Taxation with Partisan Intervention
The 2007 New Year ushered in Democratic control of the Pennsylvania House of Representatives for the first time in 12 years. Outrage over the 2005 pay raise debacle spurred voters to knock out 24 incumbents and forced double digit resignations in both chambers.
On January 27, 2007, The Patriot-News broke the Bonusgate corruption scandal. Revelations throughout January and February 2007 uncovered an illegal bonus scheme affecting all four caucuses. In February Attorney General Corbett announced that his public corruption unit would look into allegations that the staff bonuses were tied to campaign work.
The year proved be a wild ride for establishment politicians with the exception of Tom Corbett. Ironically, the same volatile mix of incompetence and preferential treatment was brewing at the Attorney General’s Office’s Financial Enforcement Section.
By January 14, 2007 Douglas Ottenberg, Assistant Comptroller concluded that both Jill Keiser and Steve Brandwene had exhibited “sheer and utter incompetence” in their prior management of FES. Ottenberg testified, “So yes, I would say that it’s safe to say that my thinking at that time was that both Jill and Steve apparently had sheer and utter incompetence.”
During this period, at least one outside agency was looking into the Financial Enforcement Section. Louis Rovelli countered, “It was also our internal affairs unit investigating whether Mark Santana had accessed confidential tax information inappropriately [sic].”
Rovelli stated, “I learned of the Santana investigation in March 0f 2007. And there was no connection between my decision to discontinue the arrangement of having collection agency personnel on site and my knowledge of the investigation.” 
Rovelli added, “And at the direction of Bill Ryan [First Deputy], the Internal Affairs Unit — referred that complaint — referred that report to the [Dauphin County] District Attorney’s Office, which opened an investigation and which was parallel to the internal investigation being conducted by out internal affairs unit — if that answers your chicken and egg question.”
Kimmett reported to Rovelli.
Rovelli reported to the First Deputy Bill Ryan.
The First Deputy reported to Tom Corbett.
But Tom Corbett, the Attorney General, reported to no one. Thanks to the 1980 Act establishing the AG as an independent agency.
After Santana resigned, Kimmett learned that Santana had authorized the compromise of a $914,000 debt for installment payments totaling only $20,000, despite not having the authorization to do so. Kimmett was astonished that an employee who was not a lawyer and was not authorized to make compromises on delinquencies of large sums made the settlement. Kimmett reported this in a memorandum to Mike Roman who became FES Chief after Brandwene retired.
Records of the transaction vanished.
Kimmett and a number of his subordinates could not locate backup documentation relating to that particular settlement. Rovelli explained that he and Roman signed off on that “abhorrent compromise” without questioning its basis.
Q: “Why did you approve the settlement?”
Roman: “Because the settlement had been offered to the taxpayer in writing.”
Q:” By whom?”
Roman: “By Mark Santana.”
Q: “Do you know whether Mr. Santana had any approval to offer such a settlement?”
Roman: “I assume Mr. Santana was acting on behalf of Mr. Brandwene or someone else — another lawyer.”
Q: “And in signing off on the settlement, did you undertake any review of the reasons why this amount of a debt compromise was being agreed to?”
A: “I did not.”
The Financial Enforcement Section was also enabling abuse outside of the Office of Attorney General. Mr. Kimmett reported gross mismanagement and wrongdoing to persons who worked at independent Commonwealth Agencies, including but not limited to DOR, the Pennsylvania Department of Motor Vehicles, the Pennsylvania Department of Transportation, state colleges and universities, and a number of other Commonwealth agencies.
By May 29, 2007, Ottenberg confirmed to Bianco that Kimmett and “found gross mismanagement” at FES and that “the mismanagement of dockets is grossly obvious.” Ottenberg outlined to Bianco a laundry list of dirty wash including:
actions or situations arising out of management ineptitude or oversight, leading to major violations of FES processes, regulations, or contract/grant provisions which could severely hamper the accomplishment of program goals. These include situations, which lead to the waste of Government resources and could jeopardize the project or reputation of the agency. This category includes, but is not limited to, unauditable records, unsupported costs, highly inaccurate fiscal and/or program reports, and the lack of good internal control procedures.”
