COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
APPROPRIATIONS COMMITTEE HEARING
STATE CAPITOL MAJORITY CAUCUS ROOM ROOM 140 HARRISBURG, PENNSYLVANIA
THURSDAY, FEBRUARY 19, 2009 3:55 P.M.
VOLUME V OF VI
PRESENTATION BY PENNSYLVANIA ATTORNEY GENERAL
BEFORE: HONORABLE DWIGHT EVANS, MAJORITY CHAIRMAN HONORABLE MATTHEW D. BRADFORD HONORABLE TIM BRIGGS HONORABLE H. SCOTT CONKLIN HONORABLE EUGENE DePASQUALE HONORABLE JOHN T. GALLOWAY HONORABLE WILLIAM F. KELLER HONORABLE WILLIAM C. KORTZ II HONORABLE DEBERAH KULA HONORABLE BRYAN R. LENTZ HONORABLE TIM MAHONEY HONORABLE KATHY MANDERINO HONORABLE JOHN MYERS HONORABLE CHERELLE L. PARKER HONORABLE JOSH SHAPIRO HONORABLE JOHN J. SIPTROTH HONORABLE MATTHEW SMITH HONORABLE GREG VITALI HONORABLE JAKE WHEATLEY
————————— JEAN DAVIS REPORTING 7786 Hanoverdale Drive • Harrisburg, PA 17112 Phone (717)503-6568 • Fax (717)566-7760 2
1 BEFORE (cont.'d): HONORABLE GORDON DENLINGER 2 HONORABLE BRIAN L. ELLIS HONORABLE JOHN R. EVANS 3 HONORABLE MAUREE GINGRICH HONORABLE THOMAS H. KILLION 4 HONORABLE DAVID R. MILLARD HONORABLE RON MILLER 5 HONORABLE SCOTT A. PETRI HONORABLE DAVE REED 6 HONORABLE DOUGLAS G. REICHLEY HONORABLE MARIO M. SCAVELLO 7 HONORABLE RICHARD R. STEVENSON HONORABLE KATIE TRUE 8
9 ALSO PRESENT: DEBBIE REEVES 10 MAJORITY BUDGET ANALYST EDWARD J. NOLAN 11 MINORITY EXECUTIVE DIRECTOR
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13 DEBRA B. MILLER REPORTER 14
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1 I N D E X
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1 P R O C E E D I N G S
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3 MAJORITY CHAIRMAN EVANS: I would like to
4 reconvene the House Appropriations Committee
5 meeting.
6 We want to apologize to you, Attorney
7 General, about the time element.
8 ATTORNEY GENERAL CORBETT: We're on central
9 time, aren't we?
10 MAJORITY CHAIRMAN EVANS: Absolutely.
11 If you would introduce the people with you.
12 ATTORNEY GENERAL CORBETT: Absolutely.
13 MAJORITY CHAIRMAN EVANS: Then we'll go
14 right to the questions.
15 ATTORNEY GENERAL CORBETT: Okay.
16 To my right is Bill Ryan, the First Deputy
17 Attorney General; to my left is Sheri Phillips,
18 Director of Management Services; and to my far right
19 you all know, because she spends as much time here as
20 in our offices, Annmarie Kaiser, my legislative
21 liaison.
22 With that, ask away.
23 MAJORITY CHAIRMAN EVANS: Thank you.
24 ATTORNEY GENERAL CORBETT: No comment, no
25 comment, no comment. 5
1 MAJORITY CHAIRMAN EVANS: Listen to you.
2 What I want to start out with, I've been
3 asking this question about the Federal stimulus money
4 that is coming in, and I know public safety has been
5 one of the areas. We've just been talking to the
6 State Police.
7 Does the Attorney General in any way have
8 any access to some of those dollars coming to you?
9 ATTORNEY GENERAL CORBETT: We have not had
10 an opportunity to fully analysis -- what is it, 1,700
11 pages or something like that? We have not had an
12 opportunity to fully analysis that. At this point in
13 time, I am not aware of any avenue for us to get in
14 there, but we will continue to look at it.
15 MAJORITY CHAIRMAN EVANS: Right.
16 ATTORNEY GENERAL CORBETT: But I will tell
17 you, this lady to my left looks for every possible
18 dollar outside the Legislature we can get, and if
19 it's there, we'll get it.
20 MAJORITY CHAIRMAN EVANS: All right. So at
21 this point, you're not really sure.
22 ATTORNEY GENERAL CORBETT: No.
23 MAJORITY CHAIRMAN EVANS: The second issue I
24 want to talk to you on, talk to me a little bit about
25 how the Gun Task Force is moving and what is 6
1 happening with the Gun Task Force.
2 ATTORNEY GENERAL CORBETT: As you know, the
3 Gun Task Force was started back in 2007, with the
4 appropriation that started in July of 2007, and we'll
5 get those numbers and give them to you.
6 MAJORITY CHAIRMAN EVANS: Right.
7 ATTORNEY GENERAL CORBETT: We started out
8 and we created a task force of individuals, all
9 former Philadelphia homicide detectives, and we have
10 a staff of about 25 agents.
11 We are funding some district attorneys that
12 prosecute the cases in Philadelphia, and I believe it
13 is working very, very well at this point in time.
14 The funding of the task force allows us to
15 increase the training of, for instance, the number of
16 firearms examiners in the city of Philadelphia.
17 We found that one of the problems in
18 Philadelphia, at one point there were 6,000 guns
19 that had to be examined before you could ever even
20 get to a preliminary hearing, and we had six
21 examiners. Now we are up to, I believe, almost
22 20 examiners, and they have cut their backlog by
23 54 percent, which is a tremendous increase for what
24 is going on and getting the case, once there is a
25 gun seized, getting the case through the preliminary 7
1 hearing and into trial.
2 Now---
3 MAJORITY CHAIRMAN EVANS: While you're
4 thinking about that, does that mean you are also
5 working with the Gun Court? Is that---
6 ATTORNEY GENERAL CORBETT: Well, my
7 attorneys are not involved in that.
8 MAJORITY CHAIRMAN EVANS: Okay.
9 ATTORNEY GENERAL CORBETT: This is a
10 partnership between Philadelphia PD, the Philadelphia
11 District Attorney's Office, and the Gun Violence Task
12 Force.
13 MAJORITY CHAIRMAN EVANS: Right.
14 ATTORNEY GENERAL CORBETT: As you will
15 recall, the agents on this task force are my agents.
16 MAJORITY CHAIRMAN EVANS: Right.
17 ATTORNEY GENERAL CORBETT: They are under
18 the understanding that as long as you fund them---
19 MAJORITY CHAIRMAN EVANS: Right.
20 ATTORNEY GENERAL CORBETT: ---they have a
21 job.
22 MAJORITY CHAIRMAN EVANS: Right.
23 ATTORNEY GENERAL CORBETT: If you don't fund
24 them, they are out of a job.
25 MAJORITY CHAIRMAN EVANS: Right. 8
1 ATTORNEY GENERAL CORBETT: In fact, with the
2 union contracts, we had to negotiate an exception
3 into that.
4 They have been working in the various
5 districts with the Philadelphia Police Department as
6 a team. And in many instances, they have been
7 helping to train, mentor, a lot of the younger
8 detectives that were out in the regions, because a
9 lot of these detectives, agents, retired right at
10 20 years. They got good pension buyouts and so
11 forth, and they lost a lot of experience. This
12 brings back that experience.
13 The task force to date has 270 arrests since
14 its inception. There were 149 arrests in 2008.
15 Now, 305 firearms have been recovered,
16 193 in 2008.
17 And right now, since inception, we have
18 913 active investigations. They get very active.
19 They have been active in a lot of the more notorious
20 cases.
21 For instance, I know our agents are very
22 active on the issue of the possession of a firearm by
23 the shooter in the killing of Officer Pawlowski last
24 Friday. That one is personal. Officer Pawlowski's
25 father is one of our insurance fraud agents. So our 9
1 guys are all over that one, working with the
2 Philadelphia PD.
3 If you would have asked -- when you did ask
4 me this question 6 months ago, a year ago, we were
5 seeing a dramatic, at that time, reduction in gun
6 violence, and I would attribute it to a new mayor, a
7 new police commissioner, a new attitude, but also to
8 the work that our agents are doing with the Gun Task
9 Force.
10 As it is, there were still a number of
11 homicides and a number of shootings in the city of
12 Philadelphia last year. We are down, I think it is
13 15 to 20 percent.
14 It doesn't sound like a lot, but when
15 you consider that the year before there were
16 400 homicides, 15 to 20 percent is a good start. Not
17 where we want to be; we don't want to have any, but
18 it is that teamwork of going after those individuals
19 who are buying guns and giving them to other people
20 that is very, very important.
