Taxpayer bill in Pa.'s Bonusgate grows

HARRISBURG - First, taxpayers footed large, secretive government bonuses to legislative staffers.

Now, more than a year into a criminal probe known as Bonusgate, the General Assembly's cost to tighten ethical standards and cope with the scandal has topped the $1 million mark and is growing.

House Democrats, who gave out the most in cash payments and who have been the main focus of a probe, have run up the largest public legal tab so far, records show. The bills include more than $710,000 in the last year to Washington consultant William Chadwick, who is billing $400 an hour.

One leading critic of the legislature described the legal costs as "breathtaking" and said it proved "the cost of corruption."

Attorney General Tom Corbett empaneled a grand jury early last year to look into allegations that $3.6 million in bonuses had been awarded to staffers, both Democrats and Republicans in the House and Senate, at the end of 2006.

The grand jury is examining whether those payments - more than half awarded by House Democrats - were given as rewards for campaign work that staffers performed.

Last spring, House Majority Leader Bill DeWeese (D., Greene) initially hired Chadwick, a former prosecutor and top aide to two Pennsylvania governors, to strengthen ethics policies of House Democrats as the investigation was in its infancy.

Chadwick helped formulate a new code of conduct and held ethics seminars, among other things. But after several months in that role, as it became clear that the grand jury was focusing on House Democrats, Chadwick became the point person for the caucus' response to the investigation.

In an interview last week, Chadwick acknowledged that his bills amount to a lot of money - about $55,000 a month - but he defended the expense as needed to respond to a series of subpoenas.

Chadwick estimated that he had culled through "tens of millions" of electronic records, most of them e-mails, to determine what to hand over to prosecutors.

"This is an investigation that is looking at large numbers of people in very diverse activities - political-campaign activities, bonus activities, coverup, obstruction," Chadwick said. "There's an awful lot to it. It is not a simple case and it is not confined to a couple of people. It is very, very large in scope."

In 1991, Chadwick was Philadelphia's acting district attorney. He went on to serve as inspector general under Gov. Robert P. Casey Sr. and in the general counsel's office of Gov. Tom Ridge.

He isn't the only lawyer on the case for House Democrats. DeWeese has also hired Walter Cohen, the former state attorney general, to assist Chadwick.

Cohen works for the Philadelphia firm Obermayer, Rebmann, Maxwell & Hippel, which has been paid $152,700 over the last year.

And the caucus has assembled a stable of other, outside lawyers to represent House Democratic staffers who were called to testify before the grand jury.

Over the last year, DeWeese has paid 10 other firms a total of $492,000 through his public discretionary account. DeWeese's office acknowledged that some of those bills were for Bonusgate-related work but refused to disclose an exact amount, citing attorney-client privilege.

"Wow," Tim Potts, co-founder of Democracy Rising PA, a Harrisburg-area public integrity group, said when told of the mounting legal bills.

Legislative leaders brought the legal expenses upon themselves and the public by issuing the bonuses in the first place, he said.

"This is proving the cost of corruption," said Potts, who worked as DeWeese's press secretary for seven years in the 1990s. "It cost you up front and in the back and all the way through."

To date, prosecutors have not filed any charges as a result of the Harrisburg grand jury, which has operated in secret for 15 months and is examining the bonuses, some of which topped $20,000.

House Democrats, who gave nearly $1.9 million to 717 workers in 2006, have received multiple subpoenas requesting documents, had boxes seized from Capitol offices, and had numerous staffers called before the grand jury.

Republicans in the House and Senate have received subpoenas to produce records as well, but not to the extent of House Democrats. Nor have any of their aides been called to testify.

House Republicans have paid $91,145 to the Pittsburgh firm Kirkpatrick & Lockhart, Preston, Gates, Ellis to represent the caucus in the matter. The caucus gave $270,000 to 45 aides in 2006.

Republicans in the Senate awarded $180,000 that year to 16 workers. The caucus has hired two firms - Ballard, Spahr, Andrews & Ingersoll and Conrad, O'Brien, Gellman & Rohn - to represent it.

Steve MacNett, chief counsel for Senate Republicans, said the caucus expected to pay the firms a total of $50,000 between late November when they were hired and the end of January. More current bills haven't been submitted, he said.

Senate Democrats, who gave out the least in bonuses - $38,000 to a dozen staffers in 2006 - have also spent the least in the probe, less than $5,000 on two outside lawyers.

They remain the only one of the caucus that has not received subpoenas from the grand jury.

DeWeese did not respond to requests for comments for this article.

When the Bonusgate controversy broke, DeWeese stressed that he never realized the full extent of the bonuses and that he had delegated the awarding of them to others.

Also, he has vigorously defended the expenses, saying they were needed to improve ethics and to fully cooperate with the attorney general's investigation.

In November, DeWeese forced seven of his staffers out of their jobs because of their roles in handling the bonuses. Once again, the move will wind up costing taxpayers in legal bills.

His office tried to block unemployment benefits for two of them and one filed a wrongful-termination suit against the House in February.

The suit is pending and an outside lawyer has been hired in that matter, as well.