Rendell, Richardson, and Rubin – Pay to Play Politics?

Illinois Governor Rod Blagojevich is facing felony charges that he allegedly attempted to sell President-elect Barack Obama’s senate seat in a pay-to-play scheme. New Mexico Governor Bill Richardson, a former presidential contender, withdrew from consideration as Secretary of Commerce in Obama’s cabinet amid a federal investigation that a political donor received a lucrative state contract worth $1.48 million.

In Pennsylvania, political corruption scandals continue to dominate the headlines. Philadelphia City Treasurer Corey Kemp was convicted in 2005 of honest services fraud, extortion, and mail fraud. The trial of former State Senator Vince Fumo, in which the powerful politician is facing a 139 count indictment, remains in full swing (Fumo for Senate donated $210,000 to Gov. Rendell’s war chest). In Harrisburg, Attorney General Tom Corbett’s "Bonus Gate" investigation will expand in 2009, a case in which taxpayer-funded bonuses were allegedly doled out to state employees for performing political campaign work. Twelve people have already been indicted, and two are cooperating with prosecutors.

But it is Pennsylvania Gov. Ed Rendell, D, who has come under increasing scrutiny as more information emerges about the frequency and high-dollar amount of secretive no-bid contracts awarded to longtime friends, fundraisers, and political donors, most notably his former law form, Ballard Spahr.

Revelations that Gov. Richardson’s donor has ties to Pennsylvania politics, including campaign donations made to the Governor, have raised eyebrows across the state, to the point where Mr. Rendell’s spokesman felt the need to address the issue.

David Rubin, founder of the financial advisory firm Chambers, Dunhill and Rubin, which later became CDR Financial, has contributed $40,000 to the Governor’s coffers. Mr. Rubin also donated $10,000 to the Democratic Governor’s Association (DGA). The DGA has given Mr. Rendell nearly $1.5 million; its Treasurer is Ken Jarin, longtime Rendell confidant, and partner at Ballard. Mr. Jarin contributed $90,000 to the Governor.

Mr. Rubin’s company was awarded a no-bid contract by the Pennsylvania Housing Finance Agency (PHFA) in 2003. Since that time, according to press reports, the company has received nearly $600,000 from the state. The Executive Director of PHFA stated that CDR was one of only two firms with the expertise to handle the bond swap work required by the agency, and said no there was no influence from the governor relating the selection of CDR.

CDR Financial has also been involved in Philadelphia city business dealings. It was paid $50,000 for work on the 2005 bond issue from the Water Department, $35,000 from the Airport Authority’s 2005 bond issue, and $195,000 related to the 2007 PAID Stadium deal.

According to published reports, CDR Financial Products was paid $225,000 as a swap advisor on Philadelphia Gas Works bonds.

CDR also was involved in the city corruption investigation of City Treasurer Kemp, although it was not accused of illegal activity. According to the Bloomberg.com news website, "In April 2001, CDR hired Ron White, a bond lawyer and chief fundraiser for Philadelphia Mayor John Street, as a consultant, paying him a $5,000 retainer to help the company win business with the city. Rubin donated $15,000 to Street between December 2000 and June 2003, according to Pennsylvania state filings."
The Bloomberg report also stated that "CDR gave White three tickets to the 2003 Super Bowl in San Diego and provided a limo ride to the game. White brought along Philadelphia treasurer Corey Kemp, according to a federal criminal indictment brought against White and Kemp in 2004. On Feb. 11, 16 days after the game, Kemp told White that the city Finance Director agreed to ‘move fast forward’ on a $150,000 swap advisory contract for CDR, according to transcripts of FBI wiretaps."

CDR’s lobbyist in the state capital is Alan Kessler, a close Rendell ally and fundraiser who has donated $10,000 to the Governor. Kessler is a partner at the Wolf Block law firm, which has contributed $25,000 to Mr. Rendell. Wolf Bock associates have contributed another $35,000.

According to Mr. Kessler’s Wolf Block biography, he served as Co-Chair of Governor Rendell’s Transition Team, and is currently a member of the Board of Directors of the Philadelphia Industrial Development Corporation and the Central Philadelphia Development Corporation. Most recently, Mr. Kessler was appointed by Governor Rendell as Finance Chair of the Pennsylvania Democratic Party.

Chris Freind can be reached at [email protected]