21 MAJORITY CHAIRMAN EVANS: Representative
22 Reichley.
23 REPRESENTATIVE REICHLEY: Thank you,
24 Mr. Chairman.
25 Thank you, Attorney General. 10
1 As important as the prosecution of violent
2 crime, Internet abuse of children, elder abuse,
3 Medicaid fraud, I think just as equally on people's
4 minds these days is the issue of public integrity and
5 some areas like that.
6 With regard to similar kinds of
7 investigations that took place in Philadelphia on the
8 pay-to-play situation, a number of us have been
9 concerned about situations arising regarding on
10 pay-to-play and the awarding of various contracts.
11 Can you comment about whether that has been
12 an area that you have looked into at this point thus
13 far or whether it is something which you feel may
14 fall within your purview as Attorney General?
15 ATTORNEY GENERAL CORBETT: That's a pretty
16 broad question.
17 REPRESENTATIVE REICHLEY: I know.
18 ATTORNEY GENERAL CORBETT: It might be
19 easier if I could get you to narrow it a little bit.
20 Let me make this general statement, however.
21 If we have an active investigation, we will tell you.
22 We can't tell you, because the investigation is going
23 to be in the grand jury. I would disappoint my media
24 brethren over here who have been trying to get those
25 kinds of answers for the last 2 years. 11
1 REPRESENTATIVE REICHLEY: Right.
2 ATTORNEY GENERAL CORBETT: We have many
3 investigations going on to the point that you may
4 have seen that we have empaneled a fourth grand jury.
5 And as far as I know, in Pennsylvania, the elected
6 Attorney General's Office has never had four sitting
7 grand juries at any one time. One is in Pittsburgh,
8 one is in Norristown, and we now have two here in
9 Harrisburg.
10 The most recent one was empaneled so we
11 could do other investigations that were being put on
12 the back burner, because they were being actively
13 investigated but they couldn't get the grand jury
14 time because of the investigation that has
15 everybody's attention here in Harrisburg.
16 As it pertains to the issue of pay-to-play,
17 I cannot directly comment on that to you right now.
18 REPRESENTATIVE REICHLEY: Okay. Fair
19 enough.
20 You mentioned about the empaneling of a
21 fourth grand jury. Are you able to estimate at this
22 point how much the grand jury investigations have
23 cost your office to undertake and then pursue?
24 ATTORNEY GENERAL CORBETT: I can give you
25 numbers on how we spend money on the grand jury. 12
1 The investigations would be somewhat
2 separate. And each investigation, for instance,
3 let's say that we are doing an organized crime
4 investigation of a drug gang in, let's say,
5 Lehigh County or in the Lehigh Valley, those costs
6 would be distributed by manpower costs. There will
7 be agents.
8 REPRESENTATIVE REICHLEY: Right.
9 ATTORNEY GENERAL CORBETT: But, for
10 instance, bringing witnesses into the grand jury, the
11 cost to the grand jury, we don't break it out then by
12 the investigation; we break it out in general. And
13 our total administration of the grand jury, and that
14 includes two individuals who will be working on it
15 full time and rental for the four locations --
16 excuse me, three locations -- is just shy of
17 $380,000.
18 The grand jury in Harrisburg, it's about
19 $250,000. Now, that is paying for housing and so
20 forth and then meals and so forth for the grand
21 juries that are brought in.
22 The Pittsburgh grand jury is just shy of
23 $200,000. The Norristown grand jury is about
24 $240,000. We are rounding the numbers off.
25 I will tell you, we had one expenditure last 13
1 year; we had to upgrade the Pittsburgh grand jury
2 room. It was 20 years old and needed to be rehabbed,
3 and that was about $50,000.
4 So you have a grand total of costs for
5 fiscal year '07-08 of $1.1 million. But that is the
6 operation of the grand jury. That is not the
7 manpower -- the attorneys and the manpower and the
8 agents. It is very hard to distinguish that.
9 There are some cases, though, where we do,
10 because we can get reimbursed maybe from the Federal
11 Government if we take a Medicaid fraud case into the
12 grand jury, which is not a usual statement, but it
13 could occur.
14 REPRESENTATIVE REICHLEY: Yesterday,
15 Judge Colins -- and I recognize you are saying you
16 can't comment on it -- but she, to some degree, maybe
17 inadvertently, disclosed that---
18 ATTORNEY GENERAL CORBETT: Oh, I listened
19 to it last night, and I didn't think it was
20 inadvertent.
21 REPRESENTATIVE REICHLEY: Okay. ---that
22 there may have been some contact between your office
23 and the Gaming Board employees. Are you able to
24 comment at all about whether one of the grand juries
25 investigated that? 14
1 ATTORNEY GENERAL CORBETT: No.
2 REPRESENTATIVE REICHLEY: Okay.
3 There has been another issue with regard to
4 the presence of Deloitte and Touche and of an
5 investigation by the Auditor General's Office with
6 regard to the expenditure of State funds and whether
7 there was any improprieties involved with that.
8 Can you comment whether you have been in
9 contact with the Auditor General at all on any
10 particular investigations?
11 ATTORNEY GENERAL CORBETT: I have read
12 what's in the newspaper. That's the extent of it.
13 REPRESENTATIVE REICHLEY: Okay. Good
14 enough.
15 Thank you very much.
16 ATTORNEY GENERAL CORBETT: Sure.
17 MAJORITY CHAIRMAN EVANS: Lentz.
18 REPRESENTATIVE LENTZ: Thank you,
19 Mr. Chairman.
20 Good afternoon, Mr. Attorney General.
21 There was an article on the wires today from
22 Ohio, that the Attorney General out in Ohio made an
23 announcement that he is going to crack down on
24 employers that pay workers under the table and
25 misclassify workers as "independent contractors." 15
1 And I'm sure you are aware that in the last
2 session, the House passed a bill that would have done
3 just that and would have, I believe, given some of
4 that jurisdiction to your office.
5 Have you looked at that legislation, which
6 we are going to be addressing again in this session,
7 and taken a look at how that would impact your
8 operations and how it would help you crack down on
9 that kind of conduct compared to the current state of
10 the law?
11 The estimate in Ohio was that they think
12 they are losing about $900 million annually in
13 revenue, and of course as you pointed out earlier, we
14 are always looking for revenue. This seems to be one
15 fairly practical way to recover a lot of it.
16 ATTORNEY GENERAL CORBETT: We have been
17 looking at the legislation. We looked at that
18 legislation last year, and one of the reasons that we
19 believe legislation is necessary is that as it is
20 currently, unless there is a referral to us from the
21 Department of Labor, we don't have the jurisdiction
22 in this.
23 We have indicated to many interested
24 parties, if given the authority and the jurisdiction,
25 we will go forward with that. 16
1 As you said, the legislation may result in
2 increasing some revenue to the Commonwealth. It is
3 really difficult at this point in time for us or for
4 you to estimate what that is. It is proving the
5 negative, I guess, to a certain extent, and it will
6 take prosecutions, I think, to determine that.
7 And quite honestly, with one or two or three
8 prosecutions, that use of that workforce may dry up.
9 It may not, but it could. I mean, if we do it by
10 example, then everybody goes, okay, we can't do it
11 that way and they stop doing it.
12 Our fiscal note for the legislation, if we
13 look at last year, there was an estimated cost to our
14 office of about $100,000. That number could change
15 significantly depending on how the legislation is
16 worded that you have this year with regard to what
17 investigations are referred to our office and
18 precisely what conduct would trigger a violation of
19 the act.
20 Keep in mind, if you give us more
21 jurisdiction, we have no problem with that. But I
22 think I have been saying this now since 1995 when I
23 was Attorney General the first time and in my
24 8 years as Chairman of the Commission on Crime and
25 Delinquency, I always believe in fiscal notes to 17
1 legislation, because every time you pass a piece of
2 legislation saying "you go do it," well, there has to
3 be somebody that can do it there.
4 And am I crying poor? No. Am I crying we
5 are stretched to our capacity at this point in time?
6 Yes.
7 Could we do it? Yeah, but something else is
8 going to suffer at that point in time if you have a
9 new jurisdiction. We'll be happy to do it, but while
10 you are considering that budget, and I know it's a
11 hard time to ask for it, consider helping us with the
12 funding of that.
13 REPRESENTATIVE LENTZ: Okay.
14 And just to your point of if people were to
15 see a few prosecutions had stopped, then we could
16 assume from that that everybody would then start
17 paying their employee taxes and we would see a
18 dramatic increase in revenue. And the other
19 States---
20 ATTORNEY GENERAL CORBETT: That would be a
21 perfect world.
22 REPRESENTATIVE LENTZ: Yeah. Well, for the
23 other States where they do have the data in places
24 like Massachusetts and New York, they are pretty
25 certain it is in the hundreds of millions, maybe 18
1 north of a billion dollars.
2 So a hundred thousand or whatever else it
3 would take to fund that enforcement would not be an
4 unreasonable request.
5 ATTORNEY GENERAL CORBETT: It would sound to
6 me to be a wise investment.
