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Saturday, January 10, 2009
Friday, January 9, 2009
Getting To Know Supreme Viceroy Sciortino
Ha! We are having some fun with the headline. It is in partial reference to a certain draft financial agreement (context) with the City:
Points 1-7 describe decisions and actions to be undertaken by the City Controller, but only after prior discussions and expressed written approval from the Executive Director of the ICA.
It all made Henry Sciortino seem to be an extraordinarily powerful figure in the sculpting of Pittsburgh's future. And point 8 in particular seemed to be a bit over the top.
So we decided to do web-based and primary research on Henry Sciortino.
Sciortino had parted ways with the firm Fairmount Capital Management, but a judge had ruled that Sciortino owed Fairmount restitution for having in some way inappropriately wound up with the City of Pittsburgh.
In a telephone interview with the Pittsburgh Comet, Sciortino said that case is being appealed.
"I have never been with the ICA as part of another firm. I was hired as an employee of the ICA," he said, beginning in March of 2004. He says his attorneys are working on it.
*-UPDATE: Didn't go so well. (P-G, Rich Lord)
The kerfuffle may have started in City Hall Pittsburgh, but touched off earthquakes in City Hall Birmingham, Alabama.
The Comet didn't think to ask Mr. Sciortino about that incident; it didn't seem to involve him. He wound up remaining on as financial adviser to Birmingham, AL.
For a while, it was a tale of two cities.
Now, I know what you're thinking.
This occurred in November of 2008. By all media accounts, it looks as though Mayor Langford got himself into trouble over previous bond deals he and his associates made during his tenure as a Jefferson County official -- before he was elected mayor of the City of Birmingham.
We asked Sciortino to confirm that this is true; that he had no connection to any of these Jefferson County bond deals. He confirmed this.
He also described how he left Birmingham in the wake of Mayor Bernard Kincaid's defeat.
"I think it was June or July of 2007," said Sciortino. "The mayor was not reelected. I think there was a run-off of some kind ... they don't do it quite like they do here."
And then the leap to this:
That contract turned out to be a no-bid contract.
Sciortino impressed upon the Comet his lack of involvement with Jefferson County, with CDR Financial Products, and with Mayor Langford entirely.
"I haven't met them," he said of the Jefferson County financial advisory team, and hadn't done business with them. Also, "I never had any conversation with the new mayor. I didn't submit my credential."
Now let's go all the way back to 1993 and 1994.
That is one part of the crux in the matter of Kevin G. Quinn, as described in the initial decision of the Securities and Exchange Commission. Quinn was accused of inappropriately marking-up financial service fees owed by the Commonwealth of Pennsylvania by a factor of ten -- from 4.5 basis points to 45 basis points. (Also there was the matter of an ill-understood fee split agreement with a second company that made things grow more unexpectedly expensive.)
During these events, Henry Sciortino was the point-person for such bond deals in the state treasurer's office under Treasurer Catherine Baker Knoll.
Here is the relative upshot of Judge Mahoney's ruling:
Although the taxpayers got soaked, the Commonwealth as a whole just didn't do its due diligence well enough to merit a case.
Sciortino reads in the SEC decision at certain times like a very well-intentioned and unfortunately ignored minor-league functionary. Some selections like this:
At other times, it sounds like Sciortino was changing his stories, and perhaps not being so vigilant as possible. Selections:
"Seven of the eight people who were sued by the SEC for various kinds of wrongdoing were fined," says Sciortino. "One of [those] went to jail."
In the matter of Kevin G. Quinn, the proceedings were dismissed.
"All I know is, I was a fact witness." Sciortino didn't care to engage or challenge our interpretation of events. "I was a fact witness in a larger matter."
Sciortino takes credit for making the initial reports that initiated these SEC investigations. Although in initial interviews he was classified as a potential target -- that's how they do it, he says -- after the initial interviews were concluded, he formally became a fact witness.
Sciortino was keen to inform the Comet In regards to the matters in the seven other SEC suits that the Commonwealth of Pennsylvania was awarded and repaid $15 million.
"That thing went through SEC investigations, the FBI was involved. They looked through everyone and every thing."
The Comet has not researched these other lawsuits as of post time. Sciortino recommends that interested parties track down a Rick Firestone of the SEC in Washington, D.C.
After all of that grilling, Sciortino cordially asked us the occasion of our interest in his at-times tumultuous professional history.
