A small Beaver County development
agency has spun into a $10.6 million outfit controlled by a powerful Democratic lawmaker and financed exclusively by Pennsylvania
In the case of the Beaver Initiative for Growth, the power lies exclusively
with state Rep. Michael Veon, of Beaver Falls -- the second-ranking Democrat in the House -- and state Sen. Gerald LaValle,
of Rochester, another veteran Democrat.
"Jerry and I are the directors," Veon said in an interview.
As board members, Veon, 49, and LaValle, 74, determine how BIG spends
its cash. As top-ranking lawmakers, Veon and LaValle influence the distribution of special grants controlled by legislative
leaders to outfits such as BIG.
What's more, Veon conceded BIG does not create or retain jobs. Instead,
the agency helps create a climate for job creation and lists its involvement in 50 community projects as proof.
"First of all, we don't presume that the Beaver Initiative for Growth
itself creates jobs," Veon said. "We are a partner in economic development in Beaver County."
The BIG arrangement is rare: powerful lawmakers sending taxpayer
money to a nonprofit organization they control.
It is an arrangement that raises questions from experts. One such
expert is Laura Otten, executive director of the Nonprofit Center at LaSalle University in Philadelphia, which advises nonprofits
on conflict of interest policies.
"The thing that makes it unique isn't that it is funded solely by
state money. There are too many organizations you'd find that are funded 95 percent by state money. But you're not going to
find them with a board of two -- and a board of two who are elected officials who have the ability to channel money to this
organization," Otten said. "That's what makes this organization stand out and smell bad."
Another critic is former state Rep. John Kennedy, a Cumberland County
Republican. He now heads a government reform project for the Commonwealth Foundation.
He called BIG an "outcropping of the arrogance of power and the mismanagement"
of the special state grants used to fund the agency.
BIG also has caught the eye of state Attorney General Tom Corbett,
whose office regulates nonprofit organizations in Pennsylvania.
"Certainly any time you have board members receive state money and
distribute it, it is prudent to have multiple board members as a check and balance and to avoid the appearance of impropriety,"
said Kevin Harley, Corbett's spokesman.
Veon, a career politician, is the public face of BIG.
"Mike Veon has been the consistent driving force behind BIG," said
Tom Woodske, the BIG executive director.
Veon said he and LaValle used their political clout to funnel $10.6
million in state money to BIG since 1999. He said BIG went through the same process every applicant follows to win special
state grants, which are distributed by the state Department of Community and Economic Development.
Yet records show Veon and LaValle were so confident of approval they
announced the receipt of BIG grants long before the state agency approved the applications, suggesting BIG grant applications
receive special consideration. In the most recent instance, Veon and LaValle announced Nov. 4 they would bring $1.8 million
from Harrisburg back to Beaver County. But the Department of Community and Economic Development did not approve the $1.8 million
grant until Nov. 30, according to state records.
The ties between Veon and BIG are deep.
BIG leases office space in a former bank on Seventh Avenue in Beaver
Falls, the heart of Veon's legislative district for the past 21 years. Taxpayers pay $1,250 a month to BIG to lease space
in the bank for Veon's legislative office, state records show.
What's more, some Veon legislative staffers also work for BIG. His
district office manager, Annamarie Perretta-Rosepink, earned $37,000 working part-time as BIG's financial officer between
2002 and 2004, according to federal income tax records filed by the agency.
Corporate records filed in 1998 identified Perretta-Rosepink as BIG's
House records show Perretta-Rosepink earned $69,974 in 2004. She
also received $20,423 that year from Veon's re-election campaign for consulting services and expenses, elections records show.
Perretta-Rosepink, who declined interview requests, is not alone.
The Pittsburgh Tribune-Review's initial inquiries about BIG were
referred to Veon's press secretary, Bob Caton, who earns $65,000 as a legislative employee. Caton is not on the BIG payroll.
"All press inquiries go through Bob Caton," Woodske told the Trib.
More recently, Caton contacted the Trib to provide help with references
and contact information for BIG members.
In addition, Veon's newest hire, former KDKA radio talk show host
Mike Romigh, works part-time for Veon's legislative staff for $20,000 a year and part-time for BIG at an undisclosed salary.
Do not skip reading this entire article thoroughly. An article like this should inspire a lot
of hopeful would-be journalists...