7 REPRESENTATIVE LENTZ: Thank you.
8 Thank you, Mr. Chairman.
9 MAJORITY CHAIRMAN EVANS: Denlinger.
10 REPRESENTATIVE DENLINGER: Thank you,
11 Mr. Chairman.
12 And good afternoon, General. Good to have
13 you here, and everyone.
14 I want to shift gears for a moment to the
15 Tobacco Master Settlement Agreement, if we can.
16 My understanding is under the provisions of
17 that agreement, if sales by a company that
18 participated in the agreement fall by 2 percent in a
19 year in the same period in which sales by a
20 nonparticipating company, by those companies, rise
21 2 percent -- hopefully I said that clearly enough --
22 that in fact those participating companies can
23 withhold some amount of their payments to the
24 Commonwealth of Pennsylvania, and that over the past
25 3 years we have been shorted to the tune of about 19
1 $110 million in payments.
2 Do I have that essentially correct in your
3 understanding?
4 ATTORNEY GENERAL CORBETT: There is another
5 aspect that I think you have to include in it -- and
6 where's Joel? Joel, you tap me if I'm wrong. The
7 other aspect to that money that they're holding is
8 their allegation that the Commonwealth of
9 Pennsylvania wasn't diligently enforcing against the
10 nonparticipating manufacturers, and that caused that
11 drop in that increase.
12 That's the subject of a great deal of
13 litigation across the United States.
14 REPRESENTATIVE DENLINGER: So---
15 ATTORNEY GENERAL CORBETT: We are presently
16 litigating county year 2003, Joel? Yeah.
17 REPRESENTATIVE DENLINGER: '03.
18 ATTORNEY GENERAL CORBETT: So we haven't
19 even gotten to '04, '05, '06, or '07.
20 REPRESENTATIVE DENLINGER: Okay. That was
21 the nature of my question.
22 I understood that we were in arbitration
23 over some period of years, and I wanted to get from
24 you a perspective on how you felt that was
25 proceeding, and in fact should we as the 20
1 Appropriations Committee assume we might just lose
2 that money?
3 ATTORNEY GENERAL CORBETT: If I were sitting
4 in your chairs, I would never count on money that is
5 subject to litigation, no.
6 REPRESENTATIVE DENLINGER: Okay. That's
7 fair enough.
8 ATTORNEY GENERAL CORBETT: That's the only
9 way -- well, you just don't know.
10 I mean, this is arbitration, and the
11 problem is, this is a national arbitration. So
12 you have the 40-some States that are part of the
13 settlement agreement in litigation with the tobacco
14 companies.
15 Every State is done a little bit different.
16 We tried to get it that each State had to deal with
17 arbitration in their State. The courts didn't agree
18 with that. So we are going to be bound by what
19 everybody does and how the court rules, the
20 arbitrators. It is on appeal.
21 Now, the arbitrators may look and say, well,
22 New York, you did a fantastic job, so no, it doesn't
23 apply to you. Kentucky, you did a terrible job, so
24 yes, it applies to you. Those are unknowns that we
25 have no control over right now. 21
1 And literally this talk of diligent
2 enforcement has been going on the entire 4 years I
3 have been Attorney General. And if I had to say on a
4 scale of 1 to 10, 10 being completion of just this
5 first case -- Joel, have we reached 5 yet? No. It's
6 very slow moving.
7 REPRESENTATIVE DENLINGER: Well, I thank you
8 for that.
9 ATTORNEY GENERAL CORBETT: There are a lot
10 of lawyers who make a lot of money on it.
11 REPRESENTATIVE DENLINGER: I'm sure that's
12 the case.
13 General, thank you for that answer. I think
14 that points to a concern that we all have about where
15 this thing is going, and we do need to use extreme
16 caution as we think about those dollars.
17 ATTORNEY GENERAL CORBETT: That's exactly
18 right.
19 REPRESENTATIVE DENLINGER: Thank you very
20 much.
21 Thank you, Mr. Chairman.
22 MAJORITY CHAIRMAN EVANS: Gordon, tell your
23 mother I said happy birthday.
24 REPRESENTATIVE DENLINGER: I will do that,
25 sir. Thank you. 22
1 MAJORITY CHAIRMAN EVANS: That's how
2 sensitive I am.
3 REPRESENTATIVE DENLINGER: She's 89 years
4 young today.
5 MAJORITY CHAIRMAN EVANS: And happy birthday
6 to her. Notice I'm saying happy birthday to her.
7 Any way to get a vote, Gordon.
8 ATTORNEY GENERAL CORBETT: I think he's just
9 announced that he's running statewide.
10 MAJORITY CHAIRMAN EVANS: Hey, I'm trying to
11 get him -- any way to get a vote, Gordon.
12 Representative Parker.
13 REPRESENTATIVE PARKER: Thank you,
14 Mr. Chairman.
15 And good afternoon, Attorney General
16 Corbett.
17 I have two questions for you, and the first
18 is in regard to your budget request for the
19 Gun Violence Witness Relocation Program and the
20 Witness Relocation Program.
21 And it is a program, of course, that I have
22 had a great interest in since being a member of this
23 body, and I wanted to know if you could just comment
24 on the necessity for this program along with
25 clarifying for the record whether or not Philadelphia 23
1 is the only county in the Commonwealth of
2 Pennsylvania whose police department and district
3 attorney's office actually sees that there is a need
4 for the program.
5 ATTORNEY GENERAL CORBETT: Let me answer the
6 last question.
7 I don't think Philadelphia County is the
8 only one.
9 REPRESENTATIVE PARKER: Okay.
10 ATTORNEY GENERAL CORBETT: I'm not so sure
11 that Allegheny County or Erie County or the other
12 counties have really been asked.
13 But I can understand why Philadelphia may
14 think that they are the only one, because they use --
15 70, 75 percent of that fund goes into Philadelphia on
16 average every year.
17 This program is actually a combination of
18 the two line items that we have, and if you look at
19 our budget, you can see it. The Gun Violence
20 Reduction Program and the Witness Relocation is
21 really combined into one.
22 The total current appropriation for both is
23 nearly a million dollars. It was actually cut last
24 year by $7,000. And where that number came from, I
25 don't know. 24
1 The Witness Relocation Program is, I
2 believe, an excellent program that allows our office
3 to act as the conduit, the disburser, to broaden the
4 funds to individuals at the recommendation of
5 district attorneys' offices who need to be
6 temporarily relocated.
7 Now, we changed this from the "Witness
8 Protection Program" title to the Witness Relocation
9 Program, because in the Federal Witness Protection
10 Program, everybody had an impression that we were
11 protecting these people -- changing names,
12 identities, moving them to great locations. That's
13 not the case. We're moving them.
14 We might move them from South Philly to
15 North Philly. We might move them from the
16 North Hills of Pittsburgh to Monroeville or something
17 like that. It is just a relocation to get them out
18 of that immediate neighborhood where their safety as
19 a witness in a criminal prosecution could be in
20 jeopardy.
21 In calendar year 2008, we opened 112 cases;
22 88 of those cases involved a gun. Seventy-two of
23 those cases were in Philadelphia; 58 of those
24 involved a gun. Excuse me; 112 of those cases. No,
25 I'm sorry, 72 of those cases involved a gun in 25
1 Philadelphia.
2 In 2008, 17 counties received funding
3 through this program, so you can see that there are
4 other counties.
5 It is very important to a prosecutor to be
6 able to have that witness to a crime get up and
7 testify. And one of the things we find that happens,
8 and unfortunately more so in Philadelphia than
9 elsewhere, is people come back out on the street
10 after they have been arrested or friends in the
11 neighborhood are on the street and they intimidate
12 that witness. And when that witness doesn't show up
13 to testify, the case gets thrown out.
14 Now, this program -- and this program is
15 used in a lot of the more serious cases -- is an
16 extremely valuable tool to the criminal justice
17 system across Pennsylvania and particularly in
18 Philadelphia.
19 REPRESENTATIVE PARKER: Thank you.
20 One last question, sir.
21 I was recently reading about two Luzerne
22 County Judges who were engaged in activity that, to
23 me, and I'm sure everyone else, was just despicable
24 as it relates to the juveniles who were standing in
25 courtrooms before these Judges and waiving their 26
1 rights to an attorney, and the Judges were sending
2 them to particular juvenile justice centers where
3 they were apparently getting kickbacks.
4 My question to you is, was our Attorney
5 General's Office at all like involved in the
6 investigation, and how can we be certain that this
7 kind of activity is not taking place in any other
8 counties? Or is there anything that we should be
9 doing?
10 ATTORNEY GENERAL CORBETT: In the first
11 instance, we were aware of the investigation. It was
12 a Federal investigation. Beyond that, I can't
13 comment, okay?
14 We certainly hope that that isn't occurring
15 in other jurisdictions, and I suspect that the
16 counties themselves will go back and take a look at
17 that. I don't know that the Legislature necessarily
18 needs to.
19 If I were a county commissioner and I was
20 looking to save costs, I would probably be reviewing
21 every juvenile placement that went to those
22 facilities to see why it went to that facility at
23 that point in time and to see if there were something
24 wrong.
