Preski Article2

Pittsburgh Tribune Review June 4, 2006 Sunday

HEADLINE: More checks than balances BYLINE: Brad Bumsted and Debra Erdley

State House Speaker John Perzel used campaign cash to treat his chief of staff and both men's sons to Super Bowl trips the past two years. Campaign money also paid for the powerful Philadelphia Republican and his chief, Brian Preski, to take their wives on Las Vegas trips; almost $1,350 worth of liquor for a Supreme Court committee meeting in Philadelphia; and Chinese takeout and pizza for Preski's children and their baby sitters so Preski and his wife

could attend campaign events, receipts and vouchers show. Pennsylvania's election law is so broad it allows legislators to spend money on just about anything, a study by the Pittsburgh TribuneReview found. A candidate needs only to show that an expenditure influenced the outcome of an election to justify it. Perzel -- who oversees the largest campaign fund in the General Assembly and raised $500,000 last week in Pittsburgh -- argues his expenditures meet that standard. The thousands of dollars spent on trips and entertainment "contributed to and will continue to contribute to the outcome of my elections," Perzel and Preski said in response to written questions from the Trib. What's unusual about Perzel's campaign is the

amount -- $700,000 -- in reimbursements to legislative staffers assisting his campaign. They assisted on their own time, Perzel said. Preski, an attorney, is paid $160,000 by state taxpayers to oversee Perzel's legislative staff. In 2005, the campaign paid him a $56,000 salary, and in 2004 and 2005 reimbursed him a combined $264,000 for expenses ranging from bottled water to the Vegas trips and the Super Bowls. Preski's reimbursements, documented in more than 2,300 receipts reviewed by the Trib, far exceed those paid by campaigns to aides of other legislative leaders in Pennsylvania. The receipts provide a rare look inside a financially flush, high-profile campaign -- one that cut more than $700,000 in reimbursement checks to family, friends and legislative staffers as some Republicans across the state were beginning what would become a struggle for

survival. Perzel, who helped orchestrate last year's later-repealed legislative pay raise, escaped a primary election challenge May 16, when voters defeated 11 of his House Republican colleagues. To John Kennedy, a former Republican House member from Cumberland County who served with Perzel, the campaign's spending is "mindboggling" and "an abuse of power." Some highlights from the 2004 and 2005 campaign reimbursements Preski received: = $9,000 for lodging and meals and air fare to Jacksonville and Houston, so Perzel, Preski and their sons could attend the Super Bowls. = $34,000 for six trips to conferences in Las Vegas for Perzel, Preski and assorted guests, including their wives and fellow lawmakers. = $1,800 for a long weekend at an Atlantic

City luxury hotel casino during the 2005 July 4th holiday. = $1,349 for drinks at Davio's, a pricey Philadelphia waterfront restaurant where Preski paid for liquor for members of the Supreme Court Rules Committee. = $41,109 for meals and food in Philadelphia, where Preski and Perzel live. The receipts show spending ranging from almost $15,000 for 26 trips to LaVeranda, another upscale restaurant in Philly, to $1,900 in Chinese food and pizza delivered to Preski's home on 52 occasions. = Outsized gratuities, including a $100 tip for a $58.75 tab at a Harrisburg watering hole. That's just a slice of the $3.9 million Perzel's campaign spent. Legislative staffers often perform campaign work on what they say is personal time. Yet, experts were stunned at the $700,000 Perzel's

campaign funneled through staffers. "That's incredible to me," said Robert Stern, director of the nonprofit Center for Governmental Studies in Los Angeles, and coauthor of California's strict campaign spending guidelines. Other legislative campaigns reimbursed staffers far less during the past two years. Sen. Vincent Fumo, D-Philadelphia, whose campaign spent $3.9 million, reimbursed one staffer $1,785 for expenses and a second, $552. House Minority Leader H. William DeWeese, DWaynesburg, who spent $827,480, reimbursed a staffer $47,300 for campaign expenses. Sen. Robert Jubelirer, R-Altoona, who spent $400,100, paid a single staffer $5,684. Sen. Robert Mellow, D-Lackawanna, spent $453,467, reimbursing two staffers $5,555 and $7,282. Edward D. Feigenbaum, an Indiana attorney who

wrote the Federal Election Commission's guide to state election laws, said the amount of money changing hands raises questions about the Perzel-Preski arrangement. "When you're looking at amounts that high it also calls into question what master they are serving. Are they serving the candidate first, or the elected official?" Feigenbaum said. Preski said all reimbursements to staffers paid for work performed on their personal time. Asked about reimbursements to Preski, Perzel said: "Many of our campaign volunteers and staff are of limited means. Mr. Preski volunteered to advance many of the campaign expenses incurred by my campaign and its volunteers, in part so as not to impose a burden on the campaign's volunteers, and as an accommodation to my campaign treasurer, who reconciles the receipts directly with Mr. Preski."

Campaigns in Pennsylvania can bundle many costs into a single entry on their campaign finance forms as "reimbursement for expenses." The receipts aren't available at the Department of State. The Perzel campaign, as state law requires, granted the Trib's request to review receipts for Preski's reimbursements at the campaign accountant's office in Merchantville, N.J. Although campaign money comes from private contributors, Pennsylvania law stipulates that all campaign expenditures must go toward "influencing the outcome of an election." Mary Heinlen, who recently retired after 21 years as director of the campaign finance division of the Pennsylvania Department of State's election bureau, was surprised by what she found when reviewing documents the Trib compiled detailing Preski's reimbursements.

