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Political donors got plenty of PennDOT's federal stimulus aid

From left, J.D. Echman Inc. employee Matthew Yacobenas, Vice President Joe Biden, Transportation Secretary Ray LaHood, Pennsylvania Gov. Ed Rendell, and Health and Human Services Secretary Kathleen Sebelius, tour the Rout 34 Bridge during the groundbreaking for the project, Thursday, June 11, 2009, in Carlisle, Pa. (AP Photo/Carolyn Kaster)

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Sunday, March 4, 2012

More than half of PennDOT's $1 billion in federal stimulus aid went to 20 Pennsylvania companies whose executives donated about $900,000 to state and federal politicians, a Tribune-Review analysis of campaign and contract records shows.

The 20 firms received the most money from PennDOT's stimulus share to perform bridge rehabilitation, road resurfacing and highway expansion projects. The value of each company's package of contracts ranged from $17 million to $67 million. PennDOT considers 70 of 115 companies' projects to be complete.

Pennsylvania received $33.8 billion from the stimulus.

Collectively, executives and rank-and-file employees from the firms gave at least $918,100 to campaigns from 2008 to 2011, before and after President Obama and Congress approved the $840 billion American Recovery and Reinvestment Act of 2009. Some donated as much as $246,400. Others gave as little as $1,000.

Company leaders and transportation officials say there's no connection between donations and contracts. But critics are troubled by the fact that employees from every one of the 20 companies donated some amount to campaigns.

"When you see a strong pattern of government contractors making campaign contributions, it strongly suggests that these contractors believe that they have to make those type of contributions to be seriously considered for lucrative government contracts. It strongly suggests to me that there is pay-to-play corruption going on," said Craig Holman, a lobbyist for Washington-based Public Citizen, a nonprofit citizen advocacy group.

Contributions from state contractors long have been fixtures of the political landscape in Pennsylvania and elsewhere, experts say. A small, but growing, number of states have passed laws to restrict or prohibit companies that receive state contracts from contributing to campaigns.

"It can have the appearance of impropriety," said Denise Roth Barber, manager director of the Montana-based nonprofit National Institute on Money in State Politics. "But it's hard to say if they're giving so they can receive a bid. They do help fund the campaigns of politicians who they think are going to advance their interests."

North Shore-based Trumbull Corp., which handled the Fort Duquesne Bridge project, ranked fourth on the list of the largest PennDOT stimulus recipients. Company executives donated at least $246,400 to campaigns, records show, making it the most prolific campaign donor in the Trib's analysis.

Pennsylvania law prohibits corporations from donating money directly to candidates.

Trumbull and PennDOT officials said low bids, not campaign donations, determined who received the largest helpings of the stimulus windfall.

"All of these contracts were (reviewed) using our standard low bid process," said PennDOT spokeswoman Jamie Legenos.

"We are advocates for the industry," Trumbull spokesman Jake Ploeger said of the company executives' campaign donations. "Hopefully, that creates an environment where we can prosper with everyone else."

Stimulus jobs in danger

Dave Maugle, executive vice president of J.D. Eckman Inc., said his Chester County firm of 450 employees increased its workforce by 15 percent "when the stimulus kicked in" between 2009 and 2010 and 17 percent in 2011, thanks to $32.3 million in stimulus-related contracts -- fifth highest in the Trib's analysis. Executives donated $14,700 to campaigns, records show.

"You bring people on thinking they'll have a career with you, but now the stimulus is gone and there's no work," Maugle said. He said he might not find work for all employees this year because the company relies primarily on public contracts. "So we're back to where we were in 2008."

J.D. Eckman's work included $7 million to build ramps and a partial interchange on Route 378 in South Bethlehem and $4.6 million to upgrade bridge safety barriers and supports in the Lehigh Valley.

For $1.7 million, the contractor replaced a 70-year-old bridge on Route 34 near Carlisle that links Cumberland and Perry counties. Then-Gov. Ed Rendell and Vice President Joe Biden drew attention to the project, finished ahead of schedule in 2009, with a national photo opportunity as a "poster child" for the stimulus program, Maugle said.

It allowed J.D. Eckman to recall "38 employees from layoff, add five new employees and one new part-time employee," according to a PennDOT news release about the project.