25 REPRESENTATIVE PARKER: Thank you, sir. No 27
1 more questions.
2 MAJORITY CHAIRMAN EVANS: Representative
3 Reed.
4 REPRESENTATIVE REED: Thank you,
5 Mr. Chairman.
6 And thank you, General, for appearing before
7 the committee today.
8 This year's budget cycle has focused quite a
9 bit on expenditures and revenues given the state of
10 the State budget and the national economy.
11 Your department has been one of the few to
12 not only expend money, but you have also been
13 successful in raising revenues, particularly through
14 your Public Protection Division and Civil Law
15 Division.
16 Could you comment just a little bit on what
17 those revenues have looked like over the last couple
18 of years?
19 ATTORNEY GENERAL CORBETT: Thank you for
20 that question, because I like to remind you all, we
21 pay for ourselves. When it comes to the budget, we
22 bring in more than we spend.
23 First off -- and I just want to get my
24 correct note on here -- last year, 2008, our
25 Public Protection Division, which is our consumer 28
1 protection, our antitrust, our charitable trust
2 section, the tobacco section, the health-care fraud
3 section, and our Civil Division recovered for the
4 citizens of Pennsylvania over $35 million in case
5 settlements.
6 In addition, we collected nearly $94 million
7 in uncollected revenues through our Financial
8 Enforcement Section in the Civil Division.
9 Through the Tobacco Master Settlement
10 Agreement, we brought in our annual stipend, I guess,
11 for want of a better word, of $382 million to
12 Pennsylvania. Even if you take the tobacco out, you
13 can see those earlier dollars where money was coming
14 in.
15 The other aspect is the amount of money --
16 and I do not have it, but I do have it somewhere --
17 that we estimate that the Consumer Protection
18 Division gets back or saves consumers when they come
19 and give us a complaint. I believe last year we
20 received about 46,000 complaints from consumers
21 across Pennsylvania. And working with them in many
22 instances in mediations, we were able to save them
23 money or have money returned to them.
24 So that money that we're talking about, that
25 is over $100 million-plus than our budget is, does 29
1 not even include that number.
2 REPRESENTATIVE REED: Given that this is the
3 year where we are all focused on revenues once again,
4 I am sure every Legislator has gotten a number of
5 different opinions from constituents across the State
6 on different ways to raise revenues.
7 And actually, I represent a college town, so
8 I have gotten a number of different letters and
9 e-mails from college students, not just from the
10 college that I represent but from some other colleges
11 as well, wondering whether Pennsylvania should
12 legalize marijuana as a way of increasing revenues
13 because it is already going on and it is something
14 that we could tax.
15 Is that something that you believe we should
16 do?
17 ATTORNEY GENERAL CORBETT: No.
18 REPRESENTATIVE REED: In general---
19 ATTORNEY GENERAL CORBETT: Is that a short
20 enough answer for you?
21 REPRESENTATIVE REED: That's a perfect
22 answer.
23 In general practice, do you think it is good
24 public policy for a State or any governing body to
25 look at filling budget gaps or expanding programs by 30
1 looking at previously illegal activities and making
2 them legal as a way of taxing them and bringing in
3 revenues?
4 ATTORNEY GENERAL CORBETT: I'll give you
5 another short answer: No. And let me go back, and
6 then I'll comment on that.
7 Back on the amount of money that we have
8 saved consumers, it is estimated that it was
9 $30.6 million in the last year. No, I'm sorry; over
10 the course of the last 4 years, $30.6 million.
11 In regard to taxing illegal activity, first
12 off, what kind of message does that send? The
13 message it sends is, well, if you get involved in
14 illegal activity, if you continue to do it, you face
15 the fines and penalties that you're going to face for
16 4 or 5 years, and then it becomes legal because the
17 government is going to give in.
18 The money, whether you are going to use
19 money on marijuana or whether you are going to use
20 money on video poker, no matter where you are using
21 it, it is very difficult to say that you are doing
22 the wrong thing for the right reason, and to me, that
23 is doing the wrong thing for the right reason.
24 You have to make difficult decisions as the
25 Legislature and as the Governor, and those of us in 31
1 the agencies will end up living with the decisions.
2 But to go and say, well, here's an easy way, but it
3 is illegal and taxing it, I think is wrong.
4 REPRESENTATIVE REED: Well, since you
5 brought up video poker---
6 ATTORNEY GENERAL CORBETT: I was just
7 talking about the elephant in the room.
8 REPRESENTATIVE REED: In the announcement
9 that the Governor made of his video poker proposal,
10 part of the justification for legalizing and taxing
11 video poker in Pennsylvania was apparently the fact
12 that we know there are 17,000 illegal video poker
13 machines operating in the State right now.
14 As a prosecutor, does it disturb you that
15 apparently the Administration knows we have down to
16 the number of illegal machines operating in
17 Pennsylvania and apparently we are turning a blind
18 eye?
19 ATTORNEY GENERAL CORBETT: I have been
20 fighting video poker since 1989 when I was the
21 United States Attorney in Pittsburgh. They probably
22 still have thousands of video poker machines stored
23 in Mayview that we took back in the early nineties.
24 It is a very difficult issue, made more
25 difficult by the fact that the Legislature and the 32
1 Governor, you passed gaming, we got casinos, and
2 it kind of complicated the moral factor of it,
3 because people go back and they say, well, we're
4 gambling.
5 And I think the argument back when the
6 Legislature passed gaming in 2004 is, well, we
7 already have gaming because we have the Lottery.
8 It's a slippery slope, and I think at some point in
9 time that slippery slope has to stop.
10 Now, if I look at it practically, you have
11 passed and you have based your idea of property tax
12 reform on 14 casinos. Now there is a proposal to
13 undercut your own proposal of property tax reform in
14 a fund by allowing gaming in every neighborhood bar
15 and spending money in a different location. And I
16 think when you do that, eventually you lose the
17 respect of the people as to, what is next?
18 REPRESENTATIVE REED: Going back to your
19 time as a U.S. Attorney, and you talked about those
20 machines being in Mayview because you confiscated
21 them, I would assume that you confiscated them
22 because it was illegal gambling, correct?
23 ATTORNEY GENERAL CORBETT: It was illegal
24 gambling. There was an organization in southwestern
25 Pennsylvania that was making a ton of money on 33
1 illegal gambling.
2 REPRESENTATIVE REED: But back to the
3 property tax issue -- and this will be my final
4 question -- as the chief attorney for the
5 Commonwealth of Pennsylvania, you would be charged
6 with representing the Commonwealth and then issue
7 against it unless you were to choose to defer that
8 case because of a conflict.
9 Would you be concerned that since the
10 Property Tax Relief Fund has already received
11 $550 million in licensing fees from the gaming
12 establishments and there is a clause in the statute
13 that says if Pennsylvania expands gambling in
14 Pennsylvania -- and as you noted, you confiscated
15 those machines because it was illegal gambling --
16 that the Commonwealth would be subject to suit by the
17 casino operators to recover that $50 million license
18 fee -- in totality, $550 million -- and thus
19 increasing property taxes for the residents of the
20 Commonwealth of Pennsylvania, is that a concern that
21 you would have as the chief attorney for the
22 Commonwealth?
23 ATTORNEY GENERAL CORBETT: I am not going to
24 comment on whether somebody would file suit. I will
25 comment that when the proposal was floated in the 34
1 papers and we saw it, my civil lawyers came right to
2 me and said, there is a concern that there is a
3 potential problem with that.
4 REPRESENTATIVE REED: Okay. Thank you very
5 much, General.
6 Thank you, Mr. Chairman.
7 MAJORITY CHAIRMAN EVANS: Representative
8 Shapiro.
9 REPRESENTATIVE SHAPIRO: Thank you,
10 Mr. Chairman.
11 And welcome, General. Thank you for your
12 testimony.
13 I wanted to follow up on a line of
14 questioning that was going on when the State Police
15 were here talking about their communications systems.
16 And they were talking about some of the concerns they
17 have with dead spots, dead zones, around the
18 Commonwealth as they are out conducting their
19 investigations.
20 So I was wondering if the Office of Attorney
21 General has similar concerns, if there are things
22 that we can do in the Legislature to be helpful on
23 that. Perhaps you can build on the commentary that
24 was going on prior to you getting here about the
25 communications. 35
1 ATTORNEY GENERAL CORBETT: That's the first
2 question we haven't anticipated.
3 Let me put it to you this way. We do things
4 a little bit differently than the State Police do,
5 and they have a radio system that we can tap into.
6 Some of our cars have radios. We do a lot
7 by telephone, by cell phone. And I would think that
8 most of our -- and Bill, I'm going to ask you if I'm
9 wrong -- most of our communication for our agents is
10 much more so in this day and age by the cell phone
11 and secure technology.
12 Some buy the radios like the State Police
13 use and we use their system, but we are not out there
14 in the gaps and we are not reacting to crime like
15 they are.
