Monthly Archives: February 2015

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By William W. Warren, Jr., Esq.

The Commonwealth’s procurement of information technology (IT) services and equipment is a source of recurring difficulty. Contrary to the views of many state administrators, the issue is not whether there are too many bid protests. Given the great fear on the part of IT vendors of adverse consequences associated with protesting (whether that fear is real or imagined), in my view there are not enough protests and challenges effectively testing the adequacy, propriety, and sometimes the wisdom of IT procurements. The issue as I see it is whether there are sufficient numbers of qualified vendors willing to weather the rather harrowing processes, risks, and great expense of preparing proposals. At stake is the credibility of and confidence in state IT procurement. Indeed, although discussed here in the context of IT services and equipment, the same point can be made across-the-board for Commonwealth procurement of all services, commodities, equipment and construction.

First, the “seven-day rule” as it is commonly called, must be applied with greater circumspection, interpreted in a manner that does not foreclose legitimate inquiry, and waived when necessary. Secondly, bid protests must be handled, not as a litigation game, but as a method of airing doubts about the propriety of the procurement, the decisions of the involved officials, and the like. We need to change the rules and practices that prevent IT vendors and contractors from getting answers to their questions.

The “seven-day rule,” set forth in the Commonwealth Procurement Code of 1998 and as interpreted by Commonwealth attorneys, has been applied with undue inflexibility, barring potentially valid protests and in any event preventing a complete airing of the issues. If this rule is not satisfied, the protest is dismissed and the merits either are not determined or are given inadequate attention. Vendors want to know what happened substantively; a dismissal on this procedural ground suggests to vendors that the state is hiding behind an unfair rule of mere procedure.

The “seven-day rule” in actuality consists of two separate components: It is commonly understood that bidders, offerors, and prospective contractors have seven days to file a protest, measured from when the vendor knew or should have known of the protest’s grounds. The 1998 Commonwealth Procurement Code, 62 Pa. C.S. §1711.1(b) provides, in pertinent part, that

. . . the protest shall be filed with the head of the purchasing agency within seven days after the aggrieved bidder or offeror or prospective contractor knew or should have known of the facts giving rise to the protest.

I call this the first seven-day period for the filing of a protest.

However, subsection §1711.1(b) continues, again in pertinent part, providing that “. . . in no event may a protest be filed later than seven days after the date the contract was awarded.” This second, seven-day period could have easily been five days or 10. The drafters of the Commonwealth Procurement Code created this second, seven-day period as an absolute bar to any protest by a disappointed bidder. Here, there is clear intent to create a final and very inflexible deadline for action. Can the same be said for the Code’s first, seven-day period?

What seems to attract little attention, perhaps because both periods are seven days in duration, is that it is only the second seven-day period that is explicitly inflexible, hard and fast. By way of contrast, the first seven-day period is triggered by a “knew or should have known” standard. There is nothing inflexible or rigid about a standard of this nature. While the second seven-day period has to be inflexible in order for procurements to proceed in a timely manner, it makes considerably more sense, putting aside the tactical advantage an inflexible approach provides to the agencies, for the Commonwealth to think twice before applying the first seven-day period to bar a protest.

Application of the first seven-day period should instead be flexible. For example, there is no reason to compel vendors to protest an RFP within seven days of its issuance if the RFP includes a question-and-answer process which could resolve the issue. The state’s interest is in avoiding a delay in a procurement; unnecessarily and prematurely filed protests create delay. Why adopt a policy that encourages interference in the solicitation process prematurely?

Moreover, knowledgeable Commonwealth counsel know how reluctant vendors are to raise objections. If anyone doesn’t know this, let me tell you: there is great reluctance. Vendors hold off filing until circumstances force them to take action. But merely because this procedural objection can be raised by agency counsel does not mean it should be.

There is no reason to use the first seven-day period to bar necessary, legitimate, and I respectfully suggest helpful inquiry into the solicitation process. Which is preferable from the standpoint of the citizens of the Commonwealth: successful avoidance of a necessary inquiry through aggressive use of this defense, or the securing of answers to legitimate questions raised in the course of a solicitation process? The question answers itself. When a serious question has been raised, applying the first seven-day period rigidly is a mistake. In order for vendors to participate on an on-going basis in Commonwealth procurement, they require honest answers to important questions. What they often get instead is a defend-at-any-cost reaction that is short-sighted and self-defeating.

