Repost of originial blog that can be found at the link above.
Some of the most influential figures in local municipalities and school districts aren't those elected by the voters. Theirs are not household names and most citizens wouldn't recognize their faces. The roles they play are hard to pinpoint and the consequences for taxpayers hard to ascertain.
Yet the threads that connect their governmental, political and business enterprises form a tight bond, affording them access to multimillion-dollar contracts, which in many cases do not go through open bidding processes that bring competition, public scrutiny and cost controls.
In "The Network," a three-part series published last week and based on a six-month investigation, Post-Gazette staff writer Rich Lord described the long-standing relationships among a group of lawyers and businessmen, and he documented $32 million in payments from state and local municipalities and agencies from 2005 to 2009 to their companies, as well as 31 bond deals since 2001.
The reality is there are two flow charts that simultaneously determine how the work of governing gets done. One is visible and contains the public officials who lead towns, counties and municipal authorities. The other is less obvious but no less influential.
The old-boys-style network includes: Stephen A. Zappala Sr., the former state Supreme Court chief justice, his brother Charles and Charles' nephew Greg; the elder Zappala's former law partner, James J. Dodaro, long active in county development, the Port Authority and the state Turnpike Commission; Mr. Dodaro's partners John F. Cambest and Gary J. Matta; Mr. Matta's brother George, the former county clerk of courts; political operatives John J. Verbanac and Edward Grattan; and business associates Joseph F. Hohman, Christopher Kerr and William Brucker.
The biggest contract, at $19.53 million, was held by Wilkinsburg-based Resource Development and Management, to handle operations of the Greater Johnstown Water Authority. The firm -- headed by Mr. Hohman, Mr. Dodaro and Mr. Kerr -- also manages three other public water systems and has gotten state contracts to advise six financially distressed municipalities and 11 local governments at risk of heading that way.
A related business, Utility Line Security, should be familiar to customers of the Pittsburgh Water and Sewer Authority. It was able to add a $5 charge to their monthly bills when it assumed responsibility for line repairs. Mr. Kerr incorporated ULS and Mr. Brucker's law firm represents it. ULS obtained an unusual contract that gave it unprecedented access to a customer base because it forced homeowners to opt out if they didn't want the service rather than opt in if they did. The contract now is the subject of a civil lawsuit and a state attorney general's investigation.
In another example in the series, a Downtown firm, PrimeSolutions Capital Corp., was paid $30,000 in referral fees for sending business to a local bank. One of the accounts that was subject to the referral agreement belonged to the Allegheny County sheriff's department. The problem is, that account, holding around $6 million, earned interest from the bank that was far below the prevailing market rate. Mr. Grattan was an independent contractor for PrimeSolutions. The bank arrangement was in effect during the term of former Sheriff Pete DeFazio, who retired after pleading guilty to soliciting campaign contributions from employees. After William P. Mullen was elected sheriff, he put a stop to the practice, but the public funds in the account had missed out on earnings during years when interest rates were much higher than current levels.
Not all of the situations detailed in the series dealt specifically with dollars. In some cases, network connections led to influence. For example, Mr. Verbanac, from outside the government, was instrumental in a change in leadership at the city's powerful Urban Redevelopment Authority.
"Who you know" often is a key factor in private commerce, and many consider its practice as simply the way of the world. No one should be so naive as to suggest it doesn't play a role in government and politics as well. But that doesn't make it right and, more to the point, it doesn't necessarily serve the public's interests.
"Know who," as opposed to know-how, should not play a decisive role when the enterprise is the people's business, funded with the people's dollars. Even though the letter of the law allows for some opaque practices, citizens have a right to see how their tax dollars are being spent and a right to know who is really calling the shots.