16 I mean, they are the first line of defense
17 in much of rural Pennsylvania where there's not a
18 police department, and they could be reacting to a
19 homicide, to a hostage situation where they could be
20 in a dead zone.
21 That is not our situation. We are
22 proactive, so that when our agents are out there and
23 we are conducting a surveillance, we are conducting a
24 child predator arrest or whatever, that we know what
25 our communication system is. 36
1 REPRESENTATIVE SHAPIRO: Okay.
2 ATTORNEY GENERAL CORBETT: About the only
3 time it would hit us is if we came upon an accident
4 scene and we had to call it in or something like
5 that.
6 REPRESENTATIVE SHAPIRO: Okay.
7 The second question, perhaps one that I
8 think you would anticipate -- on the Child Predator
9 Unit. I know we had the opportunity to talk a bit
10 about that.
11 Your request in your Child Predator Unit is
12 to increase that line by $51,000. And I was
13 following up on Representative Reed's point; we are
14 all concerned about cost, but I know that this
15 particular unit has had great success. Can you talk
16 a little bit about the work that that unit is doing
17 and vis-a-vis the $51,000 increase that the office is
18 looking for?
19 ATTORNEY GENERAL CORBETT: If I recall
20 correctly -- and Sheri is going to tell me if I am
21 wrong -- that $51,000 is just to pay the union
22 contract.
23 REPRESENTATIVE SHAPIRO: Okay.
24 ATTORNEY GENERAL CORBETT: So it is no real
25 additional money. It is just that those are BCI 37
1 agents, so they are AFSCME agents. So that is the
2 contract that the Governor negotiated. I don't get
3 to negotiate that contract. So he gave increases we
4 have to keep; we have to pay that. So that is all we
5 are asking for.
6 This unit has been tremendously successful.
7 It is one of the best, if not the best, in the
8 country.
9 When we were talking about it earlier today
10 prepping to come over here, the number of arrests
11 went from 189 to 191. We had two more arrests today
12 that we haven't publicly announced yet.
13 We have a 100-percent conviction rate of
14 individuals, men 18 to 69, who are reaching out via
15 the Internet trying to touch your children and your
16 grandchildren and your nieces and nephews.
17 Many of the times what they're doing is
18 sending Webcam live transmissions of themselves
19 without their clothes on doing things that nobody
20 should see.
21 If you remember back 4 years ago, and I
22 handled these cases as a young assistant district
23 attorney in the seventies, we had the playground
24 flasher. Well, now it is an electric playground, and
25 it is worse than just flashing, and the kids are on 38
1 the Internet.
2 So this unit from an enforcement standpoint
3 all across the State of Pennsylvania has been very,
4 very effective.
5 One of the individuals we took off a couple
6 years ago -- and I was mentioning it to you in the
7 hall -- when we arrested him, he was trying to meet a
8 15-year-old boy. After we arrested him, he admitted
9 he was an assistant Boy Scout Master. The reason he
10 wasn't talking to the Boy Scouts is because he would
11 have to expose himself on what he was doing; he used
12 the Internet.
13 He was HIV -- excuse me. We missed him by a
14 week. He had had sexual relations with a young boy,
15 and he was HIV positive. We arrested him, rearrested
16 him, convicted him, and he is serving, I think, an
17 8- to 14-year sentence. I don't have the number
18 exactly here, from Bucks County. Those are the types
19 of individuals that are out there.
20 The other aspect that we are doing with our
21 Education and Outreach Unit is our Operation Safe
22 Surf, where we go into the schools, and we trained
23 300 lawyers in the Pennsylvania Bar Association.
24 It's a partnership with the Bar Association, PSEA,
25 the School Boards Association, the principals' 39
1 association, the superintendents' association, and my
2 office, where we go into the schools and teach the
3 kids.
4 And if you have an opportunity to read
5 today's Post-Gazette, you will see a story on it
6 where I was in the North Hills Junior High School
7 yesterday teaching 1,100 seventh, eighth, and
8 ninth graders about Internet safety.
9 Now, this program, the Operation Safe Surf,
10 is totally funded out of the money that we get, and
11 a lot of the people that work on it, though, are
12 putting their time in for free. There are 300
13 lawyers who volunteer, and they go out there as
14 advocates for us, going in.
15 We have reached 150,000 students across
16 Pennsylvania in the 2-plus years it has been in
17 existence.
18 REPRESENTATIVE SHAPIRO: I thank you for
19 sharing that and, you know, commend you for the work
20 you are doing with that unit in particular. It is
21 incredibly important as a father of three and as they
22 begin to look at the Internet. I thank you for your
23 work on that.
24 Thank you, Mr. General.
25 ATTORNEY GENERAL CORBETT: Thank you. 40
1 REPRESENTATIVE SHAPIRO: Thank you,
2 Mr. Chairman.
3 MAJORITY CHAIRMAN EVANS: Representative
4 Scavello.
5 REPRESENTATIVE SCAVELLO: Thank you,
6 Mr. Chairman.
7 Good afternoon, almost good evening.
8 I have two questions. And first, I
9 mentioned to the Commissioner earlier with the
10 economic issues that we are facing and the types of
11 crime, would there be an expansion of crime in
12 particular categories, and he felt that in certain
13 cases it would.
14 In your office with the economy, what kinds
15 of complaints are you receiving in the Bureau of
16 Consumer Protection, and what are the most popular
17 types of complaints that you receive?
18 ATTORNEY GENERAL CORBETT: We are seeing an
19 increase in the last 3 or 4 years in our Consumer
20 Protection Office. Credit-related issues, a
21 tremendous number of those increases.
22 I can give you -- let me give you just the
23 top four or five.
24 Credit-related issues for 2008 were over
25 8,000 complaints across Pennsylvania. Our "Do Not 41
1 Call" list, we had 4,300. Motor vehicle sales, this
2 is a big one, and that is 2,900. Telecommunications,
3 almost 2,900. Energy-related issues, 2,700. And
4 then we get down to number 7, home improvement,
5 2,100.
6 REPRESENTATIVE SCAVELLO: Wow.
7 The second question. Act 57 of 2005, it was
8 to fund -- the Commonwealth was to fund 65 percent of
9 the district attorney's salary. And the County
10 Commissioners Association originally opposed it and
11 then we, the Legislature -- see, they were kind of
12 promised that if we passed the bill, that we would
13 fund that 65 percent, and to this point it hasn't
14 happened. It hasn't been in the General Fund in the
15 last budget cycle and it's not in the General Fund
16 in this budget cycle, and it is approximately
17 $6 1/2 million in costs to the counties.
18 And I know that in 2007, we voted to create
19 a fund, the criminal justice account fund, to put the
20 fees in there in certain convictions. To this point,
21 how much money do we have in that fund?
22 ATTORNEY GENERAL CORBETT: You understand
23 how the Criminal Justice Enhancement Fund works.
24 REPRESENTATIVE SCAVELLO: Yes.
25 ATTORNEY GENERAL CORBETT: It is the fines, 42
1 the costs, that a defendant pays. The fund then only
2 gets its money when it is collected.
3 Collection of fines and costs has always
4 been a problem across Pennsylvania. When I was
5 Chairman of the Commission on Crime and Delinquency
6 -- there are a number of other funds that you have
7 the same vehicle funding. And the Supreme Court, I
8 understand, has a priority of how they fund these,
9 and I believe the district attorneys are pretty far
10 down. Their portion is pretty far down when somebody
11 collects money. So it is almost at the bottom,
12 because it is the most recent one, for want of a
13 better description.
14 REPRESENTATIVE SCAVELLO: Okay.
15 ATTORNEY GENERAL CORBETT: In 2008, actually
16 as of February 18, as of yesterday, we collected
17 $502,477. Now, when I say "we" collected, it has
18 been deposited in our account. We do not collect it.
19 That is the duty of the court and the county in which
20 the conviction occurred.
21 REPRESENTATIVE SCAVELLO: Have any
22 disbursements been made from that fund?
23 ATTORNEY GENERAL CORBETT: There have been
24 some disbursements, but it doesn't cover nearly
25 enough. 43
1 REPRESENTATIVE SCAVELLO: Yeah;
2 $6 1/2 million.
3 Is there any law saying that we have to? We
4 pretty much gave them a commitment that we were going
5 to fund 65 percent.
6 I know a couple of the counties have sent a
7 bill for 65 percent of the district attorney's salary
8 to the Governor's Office.
9 ATTORNEY GENERAL CORBETT: Well, I believe
10 the act stipulates -- and I picked up on this word,
11 and it's a very important word when you talk about
12 legal interpretation -- it stipulates that a
13 full-time district attorney "shall" be compensated at
14 $1,000 less than the compensation paid to a Judge of
15 the Court of Common Pleas.
16 It provides that the Commonwealth "shall"
17 reimburse each county with a full-time district
18 attorney in the amount of 65 percent of the district
19 attorney's salary.