It would be better to look at the application of the first seven-day period with a measure of flexibility. Was it absolutely certain that the problem could have been identified when the RFP was issued, when the amendment or addendum was received, or when the question during Q&A was answered? Most potential problems arise in a factual matrix that is somewhat complex. Close questions should be called in a way that favors the securing of answers to legitimate questions. Stated another way, agencies should be required to apply the “knew or should have known” standard according to the facts presented.

Even where there is neither doubt nor ambiguity as to whether a matter could have been raised at an earlier time, it often would make perfect sense to permit the protest to be heard on the merits, and the objection based upon the seven-day period, waived. The solicitation process may not have reached the point where proposals are due. Even if proposals have been received, the tactical objection can be waived so that serious questions can be answered. Waivers are allowed in contexts too numerous to mention. Constitutional rights can be waived. Courts can allow time periods to be extended, both before and after a deadline. Courts also treat seemingly mandatory legislative commands as merely directory instead.

The benefit to Commonwealth IT procurement from changing the current policy to one of flexibility regarding the first seven-day period would be substantial. Such a change would benefit the Commonwealth through greater vendor confidence in decision-making and higher levels of vendor participation.
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ENDNOTES

1. Reluctance to disclose documents relevant to the issues involved in a protest is an example of litigation gamesmanship. A full discussion of that issue can be found in the original article.
2. Thinking twice and being flexible in applying the “knew or should have known” standard does no violence to the Commonwealth’s sovereign immunity in my view. The legislature waived sovereign immunity when the standard was created. What remains is for the standard to be applied in accordance with the circumstances presented in a particular case.
3. Post-bid debriefings have not been shown to solve this problem. Often if not always, debriefings are limited to matters within the vendor’s own proposal. Operating from instructions from agency counsel or as a matter of policy, agency officials say so little that the debriefings often fail to inform to a degree sufficient to reestablish the vendor’s confidence in the Commonwealth’s process. I would like to add to our list of matters that agency counsel can and should address, the unnecessarily paranoid restrictions placed on Commonwealth procurement officials. Telling the truth about a procurement can never be bad. If telling the truth results in more protests, then perhaps more protests are needed.
4. See, e.g., JPay, Inc. v. Department of Corrections, No. 625 CD 2013, Slip opinion at 11 (Cmwlth. Court, April 8, 2014), holding that the 60-day period allowed for rendering a decision under 62 Pa. C.S. §1711.1(f) will not be applied to render an agency decision on a protest announced on the 62nd day invalid. Speaking for the panel, Judge Colins found that, under all the circumstances, the 60-day period was directory, rather than mandatory. There is no reason that this same analysis cannot be applied to instances where the first seven-day period is at issue.

William Warren is Senior Partner in the Harrisburg Office of Saul Ewing LLP, a member of the PBA Government Lawyers Committee, a past Chair of the Dauphin County Bar Association’s Government Law Section, a former Chief Counsel at the Department of General Services and Chief of Litigation in the Office of General Counsel. Warren counsels school districts and local governments in construction matters and state technology vendors and service providers in Commonwealth procurements. The views expressed here are his own. This article has been adapted from a more lengthy article entitled, “What’s Wrong with Information Technology Procurement and What Government Lawyers Can Do About It,” appearing in the Summer 2014 issue of News and Views, the publication of the Pennsylvania Bar Association’s Government Law Section.