"Part of the challenge that faces us right now is how do you maintain those jobs, because there's no work," Maugle said.

PennDOT officials announced last week that cuts in state funding would result in a $1.5 billion budget in 2012-13, a level not seen since 2006 and 46 percent of the $2.8 billion available in 2009 because of stimulus dollars, "which have been completely spent."

It's unfortunate that PennDOT doesn't have more money "because they're probably in the best buyer's market that they could be in," said Charlie Campbell, special projects director of Glenn O. Hawbaker Inc. of Centre County, which received $53.4 million in stimulus contracts. Hawbaker employees donated more than $103,000 to candidates.

Bidding is fierce and projects routinely attract a dozen bidders, driving down the price, he said.

"Our perspective is infrastructure spending greases the skids of commerce, and it's employment that can't be exported to Mexico or China," Campbell said.

Stimulus contracts created the equivalent of more than 200 full-time jobs at the company, which performed $13.7 million of repaving on Interstate 80 in Clinton County, among other projects. Campbell couldn't pinpoint how many of those jobs were new.

"We are working very hard to keep those people in place, but it will not be through PennDOT. We'll have to make it up through other private-sector work," Campbell said.

Other states tighten rules

At least nine states imposed restrictions or prohibitions on campaign donations from state contractors. Laws in some states apply only to no-bid contracts; others allow exceptions for projects involving federal highway money. West Virginia, Hawaii, New Jersey and Illinois apply the law to competitive and no-bid contracts.

Pennsylvania has few restrictions on who can donate to political candidates, with two exceptions. Firms that manage municipal pension investments cannot donate to politicians overseeing pension funds. Companies and employees involved in the state's gambling industry are not allowed to contribute to campaigns.

"There is a desire on the part of the public to feel that decisions are being made for the right reasons, and not because of what people are able to give to campaigns," said Natalie O'Donnell Wood, senior policy specialist at the National Conference of State Legislatures in Denver, a bipartisan research group.

Wood said anti-pay-to-play legislation gained traction in scandal-plagued state governments such as Illinois, where former Gov. Rod Blagojevich was sentenced to 14 years in prison for trying to sell or trade Obama's former U.S. Senate seat.

In Illinois, the Comptroller Office's "open book" website allows visitors to search simultaneously by company name for state contracts received and political donations from company employees to state candidates. Results appear side-by-side, making comparisons simple.

Pennsylvania has no equivalent resource. Separate departments maintain searchable databases of state contracts and campaign donations. PennDOT contracts don't list company executives. Campaign donations of more than $250 require the contributor to list an occupation and employer, but people sometimes leave the slot blank, or donors use various spellings of a company's name or smaller subsidiaries instead of the owner.

The Trib searched campaign records by employer on the Department of State's website. In some cases, the newspaper searched by the names of a company's senior managers.

The method doesn't always produce a comprehensive result because of data inaccuracies and the possibility that employees made many small donations, which don't require employer identification.

Holman, of the Public Citizen nonprofit, said strong pay-to-play laws require companies to self-report donations because trying to match senior managers and owners from state contractors with campaign donations is difficult and inexact.

Gov. Tom Corbett's campaign received thousands of dollars from the PennDOT contractors the Trib examined. Corbett spokeswoman Kelli Roberts said there's a divide between elected officials and state officials who handle contracts with such companies. Corbett took office in 2011.

"When the decision is made for these sorts of state contracts, it's important to keep in mind that the decision is actually made at PennDOT," Roberts said. "Those decisions are not made by elected officials."

Corbett's administration in January 2011 announced a plan to prohibit state employees involved in the contracting process from accepting gifts from employees of a company going through the state bid or procurement process. It did not address campaign contributions.

A 2011 bill sponsored by state Rep. Robert Godshall, R-Montgomery County, sought to prohibit companies from receiving no-bid contracts if their officials gave more than $300 to one candidate or a total of more than $3,000 to two or more candidates in the previous year. The State Government Committee failed to advance the legislation.

"When you don't regulate this, you tend to develop a system in which lawmakers and contractors tend to think that this is how business is done, and it poses a danger to both," Holman said.




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