The Markell Unclaimed “Scandal”
I read the News Journal article yesterday, and I shrugged. Then this morning we received this comment on another post:
ANnnnnyyyy coverage on the Jack Markell unclaimed property semi scandal?
Is it a scandal, though? Even a semi-one?
A Wilmington law firm managed by Markell’s former chief of staff received nearly $2 million from the state in the last two years to help collect money owed by businesses under a program he helped create while working for the governor. State officials picked the firm, which has hired other Markell staffers, even though it received lower marks than two other bidders competing for the work, records show.
Nearly $1 million more went to Markell’s campaign finance chairman to represent the state in a Chancery Court case filed by the office supply chain Staples. The company settled its lawsuit challenging a state audit that demanded millions from the business.
In addition to Markell supporters and former staff members, state officials also have paid $120 million to a Massachusetts-based corporate auditing business that has hired two high-ranking Delaware officials.
So long as the bidding process was fair and open, what is the scandal here? This work, collecting money owed to the state, is a legitimate enterprise, and the state, like other creditors, has to pay a third party to collect the debt. The “scandal” appears to be that the winner of the bid NOW employs former Markell staffers. How is that scandalous? Are we saying that if you have ever worked for the state government you can never be employed by any private business who has a state contract? Seriously?
James Browning of Common Cause says the deals around the state program prove Delaware needs stronger laws preventing state officials and employees from profiting from their public jobs. And the state should require better lobbying disclosures for those seeking public business, he said. I agree with all of that, but is that what is happening here? Are there state officials and employees profiting from the work they do in official capacity? Or rather, did the state employee perform his or her job, resign, and then take a position at a private company that has a state contract? Is that profiting?
Absent some proven quid pro quo or wink and a nod, this is not a scandal. It is what happens in a small state. Which is why we are so adamant about open and transparent government. Because we know it happens, so we want the government to be open and transparent about what it does so that when a Markell staffer goes to work for a company with a state contract it doesn’t look like a quid pro quo.
The time line the News Journal provides doesn’t indicate any such thing:
Tom McGonigle, who served as Markell’s chief of staff, helped craft the legislation that created the new program [in June 2012]. In July 2012, [Sec. of State Jeff] Bullock awarded the contract to run the new program to Drinker Biddle & Reath, a Philadelphia-based law firm with 11 offices nationwide. In November 2012, McGonigle left his job with Markell to join Drinker Biddle as a regional partner managing the Wilmington office.
Geoff Sawyer, a former deputy to McGonigle in Markell’s office and a lawyer experienced in abandoned property matters, also works at Drinker Biddle. He was in negotiations to join the firm as the state contract was being considered, joining the office in October 2012. Greg Patterson, another former deputy chief of staff to Markell, joined Drinker Biddle this year to launch a new lobbying practice for the firm’s clients.
There is nothing to indicate here that McGonigle, Sawyer or Patterson were involved with selecting Drinker Biddle, and even if he was, there is nothing to indicate a quid pro quo.
McGonigle said he played no part in the bidding process while working for Markell and does not work on the state program at Drinker Biddle.
“I was aware of it because it was a legislative initiative that I was involved with,” McGonigle said. “I haven’t billed any time to the matter since I came to the law firm.”
Joseph Schoell, a former aide to Gov. Ruth Ann Minner who works at Drinker Biddle and helped land the contract, said the firm bid on the state work in good faith.
“Although we were not privy to the decision-makers’ thinking, my impression at the time was that Drinker had advantages in terms of size, capacity, and ability to finance a quick ramp up of a major initiative for the state,” Schoell said by email.
The News Journal says that “Nothing about the relationships and contracts is illegal[;] [b]ut the contracts raise questions about how Markell, who came into the governor’s office critical of backroom deals that benefit insiders, runs the program that collects so much state revenue.”
Well, these are not back room deals. These are conference room deals. And yes, insiders benefit, in that they now have private employment after their state job was over. But unless you prove to me that the deal was “McGonigle you give us the contract and we will give you a partnership in six months,” there is no story here. Prove that, then publish this article. Otherwise, all this is a bunch of legal activities and legitimate state business cobbled together so that the News Journal can raise questions about Markell and good government.