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February 2015 John PippyBy John Pippy
Pennsylvania’s elected officials should be commended for taking the time to understand the proposed federal environmental regulations and their compounded effects on a state level. Their time in considering all outcomes so that the Commonwealth’s full constituency is fairly represented is appreciated.
This past December, the comment period on the EPA’s proposed Clean Power Plan (CPP) closed after roughly 1.6 million comments were received. The Pennsylvania Coal Alliance (PCA), along with legislators, public policy makers, electric ratepayers and laborers statewide took to paper and email to submit comments of opposition.
CONSIDER THE CONTINUED PROGRESS
The proposed plan would require that by 2030 Pennsylvania will reduce carbon emissions by 32 percent over 2012 levels. Reducing emissions is an achievable goal and the coal industry and its utility customers have been actively developing advancements and achieving generation efficiencies and pollution reductions. However, the proposed reduction and timeframe for compliance is unachievable given the absence of currently available commercial technology.
According to a Department of Environmental Protection (DEP) report, “Carbon dioxide emissions from the fossil fuel-fired electric generating fleet in Pennsylvania has declined by 12 percent from 2008 through 2013.” These reductions were accomplished while Pennsylvania maintained a stable and reliable supply of electricity at competitively-priced rates lower than both the national average and 17-37 percent lower than its neighboring northern states.
CONSIDER THE 2.4 MILLION PENNSYLVANIA FAMILIES
A recent study conducted by NERA Consulting showed that if the CPP is enacted as proposed, Pennsylvania’s electric rates would increase by up to 31 percent. Roughly 2.4 million low-income and middle-income families in Pennsylvania spend almost 20 percent of their after-tax income on energy. The Public Utility Commission (PUC) released its annual Cold Weather Survey this past December and counted 23,213 households statewide at the beginning of winter that had no heat-related utility service compared with 19,653 at this time in 2013.

CONSIDER THE INDUSTRY
Coal keeps those rates low. According to the Pennsylvania Economy League of Greater Pittsburgh, the coal industry supports more than 36,000 jobs across all sectors of Pennsylvania’s workforce and contributes $4.5 billion annually to the state’s economy. Of the 36,000 jobs, some 13,000 are family-sustaining coal-industry jobs; the kinds of jobs we worry about losing to other countries.
CONSIDER THE ACHIEVABILITY
Coal accounts for 40 percent of Pennsylvania’s electricity and 39 percent of the electric make-up nationally making it the number one source of energy in the United States. The Energy Information Administration estimates even with aggressive growth encouraged by subsidies and grants, by 2040 renewables will still only account for 16 percent of the electricity nationwide. Renewables cannot replace the reliable baseload supply of electricity that coal provides.
CONSIDER THE SUPPLY
Grid operators nationwide have conducted their own reports and publicly opposed the severe timeline for carbon emission reductions as proposed by the CPP for fear of blackouts and a lack of electric supply. In Pennsylvania, the PJM Interconnection grid which provides power to over 60 million consumers with a capacity of 142 GW, experienced demand of 141 GW on January 7, 2014 – over a 99 percent grid utilization rate. With the new and scheduled retirements of coal-fired plants, the need for reliable baseload electricity is more important than ever.
CONSIDER THE RIPPLE EFFECT
There is room for all energy types in Pennsylvania’s electric portfolio. We have been blessed with a strong and diverse supply of domestic resources that keep our prices low and attract businesses and industries that would otherwise go overseas such as manufacturing.

In 2012, manufacturing employed 574,000 Pennsylvanians, accounting for 10 percent of the total workforce with average salaries of $64,913; 44 percent higher than nonmanufacturing sectors. Without this industry, Pennsylvania’s economy would be decimated. And without a supply of low-cost, baseload electricity, Pennsylvania would lose manufacturing.
CONSIDER THE EXPERTS
The PUC stated in their comments submitted to the EPA, “…the EPA has not given sufficient consideration to the impacts its proposal will have on organized electricity markets and the challenges that the proposal presents to system reliability and the economy.”
This past October, Pennsylvania joined other states in legislative action when H.B.2354 (Act 175), was signed into law allowing for the inclusion of the state legislature, educated parties and hearings to ensure all aspects and outcomes are weighed by the appropriate parties.
All of Pennsylvania anxiously awaits the EPA’s June 2015 Plan reveal and trusts that their elected officials will consider all of the consequences of a federal environmental regulation and respectively a forced state energy policy when working with DEP to draft the State Implementation Plan.
John Pippy is CEO of the Pennsylvania Coal Alliance.

