Corbett said. The grand jury said House Republicans hindered the investigation, causing significant delays. An obstruction of justice investigation within the House Republican Caucus and three other caucuses continues, Corbett said.

In 2004, Perzel’s campaign committee donated $25,000 to Corbett, along with a $1,219 in-kind contribution to pay for a reception. “Even if they’ve helped, and they’ve done something wrong, we go after them,” Corbett said.

Corbett said Perzel used “dirty tricks” such as automated phone calls against fellow House Republicans who opposed him, including Rep. Curt Schroder of Chester County and Rep. Will Gabig of Carlisle.

“It’s like a modern-day version of the (Watergate) plumbers,” Schroder said. He said voters in his district received anonymous calls in 2006 after he aggressively pushed a property tax reform plan as an alternative to one Perzel backed.

Perzel kept a “ghost employee” — his brother-in-law, Samuel “Buzz” Stokes, 66, of Philadelphia — on the House payroll to do campaign work, the grand jury said. From 2000 to 2006, Stokes was paid $196,808 in taxpayers’ money, Corbett said. Stokes is charged with theft, conspiracy and conflict of interest.

The others charged are Perzel’s chief of staff, Paul Towhey, 38, of Blue Bell; Perzel legislative aide John Zimmerman, 61, of Hummelstown; Perzel campaign aide Don McClintock, 41, of Voorhees, N.J.; Feese aide Jill Seaman, 57, of Dauphin; former Feese and Perzel aide Elmer Bowman, 34, of Red Lion; and former House Republican Information Technology Deputy Director Eric Ruth, 34, of Boca Raton, Fla., who is Perzel’s nephew.

The charges are part of a broad, 3-year-old investigation into whether Republicans and Democrats in the House and Senate used state resources for political campaigns.

In July 2008, Corbett filed charges accusing 12 people with ties to House Democrats, including two former legislators, of using state resources for campaign activity. The charges against Democrats involve $3.6 million in bonuses paid secretly in 2005 and 2006 to legislative staffers, some of whom worked on campaigns. Five of the 12 defendants have agreed to plead guilty.

As in the first phase of the investigation, Corbett said, the grand jury uncovered a concerted plan to use taxpayers’ money, employees and resources for political campaigns. But the difference was that Democrats used taxpayer-paid bonuses to reward staffers, and Republicans sunk taxpayers’ money into technology to fuel campaigns, he said.

Perzel, a fixture in state politics for three decades, won his first House election in his predominantly Democratic district in Philadelphia in 1978. Ten years later, he won his first leadership position in the Republican Caucus and became Republican Policy Committee chairman. He was elected speaker of the House in 2003, a post he held until 2006. He served as majority leader for nearly a decade before that.

Although he won re-election in 2006, he lost his leadership post after staunchly defending the ill-fated 2005 legislative pay raise. But it was his narrow victory in the 2000 election that became a “defining moment” for Perzel, Corbett said, prompting Perzel to seek computer software to get voters to the polls and catalogue data on them at taxpayers’ expense.

The Republican Caucus paid almost $9.3 million to GCR & Associates of New Orleans for sophisticated computer work, of which about $4.5 million was for work on campaigns. Under the “Edge” program, the user had a Web-based tool to “mine” voter data. It would produce a database showing voters’ political party, gender, jurisdiction, religion and other details. Perzel wanted to use another program, “Blue Card,” to help him run for governor next year, the grand jury said.

Republicans paid Washington-based Aristotle Inc. $6.2 million, mostly for campaign work, Corbett said. Officials from the companies were not charged with wrongdoing and cooperated with the investigation, he said.

Perzel, Preski and their wives attempted to enrich themselves by selling information collected by the taxpayer-purchased campaign programs, the grand jury said. The venture apparently was not successful, Corbett said.

Legislative staffers spent hundreds of hours preparing fundraising mailers for Perzel, the grand jury said. They were sent to constituents Perzel dubbed “the little people,” who made contributions as low as $5 and $10, Corbett said.

Extra information on the accused

Brian Preski, 44, of Philadelphia

• Legislative aide on various committees from 1995 to 2000, when he became John Perzel’s chief of staff. He left that position in 2007.

• Charged with 72 counts of theft, conspiracy and conflict of interest.

Brett Feese, 55, of Muncy

• State representative from 1994 to 2006, including stints as chairman of the House Republican Campaign Committee beginning in 2003 and majority chairman of House Appropriations Committee beginning in 2004. Did not seek re-election in 2006.

• Hired as chief counsel to the House Republican Caucus in 2007. Resigned Nov. 3.

• Charged with 62 counts of theft, conspiracy, obstruction of justice and conflict of interest.

Elmer Bowman, 34, of Red Lion

• Former aide to Feese and senior staff member in the House Republican Policy Committee. Resigned last week.

• Charged with 48 counts of theft, conspiracy and conflict of interest.

Samuel “Buzz” Stokes, 66, of Philadelphia

• Perzel’s brother-in-law and former campaign manager. Was on the House payroll, but allegedly performed little or no legislative work.

• Charged with 42 counts of theft, conspiracy and conflict of interest.

Jill Seaman, 57, of Dauphin

• Former executive assistant and paralegal for Feese in the House Republican Caucus.

• Charged with 46 counts of theft, conspiracy, obstruction of justice and conflict of interest.

Paul Towhey, 38, of Blue Bell

• Perzel’s chief of staff.

• Charged with 24 counts of theft, conspiracy, obstruction of justice and conflict of interest.

Don McClintock, 41, of Voorhees, N.J.

• Perzel campaign aide.

• Charged with 24 counts of theft, conspiracy and conflict of interest.

Eric Ruth, 34, of Boca Raton, Fla.

• Deputy director of House Republican Information Technology; nephew of Perzel’s wife.

• Charged with 48 counts of theft, conspiracy and conflict of interest.

John Zimmerman, 61, of Hummelstown

• Legislative aide to Perzel.

• Charged with two counts of hindering apprehension or prosecution and obstruction of justice.

— Tribune-Review

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