"I've not seen as many expenditures that were as questionable as these. This is voluminous," Heinlen said. "There are clearly a lot of entertainment expenses here." One of those expenses occurred just 16 hours after the 2 a.m. legislative pay raise vote in July -- when Perzel's campaign paid the tab at a Philadelphia riverfront restaurant. The bill for dinner at LaVeranda: $955 -- of which $400 went for liquor and wine, including two $150 bottles of wine. Records reviewed by the Trib don't reveal who celebrated at La Veranda. Preski's credit card charges indicate four guests were served. The dinner followed a marathon legislative session during which lawmakers worked through the July 4th weekend. Campaign vouchers show Preski also picked up the tab for a retreat at LaBorgata, an upscale Atlantic City casino hotel

that weekend. Perzel's spokesman, Robert Philbin, said Perzel and Preski couldn't attend the New Jersey trip, which was planned to form a finance committee for Friends of John Perzel. So the room at LaBorgata was for Preski's wife, Kelly, who went on campaign business, Philbin said. Heinlen questioned whether all of Preski's reimbursements met the standard of influencing the outcome of an election. In written responses, Preski and Perzel insisted they did. The Super Bowl trips, Perzel said, "helped cement my strong personal relationships with the Steelers' owners, who have been and are contributors to my campaigns." He and Preski, who attended both Super Bowls with tickets given to them by the Steelers, were introduced to others who later donated to his campaign and the

House Republican Campaign Committee, Perzel said. They attended with their sons "because I understood that these outings were to be familyoriented events," Perzel said. The Rev. Sandra Strauss, director of public advocacy for the Pennsylvania Council of Churches, which belongs to a group pushing for reform in state government, questioned some of the Perzel campaign's spending. "It's hard for me to see how trips to the Super Bowl and Vegas are going to win elections in Pennsylvania," she said, emphasizing that she was speaking for herself and not the council. But that's exactly what Perzel maintains those trips did. Perzel said the Las Vegas trips included computer shows and gatherings of political consultants and legislative leaders that he

attended "to either review election-specific technology for use in my re-election campaign, or to meet with experts and colleagues regarding my re-election campaign." His wife, Sheryl, and the Preskis "are my closest campaign advisers," Perzel said, explaining why the campaign covered the costs for his traveling companions. Perzel's guests apparently enjoyed the campaign's hospitality. On trip after trip, Preski billed the campaign for the low-cost libations that are a Las Vegas casino specialty. Timed receipts from the Casino Royale show Preski paid for 41 glasses of beer and mixed drinks in 29 minutes, between 10:47 and 11:16 p.m., on Sept. 28 at the National Speakers Convention. Again, it's not known who consumed the drinks. Paul Ryan, an attorney with the Campaign Legal

Center in Washington, said the use of campaign funds for such expenses speaks to the enormous amount of money campaigns can raise in Pennsylvania's absence of contribution caps. "If a candidate can send family and friends on nice trips to places like a Super Bowl and Hawaii, there is virtually no disincentive to not accept huge contributions from special interests, regardless of appearance of corruption, or actual corruption, that may take place," Ryan said. "As far back as 1976, the U.S. Supreme Court recognized that avoiding the appearance of corruption is a compelling government interest. Even the appearance of corruption is a serious government matter, because it poses serious potential of undermining public confidence in government." Campaign spending, once rarely scrutinized,

has gained increasing attention across the nation. In Illinois, former Gov. George Ryan recently was convicted on federal fraud charges, in part for diverting campaign money for personal use and then failing to pay taxes on the money. Idaho recently enacted a law that specifically bans using campaign money to attend sporting events. At the Center for Governmental Studies, Stern said legality is not the only question Preski's reimbursements raise. "I don't think the point is, 'Is it illegal?' Who writes the law in Harrisburg, but the Legislature. The point is, 'Is it ethical? Should it be illegal?' " he said. Perzel said the $1,349 Preski billed the campaign for drinks at Davio's on Oct. 1, 2004, was an important campaign expenditure. It

followed a meeting of the Criminal Rules Committee of the Supreme Court, on which Preski served. "My campaign benefits from the knowledge of the issues affecting criminal justice policy in our commonwealth. ... Mr. Preski is able to gain important insight into these matters during the give-and-take between members of this committee, during the meals that take place when the committee is in recess," Perzel said. The $100 tip Preski left for a $58.75 bill at the Firehouse Restaurant in Harrisburg on Oct. 17, 2005, also was campaign-related, Preski said. He said that he, Perzel and GOP colleagues were engaged in an "intense" conversation at the restaurant just two weeks before the election. A waitress allowed them to stay past closing time, Preski said. "We thanked her for her hard work

and the extra hours with a large cash tip," he said. The take-out meals delivered to Preski's Philadelphia home also were essential to the campaign, Perzel said. "In addition to being my chief of staff, Mr. Preski is my campaign manager. These expenses are related to one, food costs for campaign meetings that were conducted at his home; and two, the costs of food for his children and baby sitter when he and his wife attend fundraisers or other campaign-related meetings on my behalf." Indeed, Preski's job as Perzel's campaign chairman puts him at the head of essentially a small business. A Trib analysis of records on file with the Department of State revealed a two-year campaign committee payroll of $350,000. Its accounting

costs and taxes totaled $167,000. Postage paid to the Philadelphia postmaster ate up $53,800. Private investigators cost the campaign $3,250. And like small businesses sometimes do, the campaign contributed to a number of Philadelphia charities, ranging from $500 to the St. Matthews Swim Team, to $6,600 to the New Foundations Charter School in northeast Philadelphia, founded by Sheryl Perzel. The bills also included $38,000 for holiday celebrations. Perzel's campaign records also listed $74,500 in petty cash expenditures in 2004 and 2005. One staffer in Perzel's district office received $71,500 over two years, in 47 checks marked only "petty cash." The money was for "out-of-pocket" expenses and represents an "insignificant" portion of overall spending, Preski wrote in his response to the Trib.