 

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February 2015 Tom WolfGov. Tom Wolf has unveiled – at least in part – his plan to impose a severance tax on natural gas drilling in Pennsylvania that he said would generate $1 billion in new revenue, mostly for education.
As part of what Wolf called his “Educational Reinvestment Act” proposal, he said, “The tax I’m proposing … is modeled after the severance tax that’s levied in West Virginia … which is a 5-percent severance tax and a 4.7-cents per thousand cubic feet…on volume.”
“Together that would raise about $1 billion in the first full year, and the first full year would be, in my budget proposal, the 2017 fiscal year, because we would start this Jan. 1, 2016,” said Wolf during a morning press conference at Caln Elementary School, located in Thorndale, Chester County on Feb. 11.
“I’m not proposing anything here that is radically different from anything else – in fact it’s the same as what’s going on around us – and it puts us in a place where we can do some funding for our education system,” said Wolf.
But that’s not the case, says Drew Crompton, chief of staff and legal counsel to Senate President Pro Tem Joe Scarnati, R-Jefferson.
“West Virginia is considered by many to be the highest severance tax rate in the country,” said Crompton.
Crompton said rough calculations by the Senate Republican Caucus indicate Wolf’s plan would produce an effective tax rate of 8 percent to 9 percent on drilling, “which is at least four times the current impact fee rate, which is approximately 2 percent.”
“That would make Pennsylvania the highest tax rate in the nation – if that’s what they were after, I think they have achieved that,” said Crompton.
And if you’re experiencing a bit of déjà vu – for those who remember back to Gov. Ed Rendell’s attempts to get a severance tax – Wolf’s plan doesn’t appear to be much different from the one proposed in 2009 by Rendell, who was Wolf’s boss for a few years when Wolf was the state’s Revenue Secretary: a 5-percent tax on the value of gas at the wellhead, and a 4.7-cent tax per thousand cubic feet of volume extracted.
That plan, even with a state facing $3 billion to $4 billion budget deficits in consecutive years and legislative Democrats holding the majority in the state House of Representatives, could not win approval.
“I think the climate for passage of such a proposal is worse than in the Rendell days,” said Crompton, noting that in 2009 and 2010, no one knew what impact any tax might have on the development of the industry.
“This is tens of thousands of jobs that are at risk – we didn’t know how aggressive the industry would be back then,” said Crompton. “Now we know there are a sizable number of good-paying jobs.”
“That’s with a 2-percent-equivalent impact fee … and now we’re supposed to tell them they can go work in another state?” he said.
House Minority Leader Frank Dermody, D-Allegheny, who has considerably fewer votes in his caucus than his predecessor, former House Majority Leader Todd Eachus, D-Luzerne, did in 2009 and 2010, welcomed Wolf’s proposal.
“This is going to be a key issue as we work on closing the large structural budget deficit,” Dermody said in a press release. “Governor Wolf is following through on what he laid out in his campaign with a proposal to bring Pennsylvania into line with all the other states that already tax natural gas production.”
“No doubt there will be a lot of debate about this, but the governor’s plan provides a framework for the legislature to consider in the next few months,” added Dermody.
But Crompton said the Senate GOP Caucus might not be too interested in that debate.
“Look, if you want to consider whether we can garner more money from the impact fee, there might be ways of having that conversation – the problem is the conversation doesn’t get started when the price” of the tax “is so radically high,” said Crompton. “How do you get into a room with a guy who says he wants 9 percent?”
He said the Senate GOP would have a hard time getting past the “sticker shock” of Wolf’s proposal.

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February 2015 rob mccord 8Rob McCord has taken full blame for improperly soliciting money from two potential contributors to his campaign for governor, admitting that he said he could “make things difficult for them” and that they “should not risk making an enemy of the state Treasurer.”

“The facts are these: I stepped over the line by trying to take advantage of the fact that two potential contributors hoped to continue to do business with the commonwealth and by developing talking points to remind them that I could make things difficult for them,” McCord said in a two and a half minute video where he looked directly at the camera.

“I essentially said that the potential contributors should not risk making an enemy of the state Treasurer. Clearly, that was wrong. I was wrong. It was a mistake,” he said. “I stand ready to pay the price for that mistake.”

“I’ve always believed in accountability and talked about accountability. Now I have to live it,” he added.

Rob McCord is being charged with two federal counts of attempted extortion for pressuring a business and a law firm for campaign contributions, and threatening their business with the commonwealth, documents show.