Ottenberg also told Bianco he recognized that Keiser’s “close personal relationship with senior managers of the private collection agencies is inappropriate and the mismanagement of dockets is grossly obvious … .”
Remember, in January 14, 2007 Douglas Ottenberg, Assistant Comptroller, had already concluded that both Jill Keiser and Steve Brandwene had exhibited “sheer and utter incompetence” in their prior management of FES.
Kimmett experienced organized resistance throughout the chain of command when he identified waste, mismanagement, and wrongdoing. Mr. Kimmett identified and reported the following problems at the FES:
- Cases were assigned to private collection agencies immediately before money was to be collected, but after the FES had resolved the problem. This practice allowed the collection agencies – which had not done the legwork – to receive unearned commissions.
- Collection agencies received fees for cases where all the collection work was performed by the Financial Enforcement Section.
- Employees of the FES demonstrated clear-cut favoritism in the referral process to collection agencies.
- Cases were financially compromised at FES for extremely low amounts.
- There was a lack of documentation and an absence of bonding in certain cases for payments to collection agencies.
At the outset, Ottenberg and Kimmett discussed Keiser and Brandwene’s resistance to Kimmett’s attempt to identify and rectify issues he discovered at FES. Kimmett had to reconstruct billing histories and organize a “compromise team” for workouts. In addition to destruction of documents and missing files, many of the accounts were “a mess.”
Q: “Didn’t Tom complain that he was — in fact didn’t he use the word ‘getting resistance’?”
Roman: “He complained about resistance a lot.”
Q: “Well what efforts did you make to investigate his complaint about resistance?”
Roman: “Resistance is a hard thing to investigate.”
Kimmett sought advice outside of the chain of command but within the Republican Party patriarchy. Kimmett reached out to Richard Hudic who was instrumental in Kimmett’s placement at the OAG. Corbett’s chief of staff, Brian Nutt received Kimmett’s resume from Hudic. Hudic served as the President and Chief Executive Officer of Team Pennsylvania Foundation and was the first manager of DCED’s Keystone Opportunity Zone program.
In an early communication with Hudic, Kimmett said, “Rich, there’s something going on here that’s beyond just mismanagement, you know, and here’s what I’m – here’s what I’ve been told. You know, it seems that the people involved, and some of them are right above me, might be involved in all of this and I don’t know if the General knows about this.”
In May 2008 Kimmett discovered that the Department of Revenue had authorized a commission payment of almost $300,000 to Linebarger, Goggan, Blair & Sampson (LGB&S) or a debt that was collected when the OGA’s tax litigation department entered into a stipulation of settlement with the debtor to resolve ongoing litigation over the matter. Private Collection Agencies were aware that they cannot work cases while on appeal, and are not entitled to commissions for payments received as a result of litigation or a settlement of litigation.
Kimmett opposed paying a commission to Linebarger, Goggan, Blair & Sampson. On May 23, 2008, Furlong e-mailed Kimmett to say that he concurred with Kimmett’s determination that the commission ought not be paid. Roman informed Furlong that LGB&S, the PCA in line to receive the undeserved commission, was making a “threat” to go to the Attorney General if their fee was not paid. LBG&S was not an ordinary Private Collection Agency. According to sworn depositions LGB&S was connected to former Attorney General Leroy Zimmerman, an influential Republican power broker and political backer of Tom Corbett. The FES was started during Zimmerman’s time as the Attorney General.
Furlong and Coyne created an explanation to justify the $300,000 payment to LGB&S which Coyne forwarded the to Roman. Roman instructed Kimmett to pay the commission. The collections log indicated that the LGB&S was notified that the matter was in litigation. LGB&S knew that it would not be entitled to a commission if the matter were resolved in litigation.
