Posted on 01/09/2009 11:46:00 AM PST by grace522
Ballard's $773,000 'No-Contract' Work
Rendell’s Former Firm Went Beyond ‘No-Bid’ Contracts By Chris Freind, The Bulletin Published: Friday, January 09, 2009 Gov. Ed Rendell,D-Pa., has recently come under fire as more information emerges regarding the frequency and high-dollar amounts of no-bid state contracts that have been distributed to his political donors and friends. The details of such contracts have been previously revealed by The Bulletin.
Many eyebrows have been raised on these lucrative no-bid contracts, especially since the records from past administrations were “lost” under Mr. Rendell’s tenure — ostensibly the only way to compare the frequency, amounts and recipients of these types of contracts.
The state Senate passed a reform bill 50-0 last session amending how contracts are awarded, but it was stifled in the Democratic-controlled House. The legislation, sponsored by Republican Majority Whip Jane Orie, R-40th of Allegheny, will be re-introduced early this term.
While conflicts of interest abound, the awarding of no-bid contracts to political donors is not illegal, so long as no pay to play arrangement exists.
But in 2007, the ethical line was taken to a whole new level when Ballard performed $773,000 of state legal work without a state contract, leaving many questions unanswered.
On March 1 of that year, the firm began work on the proposal to privatize the Pennsylvania Turnpike. Over the next 83 days, Ballard utilized 55 attorneys (more than 10 percent of its legal staff), and billed the state for 2,300 hours, which equates to an average of 27.38 hours per 24 hour day. The hourly rates varied based on seniority, with firm Chairman Arthur Makadon billing $637.50/hour, and partners Ken Jarin and Adrian King Jr. billing $531.25/hour and $403.75/hour, respectively.
Mr. Makadon, a close friend to the governor, has contributed $87,500 to his campaigns. Mr. Jarin is listed as the “relationship partner” on the $773,000 project. He is a longtime confidante and fundraiser to Mr. Rendell, having contributed $90,000 to the governor’s coffers. He also serves as treasurer to the Democratic Governor’s Association, an entity that has
contributed over $1.5 million to Rendell. Mr. Jarin is married to Robin Wiessmann, who had served as state treasurer until this week. Her office approved and issued payments for the Ballard invoices. Adrian King, Jr., served as the governor’s deputy Chief of Staff and in a Cabinet position prior to rejoining Ballard as a partner.
According to the Ballard press release at the time of Mr. King’s return, Mr. Makadon was quoted as saying, “Adrian was a star here at Ballard and has been a star for the governor. Upon his return, we expect him to play a large role in the future of the firm representing important clients and managing key client relationships.”
The Ballard firm, a Limited Liability Partnership (LLP), contributed $481,000 to Gov. Rendell’s campaigns. The Philadelphia Future Political Action Committee (PAC), registered at the Ballard offices in Philadelphia and whose treasurer is David Cohen, former Ballard chairman and former chief of staff to then-Mayor Rendell, contributed $470,000. Mr. Cohen donated $80,000, and his wife, Rhonda, contributed $156,000 to the Rendell campaign. Ballard associates contributed nearly a half million more dollars to Mr. Rendell. There is no limit to how much an individual or an LLP can contribute to state candidates. The majority of law firms are LLPs.
Additionally, on Pennsylvania Department of State campaign filings, the address of Gov. Rendell’s campaign treasurer is the 51st Floor of 1735 Market Street in Philadelphia, the same floor entirely occupied by Ballard Spahr, his former law firm.
Normally, a contract must be negotiated and executed before any work for the commonwealth can be performed. However, because Ballard jumped headlong into the project without a contract, it had no way of receiving compensation for its work. Consequently, it had to sign a “Compromise, Settlement and Release” agreement initiated by the state Department of Transportation to receive payment retroactively.
The document specifies that authorization to pay Ballard in this manner was due to certain “circumstances,” among them that on March 1 the firm “was directed by the Office of General Counsel to provide professional services as special counsel to the Commonwealth of Pennsylvania in connection with the Pennsylvania Transportation Funding initiative.”
The document continues, “due to the extreme urgency of the work required, work began immediately at the Office of General Counsel’s direction prior to having a fully executed contract document in place.”
The settlement also states, “the commonwealth cannot otherwise pay the law firm for services performed during the period of March 1, 2007 and May 23, 2007 because no agreement was in place prior to performances of such services.”
A no-bid contract was executed on May 24, 2007 for future services on the privatization initiative. To date, Ballard has billed the state over $2 million in legal fees relating to the project.
While state law allows for work of an urgent nature to be performed without a contract, questions have been raised as to how the turnpike privatization initiative qualifies an “urgent” matter. The turnpike, the nation’s first, was in no danger of disappearing or being unable to continue operations.
Additionally, the legislative process is typically slow, preventing political issues from moving with any sense of speed and urgency in Harrisburg. Since the governor’s plan had been met with resistance in the legislature and had little chance of passage, why Ballard rushed into the project with no contract remains a question on many political observers’ minds.
On numerous occasions, Mr. Rendell has been asked if he has played a role in the selection of no-bid contract recipients, especially when political donors are involved. The answer typically given is that the governor has no involvement in the process, and that firms are chosen based on their particular expertise, with no consideration being given to large dollar political donors.
