A business deluge, a rainmaker under a cloud

March 18, 2007|By Mario F. Cattabiani, Miriam Hill, Andrew Maykuth and Craig R. McCoy, Inquirer Staff Writers

He has been what lawyers call a "rainmaker." He's lined up government and corporate clients for a Philadelphia law firm that pays him well for this - as much as $1 million a year.

But he was just moonlighting. His day job? State senator.

While Vincent J. Fumo has served in the Pennsylvania Senate, he has drummed up business for his law firm from government agencies where he has political clout, an Inquirer examination shows.

He has marketed the Dilworth Paxson law firm from City Hall to the state Capitol. Since he joined Dilworth in 1993, he has helped bring a parade of clients to the firm's door.

They have included the city, its courts, the turnpike, the Philadelphia School District, and Blue Cross, according to people familiar with the firm's work.

The volume of Dilworth's city and state bond work has more than doubled since Fumo joined, according to an Inquirer analysis of data provided by Thomson Financial. That work generated millions of dollars in fees for Dilworth.

Pennsylvania permits its legislators to earn outside income as lawyers, and Fumo and 29 others do. And the firm's chairman says he doesn't know of Fumo ever "using his office" to steer business to the firm. The state ethics law prohibits that.

Still, government ethicists say that law is murky about what a legislator can or can't do when soliciting government work for his firm. Some say legislators simply shouldn't do this.

If a legislator "wanted to run a pet store, if he wanted to be a physician, if he wanted to sell dresses, that would be fine," says Arthur Levitt, who as Securities and Exchange Commission chairman from 1993 to 2001 championed tough ethics rules. "But I think that for any public official to be able to profit from association with a firm that does business with the state is improper and, in my judgment, probably unethical."

Others, such as Common Cause's Barry Kauffman, say Pennsylvania could save taxpayers money if it kept politicians out of the choosing of bond lawyers and used competitive bidding, as Maryland has for years. "It's a prudent way," says Howard Freedlander, deputy Maryland treasurer.

Gov. Rendell said that while it's "perfectly legal" for legislators to seek government work for their law firms, "I don't think it's proper or appropriate."

"I think it creates at least an appearance of undue influence when a legislator is asking a governmental agency or authority to give work to a firm," Rendell said in an interview.

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