We told him that as a city news blog, we had been covering the 2009 Budget Talks (here, here, here, here) and had become familiar with his name, and in the role of the ICA in City of Pittsburgh budget matters. It seemed that role was becoming the occasion of some controversy.
Sciortino told us that if we are referring to "that agreement that was being waved around" (we are both reasonably certain we refer to the same version of a draft financial agreement), the ICA had "no party in drafting it."
The draft, he said, was produced by the Act 47 team -- Pittsburgh's other oversight body. Scoiortino claims it was rejected by the ICA definitively on the 15th or 16th of December, soon after he saw the language about the role of the Executive Director in regards to a debt reduction fund.
"First of all, the board runs the ICA."
Sciortino also says although the Act 47 team "did a nice job trying to frame the issue, they used a narrow finance mechanism".
Sciortino suggests that much of the confusion surrounding City of Pittsburgh financial matters resolves around misapprehensions about its two financial oversight bodies. "Act 47 deals with the operation of the City", he says. The ICA deals with what he calls "finances".
For example, what we and many have been referring to as the new "Five Year Plan" to be put in place by summer is actually the "Act 47 Revised and Distressed Plan" or something in that ballpark. The real "Five Year Plan" was passed as part of Mayor Ravenstahl's 2009 budget.
Councilman Ricky Burgess, who sponsored legislation (which passed Council, was vetoed by the Mayor, and then subsequently withdrawn) that attempted to push completion of a five-year plan forward from June to March confirms that distinction and characterization.
So long as we had Sciortino on the line, we asked him about whether a shift of emphasis has occurred from paying down pension obligations to addressing the debt.
"There was an agreement the Mayor made with a Council member at one time," he said, referring to a pledge to pay 15% more than the required minimum into the City pension funds, but the ICA recommeded against that strategy. Sciortino said that instead of paying off a big chunk at once, the ICA is more interested in "management behavior that is able to be continued."
That's why they recommended paying off 5% above minimum over five years. "Continue at 5% additional until the pension fund is positive."
And in regards to the City's tactics to reduce debt and debt service, including the special debt reduction fund at the Controller's office: "How it gets done is less important than getting it done."
Mr. Sciortino mentioned that he does not run the ICA; the board does. Let's meet them.
Barbara McNees: Chair
Grace Ann Geibel: Vice Chair
Dr. J. Matthew Simon: Secretary / Treasurer
Curtis Aiken: Member
Richard Stanizzo: Member
One seat on the board is appointed by the Governor, and the other four are appointed by the two party leaders of the two houses of the Pennsylvania State Legislature. If anyone can research who on the present board was appointed by whom, I would be grateful, because I am exhausted.
That should get you started.
As to the relation of Executive Director Henry Sciortino to board-level politics, we have discovered only one small indicator.
As you know, William Lieberman was prominent among Mayor O'Connor's advisers hailing from the private sector. (P-G, Dan Fitzpatrick)
8. The selection of trustee banks or any other professional support for transactions under this Agreement shall be made by the Executive Director of the ICA pursuant to Act 11 of 2004, 53 P.S. 28101 et seq.
Points 1-7 describe decisions and actions to be undertaken by the City Controller, but only after prior discussions and expressed written approval from the Executive Director of the ICA.
It all made Henry Sciortino seem to be an extraordinarily powerful figure in the sculpting of Pittsburgh's future. And point 8 in particular seemed to be a bit over the top.
##
So we decided to do web-based and primary research on Henry Sciortino.
The director of the city of Pittsburgh's state-picked oversight board must pay his former employer $717,000 as a result of a Chester County jury's verdict that he moved money and contracts from that business to his own firm, and interfered with several of the employer's business contracts.
Among the arrangements which Intergovernmental Cooperation Authority Executive Director Henry Sciortino was found to have tampered with is the contract with the ICA... (P-G, Lord and Bolesovic)
Sciortino had parted ways with the firm Fairmount Capital Management, but a judge had ruled that Sciortino owed Fairmount restitution for having in some way inappropriately wound up with the City of Pittsburgh.
In a telephone interview with the Pittsburgh Comet, Sciortino said that case is being appealed.
"I have never been with the ICA as part of another firm. I was hired as an employee of the ICA," he said, beginning in March of 2004. He says his attorneys are working on it.
