Veon's 'BIG' trial should reveal how he spent taxpayers' money
Former state Rep. Mike Veon, D-Beaver, along with former state Sen. Vincent Fumo, both started nonprofit agencies with names suggesting good works for the public. Veon created the Beaver Initiative for Growth (BIG); Fumo started Citizens Alliance for Better Neighborhoods in Philadelphia.
But the nonprofits, given civic-minded names by their Harrisburg creators and benefactors, were turned into vehicles to benefit Veon and Fumo politically and financially.
Both Fumo, once a top Democratic power broker, and Veon are now serving time in prison. Fumo is in federal prison after his 2009 conviction on 137 counts of corruption, much of it stemming from his abuse of state resources as well as the misuse of assets of the nonprofit he founded and controlled with a former aide.
This week, Veon, a former Democratic House Whip who is serving a six- to 14-year prison term for his role in the Bonusgate scandal, is on trial for the alleged misuse of some of the $10.6 million in state taxpayer funds provided to BIG.
Prosecutors charge that Veon used much of BIG’s money in ways that had little to do with bringing economic development to the Beaver area but plenty to do with helping Veon politically or personally.
Veon’s trial should reveal how the $10 million in taxpayers’ money was spent.
Reports revealed that BIG hired a company for consulting work that employed Veon’s brother soon after being awarded the contract by Veon. Owners of the company also were contributors to Veon’s campaigns.
Veon’s district office manager at the time, Annamarie Perretta-Rosepink, was paid $37,000 a year to work part-time as BIG’s financial officer. A newspaper report from 2006 noted that Perretta-Rosepink, who is facing charges along with Veon, was also paid $20,423 by Veon’s campaign for consulting services.
Taxpayers should be interested to know if BIG paid large fees to consultants who later made political contributions to Veon. Taxpayers should expect testimony to reveal how much taxpayer money from BIG was spent on economic development and how much was spent on administrative overhead. Veon’s trial should also explain who or what agency was responsible for monitoring how the state funds were being spent.
For several years after BIG was formed, Veon and a fellow state lawmaker, Sen. Gerald LaValle, were the only members of the board of directors, making all decisions about how money would be spent. With their high-level rankings in the Legislature, Veon and LaValle were effective at sending state funds to BIG.
A 2006 newspaper report noted that BIG was not formed as a 501(c3) organization under the IRS tax code, which is the most common designation for nonprofits. Instead, BIG was formed as a 501(c6), which is tax exempt, but permits political activity — something 501(c3) agencies cannot do.
It’s a situation that never should have been allowed. In 2007, the House acknowledged that, adopting a rule banning lawmakers from directing money to nonprofits they created or control.
Having more than $10 million to work with, BIG must have done some good for Beaver and the local economy. But Veon’s trial should reveal how much money was spent to benefit the community and how much was spent to benefit the politician who funded and ran the organization, as well as his circle of aides, friends and associates.
There have been plenty of red flags surrounding BIG. But they were ignored because of Veon’s powerful position, voter apathy and a Harrisburg culture that looked the other way. The trial that began this week should answer questions that taxpayers and voters should have had answered years ago.
Veon’s trial on charges of misuse of taxpayer funds through a pet nonprofit deserves public attention.