However, legislators, political experts and the media have been increasingly questioning the close relationship of the governor to these no-bid contract recipients, especially Ballard and its partners. In particular, questions have been raised regarding the role of John Estey, Mr. Rendell’s former chief of staff and a current partner at Ballard.
While he was not involved in the $773,000 project, Mr. Estey still maintains a position of enormous influence with Rendell. He is chairman of the Philadelphia Regional Port Authority, a commonwealth agency that chose Ballard Spahr as its outside counsel last June.
In addition, Mr. Estey still chairs board meetings of the Delaware River Port Authority (DRPA), of which Gov. Rendell is the self-appointed chairman. Ballard is the largest recipient of DRPA legal fees, receiving nearly $3 million since Gov. Rendell’s election in 2002. As a point of comparison, Ballard had received only $25,000 in the three years preceding Gov. Rendell’s election. As a board member, Mr. Estey receives and votes to approve DRPA legal bills, including those going to his own firm.
Many questions have also been raised as to why the state is utilizing outside counsel to such an extent, especially on the turnpike project, given that that the Pennsylvania Department of Transportation (PennDot) has a large in-house legal department. Ballard’s 55 attorneys working on the project are larger than the entire roster at many firms, which some believe is akin to the state renting a high-value law form for several months. Calls to PennDot revealed that there are 49 attorneys on staff. The Pennsylvania Turnpike Commission currently has five attorneys serving as in-house counsel, and had several more at the time of Ballard’s work.
The public’s cynicism and mistrust of government has become exacerbated by the numerous scandals and pay-to-play investigations on the state and national level. The debate surrounding whether there is a need to reform how no-bid and “urgent” non-contracts are awarded will intensify as the Senate reform bill is reintroduced.
The Bulletin will continue to seek responses from the governor and legislative leaders to questions this investigative report raises.
Chris Freind can be reached at cf@thebulletin.us
I’d loooove to see Rendell go the Blago route!
More on the Pennsylvania tree branch!
Ross Perot, after acting as the spoiler that allowed bubba to be elected with only 47% - got some VERY big gummint contracts at the same time.... I was afraid they’d pull that same scenario this election = but they didn’t need too - they had the media.
42% In 1992 47-48 in 1996!
Wonder if Fast Eddie will get cheesesteaks in the Big House?
Democrats Corrupt in Philly and pa....?
c’mon Us Attorneys....Indict! and next UNIONS!!!!!!!!!!!!
None of this matters to the idiots who keep electing Democrats. We live in a country where Chicago style corruption is fast becoming the norm. Cheat, steal, lie... just get in and grab the power. The common good is what’s good for you!
Democrat corruption PING.
It’s not a question of which Democrat is corrupt, its a question of which Democrat is NOT corrupt.
Most of them are.
http://www.freerepublic.com/focus/f-news/2160983/posts
LOOP CAPITAL!!!
Reynolds
Burris
Craig Robinson - 0 BIL
Sounds like the democrat party is drowning in a culture of corruption. Now where have I heard that phrase before? Hmmm...Culture of Corruption..
Gov. Ed Rendell,D-Pa., has recently come under fire as more information emerges regarding the frequency and high-dollar amounts of no-bid state contracts that have been distributed to his political donors and friends... The state Senate passed a reform bill 50-0 last session amending how contracts are awarded, but it was stifled in the Democratic-controlled House. The legislation, sponsored by Republican Majority Whip Jane Orie, R-40th of Allegheny, will be re-introduced early this term. While conflicts of interest abound, the awarding of no-bid contracts to political donors is not illegal, so long as no pay to play arrangement exists. But in 2007, the ethical line was taken to a whole new level when Ballard performed $773,000 of state legal work without a state contract, leaving many questions unanswered. On March 1 of that year, the firm began work on the proposal to privatize the Pennsylvania Turnpike. Over the next 83 days, Ballard utilized 55 attorneys (more than 10 percent of its legal staff), and billed the state for 2,300 hours, which equates to an average of 27.38 hours per 24 hour day. The hourly rates varied based on seniority, with firm Chairman Arthur Makadon billing $637.50/hour, and partners Ken Jarin and Adrian King Jr. billing $531.25/hour and $403.75/hour, respectively.
I’d love to see taxpayers get their $$$ back.
Isn't that kind of the definition of pay-to-play? They give money, they get lucrative contracts. Even if it can't be proven either way the appearance of impropriety should preclude it.
We’re gonna run out of jail space for these crooks. No wonder Dims never want to build new prisons.
I will be interviewing Chris Freind on this in the first hour of my show on Thursday Jan 15 at 8 pm est.
http://www.blogtalkradio.com/freedom
...Governors taken down recently:
Gray Davis Cal, Dem - incompetance, recalled
McGreevy NJ, Dem - corruption, resigned
Spitzer, NY, Dem - corruption, resigned
Blago Ill, Dem - corruption, impeached
Richardson NM, Dem - corruption, under investigation
Rendell Penn, Dem - corruption, under investigation
“Culture of corruption”
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