*-UPDATE: Didn't go so well. (P-G, Rich Lord)
##
The kerfuffle may have started in City Hall Pittsburgh, but touched off earthquakes in City Hall Birmingham, Alabama.
After the initial vote, Council President Loder appeared confused and refused to declare that the vote had failed until he could receive clarification that three votes were not a majority in this situation. He said he also wanted to give councilors the opportunity to reconsider their vote. Half an hour later, Loder called for the vote again, explaining that he now understood that a majority of four was needed when only seven councilors are present. By this time, Councilor Sykes had convened with Mayor Kincaid and Councilor Hendricks and switched her "abstain" vote to a "yes" vote.
Councillor Montgomery became livid. (Black & White City Paper)
The Comet didn't think to ask Mr. Sciortino about that incident; it didn't seem to involve him. He wound up remaining on as financial adviser to Birmingham, AL.
For a while, it was a tale of two cities.
##
Now, I know what you're thinking.
Birmingham Mayor Larry Langford was arrested Monday and the 101-count indictment against him has been unsealed.
This morning, U.S. Attorney Alice Martin announced that Langford, along with friend Al LaPierre and businessman Bill Blount, face charges of conspiracy, bribery, fraud, money laundering and filing false tax returns. (NBC13.com)
This occurred in November of 2008. By all media accounts, it looks as though Mayor Langford got himself into trouble over previous bond deals he and his associates made during his tenure as a Jefferson County official -- before he was elected mayor of the City of Birmingham.
We asked Sciortino to confirm that this is true; that he had no connection to any of these Jefferson County bond deals. He confirmed this.
He also described how he left Birmingham in the wake of Mayor Bernard Kincaid's defeat.
"I think it was June or July of 2007," said Sciortino. "The mayor was not reelected. I think there was a run-off of some kind ... they don't do it quite like they do here."
##
A federal grand jury is investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in U.S. history, did similar work in New Mexico after making contributions to Governor Bill Richardson’s political action committees. (Bloomberg, Brown and Selway)
And then the leap to this:
The head of a financial firm at the center of a "pay-to-play" investigation that prompted the withdrawal of President-elect Barack Obama's nominee for Commerce secretary donated tens of thousands of dollars to Gov. Ed Rendell and has a contract in Pennsylvania.
David Rubin, president of Beverly Hills-based CDR Financial Products, donated $35,000 to Rendell in 2002 and 2005, state campaign finance records show. (Trib, Brad Bumstead)
That contract turned out to be a no-bid contract.
Sciortino impressed upon the Comet his lack of involvement with Jefferson County, with CDR Financial Products, and with Mayor Langford entirely.
"I haven't met them," he said of the Jefferson County financial advisory team, and hadn't done business with them. Also, "I never had any conversation with the new mayor. I didn't submit my credential."
##
Now let's go all the way back to 1993 and 1994.
Meteer testified that when he mentioned to Quinn that 0.0045 was 45 basis points, Quinn did not react. Meteer was sent back to his desk with the instruction that 0.0045 was to be used, because the mathematical result of the mark-up was to be in the millions. When the preliminary bidding for the securities was done, Meteer marked up the purchase price by 0.0045, or 45 basis points.
That is one part of the crux in the matter of Kevin G. Quinn, as described in the initial decision of the Securities and Exchange Commission. Quinn was accused of inappropriately marking-up financial service fees owed by the Commonwealth of Pennsylvania by a factor of ten -- from 4.5 basis points to 45 basis points. (Also there was the matter of an ill-understood fee split agreement with a second company that made things grow more unexpectedly expensive.)
During these events, Henry Sciortino was the point-person for such bond deals in the state treasurer's office under Treasurer Catherine Baker Knoll.
Here is the relative upshot of Judge Mahoney's ruling:
I conclude that there is no evidence that Quinn intentionally withheld any information about becoming the escrow agent from the Treasurer's Office or the Governor's Office, or that he did so recklessly or negligently. I further conclude that Quinn had no duty to disclose additional information to the Governor's Office.
Although the taxpayers got soaked, the Commonwealth as a whole just didn't do its due diligence well enough to merit a case.
##
Sciortino reads in the SEC decision at certain times like a very well-intentioned and unfortunately ignored minor-league functionary. Some selections like this:
Heyison, the executive deputy treasurer, was considered a micro-manager and a tough negotiator. His style made the Treasurer's Office a difficult place to work. He was responsible for every activity in the Treasurer's Office. Heyison was in strict control of the information flow in and out of the Treasurer's Office. He reviewed all correspondences Sciortino received, except for junk mail. Most of the time, Sciortino had to clear "return calls" with Heyison before making them including routine business.
