Political donations called into question

Indicted cyber school pioneer gave $40,000 to elected officials in Ohio, Pa.

9/1/2013

Brown

THE CINCINNATI ENQUIRER

PITTSBURGH — Elected officials who received political contributions from former associates of cyber school pioneer Nick Trombetta — checks referenced in an indictment issued late last month — said last week that they hadn’t known the donations might not be legal.

The indictment of the former CEO of the Pennsylvania Cyber Charter School spurred some politicians to start tallying Trombetta-related campaign contributions, and to consider what to do with them.

The 11-count indictment of Mr. Trombetta, of East Liverpool, Ohio, and his former accountant Neal Prence of Koppel, Pa., focuses mainly on the flow of money out of the Pennsylvania Cyber Charter School to private nonprofit and for-profit entities, and allegedly into the defendant’s personal accounts. Both men pleaded not guilty Wednesday in U.S. District Court in Pittsburgh.

Referenced in the indictment, but not the subject of any criminal count, are $40,000 in campaign contributions. Among Ohio campaigns receiving funds tied to Avanti Management Group, the committee of former U.S. Rep. Charles A. Wilson (D., St. Clairsville) got the most ($6,500), followed by Sen. Bill Seitz, a Republican from Green Township ($1,250), and U.S. Sen. Sherrod Brown, a Democrat, and former state senators Mark Wagoner, a Republican from Ottawa Hills, and Tom Niehaus, a Republican, ($1,000 each). Ohio Secretary of State John Husted, a Republican, received $500 and former Gov. Ted Strickland, a Democrat, $400.

Mr. Wagoner, who is now a partner with Shumaker Loop & Kendrick LLP, said he does not recall meeting Mr. Trombetta or working on any issues that would have involved Pennsylvania cyber schools. But Mr. Wagoner added that when he was in Senate leadership he was involved in many fund-raisers, and receiving checks from people whom he did not know was common.

He vowed to look into any connections with Mr. Trombetta and to cooperate fully with any investigations.

“If he was doing things that shouldn’t be done, I want no part of it,”Mr. Wagoner said.

A spokesman from Sherrod Brown’s campaign said that if a donor were convicted, the campaign contribution would be donated to charity.

Those contributions represent a small fraction of the political involvement of charter-school-related businesses in the political process. They are noteworthy, though, because of the allegation that they were made by executives of Avanti — and their spouses — at Mr. Trombetta’s direction, and that the donors were reimbursed by the firm.

“If those allegations are true, that’s obviously a violation of the law,” said former U.S. Rep. Jason Altmire, a Democrat from Pennsylvania who received $5,700 in contributions from people tied to Avanti. He added that he would have had no way to know that anyone was reimbursing others for contributions to his campaign.

Mr. Trombetta founded the 11,000-student online school and was its CEO until he left the job June 30, 2012. On July 12, 2012, IRS and FBI agents searched the school’s offices and those of vendors and subcontractors.

The investigation led to accusations that Mr. Trombetta got $990,000 through fraud, theft, and bribery, and conspiring to reduce his tax burden. Mr. Prence is charged with tax conspiracy.

Avanti is portrayed in the indictment as a central point through which funds flowed, ostensibly owned by four former PA Cyber executives but controlled by Mr. Trombetta.

The PA Cyber CEO, according to the indictment, “caused employees of [Avanti], and their spouses, to make financial contributions to political candidates of [Mr. Trombetta’s] choosing.”

Later those employees “were reimbursed from the funds of [Avanti]. By this means, [Trombetta] directed payments of more than $40,000 to political candidates of his choosing” using the firm’s funds.

Both state and federal laws bar the reimbursement of one person’s political contributions by another person or a business.

On the federal level, contributions by individuals and political committees are capped, and secret reimbursements could be used to circumvent those caps.

The state doesn’t limit the size of contributions to its races, but bars corporations and unions from issuing campaign donations, and requires disclosure of checks of more than $50. Reimbursements could undermine those laws.

The Pittsburgh Post-Gazette used online databases of campaign contributions maintained by Pennsylvania’s Department of State, Ohio’s Secretary of State, and the Federal Elections Commission to assemble a list of contributions made by Mr. Trombetta, Avanti principals, and people who appear to be their close family members. The 91 contributions identified by the Post-Gazette ranged from $100 to $5,000, and totaled $88,450 — roughly half of them by Mr. Trombetta. They began in December, 2007, and ended in February, 2013.

It’s unclear why Mr. Trombetta would have wanted to conceal any political giving. His attorney, J. Alan Johnson, declined comment.

The Block News Alliance consists of The Blade and the Pittsburgh Post-Gazette. Rich Lord and Karen Langley are reporters at the Post-Gazette.

Contact Rich Lord at: rlord@post-gazette.com, 412-263-1542, or on Twitter @richelord.