20 So it would appear by the law that you are
21 required to pay that 65 percent.
22 REPRESENTATIVE SCAVELLO: Well, it's not
23 happening, and some of the municipalities are
24 really hurting, because, you know, it's really an
25 issue--- 44
1 ATTORNEY GENERAL CORBETT: Oh, the county
2 commissioners don't like you.
3 REPRESENTATIVE SCAVELLO: You know, the
4 county, it's an unfunded mandate that we put on them
5 and that we pretty much promised them.
6 Would you be supportive of any measure, for
7 example, if we propose or discuss both to divert
8 court fees, which we have, but any other measures
9 that we might be able to do to help the county
10 commissioners across the Commonwealth with this
11 fee?
12 This is something that they didn't ask for;
13 they just got it.
14 ATTORNEY GENERAL CORBETT: That's exactly
15 right.
16 I think, first off, I think it is very
17 important to have full-time district attorneys in
18 these counties. With the caseloads that they have
19 today, it has changed dramatically from 30 years ago
20 or even 20 years ago.
21 For instance, I can tell you, this year --
22 excuse me; in 2008 -- we received over 400 cases from
23 the district attorneys across Pennsylvania, primarily
24 on conflicts of interest or lack of resources, but
25 mostly conflicts of interest because we had a bunch 45
1 of new district attorneys. That will continue every
2 time.
3 REPRESENTATIVE SCAVELLO: Okay.
4 ATTORNEY GENERAL CORBETT: But it goes to
5 show you, when you talk to a district attorney in a
6 small county and they have 600, 700 cases, it has to
7 be a full-time job.
8 Now, that being the case, I would be happy
9 to participate in any discussion as to how you are
10 going to find the money in the budget. But I think
11 also if the Supreme Court and AOPC is the one that
12 says this is the priority on how to pay this money
13 out, that is one thing that has to be considered.
14 The other thing that has to be considered,
15 if I am the county commissioners, if my court system
16 isn't collecting at the rate it should be collecting,
17 then they do have a little bit of their own problem.
18 And there are some county systems that are excellent;
19 then there are some county systems that aren't quite
20 so good.
21 I know when I was Chairman of the Commission
22 on Crime and Delinquency, there were two or three
23 counties that we told them that if they didn't get
24 their collection rate up to, I think it was 65 or
25 70 percent, they weren't getting any more grants from 46
1 PCCD until they got to that level.
2 REPRESENTATIVE SCAVELLO: So just to recap,
3 you are saying by law that it says that we, the
4 Commonwealth, have to fund 65 percent of a district
5 attorney's salary.
6 ATTORNEY GENERAL CORBETT: As I read the
7 law, as I have my notes here in front of me.
8 REPRESENTATIVE SCAVELLO: Okay. Thank you
9 very much.
10 MAJORITY CHAIRMAN EVANS: Representative
11 True.
12 REPRESENTATIVE TRUE: Thank you,
13 Mr. Chairman.
14 Good afternoon, General, and to all your
15 fine staff.
16 And I know that I am going to sound like a
17 broken record and I know that I am preaching to the
18 choir, but I would like to go back to the place I
19 usually go, which is the drug issue.
20 And of course I note that the Governor has
21 proposed cutting their funding by 6 percent for
22 '09 and '10, and I would like to give you the
23 opportunity to just talk as long or as briefly as you
24 like what that means to our local drug task forces,
25 to your interdiction program, your prosecuting of the 47
1 criminals.
2 I just want to add, mostly for the record
3 and for anybody, and hopefully a lot of people are
4 watching this particular segment, you know, I have
5 always believed that the drug problem is the cause of
6 so many of our other problems here, which is why it
7 is important that you can explain what that cut means
8 to your fight against the drug problem -- child
9 abuse, domestic violence, gun crime, homelessness,
10 the health-care issue, IV drug use, therefore AIDS
11 many times, and these all come under the problem of
12 drugs.
13 So we seem to talk about it every year, but
14 I wonder if you could tell us in this budget what it
15 might mean to the ongoing fight against drugs in our
16 Commonwealth.
17 ATTORNEY GENERAL CORBETT: Thank you,
18 Representative.
19 Let me start off with where you started in
20 the beginning about the cut to our general operating
21 fund, our GGO.
22 The Governor's recommended cut would require
23 my office to reduce the size by an additional
24 29 people. We are already not filling 17 positions,
25 okay? We won't fill those. 48
1 If we go down 29 positions, we are not going
2 to be able to give the people of Pennsylvania the
3 level of service that we have given in the past. It
4 is just physically impossible.
5 Secondly, with the cut in services and
6 treatment, I can't tell you how opposed I am to
7 something like that. I believe that 70, 75 percent
8 of the people that you see in the State prisons in
9 Pennsylvania and in county jails, but I'll talk about
10 the State prisons of Pennsylvania, are there either
11 directly or indirectly as the result of a drug
12 problem, addiction, crime, whatever, and to reduce
13 the prevention and the treatment, to me, is a
14 mistake.
15 If we get the reduction that is proposed,
16 this is how it will affect us.
17 Currently, there are 65 counties in our
18 Drug Task Force Program. Forty-two are run by the
19 district attorneys, 12 by the Office of Attorney
20 General. Last year alone, in 2008, that task force
21 arrested 5,419 people across Pennsylvania.
22 We clearly cannot continue to fund the task
23 forces if our budget is reduced. Therefore, there
24 will be a direct impact on enforcement, whether it is
25 payment to local police departments who are working 49
1 on the drug task forces or working with the district
2 attorney or working with us.
3 We are requesting an increase of $195,000 to
4 the drug task forces, again, only to pay the union
5 increase.
6 Now, this union is BNI, our Bureau of
7 Narcotics Investigation. It is an FOP union. It is
8 the only union I get to negotiate with. I gave them
9 an increase to match their brethren agents who are
10 AFSCME agents. It is pretty hard to say, well,
11 because you're not an AFSCME agent, you aren't worth
12 as much. We made it equal. I said, you're not
13 getting anything more, you're not getting anything
14 less. We are equal.
15 Your task forces are funded, the county task
16 forces are funded through our office. Some of the
17 task forces, as I said, are OAG run, some are county
18 district attorney run.
19 What is important about many of these task
20 forces is that they develop complex drug trafficking
21 investigations to work up the chain of distribution,
22 and that's what we try to do to break up drug rings,
23 not just the little street corner guys but working
24 our way to the county, to the State, to
25 international. 50
1 We had one case that we started off with
2 information that we got at the local level. It went
3 all the way to Mexico. We would have brought in the
4 head of the gang -- excuse me -- the leader of the
5 gang back to Delaware County where the
6 methamphetamine that she and her organization in
7 Mexico were producing and sending to California and
8 sending then to Delaware and Philadelphia and was
9 being distributed on the streets of Delaware and
10 Philadelphia, we would have brought her back except
11 her competition took her out. They killed her before
12 we got her.
13 It's a violent organization. It's a violent
14 organization in southeastern Pennsylvania that we
15 took out.
16 We have, if you go back and look at our
17 office Web site and do a little history review,
18 Operation Boomerang was Hazleton, where we believe
19 the total amount of drugs that were being spent and
20 paid for on the streets of Hazleton and the money was
21 going to the Dominican Republic was over $30 million.
22 That is $30 million that is not being used
23 in the economy. That is $30 million that is not
24 being paid in taxes, that is going out illegally
25 outside of the country. 51
1 I have a number of others, but in the
2 essence of time and the consideration of time, I
3 won't go into those.
4 REPRESENTATIVE TRUE: Well, I appreciate
5 what you said. And of course I know how important
6 and passionate you all are about the issue.
7 And just in closing, Mr. Chairman, I just
8 would like to say to you, General, that it is a
9 privilege to sit in a room with someone in the
10 political realm that knows how to say yes and knows
11 how to say no without any reservation, and I
12 appreciate your remark about legalizing marijuana.
13 Thank you, Mr. Chairman.
14 ATTORNEY GENERAL CORBETT: Thank you.
15 MAJORITY CHAIRMAN EVANS: Representative
16 Petri.
17 REPRESENTATIVE PETRI: Thank you,
18 Mr. Chairman.
19 And thank you, General, for being here
20 today. It is always interesting to hear what is
21 going on in Pennsylvania and the work that you are
22 doing.
23 I wanted to ask you a couple of questions
24 about the new act that Senator Tomlinson sponsored
25 and we passed last year, the residential home 52
1 improvement contractors act, and I don't think that's
2 exactly what we called it, but that's the essence.
3 ATTORNEY GENERAL CORBETT: We all call it
4 Home Improvement.
5 REPRESENTATIVE PETRI: Yeah, the Home
6 Improvement, in order to get to the thousands of
7 consumer complaints that all of our counties have
8 over residential contract work.
9 I know that many of my constituents,
10 particularly the contractors that are impacted, don't
11 yet know about this act, which becomes effective
12 July 1. So obviously for those people that watch
13 PCN, here's a heads-up. It is coming, and you better
14 get ready.
