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Experts: State's turnpike corruption 'the worst such case'

Riskier than before

Moody's Investors Service on Wednesday downgraded the Pennsylvania Turnpike Commission's bond rating on $3.1 billion of its debt.

Moody's cited increasing turnpike debt, a weakened credit profile and under-performance of traffic and revenue. Overall, the agency has nearly $8 billion in debt.

The rating dropped from Aa3 to A1 on $3.1 billion of lien revenue bonds. The turnpike maintains an A-1 rating on its other bonds.

Under Act 44 of 2007, lawmakers required the turnpike to pay $450 million yearly to PennDOT for road and bridge repairs. Debt and tolls increased to meet that payment.

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Thursday, April 11, 2013, 5:42 p.m.
 

HARRISBURG — The Pennsylvania Turnpike scandal is the worst of its kind in the nation in recent history, experts say.

“There's been nothing as systemic, as enduring and widespread,” Peter Samuel, publisher of Tollroadsnews.com in Frederick, Md., said of allegations in a state grand jury report last month.

Attorney General Kathleen Kane has said the investigation continues; the grand jury had concluded that eight people, including a former Senate Democratic leader and former top turnpike officials, used the agency as a “cash cow” to raise campaign money for lawmakers and gubernatorial candidates. Campaign donations and gifts paved the way for rigged turnpike contracts in a pay-to-play scheme, the grand jury said.

Such schemes have surfaced in other states, though usually not with toll road agencies, said Craig Holman, lobbyist for Public Citizen, a consumer advocacy group in Washington.

“Fifteen states have pay-to-play laws,” Holman said, the strongest of which are in Illinois, New Jersey and Connecticut, which dealt with scandals.

These laws typically ban campaign donations from contractors at the start of negotiations or before, Holman said. Strict laws cover the company and senior executives.

“This situation in Pennsylvania makes Pennsylvania ripe for a pay-to-play law,” Holman said.

Gov. Tom Corbett would support such a law, given he has an executive order that does the same for agencies under his control, said his spokesman, Kevin Harley. The turnpike is one of several independent agencies. The next governor isn't bound by Corbett's executive orders.

Although the turnpike scandal is not an isolated incident at toll road agencies, others have been narrower in scope.

In Maine, the turnpike director last year went to prison for stealing hundreds of thousands of dollars by using gift cards and credit cards for travel to resorts and plush accommodations. Paul Violette pleaded guilty to felony theft.

A lawsuit alleged that Violette used the cards for personal travel, hotel and meal expenses on trips in Maine, Florida, Bermuda, Canada, France, Puerto Rico, Spain and Italy, The Associated Press reported.

Pennsylvania's corruption appears to be “the worst such case, of a large scale, over a long period of time,” said Robert Poole, transportation fellow at the Reason Foundation, a free-market think tank in Los Angeles. The grand jury report covered activities over a decade.

Turnpike spokesman Carl DeFebo said he had no comment. CEO Mark Compton has said he will try to change the culture of the agency.

Illinois Gov. Rod Blagojevich, sentenced to 14 years in federal prison, tried to sell a Senate seat and to use the Illinois Tollway to extort money from contractors for campaign money, prosecutors said. Tollway officials were not implicated in the case against Blagojevich. He was considering the choice between a $1.8 billion and $5 billion road expansion program and, in meetings wired by federal agents, Blagojevich made it clear the $5 billion project would not go through if he didn't get sufficient campaign money, Tollroadsnews.com reported.

A 50-page report in 2012 by the Office of Inspector General of the Department of Transportation on the Metropolitan Washington Airports Authority, which operates Dulles Toll Road, said the authority's “weak policies and procedures led to questionable procurements and lacked overall accountability.”

Employees accepted gifts from contractors such as Super Bowl tickets, travel and accommodations, the report said. It cited instances in which non-public information went to potential contractors, giving them an edge. No one was charged.

This month, the Philadelphia Inquirer reported a federal investigation is under way of the Delaware River Port Authority, which operates four toll bridges and a commuter rail line, for its development spending. No one is accused of wrongdoing.

Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787-1405 or bbumsted@tribweb.com.

 

 

 
 


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