McCarthy and Heyison were the decision-makers for the office, and both Arpey and Sciortino recognized McCarthy to be their superior. McCarthy was not an employee of the Commonwealth, but they understood that he was standing in the shoes of Heyison and was to be involved in every decision.
Sciortino objected because Alex Brown was outside of Pennsylvania and other applicants had better credentials. However, Heyison and McCarthy's decision was submitted to the treasurer and approved.
When Sciortino learned that Heyison and McCarthy selected Alex Brown, he objected. Sciortino believed that the Commonwealth could effectively provide the same services.
According to Sciortino, the first three options would have resulted in no more compensation to Alex Brown than that identified in the financial advisor service purchase contract. The fourth option, open-market purchasing by negotiated bid, which Heyison and McCarthy pursued, would pay Alex Brown a mark-up.
Sciortino also believed that it was a conflict of interest for Alex Brown to act in the capacity of escrow agent while already under contract as the treasurer's financial advisor.
Quinn negotiated with the Treasurer's Office concerning the level of the mark-up on the escrow securities. Sciortino thought a fair mark-up for the escrow securities was 1/32, approximately 3 basis points or 0.0003125.
When Sciortino was told that the mark-up was 45 basis points, he became "unhappy" and rechecked the numbers with the analyst to make sure they were accurate. Once Sciortino was comfortable with the conclusions, he notified Quinn that the securities had been marked up ten times the amount previously agreed to. Quinn replied that Sciortino's calculations were inaccurate because it was 4.5 basis points.
Sciortino also reported the excessive mark-up to Heyison and McCarthy.
Sciortino also personally notified Knoll, and explained to her the difference between 45 and 4.5 basis points by providing a numeric example of the difference between 179,000 and 1.79 million. Sciortino's action of notifying Knoll agitated Heyison and he forbade Sciortino to ride in the car alone with Knoll after this incident.
Sciortino believed that he could pursue the possibility of getting a refund from Alex Brown for what he believed was an excessive mark-up. Sciortino wanted the difference between the actual mark-up and what he believed they had agreed to originally. He pursued it with Heyison, Arpey, and also McCarthy. Sciortino was told repeatedly that the Treasurer's Office, meaning Heyison, was considering the issue. Sciortino was to "get out of it, go back and do [his] job and [Heyison] would handle that aspect of the transaction."
##
At other times, it sounds like Sciortino was changing his stories, and perhaps not being so vigilant as possible. Selections:
Sciortino did not believe he received the letter although it was copied to him.
In his investigative testimony, Sciortino stated that he wrote the amount on the day of the pricing, but at the hearing he stated that he wrote it sometime later. Meteer received Sciortino's approval of the figures and the purchase was locked in. If Sciortino had withheld his permission, the transaction would not have occurred and "all hell would have broken loose."
During the investigation and the hearing, Sciortino provided a variety of reasons for his presence at Alex Brown, none of which related to the mark-up. He stated that he was there as requested by McCarthy to represent the Commonwealth and oversee the bidding and structuring of the escrow securities. (Tr. 287, 393, 480.) It was standard practice for the Commonwealth to visit the offices of the companies with which it worked, as a form of due diligence. Having never been to Alex Brown's office, Sciortino thought this was a good opportunity. (Tr. 393-94.) Sciortino wanted to see the process of purchasing escrow securities. (Tr. 287.)
In his investigative testimony, Sciortino stated that he visited Alex Brown to make sure that it did the escrow securities purchase "right," because there were certain firms that the Commonwealth did not want to do business with, which the traders at Alex Brown would not have been aware of (Tr. 394.) In investigative testimony taken on November 19, 1997, Sciortino stated that he was at Alex Brown to check on what it charged the Commonwealth for the escrow securities. (Tr. 395-96.) Then, in investigative testimony taken on March 13, 1998, Sciortino stated his purpose was to determine whether or not there was sufficient escrow securities to defease the issue and to obtain a verification report. However, that report was not ready until 6:00 p.m., well after the time Sciortino left. (Tr. 396.) Also, Sciortino was unable to clearly recall other events that day. He was unsure about whether he went trout fishing, to the office, or home upon leaving Alex Brown. (Tr. 397-99.)