15 I am also finding that a lot of the
16 constituents I speak to, once they actually hear what
17 is in the bill, as contractors, they are very
18 thrilled. They think that it is going to have great
19 measures in getting rid of what we call the
20 contractor with a shovel and a pitchfork and an ax
21 and, you know, he thinks he's a contractor.
22 The question I have is, I know your office
23 is charged with putting up the 800 number and also
24 having the system ready to go and ultimately
25 enforcement. 53
1 When do you think, for those that need to
2 obtain their registration numbers, when do you think
3 those applications will be ready and the 800 number
4 will be ready?
5 ATTORNEY GENERAL CORBETT: We plan on being
6 up and running and advertising that sometime in
7 middle to late March.
8 This is a process that we have been going
9 through. We looked at other States where they have
10 had this process, particularly New Jersey, which has
11 done it most recently.
12 In the New Jersey system, it was a complete
13 fill out the form and send the form in. We are
14 working on making it as user friendly as we can, and
15 we are working on an electronic system where the
16 contractors will be able to go on line and fill out
17 the information and provide it to us.
18 And there's a fair amount of detailed
19 information that is required under the act. Those
20 people who need to register are individuals who made
21 $5,000 or more last year in the calendar year in
22 home improvement work. They need to sign up for
23 this.
24 In the future, as you said, in the act, they
25 will have to have a registration number from us. 54
1 They are going to have to advertise that registration
2 number from us. It will be important for the
3 consumers who are purchasing home improvement
4 services to be looking for somebody who has that
5 number.
6 It doesn't mean we are guaranteeing that
7 they are excellent or good or even know how to swing
8 at hammer; it means they registered with us. But
9 where it is going to help us is when we have to go
10 look for -- and I call them the bandits, not even the
11 1 percenters of home improvement people that give
12 home improvement contractors a bad name that we had
13 to pass this legislation for.
14 We have a hard time in Consumer Protection
15 to find them. At least they are going to be
16 registered, or if the people see somebody who is not
17 registered, literally it is on the consumer at that
18 point not to use them.
19 So we are in the process of working up the
20 media plan as to how to get this out. I can tell
21 you, we have been in close contact with all of the
22 contractors' associations, home improvement
23 associations. We will be going to Home Depot and
24 Lowe's putting out information at all those
25 locations. 55
1 Maybe people will be watching this. We will
2 be looking to do PSAs on the radio across
3 Pennsylvania to get that message out there. And
4 hopefully we will be taking our first registration by
5 about the middle of March.
6 REPRESENTATIVE PETRI: Fantastic.
7 I know in my own district there were
8 contractors that ran off with hundreds of thousands
9 of dollars of deposit moneys that never did any work.
10 So unfortunately it is necessary to go after those,
11 as you said, bandits.
12 On the tobacco money, I just wanted to ask
13 you a quick question on that. I know we were talking
14 about the moneys not coming in and diminishing and
15 then we have this lawsuit pending.
16 The other concern I have, and I wonder if
17 you share it, is, as the Federal Government increases
18 the tax, as the State increases the tax, and as the
19 cessation programs continue to work, what is the
20 exposure to our cancer research organizations that
21 are just doing marvelous work in the State of
22 Pennsylvania and are attracting -- it is probably the
23 one good employment circumstance we have where we are
24 actually growing and we attract people from other
25 States. 56
1 Can we expect that to continue to struggle
2 to be able to fund those programs?
3 ATTORNEY GENERAL CORBETT: I think you are
4 always going to have struggles funding those
5 programs.
6 They are worthwhile programs. I don't know
7 that they are necessarily connected directly to the
8 tobacco. I mean, as far as I know, lung cancer -- I
9 mean, excuse me. Tobacco is alleged to have caused
10 lung cancer, tongue cancer, and throat cancer. The
11 other cancers, obviously, you know, the research will
12 be conducted.
13 What is interesting to know is, you brought
14 up the fact that we tax tobacco. I mean, I can
15 remember -- everybody in my family smoked; I never
16 did, but my mother buying cigarettes for 25 cents a
17 pack back in 1965. And I have no idea what it is
18 now, but it is like $4 and some cents. The vast
19 majority of that really is the different taxes.
20 Part of the Master Settlement Agreement, the
21 purpose of the Master Settlement Agreement was to
22 impose a tax and fees would be paid, but really it
23 was to drive down smoking, to cause cessation.
24 So eventually, you know, the whole idea is,
25 the more you do that, the more you dry up smoking, 57
1 then that money is going to go away. And the more
2 you tax it, that is going to drive down smoking and
3 then the money is going to go away.
4 One of the aspects that you should always be
5 aware of is you had four -- Joel, four major
6 manufacturers? -- four major manufacturers that
7 participated.
8 There were smaller manufacturers that didn't
9 participate. We call those the nonparticipating
10 manufacturers. They have grown, and they are the
11 ones that we have to go out and diligently enforce,
12 again to get them to put money into an escrow
13 account, and there's another whole battle going on
14 there.
15 They have grown and taken a bigger share of
16 the market than they had, and that's a whole nother
17 aspect that you don't want to go into today, because
18 I think you have somebody else after me.
19 REPRESENTATIVE PETRI: Following up on that
20 real quickly, I guess we can expect that there will
21 be more illegally non-taxed cigarette trading then,
22 which would create more law enforcement activities by
23 your office.
24 ATTORNEY GENERAL CORBETT: Well, and
25 particularly by Revenue, because they are the ones 58
1 that enforce the cigarette tax.
2 REPRESENTATIVE PETRI: A final question real
3 quickly on this issue with the Medicaid fraud that
4 Auditor General Jack Wagner found.
5 Do you get or are you getting referrals on
6 those cases, now that he has produced his audit,
7 which suggested that 14 percent of the random files
8 he selected had some level of fraud? And if not, are
9 you allowed to pursue those cases yourself for
10 recovery?
11 ATTORNEY GENERAL CORBETT: I have not seen
12 other than what was in the newspaper. He wrote me a
13 letter about it, but what he is addressing there is
14 recipient fraud, you or I going to the doctor and
15 then pulling a scam.
16 We don't have jurisdiction over that. We
17 have jurisdiction on provider fraud -- wheelchair,
18 hearing aid, whatever. So that really doesn't fall
19 within our realm at this point.
20 REPRESENTATIVE PETRI: Thank you.
21 ATTORNEY GENERAL CORBETT: Thank you.
22 MAJORITY CHAIRMAN EVANS: Representative
23 Millard.
24 REPRESENTATIVE MILLARD: Thank you,
25 Mr. Chairman. 59
1 General Corbett, thank you for being here
2 this afternoon.
3 Representative Petri and you had a
4 discussion about the contractors and everything. I
5 would make a request that when your office sends out
6 any information in March or April, that perhaps you
7 could copy us as Legislators on it and we could help
8 spread that message as well.
9 ATTORNEY GENERAL CORBETT: I think we
10 usually send you a lot of material, and that will be
11 added into the material.
12 REPRESENTATIVE MILLARD: You bet. And I
13 have done a lot of programs through your department,
14 and they have worked out excellent for my seniors and
15 everybody else, and I thank you for that.
16 ATTORNEY GENERAL CORBETT: Thank you.
17 REPRESENTATIVE MILLARD: Just a follow-up to
18 Representative Petri's question here on Medicaid
19 fraud.
20 Do you expect that you will receive any
21 additional cases in the future as a result of
22 audit findings? Are they normally referred to
23 you?
24 ATTORNEY GENERAL CORBETT: Well, if you are
25 talking about what Auditor General Wagner just 60
1 reported on on the recipient fraud, no, that won't
2 come to us. We don't have that jurisdiction.
3 REPRESENTATIVE MILLARD: Okay.
4 ATTORNEY GENERAL CORBETT: I would imagine
5 that that may be going to the Inspector General for
6 him to follow up to refer cases to the local district
7 attorneys.
8 REPRESENTATIVE MILLARD: Okay. So actually
9 what you have done is answered the next question
10 here, but maybe we can clarify this.
11 So you can't go after some of these cases on
12 your own; they have to be referred to you by some
13 other State agency or entity that is unable to do
14 that investigation themselves.
15 ATTORNEY GENERAL CORBETT: I'm not sure I
16 can quite agree to the way you are stating it.
17 I mean, the Attorney General's jurisdiction
18 is -- in some cases it's original, in some cases it's
19 concurrent, and in some cases it is just upon
20 referral of cases.
21 REPRESENTATIVE MILLARD: Okay.
22 ATTORNEY GENERAL CORBETT: It all depends
23 upon the fund that we are talking about and it all
24 depends what was given to us in the original
25 legislation under the Commonwealth Attorneys Act. 61
1 So before I make a general statement like
2 you are asking me to make, I would almost have to ask
3 you, which fund are we talking about right now?
4 REPRESENTATIVE MILLARD: Well, let's talk
5 about Auditor General Jack Wagner's area.