In May 2008 Kimmett deviated from the chain of command and spoke with Bruce Brandler, an Assistant U.S. Attorney at the United States Attorney’s Office. After the phone conference with Kimmett, Brandler wanted to send an FBI agent to interview Kimmett.
Kimmett’s attorney was contacted by the FBI, regarding compensation rates to the private collection agencies hired to pursue delinquencies, and established contact with the Federal Bureau of Investigation in the summer of 2008. FBI agent Tim Lynch subsequently met with Mr. Kimmett. According to Kimmett’s deposition, Lynch “was very interested.” He said, “Tom, I need to come out again and meet with you again, but I want to pursue this.”
Kimmett’s investigation generated a “toxic environment” which ignited stiff institutional resistance throughout the Department. Kimmett was “treated like garbage,” “ignored,” and “ostracized.”
Suddenly, the chain of command was routed around Kimmett whose employees started meeting with Kimmett’s supervisors without Mr. Kimmett. On August 13, 2008, Kimmett e-mailed Roman about the “toxic environment” Roman fostered in FES by allowing Kimmett’s subordinates to circumvent the chain of command and bring their complaints directly to Roman without speaking to Kimmett first.
Rovelli produced a “negative evaluation”, and subsequently prepared a “remedial plan” for Kimmett “after the lawsuit was filed.” Rovelli noted, “I prepared it as I recall, in September of 2008.”
Going around the chain of command was a big mistake for Tom Kimmett. The Office of Attorney General strongly emphasizes the importance of reporting up one’s chain of command. Mr. Ryan testified that Kimmett’s report outside of his chain of command was “[n]ot a great career move” because “to go over your supervisor’s head and to complain could cause your supervisor to have, let’s say, a certain ill-will toward you.”
Roman testified that he does not like Kimmett because Kimmett sued him. Rovelli denied Kimmett a promotion to Chief of FES because Kimmett’s reports of gross mismanagement and wrongdoing were inconsistent with OAG’s “culture.”
The Attorney General’s Office contends that Kimmett was not managing his employees in an effective manner, and he was obstreperous in his response to his evaluation review in 2008. The Office had no option but to terminate him, according to court filings.
Mr. Rovelli informed Mr. Kimmett on November 21, 2008, that his employment was terminated, three months after Kimmett filed his lawsuit. A criminal division agent escorted Mr. Kimmett through OAG’s offices to Kimmett’s office to collect his personal belongings, and out of the building.
What was going on inside the Attorney General’s machine?
Corbett acknowledged in his deposition, “Obviously there was something going on that I would have relied upon Mr. Rovelli in his role as a supervisor, in his role as Executive Director, and rely upon Mr. Ryan as first Deputy.”
In a legal filing opposing Kimmett’s partial summary judgment request, the Attorney General’s office stated that “there is no question that the collection operation where Kimmett worked suffered from mismanagement and inefficiencies but mismanagement and inefficiencies are not the same things as criminal misconduct and while this distinction may not be material to the First Amendment issues raised in Kimmett’s motion, fairness to the people whom he has smeared requires that his canard be exposed for what it is.”
On August 13, 2008, OAG Communications Director, Kevin Harley, dismissed Kimmett’s lawsuit as a “frivolous lawsuit by a disgruntled employee. ”Harley made that statement without responding to allegations contained in Kimmett’s complaint.
Harley, who now serves as Governor Corbett’s communication director, never spoke with anyone who had worked with Kimmett. In fact, Rovelli and OAG Human Resource Director Bruce Sarteschi did not feel the term “disgruntled” to apply to Kimmett.
