HARRISBURG — Describing the Pennsylvania Turnpike as “cash cow” for the state Senate, a state grand jury on Wednesday issued a report that charges former state Sen. Robert Mellow and seven other men of engaging in a “pay-to-play” scheme.
The charges, announced Wednesday by state Attorney General Kathleen Kane, allege Mellow and the other defendants used their power to influence the awarding of numerous, multimillion-dollar contracts to political supporters, even when the contract winners were not the most qualified or had submitted bids far in excess of other contractors.
The grand jury’s report notes several turnpike employees who questioned the awards were terminated or given poor job evaluations in retaliation for raising objections.
The largely secret investigation took 44 months, dating back to 2009, and involved hundreds of witnesses, Kane said at a press conference Wednesday afternoon.
“Evidence of secret gifts of cash, travel and entertainment — and the payment of substantial political contributions to public officials and political organizations by private turnpike vendors and their consultants — demonstrates that the turnpike operates under a pay-to-play system that is illegal and corrupt,” Kane said.
The public, she said, “has lost untold millions of dollars,” and she added that the “greatest improper influence” involved the turnpike’s procurement process.
Already in prison
Mellow, 70, is serving a federal prison for his conviction on charges related to using Senate staff to perform campaign work. The state grand jury report charges him with corrupt organizations, bribery, bid rigging, conspiracy and other offenses.
Attorney Dan Brier, who represented Mellow in the federal case, did not return a phone message Wednesday seeking comment on the new allegations.
Other turnpike officials charged are Joseph Brimmeier of Pittsburgh, former chief executive officer; Mitchell Rubin of Philadelphia, former chairman; George Hatalowich of Harrisburg, former chief operating officer, and former workers Melvin Shelton of Philadelphia and Raymond Zajicek of Tarpon Springs, Fla. The other two defendants are turnpike vendors: Dennis Miller of Harrisburg and Jeffrey Suzenski of Pottstown.
Miller, Rubin, Hatalowich and Suzenski were arraigned Wednesday and released on $100,000 unsecured bail. Shelton and Brimmeier are due in court today. Arrangements were pending for Mellow and Zajicek
One of the key witnesses before the grand jury was Tony Lepore, who served as chief of staff to Mellow and to the current Democratic floor leader, Sen. Jay Costa, of Allegheny County. Lepore testified under a grant of immunity.
“Lepore explained that Senate officials would learn of work becoming available at the turnpike and would call … Brimmeier and tell him which firm, vendor or consultant they wanted to steer turnpike work to,” the grand jury wrote in an 88-page presentment released with the charges. “Generally, their requests were honored.”
Mellow was actively involved in steering contracts to particular vendors, the grand jury report says. He also imposed fundraising obligations on turnpike staff and vendors and personally benefited from sports and entertainment gifts.
Many of those gifts were supplied by a regional vice president of PNC Bank, which was seeking to obtain work as a bond underwriter for turnpike projects, the report says.
According to the grand jury report, the vice president, who is not identified, met with Mellow and his staff to seek information on how the bank could obtain work. The bank official told the grand jury he developed a personal relationship with Mellow and took him to New York Yankees games in a limousine, and often bought food at the games that was paid for by the bank.
All told, PNC paid $5,935 for trips to Yankees games and other events from 2006 to 2010, the report says.
PNC had never gotten any turnpike bond work until 2005, when, the report says, Mellow intervened on its behalf. From 2006 to 2012, it was paid $2.48 million in bond underwriting fees.
Fred Solomon, a spokesman for the PNC, declined to comment on the report, other than to note it does not allege any wrongdoing by PNC officials.
Kane: 60-40 rule
Kane said the selection and recommendation of turnpike vendors followed what witnesses identified as a 60-40 rule that split up contracts among firms favored by Republicans and Democrats: 60 percent of the turnpike contracts went to the “majority party” and 40 percent went to the “minority party.”
Vendors who participated in the pay-to-play system were rewarded with multimillion-dollar contracts, authorities said. “The reason they made these contributions and provided these gifts (is) because they knew that was the way they would get these contracts,” said state police Commissioner Frank Noonan.
The charges might revive efforts to overhaul or even dissolve the turnpike commission.
Sen. John Rafferty, chairman of the Senate Transportation Committee, said Wednesday his committee wants to “tighten up the way that we do business and prevent (this type of activity) from happening in the future.”
The turnpike figured tangentially in the federal criminal case against former state Sen. Vince Fumo, who was convicted of fraud and related charges in 2009. His co-defendant and aide, Ruth Arnao, was married to Rubin, the turnpike chairman. Arnao was also found guilty at that trial.
Fumo is not identified by name in the jury report, but as Senator No. 6 he is described as having a powerful influence over the turnpike. Political donations from turnpike vendors were directed to him and other senators of both parties who had sway over decisions related to the agency, the report said.
Gov. Ed Rendell had ousted Rubin in March 2009, citing what he called “overwhelming” evidence in trial testimony that Rubin had been paid $150,000 for a no-work job for the Appropriations Committee under Fumo, a Philadelphia Democrat. Fumo is currently in a Kentucky federal prison.
Rendell also was not named, but it’s clear he is the person in the jury report described as Gubernatorial Candidate No. 1, for whom Brimmeier and Hatalowich were allegedly collecting political donations from vendors.
Rendell said he had not read the report and was unaware of any inappropriate activity, but he praised Brimmeier for making “significant improvements” in the turnpike’s operation during his tenure.
The Associated Press contributed to this story.