Sciortino did not make an effort to stop the closing, even though the mark-up issue remained unsettled. To stop the closing would have caused a significant negative impact on the Commonwealth's ability to borrow in the future. It would have also caused problems with the Commonwealth's credit rating, and decreased its credibility in the marketplace. Comparatively, the risk in causing the transaction to fail and the fact that Sciortino had reported it, caused Sciortino to not attempt to stop the closing. Sciortino assumed that the overall transaction would be successful financially.
Quinn, Sciortino, and Arpey became involved in a heated discussion. Quinn stated that Sciortino was aware of the forward supply contract. Sciortino said that he was not. Quinn stated that he had sent a memorandum to Sciortino about the forward supply contract prior to the escrow securities pricing day. When Sciortino denied seeing the memorandum, Arpey went into Sciortino's office and found it. Still Sciortino claimed to had never seen the memorandum because that was the day he was in Baltimore. The memorandum discussed the forward supply contract, not the mark-up on the escrow securities. Arpey described the memorandum's contents to Sciortino, and Sciortino concluded that the Commonwealth had been deceived.
Heyison and Sciortino did not explain to Heilman why it took them until August 22 to raise the issue or bring this mistake to Heilman's attention. They did not decide on any course of action.
##
"Seven of the eight people who were sued by the SEC for various kinds of wrongdoing were fined," says Sciortino. "One of [those] went to jail."
In the matter of Kevin G. Quinn, the proceedings were dismissed.
"All I know is, I was a fact witness." Sciortino didn't care to engage or challenge our interpretation of events. "I was a fact witness in a larger matter."
Sciortino takes credit for making the initial reports that initiated these SEC investigations. Although in initial interviews he was classified as a potential target -- that's how they do it, he says -- after the initial interviews were concluded, he formally became a fact witness.
Sciortino was keen to inform the Comet In regards to the matters in the seven other SEC suits that the Commonwealth of Pennsylvania was awarded and repaid $15 million.
"That thing went through SEC investigations, the FBI was involved. They looked through everyone and every thing."
The Comet has not researched these other lawsuits as of post time. Sciortino recommends that interested parties track down a Rick Firestone of the SEC in Washington, D.C.
##
After all of that grilling, Sciortino cordially asked us the occasion of our interest in his at-times tumultuous professional history.
We told him that as a city news blog, we had been covering the 2009 Budget Talks (here, here, here, here) and had become familiar with his name, and in the role of the ICA in City of Pittsburgh budget matters. It seemed that role was becoming the occasion of some controversy.
Sciortino told us that if we are referring to "that agreement that was being waved around" (we are both reasonably certain we refer to the same version of a draft financial agreement), the ICA had "no party in drafting it."
The draft, he said, was produced by the Act 47 team -- Pittsburgh's other oversight body. Scoiortino claims it was rejected by the ICA definitively on the 15th or 16th of December, soon after he saw the language about the role of the Executive Director in regards to a debt reduction fund.
"First of all, the board runs the ICA."
Sciortino also says although the Act 47 team "did a nice job trying to frame the issue, they used a narrow finance mechanism".
Sciortino suggests that much of the confusion surrounding City of Pittsburgh financial matters resolves around misapprehensions about its two financial oversight bodies. "Act 47 deals with the operation of the City", he says. The ICA deals with what he calls "finances".
For example, what we and many have been referring to as the new "Five Year Plan" to be put in place by summer is actually the "Act 47 Revised and Distressed Plan" or something in that ballpark. The real "Five Year Plan" was passed as part of Mayor Ravenstahl's 2009 budget.
Councilman Ricky Burgess, who sponsored legislation (which passed Council, was vetoed by the Mayor, and then subsequently withdrawn) that attempted to push completion of a five-year plan forward from June to March confirms that distinction and characterization.
So long as we had Sciortino on the line, we asked him about whether a shift of emphasis has occurred from paying down pension obligations to addressing the debt.
"There was an agreement the Mayor made with a Council member at one time," he said, referring to a pledge to pay 15% more than the required minimum into the City pension funds, but the ICA recommeded against that strategy. Sciortino said that instead of paying off a big chunk at once, the ICA is more interested in "management behavior that is able to be continued."
That's why they recommended paying off 5% above minimum over five years. "Continue at 5% additional until the pension fund is positive."