Newsflash, Jack Markell is not the open government progressive he campaigned as in 2008. He said he was to gain traction among progressives in the Democratic Primary against Carney. But those of us who believed that were made into fools. But that does not mean anything untoward is going on with the state’s business with Drinker Biddle or Kelmar. If you are going to ban state employees from ever taking a job with a private company that has a state contract after their state employment is finished, that is going to seriously hamper the state from every hiring anyone half way competent.
Tags: Featured, Gov. Jack Markell
lol… Markell doesn’t need a communications team as long as he has some of the commentators here on Delaware Liberal holding his water. Everything that sounds shady, the response seems to be… Nothing to see here. Pay no attention to the man behind the curtain.
Its to be expected. The Jack Pack defends their own. Three of Markell’s top staffers go to the same firm and “Nothing to see here”… Your only response is that the three in question were not “directly” responsible for selecting the firm? Even though the actual person responsible for selecting the firm is still a Markell appointee and a long time politico from the same circles?…. Nothing to see here. Pay no attention to the man behind the curtain.
I would criticize Markell in this matter if you can point out to me where the wrongdoing is. Seriously? Where is it? What is described doesn’t even sound shady. But whatever. Have fun with your new scandal.
I don’t know what this means…
“State officials picked the firm, which has hired other Markell staffers, even though it received lower marks than two other bidders competing for the work, records show.”
I presume that those low marks don’t make it against the law to use this firm over others since they said there’s no evidence of anything illegal.
However, this is typical dirty behaviour. Pack the executive offices of the firm with ex-staffers then direct the cash there. Same old special favours for who you know.
I most agree with Bane here. Rather than the commentary about the legality of the thing why not just admit that while not illegal this is some dirty political business. When conservatives pull this shit everyone’s up in arms… The stinks of double standards.
In my opinion that firm should have been excluded based on conflicts of interest. Legality is fine but this is pretty shady shit…
How isn’t it shady? Come on, brother. I suppose you know people associated with the Gov. And I know you’re an attorney… but this, like all these revolving door deals, is shitty. Again, perhaps perfectly legal… but nonetheless shitty.
I will agree with one thing though. This in particular is not a “scandal.” Unless our entire nepotism based, back scratching, quasi-oligarchy is a scandal… Between the Bushes and the Clintons we have plenty of dynasties/monarchies so… that’s the real scandal.
The conflict of interest part is a wholly separate issue and that is a scandal for Drinker Biddle, not the Markell Administration.
Here is my problem with this: what law is going to fix this? This is a law firm we are talking about here. So if you ban state employees from ever going to work for a private company, that means a whole lot of people will never serve in state government, and vice vers: Once you have a state job, you are forced to stay employed by the state for all eternity. Especially if your profession is the law. I am a lawyer. Lateral moves like this happen all the time in business.
For me to consider this shady typical dirty behavior, you are going to have to show me the inappropriate deal that led to this, as I mentioned. Otherwise it is all coincidence.
To me, what’s of more interest is how Delaware uses gimmicks to balance its budget.
As Al Mascitti pointed out, this (escheats) was just one way to balance the budget w/o taxing the filthy rich who, at the time, controlled state government and, no doubt, sent plenty of state contracts to THEIR favorite law firms. Richards, Layton, & Finger anybody (Pete duPont hung his shingle there)?
As for Tom McGonigle, he is one of the most honest people I’ve ever dealt with in state government. I mean it. There are few Delawareans for whom I have more respect.
As for the issue of ‘politically-connected law firms’, show me a law firm w/o political connections, and I’ll show you a law firm w/o government contracts. That’s just the way it is. Many law firms have rainmakers with contacts in both political parties. Of course, with one-party rule, Republican rainmakers are probably not quite as in demand as before. But I’m sure that the Stablers, for example, make out just fine.
What does “lower marks”? mean? They were lower in price? They were lower in technical approach Lower in qualifications? What? The government has multiple ways of awarding work and — especially for professional work — low price isn’t always the deciding factor. You’d need to know how Delaware said they’d award the work, then compare to the award records to know if they ran that procurement the way they said they would.
