Letter Reveals Sestak Knew of Non-Profit's For-Profit Connection

Democrat senatorial candidate clarifies earmark controversy

SEPTEMBER 2, 2010 | by ERIC BOEHM

This story has been updated from it's original format.  See bottom for changes.

Democrat candidate for U.S. Senate Joe Sestak released a letter Thursday afternoon detailing his knowledge of the connection between a non-profit organization and its chairman's for-profit wind energy company.

Mr. Sestak, currently a member of Congress representing Pennsylvania's 7th district, attempted to secure a $350,000 earmark for the Thomas Paine Foundation for a wind energy turbine project.   The funds were to go to Drew Devitt, the sole officer of the Thomas Paine Foundation.

The Morning Call (Allentown, Penn.) newspaper reported last weekend the funds were being channeled through the non-profit and were actually funding Mr. Devitt's for-profit company, New Way Energy LLC.  In the story, and in days after the story was published, Mr. Sestak and campaign staff denied knowledge of the connection between the two organizations.

In a letter written by Mr. Sestak to the director of the U.S. Department of Energy on April 12 of this year, the congressman makes the connection between Mr. Devitt, New Way Air Bearings, and the Thomas Paine Foundation.

"I am writing to introduce you to Drew Devitt, the Founder and Chairman of New Way Energy LLC, a company located in Aston, PA," wrote Mr. Sestak.  "Mr. Devitt would like to discuss utility scale floating Vertical Axis Wind Turbine (VAWT) as a means to reach off-short winds quickly and cost effectively.  The technology has been developed in conjunction with his non-profit organization, the Thomas Paine Foundation."

The letter was obtained by the Philadelphia Daily News.

Mr. Sestak told the newspaper he was asked by Mr. Devitt to write the letter after applying for the earmark.  He took responsibility for the mistake and said he "failed to catch in the letter" the connection between the two organizations.

Nachama Soloveichik, a spokesperson for the campaign of Pat Toomey, Mr. Sestak's Republican opponent, accused the congressman of misleading voters.

"Over the past couple of days, Congressman Sestak has broken congressional rules, misled the public about his involvement in the violation, and tried to funnel hundreds of thousands of taxpayer dollars to a tiny atheist group to build a wind turbine demonstration project with which it had no experience," said Ms. Soloveichik.

The Thomas Paine Foundation is part of the Freethought Society of Philadelphia, founded in 1993 to promote humanist ideas and maintain the constitutional division between government and religion, according to its website.  The organization has no previous experience with alternative energy projects, said Margaret Downy, a spokesperson for the Freethought Society.

The earmark request, listed on Mr. Sestak's congressional website, includes an address in Media, Penn., but says the money will be spent in Aston, Penn., about five miles away.  Aston is the home of Mr. Devitt's company.

The U.S. House passed a rule this year banning earmarks to for-profit companies.

This story originally reported the U.S. House had passed a law banning earmarks to for-profit companies.  The House passed a rule that applied only to its own members.

Related : U.S. Senate Election, Elections and Campaigns

AG Wants 'Unusual' Combined Trial For DeWeese, Stetler

Bonusgate duo had separate grand juries, hearings, and alleged crimes

SEPTEMBER 2, 2010 | by ERIC BOEHM

The state Attorney General's office has moved to join together the upcoming trials of two public officials accused of different crimes and indicted with different grand jury presentments.

The lawyer for one of the defendants said the move is unusual given the circumstances of the case, but the Attorney General's office maintains the decision was made for the sake of efficiency.

The two public officials - state Rep. Bill DeWeese (D-Greene) and former state Rep. Stephen Stetler (D-York) - are charged with crimes uncovered during the Attorney General's wide-ranging investigation of political corruption in Harrisburg.  The investigation has focused on elected official's use of public personnel and resources for political efforts.

State Rep. Bill DeWeese (D-Greene)

Mr. DeWeese is charged with the use of taxpayer money to pay staffers to conduct political fund raising activities and do general campaign work.  Mr. Stetler is accused of doing the same thing, but his charges are entirely separate from the charges against his former colleague. 

In other words, according to the grand jury presentments against them Mr. DeWeese was not involved in the alleged criminal behavior of Mr. Stetler, and Mr. Stetler was not involved in the alleged criminal activity of Mr. DeWeese.

Former Revenue Secretary and state Rep. Stephen Stetler

William Costopoulos, Mr. DeWeese's defense attorney, said joining defendants together when they are charged with the same crime is common, but in this instance he was surprised to see the government ask for such action.

"This case in particular was generated by different grand juries and different witnesses and there is really no commonality in the charges," said Mr. Costopoulos.  "This is an unusual effort by the Attorney General's office in light of the fact that these cases are not the same."