During his failed bid for governor last year, McCord, a Democrat, demanded campaign contributions from a western Pennsylvania-based property management company engaged in interstate commerce and a Philadelphia-based law firm, according to documents filed with the U.S. District Court in Harrisburg.

In one conversation, McCord said “it’s sort of shocking” who’s contributing and who’s not.

“At the very least I’m still going to be the freakin’ Treasurer. What the hell are they thinking? You know,” McCord said, according to the documents.

With regard to the Philadelphia law firm, the 55-year-old McCord “counseled” a lawyer at the Philadelphia firm to pressure the managing partner to contribute. In the other instance, he counseled a so-called “bundler” – a person who collects contributions from friends, family and other groups – into pressuring principles of the property management company. None of the participants, other than McCord, are named in the documents. The incidents happened during the months of April and May of 2014.

The documents show McCord has signed a plea agreement on two Hobbs Act extortion charges, but don’t say if McCord actually received any of the campaign funds he sought. He abruptly resigned as state Treasurer, which is part of the plea agreement. The maximum penalty for each count is 20 years in prison and a fine of $250,000. He could face lesser penalties for pleading and not fighting the charges.

“The citizens of the Commonwealth expect and deserve public officials who perform their duties free of deceit, favoritism, bias, self-enrichment, concealment and conflict of interest,” said Special Agent in Charge Edward J. Hanko of the Philadelphia Division of the FBI. “Public corruption is an erosion of the public’s trust in our system of government, and the FBI stands committed to holding public officials accountable when they violate their oaths of office and betray that trust.”

During April and May of 2014, the law firm had contracts with the commonwealth and the Treasurer’s office to provide legal services and had billed hundreds of thousands of dollars in legal fees to the commonwealth in the preceding years, the documents said.

McCord had numerous conversations with the managing partner who agreed to make a $5,000 contribution to the McCord campaign, but prosecutors say McCord “threatened economic harm” on multiple occasions to the firm if the contribution wasn’t $25,000.

Prosecutors say McCord gave one of the firm’s lawyers, who the documents say was a neighbor of McCord’s, “talking points” to convince the managing partner to authorize at least an additional $25,000 from the law firm. McCord advised the attorney to tell the managing partner “every time you are trying to get something done through state government you are going to have the State Treasurer looking to screw you.”

McCord also suggested using the attorney or the attorney’s wife as “a conduit” for the contribution to shield it from public disclosure, since the managing partner was a supporter of former Gov. Tom Corbett, the documents say. In a later conversation, McCord told the attorney to “brow beat” the managing partner into authorizing a $25,000 contribution – a sum at which McCord could say the law firm “didn’t totally bone him.”

Prosecutors say in the second scenario, McCord believed principles of the unnamed property management company, who McCord said were “rich as gods,” had failed to honor a campaign contribution pledge of $100,000.

McCord suggested the company would be “part of the problem” if the principles didn’t come through on contributions.

“…you need to be really careful about breaking your political word because you … start break … breaking your political word to a guy who is the sitting State Treasurer…” McCord instructed the bundler to say, the documents said.

McCord told the bundler to relay to the principles that “you could hurt yourself” if a contribution weren’t made. He also indicated to the bundler that the principles “could be embarrassed” into making the $100,000 contribution.

“I’m going to be the Treasurer either way,” McCord told the bundler.

U.S. District Judge John E. Jones III was assigned the case. McCord’s arraignment is scheduled for Feb. 17 at 10 a.m. Out of as four person field of Democratic candidates for governor, McCord came in third in last year’s primary election. He loaned his campaign $2.1 million as he and the rest of the field struggled to keep up with Gov. Tom Wolf’s self-funded contribution of $10 million.

Gov. Tom Wolf, who initially praised McCord’s service to the commonwealth after McCord announced his resignation Jan. 29, said “this is a sad day for the Commonwealth of Pennsylvania and for Rob McCord’s family.”

“As elected leaders we should be stewards of democracy and we should act to protect hardworking taxpayers, not take advantage of them. This type of behavior leads to the erosion of the public’s trust – it is simply unacceptable,” Wolf said in the statement. He said he’ll “act as quickly as possible” to nominate a replacement for Senate confirmation.

McCord said he had planned to step down in mid-February because he said he didn’t expect the federal investigation to become public until around then. McCord’s top lawyer at Treasury, Christopher Craig, will take over until a successor is nominated and confirmed.

