Pennsylvania Attorney General Kathleen Kane announced criminal charges Wednesday against a former state senator, five former Pennsylvania Turnpike Commission officials and employees, and two businessmen with multimillion dollar contracts with the Turnpike, accusing them of using pay-to-play schemes for financial and political gain.
The allegations include improper steering of bond underwriting business to PNC Capital Markets.
According to Kane, an investigating grand jury unearthed criminal acts that resulted in misdirection, misuse and theft of millions of dollars of public money. “The grand jury found that these men were using the Turnpike to line their pockets and to influence elections,” said Kane, who took office on Jan. 15.
Charged were former State Senator Robert Mellow; former Turnpike commissioner Mitchell Rubin; former Turnpike chief executive Joseph Brimmeier; former Turnpike chief operating officer George Hatalowich; and former Turnpike employees Melvin Shelton and Raymond Zajicek.
In addition, Turnpike vendors Dennis Miller and Jeffrey Suzenski are charged with a variety of offenses, including conspiracy, commercial bribery, bid-rigging, theft, conflict of interest and corrupt organization violations.
Mellow, a Scranton-area lawmaker who once considered running for governor, pleaded guilty to a conspiracy charge related to using Senate staff members to do political work and filing a false tax return. He started a 16-month sentence in January.
Kane said the grand jury, in its 85-page presentment, found “substantial evidence” that Mellow, as Democratic floor leader, directed that his chief of staff, Anthony Lepore, secure Turnpike contracts for key contributors and supporters, and task Turnpike individuals with providing political support and fundraising efforts on his behalf.
The grand jury, which examined a list of bond underwriters from 2003 to 2010, reported that Mellow and Lepore intervened directly to secure bond work for PNC.
“Mellow participated in the larger pattern of bidrigging, improper influence, and commercial bribery in his efforts to steer Turnpike bond work to PNC Capital Markets,” said the grand jury report, which said the bank treated Mellow to tickets for New York Yankees games and a Rod Stewart concert.
“Our practice is not to comment on legal matters, though we note that the presentment does not accuse PNC of any wrongdoing,” a PNC spokesman said.
The Turnpike had already been under fire for its debt, which soared from $2.6 billion in 2008 to more than $8 billion. Gov. Tom Corbett two months ago recommended phasing out the Turnpike’s $450 million yearly payment to the Pennsylvania Department of Transportation for mass transit and road-repair projects.
Shortly before leaving office in January, auditor general Jack Wagner said the commission was “drowning in debt.” He also criticized the commission for using interest-rate swaps.
Mark Compton, who became the Turnpike’s chief executive on Feb. 1, issued the following statement late Wednesday:
“Certainly, we’re troubled by today’s news from Attorney General Kane’s office. If charges against former Turnpike employees are indeed proven, we certainly cannot — and will not — defend that.
“But I can say that these actions definitely don’t represent the hard-working men and women who keep our road open and safe for customers. In the time that I’ve been here, the Turnpike that I have experienced firsthand is quite different than the one that I’ve heard about in media reports.”
The grand jury said Mellow and an unnamed “Senator No. 6” from the Philadelphia area “exerted tremendous influence over the Turnpike.”
Then-Gov. Ed Rendell appointed Brimmeier, an influential Allegheny County political operative, as the Turnpike’s CEO in 2003. He served until 2011, when Rendell left office.
Rendell himself was not accused of any wrongdoing.
“It’s all tied to Rendell and he really should be sweating at this point. I wonder if he’s having a good day,” said Mark Schwartz of Bryn Mawr, Pa., who represented the Harrisburg City Council during its debt crisis in 2011 and 2012 and has served as a bond lawyer and investment banker.
“Pinstriped patronage, fundraisers and the Pennsylvania Turnpike go way back. None other than the governor’s mentor, Dick Thornburgh, used it very much to his advantage,” Schwartz added.
Schwartz in the early 1990s sued Prudential Securities, saying the firm fired him because he complained about pressure to donate to political campaigns.
Rendell late Wednesday issued the following statement from his Philadelphia office: “I have not read the indictment nor was I aware of any inappropriate activity. I am saddened by this news, because Joe Brimmeier made significant improvements in the operation of the Pennsylvania Turnpike during his tenure.”