6 Do you ever get involved in any of those
7 cases at all, or is that strictly handled through the
8 Auditor General's Office?
9 And then specifically---
10 ATTORNEY GENERAL CORBETT: If he conducts an
11 audit and he finds criminality---
12 REPRESENTATIVE MILLARD: Okay.
13 ATTORNEY GENERAL CORBETT: ---he will refer
14 it to the local prosecutor or our office, depending
15 upon which one has the jurisdiction.
16 REPRESENTATIVE MILLARD: Okay.
17 ATTORNEY GENERAL CORBETT: So, for instance,
18 let's say in conducting an audit he finds a State
19 employee who is embezzling hundreds of thousands of
20 dollars from some agency in State Government, he
21 could send that to us because we have jurisdiction on
22 something like that.
23 REPRESENTATIVE MILLARD: Okay.
24 ATTORNEY GENERAL CORBETT: But if in the
25 course of conducting an audit of a school district he 62
1 finds a local employee of a school district, that
2 would get referred to the district attorney, because
3 we do not have authority over the local school
4 districts.
5 The district attorney could refer it to us
6 if they had a lack of resources or a conflict of
7 interest. That is how we get into local, for want of
8 a better word, public corruption.
9 So it really goes, Representative, on a
10 case-by-case basis.
11 REPRESENTATIVE MILLARD: And really what I
12 was concerned about here, what I was trying to focus
13 on was anything involving Medicaid fraud,
14 Medicaid/Medicare fraud, and the point---
15 ATTORNEY GENERAL CORBETT: Well, we have a
16 Medicaid Fraud Unit that is very busy, and I don't
17 have the statistics here in front of me on that.
18 We'll get them to you. But they are busy.
19 They tend not to have jury trials, because
20 when we get done investigating, we work it and
21 there's a plea to it, and they are busy in that
22 regard.
23 REPRESENTATIVE MILLARD: Okay.
24 And finally, when your office does prosecute
25 anything involving a welfare case or Medicare and 63
1 Medicaid, are you able to make any recovery of
2 improperly paid funds?
3 ATTORNEY GENERAL CORBETT: If there's money
4 there.
5 REPRESENTATIVE MILLARD: And typically you
6 are probably dealing with a clientele that there's
7 not a whole lot of money there, I would think.
8 ATTORNEY GENERAL CORBETT: That is true.
9 I mean, we try and get restitution any time
10 in any criminal case that there needs to be
11 restitution for, or to get a court order for
12 restitution.
13 For instance, Mr. Snyder in OPMF, I believe
14 we took a lawsuit against him, and we are seeking a
15 default judgment.
16 Now, he owes millions and millions and
17 millions of dollars. People might say, well, why did
18 you do that? Well, the last time I looked, the
19 Powerball last night was $100 million; what if he
20 won? If we have a default judgment, we can go after
21 that money. If we don't have a default judgment, we
22 got to start it all at that point in time, so we're
23 going to go get a default judgment against him. So
24 we do that oftentimes.
25 Let me just share with you our Medicare 64
1 Fraud Section. In Medicaid recoveries last year,
2 calendar year 2008, we recovered $18 million to
3 Pennsylvania -- 3.9 of that was restitution, 63,000
4 was in fines, 2.2 was in nursing home recoveries, and
5 11.7 was in State civil settlements.
6 So we do get money back for the people of
7 Pennsylvania.
8 REPRESENTATIVE MILLARD: Okay.
9 Well, thank you for sharing that information
10 with us.
11 Thank you, Mr. Chairman.
12 MAJORITY CHAIRMAN EVANS: Representative
13 Evans.
14 REPRESENTATIVE J. EVANS: Thank you,
15 Mr. Chairman.
16 And thank you, General Corbett, for your
17 testimony today.
18 I want to commend you and your office for
19 your frequent visits to the northwestern part of the
20 Commonwealth and your close working relationship with
21 our district attorneys up there, Brad Foulk and
22 Francis Schultz from Erie and Crawford Counties.
23 The questions -- I'll try and make this
24 brief, Mr. Chairman -- deal with the deceptive
25 advertising issue. 65
1 In this type of an economy when people are
2 looking for more and more bargains out there, there
3 have been some bait-and-switch techniques going on.
4 There have been some cases and some judgments against
5 companies for deceptive advertising practices in the
6 Commonwealth.
7 I just wondered if you could comment on the
8 success ratio and the judgments that we have been
9 able to obtain against those particular companies?
10 ATTORNEY GENERAL CORBETT: I couldn't
11 address it on the individual companies. I just don't
12 have that information in front of me.
13 That is one of the duties of our Bureau of
14 Consumer Protection, is to go after deceptive
15 advertising.
16 Many times, if we are advised of the
17 advertising early enough on, before there were any
18 major losses, the Consumer Protection agent and the
19 attorney oftentimes will get involved in negotiations
20 with the advertiser, the actor, and have the
21 advertising changed.
22 I know with one association we sat down and
23 went over the rules, that they knew what the rules
24 were for advertising, that there was equal
25 application by my agents and attorneys across 66
1 Pennsylvania, so that what happened in Philadelphia
2 was treated the same way in Erie, and I think that is
3 important to give business a level playing field.
4 But we get the complaints from the citizens,
5 and if we believe they have a legitimate complaint
6 and we can prove it, we oftentimes will go after
7 the individual companies. But I don't have the
8 individual statistics to go into the cases with
9 you.
10 REPRESENTATIVE J. EVANS: I do have a
11 concern about some of the practices that some
12 retailers engage in, particularly at the holiday
13 season.
14 And we saw it this past Christmas, I
15 believe, in the neighboring State of New Jersey where
16 at a Walmart, there was such a rush when they opened
17 the doors for a limited supply of a product that an
18 employee was trampled and killed.
19 It becomes a public safety issue, and I am
20 wondering if there are any other States that you know
21 of or any legislation we could possibly draft here to
22 put some rules on the guidelines toward the offers
23 that are made, the enticements, when someone is
24 scrambling for a TV set when there may be only a half
25 dozen available for sale with massive advertising 67
1 toward those select products.
2 It seems as though a line has been crossed
3 somewhere and that it is involving now public
4 safety.
5 ATTORNEY GENERAL CORBETT: I am not aware of
6 any legislation right now, but I know that my
7 legislative liaison and her staff will look for it
8 for us and we will get it back to you.
9 REPRESENTATIVE J. EVANS: All right. Thank
10 you very much.
11 MAJORITY CHAIRMAN EVANS: Mr. Attorney
12 General, I want to go back to one question relating
13 to the budget.
14 Now, I think I heard you say, and you can
15 correct me if I'm wrong, that obviously you will live
16 with this budget if you have to. That is what I
17 heard you say. Am I correct?
18 ATTORNEY GENERAL CORBETT: Do I have a
19 choice?
20 MAJORITY CHAIRMAN EVANS: Well, I'm just
21 asking. I'm just asking.
22 ATTORNEY GENERAL CORBETT: Whatever you ask
23 is what we live with.
24 MAJORITY CHAIRMAN EVANS: Okay. So then in
25 other words, we don't have to do anything. That is 68
1 what you are saying. You are saying you accept the
2 budget as it is.
3 ATTORNEY GENERAL CORBETT: Well, no. I
4 mean, we have asked you not to accept the Governor's
5 budget, just as I don't think any year since I have
6 been here have I asked you to accept the Governor's
7 budget.
8 MAJORITY CHAIRMAN EVANS: So what are you
9 recommending then?
10 ATTORNEY GENERAL CORBETT: We have
11 recommended a 1.3-percent increase.
12 MAJORITY CHAIRMAN EVANS: And that totals,
13 it looks like, about $900,000?
14 ATTORNEY GENERAL CORBETT: $900,000.
15 MAJORITY CHAIRMAN EVANS: That's it?
16 ATTORNEY GENERAL CORBETT: That's it.
17 MAJORITY CHAIRMAN EVANS: That is all you
18 are asking for, $900,000?
19 ATTORNEY GENERAL CORBETT: Well, to be
20 accurate, $913,000.
21 MAJORITY CHAIRMAN EVANS: How about if I
22 give you a video poker machine?
23 I would like to thank you for all that you
24 do. I would like to thank you for all that you do
25 for the people of the Commonwealth of Pennsylvania. 69
1 ATTORNEY GENERAL CORBETT: Thank you.
2 MAJORITY CHAIRMAN EVANS: I thank your
3 staff. I really appreciate what you do. And I know
4 it's not easy, it's really not easy what you do. We
5 will be more than glad to continue to work with you.
6 We will recess for 2 minutes and bring up
7 the Office of Open Records.
8 Thank you very much.
9
10 (The hearing concluded at 5:05 p.m.)
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1 I hereby certify that the proceedings and
2 evidence are contained fully and accurately in the
3 notes taken by me on the within proceedings and that
4 this is a correct transcript of the same.
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7 ______Debra B. Miller, Reporter 8
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