A Korean consortium hired a lobbyist for $10,000 a month while seeking a controversial deal to build train cars.
(The following story by Jere Downs and Nathan Gorenstein appeared on the Philadelphia Inquirer website on March 4.)
PHILADELPHIA – The South Korean consortium seeking a quarter-billion-dollar SEPTA railcar deal hired Pennsylvania Republican chairman Alan Novak’s lobbying firm for a five-year, $10,000-a-month contract, according to a document released yesterday by the train-car company.
Novak’s role in United Transit Systems’ attempt to win a contract for 104 Regional Rail cars had been disclosed, but not his fee.
The Inquirer obtained the information from the consortium. SEPTA declined repeated requests for any federal lobbying disclosure forms filed by the four companies that sought the contract.
United Transit’s Japanese competitor, Kawasaki Rail Car Inc., failed to file a disclosure form with SEPTA. Kawasaki acknowledged yesterday that it hired former SEPTA executive Robert G. Bickhart, who now runs his own lobbying firm.
This month, a Common Pleas Court judge will hear Kawasaki’s claim that SEPTA “rigged” the bid for United Transit when it changed the contract’s specifications in May. The $236 million award to United Transit is on hold pending the outcome of the suit.
Novak’s firm was hired at the $10,000 monthly fee in 2002 to “actively” contact SEPTA board members to “introduce” the South Korean firm, the form states.
“This introduction has been educational in nature covering the company’s history… . Initial contact with SEPTA board members began in December 2002 and will continue through 2003,” the form states.
Along with Novak, the lobbyists actively working on United Transit’s behalf for that fee were Craig L. Tucker, an employee of Novak’s firm, and Albert Mezzaroba, a Philadelphia Democrat and president of the Convention Center, who is a fishing buddy of Pasquale “Pat” Deon, chairman of the SEPTA board of directors.
Citing the ongoing lawsuit, SEPTA spokesman Richard Maloney declined to comment yesterday. Deon and board vice chairman James Schwartzman did not return phone calls seeking comment yesterday.
In a statement, United Transit contended that all four bidders for the railcar contract “had to file” the detailed lobby form and that United Transit “may have been the only one to fully comply” with SEPTA’s requirements.
United Transit said lobbying disclosure was required because up to 80 percent of the funds would come from the federal government.
“This is a federally funded contract and federal requirements flow with the money,” a United Transit statement said. “Now we find out that… other bidders thought these rules… didn’t apply to them.”
Kawasaki said it interpreted the requirements differently. It concluded it only had to file a brief statement certifying that it was neither using federal funds for lobbying nor lobbying federal officials. Kawasaki did file that statement with SEPTA.
A Kawasaki official yesterday contended that Bickhart, a former aide to U.S. Sen. Rick Santorum (R., Pa.), was a “representative” rather than a “lobbyist.”
“Lobbying is if you’re trying to influence,” Kawasaki marketing manager Jitendra Tomar said.
“We never did that kind of thing… . You could say he [Bickhart] is our representative… to keep a watch on what these Koreans are doing… to see and give us information on that. I am very clear he is not a lobbyist.”
Reached yesterday, Bickhart said he was not a lobbyist for Kawasaki.
“I was helping them discern their way around SEPTA and the region, and who might be important people to be in contact with,” Bickhart said. He described his role as a “government affairs” consultant.
Tucker and Novak did not return phone calls seeking comment yesterday.
Donald Nigro, president of the Delaware Valley Association of Rail Passengers, expressed dismay that lobbyists were needed by any potential contractor.
“Why can’t the product… sell itself?” said Nigro, who represents the region’s largest organized group of rail passengers. “I don’t know why they need to be spending $10,000 a month on lobbyists.”
Stephan Rosenfeld, a former SEPTA official familiar with large-scale public procurements, said: “None of this should come as a surprise to anyone. It is a high-stakes game.”
SEPTA did not disqualify Kawasaki for its failure to file the detailed form.
The penalty for not filing the form is a fine of $10,000 to $100,000 and is a civil rather than criminal violation. Disqualification from bidding is not a sanction mentioned in the law.
A third competitor, Sumitomo Corp. of America, spent $20,000 to hire the lobbying services of former SEPTA board member and agency executive Robert “Rick” Wooten. Wooten left the SEPTA board in January 2003. Beginning in September, Wooten met with most of SEPTA’s 15 board members to discuss Sumitomo’s merits, company vice president Gino Antoniello said.
“We don’t like to call it grease,” Antoniello said of Wooten – a respected transit expert – and his resulting introductions on the company’s behalf to SEPTA decision-makers.
“We’re not from Philadelphia,” Antoniello added. “Rick’s services were as a public relations consultant.”
Wooten declined to comment for this article.
The fourth contender, Bombardier Transit Corp., said it hired no outside lobbyist.