And in regards to the City's tactics to reduce debt and debt service, including the special debt reduction fund at the Controller's office: "How it gets done is less important than getting it done."
##
Barbara McNees: Chair
Grace Ann Geibel: Vice Chair
Dr. J. Matthew Simon: Secretary / Treasurer
Curtis Aiken: Member
Richard Stanizzo: Member
One seat on the board is appointed by the Governor, and the other four are appointed by the two party leaders of the two houses of the Pennsylvania State Legislature. If anyone can research who on the present board was appointed by whom, I would be grateful, because I am exhausted.
William K. Lieberman left the board in September to join the would-be slot casino team of Forest City Enterprises and Harrah's Entertainment that hopes to get the license for Station Square. House Republicans haven't decided who should fill that seat, said a spokeswoman for House Speaker John Perzel.
The Rev. James Simms resigned in January to work on behalf of Isle of Capri Casinos, the Pittsburgh Penguins' partner in a proposed slot machine casino. House Democrats haven't chosen his successor, said a spokesman for House Minority Leader H. William DeWeese. (P-G, Rich Lord)
That should get you started.
As to the relation of Executive Director Henry Sciortino to board-level politics, we have discovered only one small indicator.
Mr. Sciortino's backers included William Lieberman, a politically connected insurance broker. (P-G, Rich Lord)
As you know, William Lieberman was prominent among Mayor O'Connor's advisers hailing from the private sector. (P-G, Dan Fitzpatrick)
Thursday, January 8, 2009
Thursday: Plodding Forward
The Steelers and a Columbus developer won't start construction of a proposed $12 million entertainment venue on the North Shore until April, four months later than required under a term sheet approved in August. (P-G, Mark Belko)I guess there's no reason ever to hold the Steelers to anything.
Stadium Authority Executive Director Mary Conturo said she did not believe she needed board approval for the change in the start date, arguing the term sheet simply set forth the "basic intent of the transaction."
Do we have any legitimately functioning authorities?
UPDATE: Allegheny Institute.
##
Based on this and maybe a few other things, the Pittsburgh Comet has a lot of confidence in both the Allegheny County Sheriff's Office and the Court of Common Pleas. This is major-league problem solving. (P-G, Edit Board)
##
The head of Allegheny County's Health Department said today that restaurant inspection has been up to par.
Dr. Bruce Dixon testified before County Council's Health and Human Services Committee this afternoon, responding to a recent article in the Post-Gazette detailing shortcomings in restaurant inspection. (P-G, Daniel Malloy; h/t Pgh Is A City)
##
The long-awaited Henry Sciortino post should appear tomorrow. If anyone out there would like to scoop me or provide some input in advance as to what I might include or be wary of (it will neither be an exhaustive nor definitive piece), you should have about 24 hours.
##
Bruce Vilanch: Yeah, there aren't many cities where you can look down on skyscrapers. (Pittsburgh Hoagie)
##
City solicitor George Specter is now on the record independently regarding the developments.
"This so-called cease and desist letter, which is what it was, was sent to them, and they were given thirty days in which to come into compliance." (KDKA, Marty Griffin)
Mayor Ravenstahl:
"They were told to come into compliance, based on the issues that were brought forward to our attention, and our understanding is that they did come into compliance." (ibid.)
Now in today's paper:
A building inspector looked at the outside of the building a week later but didn't enter or write a report, said Bureau of Building Inspection Chief Sergei Matveiev. He did not know why the inspector didn't go in. (P-G, Rich Lord)
Had the club never been visited at all by BBI, that might have been explained by overworked departmental staff or even "things getting lost in the shuffle."
The only reason I can imagine to inspect a building's exterior in response to a situation involving these specific kinds of alleged non-compliances is to log or otherwise demonstrate the semblance of an inspection, and to purposefully look the other way while doing so. That seems more likely to me than sheer staff incompetence -- and there's plenty of motivation to look in that other direction.
From a comment on the Comet by Anonymous 4:43 AM:
This place has been around for years. Has always stayed off the radar. I will not be surprised to find that this poor guy died from some type of natural condition or exposure to a controlled substance.
Drugs are every where. Straight bars, gay bars, clubs, dive hotels, fancy hotels.
IF this is a private club, then what is the harm? As long as everyone is an adult, there are no illegal activities inside? And the patrons do not cause problems inside and out? Leave them be.