Nils Frederiksen, a spokesperson for the Attorney General's office defended the decision to join the cases, saying the two trials were similar enough to be tried at the same time.

"They are similar matters and similar types of conduct and it is most appropriate and more efficient to deal with those matters at the same time," said Nils Frederiksen.

John Burkoff, a professor at the University of Pittsburgh School of Law, said the prosecution typically needs a very good reason to put trials together, and usually it is only done when the same list of witnesses will be used against both defendants.

Mr. Frederiksen declined to comment on witness lists or prosecution strategy prior to the trial.

Bruce Ledewitz, a professor of law at Duquesne University.  He said trials can be combined in situations when multiple defendants are involved in the same crime, such as when a team of criminals carries out a bank robbery.

In this case, there is not even a single mention of Mr. DeWeese in the presentment against Mr. Stetler, nor is there a single mention of Mr. Stetler in the presentment against Mr. DeWeese.

Mr. Ledewitz noted the charges of conspiracy against both defendants made it easier for the prosecution to combine the trials despite differences in the alleged crimes.

State Rep. John Perzel (R-Philadelphia)

Another public official -state Rep. John Perzel (R-Philadelphia) - is also awaiting trial on similar charges of using taxpayer money to conduct political activity out of his Harrisburg office.  Yet the Attorney General's office is not moving to combine his trial with that of the Mr. DeWeese and Mr. Stetler.

Mr. Frederiksen said there is a difference in how the corruption was conducted.

"The Republican case is about the misuse of technology, while the Democrat case is about the misuse of personnel.  They functioned in different ways," said Mr. Frederiksen.

Since the request has been made to join the trials, it now falls to the defense to prove the cases should be separated, Mr. Frederiksen said.

Attorney General Tom Corbett

Mr. Costopoulos declined to comment on whether his client would challenge the government's request.

The next step for both Mr. DeWeese, Mr. Stetler and their co-defendants is a pre-trial hearing on Sept. 23, at which time the case will be scheduled for trial. 

Mr. Perzel and other Republican co-defendants will have a scheduling hearing on Sept. 10 to establish a timetable for proceeding with that case.

Mr. DeWeese has been a member of the state House of Representatives since 1976, and has served as both Democrat Leader and Speaker of the House during his tenure.  He is charged with theft, conspiracy, and conflict of interest.

Mr. Stetler served as a state representative from 1991 until 2006.  He was appointed by Gov. Ed Rendell as Secretary of Revenue in 2009, but resigned in December of the same year when charges were filed against him.  He has been charged with a six counts of public corruption.

Attorney General Tom Corbett is also the Republican candidate for governor.  He is opposed by Dan Onorato, the Democrat candidate and current Allegheny County executive.

Eric Boehm is a reporter for PA Independent.  He can be reached at Eric@PAIndependent.com

Related : Bonus-gate Trial

Private Campus Police Forces Want Upgrade

State police question logistics and logic

SEPTEMBER 1, 2010 | by JIM PANYARD

EAST WHITELAND, Penn. - As many as 1,200 additional police officers may be patrolling streets near Pennsylvania universities if 88 private colleges and universities are allowed to qualify under the same regulations enjoyed by police forces of state and semi-private institutions of higher learning.

Two bills sponsored by state Rep. John Yudichak (D-Luzerne) would modify current state laws to permit campus police departments, after they meet state qualifications, full police powers to cover not only their own grounds, but also property within about one-third of a mile (500 yards) of the school.

The House Judiciary Committee heard testimony from representatives of private colleges in Pennsylvania on Wednesday in Chester County.

During a hearing of the House Judiciary Committee at Immaculata University Wednesday, representatives of campus police and security agencies from Franklin and Marshall University, the University of Scranton and Bucknell University testified enthusiastically for House Bills 2592 and 2593, sponsored by Mr. Yudichak, who did not attend the meeting.

The only sour note at the proceedings came from the Pennsylvania State Police (PSP), which sent in testimony questioning the wisdom of the measures. No PSP representative attended.

In the PSP's unsigned and unattributed document, the state force said all municipal police officers must be certified under the Municipal Police Officers Education and Training Commission (MPOTEC), which falls under the purview of PSP. Currently, the police forces at the University of Pittsburgh, Penn State University, Lincoln University, the University of Pennsylvania, Temple University, Drexel University, Penn Tech and the State System of Higher Education's 14 colleges are MPOTEC qualified.

The state police said the influx of up to 1,200 officers from non-state affiliated schools could overwhelm MPOTEC program trainers.

The state police said the additional training and related costs "make it difficult for MPOTEC to adequately assume responsibility for new departments, especially at a time when ever diminishing public dollars can be better leveraged through regionalization of police forces and streamlining of operations."

