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By Dennis J. Willard
Beacon Journal Columbus Bureau
POSTED: 08:48 p.m. EDT, May 16, 2009
COLUMBUS: Gov. Ted Strickland and state lawmakers need look no further than Pennsylvania to see that politicians and nonprofits do not go together.
The Keystone State has two glaring examples of politicians creating nonprofits to solicit funds from the government, individuals and companies — including one of the state's major utilities — and then using the money for personal enrichment or to further a political agenda.
Currently, Strickland is pushing an effort to allow state employees to form nonprofits within the walls of government. The employees running the nonprofits would solicit individuals and companies for funds to pay for ongoing operations and special projects.
The legislature has never debated the idea. Instead, Strickland asked House Democrats to quietly insert a provision in an amendment to the two-year state budget late, late one legislative night.
After news reports surfaced, Strickland indicated he would not push the plan while the Ohio Senate works on the two-year budget. But the governor still believes it is a worthwhile proposal.
Well, if the governor is wondering how such a system — where people working inside of government solicit money from individuals and companies regulated by or receiving contracts from government — could lead to corruption, he should look east for wisdom.
Take the case of state Sen. Vincent Fumo from the Philadelphia area. He was a 30-year lawmaker and, at one time, the highest-ranking Democrat on that state's Senate Appropriations Committee.
Fumo, whose name in Italian means ''smoke'' — and you know the old saying about smoke — was convicted of 137 counts of corruption in March in federal court.
He had formed a nonprofit called the Citizens Alliance for Better Neighborhoods in his hometown.
According to a lawsuit filed this month by the Pennsylvania attorney general, Fumo and Ruth Arnao, who worked in his Senate office before holding at least four job titles with the nonprofit, diverted about $1.9 million for ''personal use and political advantage.''
With money from public grants and private donations, including $17 million from Peco Energy, a state-regulated utility, Fumo and Arnao went shopping.
For her involvement, Arnao was convicted in federal court of 45 counts, according to court records. She and her boss are waiting to hear how long they will spend in prison.
In happier times, they took in money through the nonprofit and spent it as they wished.
Fumo spent $350,000 on vehicles, $52,000 for a backhoe, bulldozer and all-terrain vehicle for his farm in Halifax, Pa., $225,000 to purchase a building for his campaign and Senate headquarters, and an additional $600,000 to remodel the place, according to court records.
The Citizens Alliance formed a for-profit holding company that received $250,000 from its nonprofit parent to spend on political polling; an additional $60,000 to oppose a New Jersey sand dune project that threatened to reduce the value of Fumo's ocean beach house; and $39,000 for trips to Cuba.
At one point, Fumo used nonprofit dollars, funneled through the for-profit holding company, to conduct political surveillance, which is fancy talk for spying on your opposition.
Fumo and Arnao invested $9 million from the nonprofit with a broker who just happened to be both a contributor to the senator's campaigns and a benefactor who bestowed various gifts — including a $500,000 jet-powered boat — upon the lawmaker, court records show.
In a news release, Pennsylvania Attorney General Tom Corbett said, ''The purpose of Citizens Alliance for Better Neighborhoods was to promote the public health, housing, safety and education in Philadelphia. Using nonprofit money to fund a lavish lifestyle and finance political campaigns is unacceptable.''
The Strickland administration maintains its effort would create a transparent process, in which all donations and spending would be traced. But the language inserted in the budget mentions vendors without clarifying how dollars flowing from the nonprofit to a for-profit entity could be tracked.
In other words, once a nonprofit hires a for-profit consultant or a for-profit vendor, the paper trail — the ability to track the public dollars — would stop.
In Beaver County on the other side of the state, not far from the Ohio border, former Pennsylvania Rep. Mike Veon and one of his legislative aides are also on Attorney General Corbett's to-prosecute list.
Veon, once the second-highest ranking Democrat in the Pennsylvania House, is facing 28 corruption charges related to overseeing how money was spent by a nonprofit called the Beaver Initiative for Growth.
A grand jury looked into the case and discovered the nonprofit received $9.9 million in state development tax dollars over four years.
Veon decided how the money would be spent.
According to the attorney general, the Beaver Initiative paid $1 million to hire a consultant who could not document any work for the money. The firm did hire Veon's brother for $160,000 a year.
Veon and his aide deny the charges and say Corbett, a Republican, is on a partisan witch hunt.
Now, one could argue the problems with Pennsylvania nonprofits are different from the Strickland proposal in Ohio because they were created outside the walls of government.
But the real problem is that both plans involve people who control how tax dollars are spent or how businesses are regulated asking individuals and companies with business before state government to give them money.
The rest is pure imagination.
COLUMBUS: Gov. Ted Strickland and state lawmakers need look no further than Pennsylvania to see that politicians and nonprofits do not go together.
The Keystone State has two glaring examples of politicians creating nonprofits to solicit funds from the government, individuals and companies — including one of the state's major utilities — and then using the money for personal enrichment or to further a political agenda.
