On November 12, 2009, Pennsylvania state representative John M. Perzel was charged with 82 counts of theft, conflict of interest, conspiracy, obstruction of justice and hindering apprehension or prosecution as a result of Attorney General Tom Corbett’s long-running investigation into political corruption, nicknamed “Bonusgate.” Perzel, a Republican and former Speaker of the House, had for years been a member of the board of directors of GEO Group, the nation’s second-largest private prison firm.
Perzel, his brother-in-law, a nephew, two former chiefs of Perzel’s staff and five other people with ties to the Pennsylvania House GOP caucus (including two former district attorneys) were charged with spending around $10 million in state funds to develop advanced computer programs that were used by Republicans to give them an advantage during elections.
According to William Tomaselli, a state-paid special projects coordinator who was granted immunity by prosecutors, Perzel was aware that the programs were utilized to benefit GOP candidates. “The goal was to win elections. It was a campaign piece,” Tomaselli alleged.
Perzel has denied any criminal conduct and claims the charges are “political opportunism” by Corbett, a fellow Republican who is running for governor. Corbett countered that Perzel was the mastermind behind a “sophisticated criminal strategy” to spend $10 million in public funds on Republican political campaigns.
The same day he was indicted, Perzel resigned as a member of GEO Group’s board, a position he had held since 2005. Perzel was paid a salary of $20,000 a year as a GEO board member plus board fees and options; those fees and options were worth $147,953 in 2008. In contrast, he receives around $78,000 a year as a state lawmaker.
On October 28, 2009, the first day he was able to do so, Perzel exercised an option to buy 5,000 shares of GEO stock valued at $105,360. “Our company has no comment beyond the information it has disclosed through its public filings with the Securities and Exchange Commission,” remarked GEO Group spokesperson Pablo E. Perez.
Perzel’s financial relationship with GEO has long been controversial. A 2006 bill, clearly inspired by his board membership with the private prison company, would have prohibited legislators from receiving financial compensation when serving on corporate boards. The bill was defeated in the House.
GEO Group does not currently operate a prison in Pennsylvania, though from 1995 until 2008 the firm had an almost $40 million annual contract to manage the 1,883-bed George W. Hill Correctional Facility in Delaware County. GEO ended that contract one year before it was due to expire, citing “underperformance and frequent litigation.” [See: PLN, March 2009, p.16].
Perzel, 59, has enjoyed a 30-year career as a state legislator. A former dishwasher and waiter, and the son of a waitress and Linotype operator, he was first elected to the House in 1978. He represented Northeast Philadelphia, a tough blue-collar neighborhood, and had a reputation as a political brawler.
Perzel worked his way up through the GOP leadership and became House Speaker in 2003. He vied with former Pennsylvania state senator Vincent J. “Vince” Fumo for the title of most influential state lawmaker; Fumo is currently serving a 55-month federal prison sentence on unrelated political corruption charges. In 2007, a Democratic takeover of the House by a single vote relegated Perzel to a back bench, where he toiled in near anonymity until the Bonusgate scandal broke.
On May 27, 2010, a state district court held there was sufficient evidence to take the case against Perzel and the nine other defendants to trial, although some obstruction charges were dropped. A grand jury that investigated corruption in state government concluded that the Pennsylvania legislature was in a “‘time warp’ of corruption,” and recommended imposing term limits among other remedies.
Perzel is free on $100,000 bond pending trial – about the value of the GEO stock he purchased just weeks before he was indicted. He has not resigned his House seat despite the pending criminal charges, and could draw over $100,000 in annual retirement benefits should he retire. However, he may lose his state pension if convicted.
Sources: Philadelphia Inquirer, www.pittsburghlive.com
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