Which is often the problem with these kinds of articles — they rely on you not knowing how this works. Which isn’t to defend anything about what is described in the article, just that the sentence pointed out isn’t evidence of anything without plenty of other data.
What this is an example of, I think, is how hard it is to shrink government. When the state is paying law firms to do part of its work, you can see how silly it is to deny state workers raises or to try to cut back on people doing snow removal.
Calling bullshit on those that see nothing wrong here. You need to get those rose colored glasses adjusted while having your intellectual honesty re-calibrated.
The question is not whether they did or did not comply with state law. If that answer is all that matters, then you have no right to complaint about Wall Street cause they’re great at pointing to how they complied with the law.
The real question is whether this “looks” amiss. It does. That’s the problem. It is very easy for the electorate to look at this see that the fix is in. From there its only a short leap to condemn government and politics, undermine confidence, lose faith and drop out.
It’s simply not enough to meet the bare minimum code of conduct imposed by the law. Decency is always at least a few rungs higher than that.
I wrote the comment and I’m glad I did.
You “shrugged”?! That’s it? How jaded are you?
If you don’t want to place blame on the Markell administration then fingers should be pointed at McGonigle and Drinker. McGonigle essentially awarded Drinker a contract that will bring in tens of millions of dollars and then two months later took a job with that firm.
I know for a FACT that Drinker would not have gotten the bid if not for McGonigle annnnnddd I know for a FACT that he has hands in the handling of these cases over at Drinker. Even if he wants to say he doesn’t, wouldn’t he still make money since he is a partner?
You can blame Drinker, or not since apparently this is all on the up and up according to our commentator, all you want but the Markell administration should have excused Drinker Biddle based on conflict of interest since that is essentially what he campaigned on in ’08.
But it all doesn’t matter because we, commentator included, will still elect the same people in ’16 and nothing will change. Long Live the Delaware Way.
From the outside, it appears Drinker Biddle got the contract, then Markell’s aides jumped ship months later. If they had been involved in making sure it got the contract, there would be a paper trail of some sort – notes, emails, minutes, appointment calendars. The reporter could have easily found that out with a FOIA request. The fact that he didn’t bother to do so says a lot. This is a story all about appearances – lots of smoke, little fire, with a lot of loose language by TNJ.
Former state employees are already barred from working on the same projects in the private sector as they worked on in the public sector. For someone on the governor’s staff, who comes into contact with pretty much every project of significance, the bar has to be fairly low – because otherwise you’re severely limiting their future employment opportunities.
My two cents: this bag of crap falls entirely into Markell’s little lap.
As the only elected official, as the Governor, it is solely his duty to protect the integrity of the body government.
Failing that he’s just another schlock politician and excusing him makes sense only because he’s a “D”
I’m much more interested in where this money is actually coming from than I am in who’s being rewarded for finding it.
Were those of you who are angry really surprised to learn that people who spent time in government landed cushy jobs when they left? Really? Why do you think people like Tom McGonigle take government jobs? Public service? If so, you probably believe that Beau Biden has gone into “public service” rather than “politics.”
The eye-opening parts of the story weren’t who got hired where, or which company got the contract. The company that was less qualified still found more than $630 million last year in supposedly “abandoned” property, three times the amount of a few years ago.
There’s no such thing as free money (unless you’re a government contractor in Afghanistan), so I’d like to know exactly what property has been “abandoned” — that is, how much is coming from what sources, and is our only choice really to turn it over to either government or the corporations?
Geezer – hard to imagine profit being the motivation for McGonigle to leave his job as head of a law firm and put in four years at Chief of Staff hours (and not remotely head of law firm pay) just to go back and head a different law firm. Your cynicism is right in general but I don’t think applies in this specific.
Perhaps not; I don’t care either way. I’m more interested in the growth of what has become a very big business.
Let me illustrate: I started looking into this stuff, shallowly, when Democratic Party fluffer John Manifold brought it up. Now every other pop-up ad on my screen is from one of the firms that governments contract with to find this money.