House Democratic Leader Frank Dermody, D-Allegheny, also praised McCord’s service Thursday but said McCord’s admission is “disappointing.”

“I am shocked and dismayed at this news from a man whose achievements in the private sector and in public office I admired,” Dermody said in a statement. “The apology and resignation are a necessary first step, but this betrayal of public trust is tremendously disappointing.”

McCord said he hopes the people of the commonwealth will evaluate his service to the commonwealth and find that he served as Treasurer “well and in good faith.”

“But I know my improper efforts to raise campaign contributions will forever be a stain on my record,” McCord said.

He apologized to his family, supporters and staff at the Treasury Department: “I’m sorry, I let all of you down.”

Here is McCord’s full statement:

“Good afternoon. I owe an apology to the people of Pennsylvania. I owe an apology to my incredible staff at Treasury, people who have, for the past six years, served the commonwealth with nothing but professionalism, honor and integrity. The mistake and fault here is mine and mine alone. And of course, I owe a big apology to everyone who has supported me, most especially my amazing family. I’m sorry. I let all of you down.

The facts are these: I stepped over the line by trying to take advantage of the fact that two potential contributors hoped to continue to do business with the commonwealth and by developing talking points to remind them that I could make things difficult for them. I essentially said that the potential contributors should not risk making an enemy of the state treasurer. Clearly, that was wrong. I was wrong. It was a mistake. I stand ready to pay the price for that mistake. I’ve always believed in accountability and talked about accountability. Now I have to live it.

I do want people to know I did my best as treasurer to serve the people of Pennsylvania and I’m proud of the many accomplishments and innovations of our talented team at treasury and I do hope that, over time, people will evaluate my service to the commonwealth and conclude that I did serve them well and in good faith. But I know my improper efforts to raise campaign contributions will forever be a stain on my record.

Yesterday, I tendered my resignation to Governor Wolf and it was to be effective on February 12. That was when I did not expect these matters to become public for quite some time, though I always expected to be accountable. I’m now deeply concerned that my continuation in office, even for a day, might interfere with the operation of the Office of the Treasurer and so I’m now resigning effective immediately in order to be certain that the staff of that fine office can continue to perform the essential job of protecting the public’s resources. Again, I deeply regret my actions and apologize for any harm or any embarrassment I’ve caused for anyone. Thank you.”

 

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February 2015 erikFor now, Erik Arneson, the ousted chief of the Office of Open Records who maintains his firing by Gov. Tom Wolf was illegal, can’t perform any duties associated with the office.

But his case is on the fast track to be heard by an en banc Commonwealth Court panel on March 11.

“We’re getting what we want – we want a fast decision on this,” said Matt Haverstick, a lawyer working for the Senate Republicans. He noted it’s unusual for the court to grant an en banc hearing so quickly.

Commonwealth Court President Judge Dan Pellegrini heard over an hour of argument Feb. 5 on a preliminary injunction from Senate GOP lawyers that aimed to reverse Wolf’s termination of Arneson last month. Instead of granting or denying the injunction, Pellegrini met privately with lawyers representing Arneson, the Senate GOP, and the Wolf administration, and later announced an agreement.

Per the agreement, the court agreed to an expedited, full court hearing next month on the merits of the case. Under the agreement, Senate Republicans agreed to withdraw their preliminary injunction request, which claimed there was daily, irreparable harm because Arneson was not on the job at the OOR. Wolf’s lawyers agreed to drop a motion to strike challenging the Senate Republican Caucus’ standing in the matter.

Also under the agreement, Arneson, who post-termination had said he still is OOR’s executive director, can no longer participate in any operations of the OOR. But he could seek employment elsewhere without Wolf’s lawyers saying he abandoned his position, lawyers said.

The Wolf administration says Arneson is not the executive director. Arneson, who was stripped of his Capitol credentials, access to OOR emails and has not received a paycheck, maintains he is the executive director of the office. When he said so testifying in court, Wolf’s lawyers objected and Pellegrini suggested Arneson be referred to as the “purported” executive director to avoid further objections.