Currently, Strickland is pushing an effort to allow state employees to form nonprofits within the walls of government. The employees running the nonprofits would solicit individuals and companies for funds to pay for ongoing operations and special projects.
The legislature has never debated the idea. Instead, Strickland asked House Democrats to quietly insert a provision in an amendment to the two-year state budget late, late one legislative night.
After news reports surfaced, Strickland indicated he would not push the plan while the Ohio Senate works on the two-year budget. But the governor still believes it is a worthwhile proposal.
Well, if the governor is wondering how such a system — where people working inside of government solicit money from individuals and companies regulated by or receiving contracts from government — could lead to corruption, he should look east for wisdom.
Take the case of state Sen. Vincent Fumo from the Philadelphia area. He was a 30-year lawmaker and, at one time, the highest-ranking Democrat on that state's Senate Appropriations Committee.
Fumo, whose name in Italian means ''smoke'' — and you know the old saying about smoke — was convicted of 137 counts of corruption in March in federal court.
He had formed a nonprofit called the Citizens Alliance for Better Neighborhoods in his hometown.
According to a lawsuit filed this month by the Pennsylvania attorney general, Fumo and Ruth Arnao, who worked in his Senate office before holding at least four job titles with the nonprofit, diverted about $1.9 million for ''personal use and political advantage.''
With money from public grants and private donations, including $17 million from Peco Energy, a state-regulated utility, Fumo and Arnao went shopping.
For her involvement, Arnao was convicted in federal court of 45 counts, according to court records. She and her boss are waiting to hear how long they will spend in prison.
In happier times, they took in money through the nonprofit and spent it as they wished.
Fumo spent $350,000 on vehicles, $52,000 for a backhoe, bulldozer and all-terrain vehicle for his farm in Halifax, Pa., $225,000 to purchase a building for his campaign and Senate headquarters, and an additional $600,000 to remodel the place, according to court records.
The Citizens Alliance formed a for-profit holding company that received $250,000 from its nonprofit parent to spend on political polling; an additional $60,000 to oppose a New Jersey sand dune project that threatened to reduce the value of Fumo's ocean beach house; and $39,000 for trips to Cuba.
At one point, Fumo used nonprofit dollars, funneled through the for-profit holding company, to conduct political surveillance, which is fancy talk for spying on your opposition.
Fumo and Arnao invested $9 million from the nonprofit with a broker who just happened to be both a contributor to the senator's campaigns and a benefactor who bestowed various gifts — including a $500,000 jet-powered boat — upon the lawmaker, court records show.
In a news release, Pennsylvania Attorney General Tom Corbett said, ''The purpose of Citizens Alliance for Better Neighborhoods was to promote the public health, housing, safety and education in Philadelphia. Using nonprofit money to fund a lavish lifestyle and finance political campaigns is unacceptable.''
The Strickland administration maintains its effort would create a transparent process, in which all donations and spending would be traced. But the language inserted in the budget mentions vendors without clarifying how dollars flowing from the nonprofit to a for-profit entity could be tracked.
In other words, once a nonprofit hires a for-profit consultant or a for-profit vendor, the paper trail — the ability to track the public dollars — would stop.
In Beaver County on the other side of the state, not far from the Ohio border, former Pennsylvania Rep. Mike Veon and one of his legislative aides are also on Attorney General Corbett's to-prosecute list.
Veon, once the second-highest ranking Democrat in the Pennsylvania House, is facing 28 corruption charges related to overseeing how money was spent by a nonprofit called the Beaver Initiative for Growth.
A grand jury looked into the case and discovered the nonprofit received $9.9 million in state development tax dollars over four years.
Veon decided how the money would be spent.
According to the attorney general, the Beaver Initiative paid $1 million to hire a consultant who could not document any work for the money. The firm did hire Veon's brother for $160,000 a year.
Veon and his aide deny the charges and say Corbett, a Republican, is on a partisan witch hunt.
Now, one could argue the problems with Pennsylvania nonprofits are different from the Strickland proposal in Ohio because they were created outside the walls of government.
But the real problem is that both plans involve people who control how tax dollars are spent or how businesses are regulated asking individuals and companies with business before state government to give them money.
The rest is pure imagination.
Comments
Click here to post your comments
Akron, OH
Posted 09:51 PM, 05/16/2009
I want a piece of that. I hereby form the Citizens Alliance for Better Government, local Akron Chapter. Government agencies, please start forwarding money directly to me. I'll make sure it goes to a good cause.
Akron, OH
Posted 10:42 PM, 05/16/2009
Government greed
akron, oh
Posted 11:23 PM, 05/16/2009
wow, and no one has commented on king don...amazing
akron, oh
Posted 12:01 AM, 05/17/2009
yea and when one try's for any of the stimulus,the question ask-would this be for a non-profit prospect? hell no,its for profit,...havent heard bk frm em yet,hmm,maybe I should re-think my request
Akron, OH
Posted 01:45 AM, 05/17/2009
collar crime.