Also, there was F-Dzerzh:
This whole thing is a story because a man died, but the relationship between gay bar owners and city officials is a well-known and longstanding fact of life (and not only in Pittsburgh). It began in the pre-Stonewall days when they had to pay off the cops and other officials to prevent raids by the vice squad, and it never stopped. My understanding is that this fact is well-known in the gay community...
No doubt other bars, other businesses, and other building owners pay the equivalent of protection money to keep the regulators away. This is not a trivial fact, and specific examples ought to be exposed, but it is also wildly commonplace.
My response to all of that is that we definitely have to be sensitive, but we don't have to be reflexively tolerant. I don't know that anyone benefits from a double-standard, particularly one both institutionalized and shrouded in secrecy. There is an argument to be made about the bigotry of low expectations -- also I think the oft-cited "under the radar" nature of the club tells us something about its owners feelings on gay pride.
I'm not blind to the fact that Club Pittsburgh provides, perhaps tangentially, a needed service. I do wonder in 2009 whether this particular service is still so desperately necessary that we need to coddle it in all forms and deprive it of regulation. Things grow moldy in the dark.
It's also important to note that according to previous blogging by Sue (who is now admirably focused on the Big Queer Rally), some of these business operators and contributors (in some cases through prominent advocacy organizations) acted as near-formal liaisons between the GLBTQ community and the Ravenstahl administration, and were in the process of helping to organize the city's formal GLBT Advisory Board.
Now, a RETRACTION:
"As to its fate: the owners are obviously being fantastically coy about what they are operating, and are playing what one might call the sexual orientation card."
I think I must have been dreaming this. Certainly some anonymous commenters have started to play the sexual orientation card (and Mr. Karlovich certainly played the "I'm rich and people be hatin'" card) but I can find no evidence of the owners attempting to stifle public discussion by means of crying specifically homophobic persecution.
I don't know to what degree these two club owners are "respected in the community", but they do have my sincere apologies for that lack of respect and attention.
Wednesday, January 7, 2009
UPDATE: Mayor Says We're Being Unfortunate
"Nothing was done for those individuals that wouldn't be done for someone who sent a random letter to our office," said Mr. Ravenstahl. He called reports suggesting that his campaign contributors get special treatment "unfortunate ... Every contributor that has ever given money to me has not been given preferential treatment." (P-G, Rich Lord, or watch it on WTAE, Bob Mayo)It seems like it should go without saying, but here goes:
Should we believe The City's Number Two Official responds to every complaint received regarding B.B.I. cessation orders by personally arranging a "series of conversations" with the city's number one and number two attorneys -- culminating a handshake agreement, a total voiding of the cessation order, and absolutely no verification or follow-up?
I'm going to say no. I don't know who would believe such a thing.
For the record, I suspect this has less to do with a $2,000 contribution than it does with the Mt. Washington fundraiser -- specifically, the idea of continued fundraisers and events. In the wake of a dust-up involving his declared opposition to gay civil unions, Mayor Ravenstahl would be keenly aware of a need for political allies somewhere in the GLBTQ community.
Did Ravenstahl choose to nurture the right kind of gay leaders? I suppose we'll find out.
Did Ravenstahl's chief of staff run interference in order to do an exceptional favor for a political ally? That seems plainly to have occurred.
Would it be as big a deal if it weren't the world's longest pattern -- including Lamar and the billboard, Walnut Capital and the floating hotel, McTish and the parking lots, et cetera? No, it probably would not be quite as big a story, but there you have it.
It's an organizational compulsion.
This Week in "Perceived" Impropriety
I've heard of Pay to Play, but this is ridiculous."It's a private club, just like the Duquesne Club," he said. (P-G, Lord and Sherman)
To my knowledge, no 31 year-olds have ever been wheeled out of the Duquesne Club in a sack.
[Peter Karlovich] said it only got scrutiny because he and [Steven] Herforth are prominent. "Because people don't like us -- we have a big house, we're successful in the community, we donate money to charity -- they feel like they have to knock us down."
They sure are sounding exactly like your typical pay-to-play playahs so far.
After getting the order from the Bureau of Building Inspections, Mr. Karlovich and Mr. Herforth met with Mr. Shields at a Strip District restaurant. In 2007, they had contributed $500 and hosted a fundraising event for his losing bid for city controller.
"I read the law to them," Mr. Shields said. He said the sale of items probably wasn't a big problem, but "the go-go boys are a big no-no here ... And then they said they'd go to Yarone."