I’m just saying, had this been the Treasurers office, I highly doubt anyone would be shielding Flowers. Last I check, he didn’t break any laws either.
Well, one difference would be that the Markell administration actually runs the state, and the treasurer’s office is a sideshow.
I don’t know about everyone else, but my criticism of Flowers is that he’s a wastrel. I don’t care if what he did was legal, it still shows an appetite for living large on the public dime.
What does this show about McGonigle — that he wants to leverage his position in a governor’s administration into a more powerful position in Delaware politics like so many others before him? And I’m supposed to get all upset about it? Right.
If we’re going to rake DLers for accepting the status quo and celebrating lame politicians just because they’re Democrats, shouldn’t we start with their support for Beau Biden, who has never shown competence at any of the very few things he has attempted?
Touche Geezer… That is a good point. Still, the consistent whitewashing of the stories that arise out of the Markell administration is very disheartening. However, I agree wholeheartedly about Beau. I’m starting to think that some people on Delaware Liberal are supporters of individuals rather than good.
As DD noted in the post, Markell’s true colors have been apparent from very early on, and he has been taken to task for it by various DLers. I’m not saying this smells good, but it’s not the stinkiest thing in the Delaware Democratic Party refrigerator.
To the question about where is the money coming from – a very dangerous place in a very dangerous way.
This “money” is taken from the corporations that incorporate here in Delaware. You know the same corporations that pay franchise tax fees that, in the aggregate, fund about 1/3 of Delaware’s annual budget. Delaware is on the few multi-dimensional government entities in the world that has so successfully exported their tax burden beyond their borders, i.e., off their own citizens backs.
Put plainly – we are shitting where we eat by pursuing a very, very aggressive escheat policy.
Places like Nevada impose looser statutory management controls than Delaware law (one of the primary reason corporations are incorporated here in Delaware), offer a lower corporate franchise tax structure than Delaware and MOST importantly don’t screw the bejezus out of those corporations with proctology-essque type escheat audits.
The golden goose is under assault.
I am not an apologist for Ruth Ann Minner – I am one of the first to admit she wasn’t perfect. And I don’t know if I would indeed consider this a “scandal.” But the difference in treatment of the two governors and double-standardism (?) over the years is pretty breathtaking. Trips, appointees, Coastal Zone Act, Fisker, sports betting, DelDOT, cronies, the list goes on.
Just be consistent in your snap judgements. Really, that’s all.
P.s. In Carper’s time it was Skadden Arps and Sol Ewing. There always seems to be a favored law firm or two.
The difference is that Minner’s second term in particular was DEFINED by cronyism. Giving her former Senate colleagues golden parachute cabinet jobs that they really didn’t do, illegally putting Tony DeLuca in a job for which he was totally unqualified, ‘making it happen’ for her ol’ bud Tigani, and kicking issues of importance down the road to her successor.
As someone who has bid on state of de. jobs, I can assure you the process may be open, but it is not fair. It all depends on what they want to pay and who you know. Quality is not always the highest priority. Look at mandates for certain equipment lines for schools- you will find the authorized dealer(the only in the state) is very friendly with our state reps- even if their equipment is shit. At that point, is there a really a bid process?. DBR has pulled some good land use/real estate deals from Del Dot using their connections, but for the most part, are a pretty reliable firm. One would think they would be smart enough to keep the former Markell staffers away from the State work.
Crooks, White collar crooks, plain and simple. You are defending and explaining . Why ? Stop trying to defend it. They are burning bridges, burning them all the way down to the ground due to greed. I got mine , try and get yours. This admin is killing DELAWARE , wake, wake up.
The Chamber threw the kitchen sink (you’ll need a pitchfork for this one) in spinning this backstory. The claim that there was something untoward in Kelmar’s hiring of two experienced but non-policy-making staffers (Mark Udinski and Pat Hurley) was laughable. Stuart Grant’s a sourpuss who sues his kids’ classmates’ parents, but I don’t want him representing the guy who’s suing me. As for the Drinker connection, what other firms were in play? Brenda’s solo shop doesn’t count.