Big money flowing into Pa. governor's race

Posted: February 17, 2014

A half-million dollars from someone who wants a seat on the Pennsylvania State University board of trustees.

A quarter-million as a "thank you" from a philanthropist. A million from a York County businessman who says he just wants a good governor.

The flow of outsize checks to candidates for governor of Pennsylvania, disclosed in recent filings, shines a new spotlight on the state's wide-open campaign laws, with no limits on donations from individuals and political committees.

Watchdog groups say big donors always want something and the flood of money at least brings access to public officials that regular voters can't match.

"There are no rules," said Barry Kauffman, executive director of the state chapter of Common Cause, which tracks the influence of money in politics. "You can be sure that people don't give a half-million-dollar contribution without it turning into a power tool. . . . Big checks are investments in future favors."

Al Lord, the recently retired CEO of Sallie Mae, contributed $500,000 to the gubernatorial campaign of state Treasurer Rob McCord because he said McCord agrees with his views about helping Penn State recover from the Jerry Sandusky child sex-abuse scandal.

"He is sympathetic to the ongoing malaise and angst surrounding Penn State . . . and will be at least fair-minded to the university," Lord, a Republican, said in an interview.

Lord is running for one of nine alumni seats on the PSU board of trustees in an April election. He also is helping former university president Graham B. Spanier sue Louis J. Freeh, the former FBI director who oversaw an investigation that faulted Spanier, Joe Paterno, and other school officials for not acting to stop Sandusky's abuse of young boys.

"For Penn State to get a fair shake, [Gov.] Corbett's got to go, and I think McCord is the best fit to beat Corbett," Lord said. "He's about as close as you can get to the middle of the road for a Democrat; I can get Republicans to vote for him."

Pennsylvania also has millions invested through its pension funds and the 529 college-savings program in securities issued by Sallie Mae, the private, for-profit issuer of college student loans.

As treasurer, McCord is the overall custodian of the funds and administers the 529 program, supervising professional money managers, state officials said. McCord does not make direct investment decisions himself.

Federal Securities and Exchange Commission rules prohibit executives of firms that manage money or issue municipal bonds from donating to the campaigns of state officials who can influence investments. Lord donated to McCord at the end of the December, around the time he left Sallie Mae.

Pennsylvania is one of 11 states that allow unlimited campaign contributions from individuals and political committees; direct corporate and union contributions are prohibited.

Donors say they give for a variety of reasons.

H.F. "Gerry" Lenfest said he gave $250,000 to Corbett's campaign out of a sense of gratitude - the governor approved a $30 million state grant for the proposed Museum of the American Revolution, a favorite cause of Lenfest's.

"I greatly appreciated that support from the commonwealth," Lenfest, a philanthropist and part-owner of The Inquirer, said in an interview. He said it meant even more because he supported Democrat Don Onorato over Corbett in 2010.

Democratic candidate Tom Wolf of York, owner of his family's building-supply business, got a $1 million check from Tim Grumbacher, board chairman and former CEO of the Bon-Ton department-store chain.

"I'm sure the biggest question is, Do I hope to get anything personal from this?" Grumbacher said in an interview. "The answer is, No, I don't expect anything - no state contracts, nothing. . . . The best thing he could do for me is make Pennsylvania a better place for all citizens as governor."

Wolf is both a candidate and the largest donor in the race so far - he and his wife, Frances, put $10 million into the campaign. Wolf likes to say on the campaign trail that his money gives him independence and that he can't be bought.

As a result, he leads the Democratic pack in cash by several million. His money is no guarantee of success, but family wealth has gone a long way in recent statewide races.



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