Posted on Sun, Jul. 27, 2008
Pa. House spam scam is outlined
Prosecutors: $1.7 million spent on campaign-related e-mail.
By Mario F. Cattabiani
Inquirer Staff Writer
HARRISBURG - They cost only a dime each, but it added up quickly.
Over more than two years, as they toiled in the minority, Democrats in the state House allegedly purchased millions of e-mail addresses to send campaign-related propaganda to Pennsylvania voters who were stuck paying the political tab - $1.2 million.
And that's not including several hundred thousand more in public funds that went to a tech consultant - the son of a state representative - who allegedly made it all look like a legitimate legislative endeavor.
Details of the conspiracy were laid out recently in the 74-page grand-jury indictments against a dozen Harrisburg insiders in what has become known as Bonusgate.
They are charged with carrying out a massive conspiracy to use public funds and staff to underwrite political campaigns.
But lost in the sensationalism of the charges, which included allegations of a sex-for-state-job swap involving a former beauty queen, was the e-mail scam that authorities say ended up costing taxpayers, in total, more than $1.7 million over five years.
State Attorney General's Office prosecutors dubbed the scam the LCOMM EFFORT - short for Leader's Communications Office. A leader of one government watchdog group called it "a theft of democracy."
The Leader's Communications Office, prosecutors allege, was the brainchild of Rep. Michael Veon, then the No. 2 House Democrat, and Michael Manzo, the former chief of staff to Democratic Leader Bill DeWeese.
In the spring of 2003, Veon and Manzo - both charged in the indictment - created the office with the publicly stated goal of expanding the caucus' constituent outreach through the Internet. Lawmakers and their public-relations experts have long groused that newspapers don't print the good deeds they are doing, and that they need other outlets.
Five staffers were assigned to the effort. Among them was Eric Buxton, the 29-year-old son of Rep. Ron Buxton, a Democrat who has represented Harrisburg for 16 years.
Much of the information prosecutors gleaned about LCOMM came from the younger Buxton, who testified before the grand jury under a grant of immunity.
Reached at his consulting business, Govercom, across from the Capitol last week, Buxton referred questions to his attorney, Edward Spreha, who declined to comment.
Buxton told prosecutors that to be effective in reaching voters, he and others created a massive electronic database of e-mail addresses from across the state.
Initially, according to the indictment and sources familiar with the effort, organizers hoped to obtain e-mail addresses from people logging on to House Web sites and signing up for electronic updates. Few people did, however.
So House Democrats started paying an outside vendor for e-mails collected by various means.
Between 2003 and 2005, House Democrats purchased millions of such addresses for their blast e-mail effort, costing taxpayers $1.2 million, the indictment alleges.
On its face, it seemed like wasteful spending, perhaps - but legal. But prosecutors say it was all a ruse.
Buxton told authorities that "it was very clear from the beginning" that the effort was all about campaigns, not government, according to the indictment. The indictment doesn't give examples of the e-mails. Such details will be revealed at upcoming court hearings, said Kevin Harley, press secretary for state Attorney General Tom Corbett.
By the end of 2004, the LCOMM effort had allegedly helped garner 15,000 to 20,000 e-mails for each House district. And those addresses could be sorted so that e-mails could be sent on specific topics, based on gender, income level and ethnicity, among other things.
The first test of the system came during a 2005 special election for a House seat in the Lehigh Valley.
Buxton testified that for that race, he rented a server from a company located in Michigan "to hide the fact that these campaign e-mails were being sent from the taxpayer-owned caucus computer system in the Capitol," according to the grand jury's findings.
Buxton also designed the campaign e-mails to state that they were being paid for by the House Democratic Campaign Committee "to disguise the fact that these were actually a product of taxpayer resources."
In the summer of 2005, Buxton left the employ of the House and struck out on his own. He opened a consulting business.
But he allegedly arranged, with the blessing of Manzo and others, to have his business hired by House Democrats.
Essentially, he told prosecutors, he was doing the same job - sending blast e-mails to voters - only now as a private consultant. As a consultant, he earned as much as $16,875 monthly - four times his $51,400 annual state salary.
Over 26 months, the public paid Buxton $420,000.
In 2006 alone - the year that Democrats won back control of the House - state-paid aides crafted more than 300 campaign e-mails from Democratic offices inside the Capitol, which Buxton then blasted to voters.
Even so, prosecutors said, Veon, Manzo and others weren't completely satisfied with the speed in which Buxton was cranking out the campaign product. So, as the general election in November 2006 approached, they brought in another consultant. That firm was paid $82,550 in taxpayer funds, and, again, it was for campaign work, prosecutors said.
"If you put all these allegations together, what we are seeing is a theft of democracy, and taxpayers are picking up the tab," said Barry Kauffman, executive director of the watchdog group Common Cause of Pennsylvania. "It's like the public unknowingly turn over their credit card to politicos and are being beaten with it."
Buxton's contract was terminated last October because it posed "ethical problems" for the caucus, he told prosecutors.
Chadwick Associates, a Washington consulting company hired by DeWeese soon after Bonusgate broke early last year, flagged the contract after reviewing tens of thousands of internal documents in order to meet grand-jury subpoenas. A month later, in November 2007, DeWeese fired seven staffers, including Manzo, who was involved in negotiating Buxton's contract in the first place, said Tom Andrews, DeWeese's press secretary.
In announcing the charges against Veon, Manzo, nine other current and former aides, and a sitting lawmaker earlier this month, Corbett stressed that the Bonusgate investigation was continuing and that it would include both parties in both houses of the legislature...
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The caucus later spent $1.2 million of state funds to purchase e-mail addresses for the project. [2] In 1999, Veon became Democratic whip, the caucus' second-most powerful position.[28] When Jason Petrella, Ramaley's rival in the Democratic primary, suggested in April that Ramaley has insider ties to LaValle and Veon, Ramaley brushed off the inference.[36]
Jeff foreman started working as chief counsel for State Representative Keith McCall of Carbon County in January, 2007, about the same time the investigation began. [32] The state probe was launched following a Patriot-News investigation into the bonuses published in January 2007.[49] A current and a former state lawmaker are among the 12 charged in a sweeping investigation of the state Legislature.[1]
The charges, which include nu merous allegations of theft, criminal conspiracy and conflict of interest, go beyond what has come to be known as "Bonusgate." They encompass no-show jobs, researching opposition candidates at public expense, using public employees to perform private services, and living high on the hog on the public dime. [4]
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