House Judiciary Minority Chair Ron Marsico (R-Dauphin), left, and Committee Chair Thomas Caltagirone (D-Berks)

The bills also neglect to state what governmental authorities will have oversight and responsibility for the new police forces, and what entity would assume legal liability for the actions of the forces, the state police wrote.

"Moreover, the bill(s) exacerbate the situation by mandating that these private campus police agencies be considered as criminal justice agencies after the officers are sworn in and the Act 120 training is completed. As such, they would be automatically eligible to obtain certification from MPOTEC without further background investigation," the state police letter said.

Act 120 was passed in 1993 as a means of having campus police officers at state-related schools deemed "police officers" by having MPOTEC training.

The representatives of the private schools offering testimony indicated their schools would pay the costs of MPOTEC training, rather than taxpayers, and that their schools currently have excellent working relationships with local municipal forces. They added that current law allows campus police to work on off-campus incidents "in the immediate vicinity," but does not define the term.

The vagueness of the law can lead to indecision by law enforcement officers, they said.

"Of more than 1,200 police departments in Pennsylvania, less than 70 are accredited," said Lt. Dennis H. Walters of the Franklin and Marshall Department of Public Safety. The status of ‘campus police' varies with various legal interpretations, he said, while endorsing the idea of having other campus police departments attain parity with those of state-related universities.

Jim Panyard is a reporter for PA Independent.  He can be reached at Jim@PAIndependent.com

Governor Announces 40 New Green Energy Projects

Argues for legislative amendment to increase solar requirements

SEPTEMBER 1, 2010 | by DARWYYN DEYO

Gov. Ed Rendell announced 40 new alternative energy projects at a Wednesday press conference and argued government investment in the new energy sources was necessary to incentivize growth, slamming conservatives who suggest otherwise.

“In seven and a half years, our administration has made significant investments in the green energy field, starting with the Alternative Energy Portfolio Standards (AEPS) we passed in 2004, our strategic investments in cellulosic ethanol and biodiesel and our investments in clean energy projects including the 2007 $650 million alternative energy investment fund,” said Mr. Rendell.

He also claimed $1 billion in government investment attracted $5 billion dollars in private investment, leading to the creation of nearly 10,000 jobs, an average cost of $100,000 per job.

The 40 projects announced today, using $20.5 million in state and federal investments, are expected to create 1,400 jobs, an average cost of $14,642 per job.

Mr. Rendell touted the projects and said “the state is now purchasing 40 percent of its electricity needs from renewable energy sources including biomass and wind energy which means 160 million of our 400 million kilowatts of energy are green, making us the number one state in the nation in terms of energy that we purchase that is renewable.”

According to the Pew Charitable Trust, Pennsylvania is third in the nation for creating green energy jobs, just behind California and Texas, which also have alternative energy portfolio standards.

The governor also suggested the state legislature should take up the amendment to the Alternative Energy Portfolio Standards act to increase the mandate on solar energy purchased by energy companies from 0.5 percent to 1.5 percent of total energy purchased.

“If we do that we remain competitive and grow that industry,” said Mr. Rendell. “You can see the innovation and if you just look forward, five ten years, the potential for capturing forms of energy production that never existed is almost unlimited.”

But the reports on the alternative energy standards released by the state Public Utility Commission (PUC) indicate solar energy is more expensive today than 2007, using information from the U.S. Energy Information Association. In 2007, solar cost 41.25 cents per kilowatt and in 2009, it costs 67.8 cents per kilowatt, a 65 percent increase.

Andrew Place, acting deputy secretary for the state Department of Environmental Protection, said the size of the cost increase is due to a change in the baseline the PUC uses to compare the cost of alternative energy and traditional energy. As a result, data from previous reports could not be used to accurately predict the cost of alternative energy. Mr. Place insisted the cost of solar energy is going down over time, citing falling installation costs.

“That’s a snapshot; they are trending downwards,” said Mr. Place. “The solar companies will recoup their costs two, three, four years from now. You’re driving the market, you’re investing in technology that only gets cheaper by greater installation, more companies innovating. We’ve seen a 35 percent drop in the install cost of solar since the governor instituted much of what you’re doing here.”

And Mr. Rendell further argued for government intervention and investment where private investment already exists, suggesting it will create more jobs and tax returns down the road.

“If you worry about that, we will never produce new forms of energy. Every new business in its incipient stages is more expensive,” said Mr. Rendell. “That’s what the conservatives don’t grasp about government money going into economic development. The conservatives don’t get it or, if they get it they don’t want to admit it.”