Yikes -- someone said the magic word. Now we know it's serious.
"If I'm contacted by a constituent or a business directly, whether it's on my office phone, or cell phone, or by e-mail, I try to make sure that any issues that are brought to our attention are resolved to the satisfaction of all parties," [Ravenstahl chief of staff Yarone Zober] said.
Is that why the Bureau of Building Inspection has such singular track record of achievement? How about letting them do their job once in a while?
Pittsburgh's Lesbian Correspondent has some thoughts:
Ironically, this article demonstrates that the gay community has reached some level of equality. The police raided the Stonewall Inn. The Bureau of Building Inspection sent a letter to Club Pittsburgh. Stonewall patrons and owners fought back using direct action. Club Pittsburgh fought back by placing a call to the Mayor's Office and changing their website.
They did exactly what any other heterosexual owned business would do when facing a threat to their business. They made a few calls and there was no need to take the streets to get BBI to back off.
By that logic, then, we can all proceed as though there's nothing unusual. Club Pittsburgh is more like Lamar Advertising than the Duquesne Club as far as we're concerned.
As to its fate: the owners are obviously being fantastically coy about what they are operating,
Shouldn't have messed up.
##
A West Coast businessman at the crux of a pay-to-play investigation in New Mexico has political ties to Pennsylvania Gov. Ed Rendell and a contract with the state.
David Rubin, head of CDR Financial Products Inc. of California, contributed $40,000 to Mr. Rendell's political coffers between 2001 and 2005, campaign finance reports show. His company also has had $599,000 worth of no-bid contracts with the state since 2003, including a current one for $45,000, according to records released yesterday. (P-G, Tracie Mauriello)
Those financial advisory firms, man. Especially the ones that deal with bond deals. Gotta watch them.
House Republicans used the CDR connection as an opportunity to press for an end to no-bid contracts.
"This governor has made a sport of playing around with the rules regarding procurements ... and he's been able to get away with this stuff," said state Rep. Doug Reichley, R-Lehigh, who is leading an effort to pass a package of bills that would change the way contracts are awarded.
That's good. Cede the issue to Republicans.
Tuesday, January 6, 2009
Tuesday: Anticipating Arguments
Dan Onorato is glad that at least Judge Olson allowed him to use the money on capital improvements and debt service for the Port Authority; she didn't forbid him from spending it on anything besides Port Authority operating expenses, like Kevin Joyce wanted.So she actually gave him some "leeway", provided a "roadmap", split it "down the middle". (P-G, Michael Henninger)
Really? Was that in fact what the plaintiffs were arguing for? Could be.
So we're to call it a draw.
##
"Everybody has been speculating about how much Onorato has in the bank, and we just wanted to be able to report where we stood prior to the Feb. 3 filing deadline," she said. (Trib, Deborah Erdley)
You know, just by the way, in case anyone was wondering. Judge Olson can't tell anyone what to do with that money.
An odd number of search engines hits here of late for terms mentioning Judge Wettick in one form or another. I am just wondering when the State Supreme Court is going to rule on the county's appeal of Judge Wettick's ruling that threw out the base year assessment system currently in place.
Is a ruling getting closer? That would be state-wide news and many counties are already fretting over potential reassessments. (Null Space)
Got to imagine a loss (er, a draw) on this one would be expensive in more ways than one. According to my inexpert calculations, we can expect a ruling around February 9th or March 9th or thereabouts.
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Allegheny County's drink tax dropped with the new year, but that doesn't mean customers are seeing lower bar tabs. (P-G, Dan Majors)
Hey, that's nothing. Virtually the exact same day the City lowered its parking tax, the owners of the lot at One Oxford Center jacked their rates from $15 to $16.
For decades we've been told that raising taxes reliably leads to higher prices and diminished economic vigor, while lowering taxes always benefits the consumer and the employer and the employed and the country.
Could we possibly be learning that it just isn't so? Maybe there are so many other factors which impact economic decision making that so long as certain truly onerous taxation thresholds are avoided, 5% here and 15% there and 25% somewhere else hardly ever make a difference -- except to governments that are struggling to provide services that markets can not.
##
Yes, Trib, it is extremely special. It's also curious how you're either the only ones who have this story or else still think it's important. The whole sordid flaming mess didn't make anyone else's list.
Monday, January 5, 2009
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