Despite not having an official state-issued ID, parking or IT access, and no longer being paid, Arneson showed up to work Jan. 23 and again on Jan. 26. He said human resources representatives barred him from entering the executive director’s office at the OOR on Jan. 26. Arneson, who was a long-time top Senate GOP aide, worked on Jan. 26 from various Senate GOP offices around the Capitol, he said.

Arneson told reporters he may seek employment in the meantime with his old boss, Sen. Dominic Pileggi, R-Delaware, but he hasn’t made a decision.

Haverstick characterized the agreement between the parties as “a repudiation” of the “really spurious” claims by Wolf’s lawyers in their brief that said Arneson’s situation was a “garden variety” wrongful termination issue and that Arneson was “farcically” doing the work of the OOR.

“No it’s not ‘farcical,’ it’s constitutional, and the court recognized that and that’s why the court wants to have the full Commonwealth Court decide this case on the merits in a month,” Haverstick said to reporters after the hearing. Lawyers from the OAG did not speak with reporters.

During the hearing, Pellegrini alluded to the constitutional weightiness of the issue, saying the disagreement isn’t simply Republicans versus Democrats.

“This issue in this case is how the democracy operates,” he said. “…The sides could flip the next time.”

The governor and his administration have maintained they have every right to fire Arneson and appoint a new executive director – which they have said they intend to do after a national search for a new director is conducted.

Gov. Wolf, in a statement, said Arneson’s appointment was “anything but open and transparent,” and criticized Arneson’s decision to replace the OOR’s top lawyer, Charles Rees Brown, with one of Gov. Tom Corbett’s top lawyers, Delene Lantz-Johnson, who Arneson hired once he took over the OOR.

“With one of his first acts, Mr. Arneson demoted a qualified chief counsel in favor of a Corbett staffer,” Wolf said. “By removing Mr. Arneson, I am standing up against an effort to destroy the integrity of the Office of Open Records and turn it into a political operation. These attempts to change the office, which exists to protect the public’s right to know, are the exact reasons people distrust their state government. When given the choice between protecting the public and playing politics, I will stand with the people of Pennsylvania.

“As a public servant I strive to promote democracy and change the culture in Harrisburg. I will continue to fight for the integrity of the Office of Open Records. Today’s lawsuit does nothing to alter my conviction,” Gov. Wolf said.

Corbett appointed Arneson during his lame-duck period before leaving office. Gov. Wolf said the process “lacked transparency, was of questionable timing and appears to have been rushed through.” Wolf named Nathan Byerly, the office’s deputy director, as Acting Executive Director.

“Appointed officials like Erik in the position that he has under the separation of powers principle just can’t be removed by the executive branch for no reason,” said Matthew Haverstick, outside counsel for the Senate GOP

Gov. Wolf believes Arneson is an “at-will” employee, meaning he could be fired for any reason or no reason at all. Arneson and the Senate Republicans argue the executive director could not be truly independent if he or she worked at the pleasure of the governor.

The lawsuit also relies on the OOR’s quasi-judicial powers, pointing to a 1961 case, Bowers v. Pennsylvania Labor Relations Board. There, the Supreme Court found “a ‘compelling reason’ to deny the Governor the power to remove at will the appointed member of the PLRB because the PLRB was an administrative board that was ‘vested with judicial powers and duties,’” the lawsuit states.

“The OOR unquestionably performs quasi-judicial functions, and is a ‘quasi-judicial tribunal,’” the lawsuit states, adding the executive director “has a direct role in these judicial functions,” and the lawsuit says the executive director of OOR is “substantively indistinguishable” from the PLRB member in Bowers.

“The quasi-judicial power of the Executive Director, as with the PLRB member, must be preserved to prevent the perception (or the reality) that the Executive Branch, through the Governor, is gaining an inappropriate advantage in our tripartite government,” the lawsuit states. “It must not be lost that the OOR has direct oversight over the Office of the Governor in that the OOR – and the OOR alone – is tasked with hearing direct appeals from the Governor’s RTKL decisions.”

“The opportunity for inappropriate control of the OOR by making its leader (and the appointer of its judges) subject to the whims of the Governor is distinctly real, which is precisely what Bowers forecloses,” the lawsuit states.

Arneson was deeply involved in the re-write of the Right-to-Know law signed in 2008.

 

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