Darwyyn Deyo is a reporter for PA Independent. She can be reached at darwyyn@paindependent.com

Related : Environment & Energy, Economic Development

Income, Sales, Gasoline Taxes Off The Table For Onorato

Democrat nominee supports "competitive tax" on natural gas drilling

SEPTEMBER 1, 2010 | by ERIC BOEHM

Democrat gubernatorial candidate Dan Onorato pledged Wednesday to not raise three of the state's largest revenue-raising taxes if elected governor, but other taxes, including the natural gas extraction levy, are still on the table.

Speaking at the state Capitol on Wednesday afternoon, Mr. Onorato said he would not consider raising income taxes, sales taxes or gasoline taxes on Pennsylvanians.  He said the next governor will need to focus on cutting spending rather than new revenues, but refused to fully rule out increases to smaller taxes - including the state's litany of license and user fees.

 "We have a state that's broke, and we have households that are broke.  We have to figure out how to live within our budget," said Mr. Onorato, who promised to draw upon his seven years of experience as Allegheny County executive to manage the state budget without new general revenue taxes.

Dan Onorato laid out his severance tax plan on Wednesday, but said he does not support any other major tax increases.

Mr. Onorato is opposed by state Republican Tom Corbett, the state Attorney General, in the gubernatorial general election.

While increases to the state sales tax are off the table, Mr. Onorato refused to rule out an expansion of the tax, something Mr. Rendell had proposed earlier this year.  Mr. Onorato made it clear he did not agree with the exact proposal made by the current governor - which would expand the sales tax to 74 new items - but said the list was "worth an evaluation" before he would rule out those options.

On another front, Mr. Onorato said he would not consider raising gasoline taxes to pay for infrastructure projects because Pennsylvania's gas tax already ranks tenth in the nation at 32 cents per gallon.  He admitted he would consider fee and tax increases "down the road" to pay for transportation.

Pennsylvania currently faces a $472 million transportation funding deficit created by the failure of the state's plan to place tolls on Interstate 80.  On top of that, the state Transportation Advisory Committee issued a report in May showing the state needs to increase transportation infrastructure by $3 billion annually.

"I'm going to try to find ways to do it within the system we have now," said Mr. Onorato on the need for transportation funding.

With the gubernatorial election increasingly turning into a battle over who promises to be more anti-tax if elected, Mr. Onorato on Wednesday blamed his opponent for creating the tax issue in the first place. 

Mr. Corbett signed a "no tax" pledge during his primary campaign, though he has recently waivered on exactly what kinds of taxes could fall under the pledge.  Last week, Mr. Corbett said he would not consider the state's many licensing and registration fees to be covered by the "no tax" pledge.

Mr. Onorato has called the pledge a "political gimmick" and said Wednesday he does not need to sign a pledge for people to take him at his word.

The one clear distinction between the two candidates' tax policies is the on the Marcellus Shale natural gas extraction tax.  Mr. Corbett has repeatedly said he opposes the placement of a specific tax on the industry, fearing it would drive the drillers out of the state.  Mr. Onorato supports a "competitive tax" on the industry, though Wednesday he did not give a specific rate he would like to see for the tax or a target revenue amount.

Two different proposals for a severance tax have been floated in the General Assembly so far this year - one from Mr. Rendell and the other a product of the House Democrats - but both would reserve a portion of the natural gas tax for the state's General Fund.

Mr. Onorato said he disagrees with those plans, and would use severance tax revenues to fund the state Department of Environmental Protection (DEP), to rebuild local infrastructure damaged by the drilling process, and to fund a third version of the state's Growing Greener program, which preserves farmland and pays for clean-up of industrial sites.

"Not a penny of [the severance tax] will go to balance the General Fund.  I'm talking about using that to protect the environment, protect infrastructure, and to deal with all the problems that could possibly come from the Marcellus Shale industry ," said Mr. Onorato.  He said the DEP needs more funding to investigate and oversee the gas industry's activities in the state.

Tom Rathbun, a spokesperson for DEP, said Wednesday the budget cuts endured by the department this year did not impact line items related to Marcellus Shale oversight and inspections.  He said DEP Secretary John Hanger believes the department has adequate resources to monitor the industry at this time.

If the General Assembly lives up to their budget-session promise to pass a severance tax before the end of 2010, the issue might be a moot point because the tax would take effect on January 1, weeks before the new governor arrives in Harrisburg.

Mr. Onorato said he would rather see the legislature act on the severance tax now, although the beneficiaries of the tax might differ from his proposal, rather than waiting until the next governor takes office in January to pass the tax.

Eric Boehm is a reporter for PA Independent.  He can be reached at Eric@PAIndependent.com

Related : Taxation, Gubernatorial Election, Elections and Campaigns