Ballard Spahr and Governor Rendell: Perfect Together

In 1999, after serving eight years as Mayor of Philadelphia, Ed Rendell joined the Ballard Spahr law firm, headquartered in Center City. Two years later, during his campaign for Governor, Rendell stated, "I have, for the last two years, done practically nothing for [Ballard]," according to numerous press reports.
Upon assuming office, he appointed himself Chairman of the Delaware River Port Authority, the entity overseeing the four major bridges in Philadelphia. One of the major beneficiaries of Mr. Rendell being DRPA Chairman has been his former firm. In the three years preceding Rendell’s election, Ballard received $25,000 in legal fees from the Port Authority, including only $480 in 2001. From 2002 until the present, Ballard has received over $2.7 million.

Two of the Governor’s former top aides, John Estey (Chief of Staff) and Adrian King, (Deputy Chief of Staff) are currently partners at Ballard, and both hold influential positions related to DRPA. Mr. Estey chairs the board meetings and maintains full voting rights on behalf of the governor, and Mr. King serves as the Authority’s Outside Counsel. Estey and King are brothers-in-law, and together have contributed over $35,000 to Mr. Rendell’s political coffers.

Additionally, a Rendell appointee, Pennsylvania Treasurer Robin Wiessmann, sits on the DRPA Board. Her husband, Ken Jarin, also a partner at Ballard, serves as DRPA Outside Counsel and occasionally chairs board meetings. He contributed $90,000 to the Governor’s campaigns. Ballard attorneys have contributed nearly a half-million dollars to Governor Rendell. Hundreds of thousands of dollars of "in-kind" contributions were also donated.

The Philadelphia Future Political Action Committee, registered at the Ballard Spahr offices, contributed $471,000 to Mr. Rendell. The PAC’s Treasurer is David Cohen, former Chief of Staff under then-Mayor Rendell, former Chairman of Ballard Spahr, and currently Executive Vice President of Comcast Corporation. Mr. Cohen contributed $80,000 to the Governor.

And on Pennsylvania Department of State campaign filings, the address of Gov. Rendell’s campaign treasurer is the 51st Floor of 1735 Market Street in Philadelphia; Ballard Spahr occupies the entire floor.

While many believe this arrangement is a blatant conflict of interest, it is far from out of the ordinary. In fact, such relationships are commonplace in how business is conducted in Pennsylvania. Despite the questionable nature of such practice, it is not officially considered "pay-to-play," which generally relates to the illegal practice of giving political contributions in return for government contracts. In the absence of a quid pro quo arrangement, the rewarding of former firms with lucrative contracts is legal, and continues unimpeded.

What has raised the ire of both the public and the state legislature, however, is the frequency of these contracts, the huge contract amounts, and the secrecy surrounding no-bid contracts ¬– especially when they are doled out to firms, such as Ballard Spahr, that maintain a close relationship with the governor. When pressed for answers about the decision-making in hiring Ballard Spahr, Governor Rendell’s spokespeople routinely deflect all responsibility away from him, issuing statements that the Governor had no role in the selection process.

Consequently, there has been a renewed push in the state House to enact reforms in how contracts are awarded, and to prohibit campaign contributions by companies and individuals who contract with the Commonwealth or its political subdivisions. Four bills addressing these issues have been introduced as a legislative package by Representatives Godshall, Reichley, Grell and Turzai, and all remain pending in committee (see sidebar).

There are numerous firms that have benefited from political connections, but none navigate the political landscape so adroitly as Ballard. Many of its partners are consummate political insiders, so much so that according to press reports, Gov. Rendell chose not to utilize his Philadelphia office in The Bellevue for an August meeting regarding city casinos, preferring the cozy confines of Ballard Spahr instead. Zack Stalberg, President of the nonpartisan watchdog organization Committee of Seventy, was quoted as saying, "It seemed like an odd place to have it. There’s got to be a lot of other neutral territory around town other than a highly influential, connected law firm."

According to state records, over $1 billion in no-bid contracts have been doled out during Gov. Rendell’s tenure. While the vast majority of state contracts require a bidding process, the Governor has the discretion to award contracts on a no-bid basis when it is in the "best interest of the Commonwealth." It is not known whether the Rendell Administration has exploited this loophole more than the previous Administrations, since comparative state records were "lost." To date, the Department of General Services has been unable to locate the records.

Ballard Spahr ranks near the top of law firms receiving state work since Gov. Rendell became the state’s chief executive, totaling over $10 million, not including DRPA fees, in large part because no other firm comes close to having the intimate connections with the Governor himself. Enough eyebrows have been raised by watchdog groups and the legislature that Barbara Adams, General Counsel to the Commonwealth and an appointee of Gov. Rendell, made a special presentation during a recent state-sponsored Continuing Legal Education (CLE) course to stress that law firms are not chosen because of their political connections. According to a source, many attorneys "rolled their eyes and smirked" at that comment. CLE courses are mandated for all Pennsylvania attorneys in order to keep their law licenses current.

In addition to the millions in DRPA legal fees, Ballard Spahr’s connections have allowed it to be selected as counsel for the following entities:

Pennsylvania Turnpike Commission –For several years, the Rendell Administration has proposed privatizing the Turnpike in order to raise revenue. Despite the Pennsylvania Department of Transportation having a large in-house legal staff, numbering over 70 attorneys, Ballard was selected as counsel for this project, being awarded a $1.8 million no-bid contract. Ken Jarin billed the state $25,000, which was ultimately paid for by the state Treasurer – and Jarin’s wife – Robin Wiessmann. Ballard chairman Arthur Makadon billed the state at a rate of $637/hour. Additionally, Ballard performed $773,000 worth of legal work without a contract. In order for those legal fees to be paid, a special arrangement, known as a "Compromise, Settlement, and Release" agreement, was executed between the state and Ballard. These actions have infuriated state legislators, prompting the proposed reform legislation.

The Philadelphia Regional Port Authority – As an "independent agency of the Commonwealth," the PRPA depends on and takes direction from the state. John Estey serves as Chairman of the PRPA. During a June 18, 2008 board meeting, Ballard Spahr was selected to be counsel to the Authority.

GTECH- This Rhode Island company, which specializes in casino-related operations, hired Ken Jarin for assistance in contract negotiations while it was attempting to win a contract for a computer system that monitors slots gaming in Pennsylvania. GTECH received a five-year contract worth millions per year. Additionally, the state Department of Revenue awarded a five year contract to GTECH earlier this year "to supply terminal-based game services to the Pennsylvania Lottery," potentially worth $25 million/year. (see sidebar article)

Chris Freind can be reached at [email protected]