- Exhibit 27, Corbett Deposition at Ex. 5 at 2.↵
- Rovelli Deposition, pp. 362-363.↵
- Rovelli Deposition, p. 362.↵
- Rovelli Deposition, p. 364. 27↵
- Roman Deposition, Exhibit 9 at 431:12-22 & Rovelli Deposition Exhibit 12.↵
- Roman Deposition, Exhibit 9 at 340:5-342:7; Rovelli Deposition, Exhibit 7 at 379:16-380:14, & Ex. 44, Rovelli Deposition Ex. 15.↵
- Rovelli explained that he and Roman signed off on that “abhorrent compromise” without questioning its basis. Exhibit 9, Roman Deposition, Exhibit 9 at 429:4-430:4 & Rovelli Deposition, Exhibit 7 at 334:13-336:9.↵
- Roman Deposition, pp. 429-439↵
- Kimmett Declaration, Exhibit 11, ¶¶ 6-7.↵
- Exhibit 27, Corbett Deposition, Ex. 5.↵
- Exhibit 27, Corbett Deposition at Ex. 5 at 2.↵
- Exhibit 27, Corbett Dep. Ex. 5.↵
- Exhibit 11, Kimmett Decl., ¶¶ 10-21 .↵
- Exhibit 3, Ottenberg Dep. Ex. 14 * Ottenberg Deposition, Exhibit 14 at 319:14-320:23.↵
- Bellaman Deposition, p. 320, p. 472 & p. 502.↵
- Roman Deposition, p, 613.↵
- Nutt Deposition, Exhibit 5 at 74:8-76:13, Corbett Deposition, Exhibit 3 at 87:20-88:5 and Kimmett Deposition, Exhibit 1 at 89:4-23.↵
- Kimmett Deposition, Exhibit 1 at 178:15-22.↵
- Exhibit 57, Coyne Deposition at Ex. 25.↵
- Bellaman Deposition, Exhibit 18 at 536:5-15, 537:13-21↵
- Exhibit 57, Coyne Deposition, Ex. 25.↵
- Coyne Deposition, Exhibit 23 at 276:12-279:14 & Exhibit 58, Coyne Deposition t a. Ex. 26 at 2.↵
- Exhibit 58, Coyne Deposition at Ex. 26.↵
- Exhibit 59, Coyne Deposition at Ex. 28.↵
- Exhibit 60: August 8, 2008 E-mail from Robert Coyne to Michael Roman.↵
- Bellaman Deposition, Exhibit 18533:8-540:2 & Exhibit 61, Bellaman Dep. Ex. 28.↵
- On August 13, 2008, Kimmett e-mailed Roman about the “toxic
environment” Roman fostered in FES by allowing Kimmett’s subordinates to circumvent the chain of command and bring their complaints directly to Roman without speaking to Kimmett first. See Ex. 36 (Sarteschi Dep. Ex. 6); see also Ex. 11 (Kimmett Decl.) 506:13-18↵
- Roman Deposition, Exhibit 9 at 613:8-12.↵
- Kimmett was excluded from meetings between his subordinate,
Santana, and his supervisor, Brandwene and later Roman. Ex. 1 (Kimmett Dep.) 276:11-277:7 (“Mark Santana met with Steve on compromises every week and then subsequently met with Roman on compromises every week. I was not invited to those meetings. He worked for me. I asked to attend those meetings. I was not allowed to attend those meetings.”).↵
- Exhibit 36, Sarteschi Dep. Ex. 6 & Exhibit 11, Kimmett Decl.506:13-18.↵
- Rovelli Deposition, p. 90.↵
- Rovelli Deposition, pp. 548-549.↵
- Ryan Deposition, Exhibit 6 at 163:16-164:13, 174:17-175:13.↵
- Roman Deposition, Exhibit 8 at 615:6-12.↵
- Exhibit 11, Kimmett Decl. ¶¶ 14-15.↵
- Harley Deposition at 76:11-77:16, 79:18-95:19.↵
- Exhibit 35, Harley Deposition at 73:8-74:14, 78:21-79:4.↵
- Exhibit 7, Rovelli Deposition at 562:7-565:12 & Sarteschi Deposition, Exhibit 21 at 184:7-10.↵
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