Pay-to-Play

By Tim Potts, Co-founder Democracy Rising PA

It sounds like another form of gambling getting ready to take root in PA. But for many years it hasn't been much of a gamble for those who bankroll political campaigns, and its roots are firmly established.

Pay-to-play refers to the coincidence of campaign contributors receiving no-bid contracts from the government after their candidates win. If such arrangements were in writing, they would be illegal. But they exist in the land of Wink and Nod with no paper trail for prosecutors to assemble as evidence. Click here for Wikipedia's description of pay-to-play.

Yesterday, the Wall Street Journal reported on a specific instance of what it called the "State Lawsuit Racket" involving Gov. Ed Rendell and a law firm in Houston, TX. Click here for Wednesday's WSJ story and here for The Philadelphia Inquirer's follow-up today.
F. Kenneth Bailey, a principal in the firm of Bailey, Perrin & Bailey, made repeated donations to Rendell when he was seeking re-election in 2006. During the eight-month period from February through October 2006, the donations totaled $91,100. During the same period, Rendell, with the concurrence of Attorney General Tom Corbett, negotiated a no-bid contract with Bailey to prosecute a lawsuit by the state against a pharmaceutical manufacturer.

The story presents another one of those timelines that strain the definition of coincidence. Here it is, as presented in the WJS story (all dates are 2006):

• February 23: Bailey contributed airplane travel valued at $9,200 to Rendell's re-election campaign.
• March 3: Bailey contributed $50,000 to the Rendell campaign.
• May 12: Rendell's office asked Corbett's office, which normally would represent the Commonwealth in such a lawsuit, to allow the governor's office to handle the case.
• May 24: Corbett's office granted Rendell's request.
• August 14: Bailey signed a no-bid contingency-fee contract with the state.
• September 15: Bailey contributed airplane travel valued at $6,900 to Mr. Rendell's campaign.
• October 23: the Governor's Office of General Counsel mailed the contingency fee contract to Bailey.
• October 30: Bailey contributed another $25,000 to Rendell's campaign.

As is customary when awarding no-bid contracts, Rendell's office claims that the Texas law firm has "experience" in such matters. The pharmaceutical company has challenged the legality of Rendell's arrangement with Bailey, Perrin & Bailey. Apart from the smell test, the company contends that the Bailey contract violates the state Constitution. The matter is now before the PA Supreme Court.

Questions:

• Why did this have to be a no-bid contract?
• Why did Corbett's office decide not to handle this case? How many and which other cases have they allowed Rendell to pursue with outside counsel? Who got the contracts to handle those cases?
• How is a Texas law firm better able than the attorney general to argue the interpretation of PA's Constitution?
• In a state that is home to pharmaceutical companies, how likely is it that the experience of a Texas law firm is better than the experience of PA law firms that might have bid on the work?

A Timely Proposal
The WSJ story arrived just two days after House Republican Leader Sam Smith, R-Jefferson, announced that his caucus will propose a package of bills to improve various aspects of public integrity, including pay-to-play. Click here for the list of 12 proposals.

One of five parts in the pay-to-play proposal says, "No government contract can be awarded to a person, partnership or corporation that donated to the campaign of the state official responsible for awarding the contract within one year of the date a contract is posted for public bidding."

Question:

• If the campaign contribution is intended to influence an election that won't occur again for a specific term of years, why not ban contracts with agencies for the full term of the officials who benefit from the contribution? (E.g. two years for contributors to representatives; four years for contributors to senators and the governor; and ten years for contributors to judicial campaigns.)

Philadelphia First?
Now here's some news that those who love to hate Philadelphia won't like: Philadelphia has taken the lead on ending pay-to-play in PA.

Three years ago, Philadelphia banned large campaign contributors from getting large city contracts. Businesses that contribute more than $10,000 to a city candidate may not get no-bid contracts worth more than $25,000. Individuals who donate more than $2,500 may not get no-bid contracts worth more than $10,000. It's still a pretty good investment, but not nearly as good as it used to be.

Click here for access to the Philadelphia Code provision. Look for Section 17-1404.

Question:

• Will enough rural legislators be embarrassed by Philadelphia's leadership to ensure passage of a better law for PA?

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