Legislators, Citizens React to Ballard’s ‘No-Contract’ Work

Pennsylvania state legislators and community activists expressed outrage this week in response to the Bulletin’s Jan. 9 revelation that the politically connected Ballard Spahr law firm performed $773,000 of legal work for the Pennsylvania Turnpike privatization plan without a contract.

Chester county Republican state legislator Curt Schroder stated, "I can’t understand what was so urgent to the public’s interest that the attempted privatization of the Turnpike suddenly merited that a large no-bid contract be awarded. And that prior to that, why 2300 hours of work was done by Ballard with NO contract." Mr. Schroder added, "At the very least, the Administration owes the public a complete explanation. Leasing the Turnpike has been a politically dead issue, regardless of its merits or lack thereof."

Wally Zimolong, a center city attorney and Republican activist, was equally skeptical, stating that questions need to be answered about why Ballard performed work without a contract, and how they knew they would receive compensation.

"This whole thing reeks. I see several red flags. First, no reasonable business, particularly top notch attorneys like those at Ballard, performs work without a contract, unless they know they are getting paid, especially when the work performed is worth close to a million dollars," Mr. Zimolong said. "So the question is how did Ballard know it would get paid? Was it the result of some back room deal with Mr. Rendell?," he asked.

Companies performing state work normally negotiate a contract before commencing any activity. Without a contract, Ballard could not be compensated for its work, and was therefore required to sign a "Compromise, Settlement and Release" agreement initiated by the state Department of Transportation to receive payment retroactively.

Authorization to pay Ballard in this manner was justified "due to the extreme urgency of the work required," according to the document.

The Bulletin has repeatedly illustrated the intimate relationship between the Governor and Ballard (see sidebar).

"The Bulletin article describes an incestuous and tangled web of relationships that can only be helpful in attracting no bid contracts from the administration," Mr. Schroder added.

The legislator explained that this situation exemplifies the need to prevent big donors from obtaining no bid contracts. "I will be re-introducing legislation to place strict limits on campaign contributions for those who receive such government contracts. Anyone exceeding the low limits would not be eligible to receive such contracts," he said.

Reform legislation sponsored by Republican Majority Whip Jane Orie, Allegheny, will be introduced in the state Senate next week; a similar bill passed 50-0 last session, but it was stifled in the Democratic-controlled House.

The Pennsylvania General Assembly should do all it can to eliminate the appearance of impropriety in regards to "Pay-to-Play" in Commonwealth government. This can be done by creating an open bid process and providing for transparency in regards to who is receiving state contracts and their political contributions," Senator Orie said. "This issue is receiving an enormous amount of national coverage at the current time and there is no better time than now to adopt legislation to restore integrity as to how public dollars are spent," she added.

Mr. Zimolong questioned the fiduciary duty the Governor owes to the taxpayers. "Ballard could have run up the bill as much as they wanted to, as this was open-ended. Theoretically, nothing prevented them from doing that, unless there was a gentlemen’s agreement of which we are unaware. Also, the hours worked are absurd," he said. "Remember this was proposed legislation. Essentially, the Commonwealth paid to set up an outside law firm with 55 attorneys working 27 hours per 24 hour day, for 84 straight days, to perform due diligence for proposed legislation," he added. "Setting aside that it is doubtful these Ballard attorneys worked 24/7, doesn’t the Commonwealth have a large number of attorneys among all state agencies? What do they do?," he asked.

"While it’s true the Procurement Code allows services to be obtained in urgent cases without competitive bidding, the Code does require a written basis for the emergency, and why the particular party was selected for the work, to be included in the contract file. Taxpayers should demand to see that written basis in this case," Zimolong said.

"Whether or not ‘pay to play’ can be proven in any particular situation, the appearance is certainly a big problem and continues to erode trust in government. It is time we take a strong stand against this continued practice," stated Rep. Schroder.

Chris Freind can be reached at [email protected]

The Bulletin has published an ongoing series detailing the frequency and high-dollar amounts of no-bid state contracts doled out to Gov. Rendell’s political donors and friends. Please see the website for reference. www.thebulletin.us