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Pa. Gov. Wolf’s general counsel tied to $358M bond project winner

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Sean Stipp | Trib Total Media
Pennsylvania Gov. Tom Wolf in his office in Harrisburg on April 13, 2015.
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Denise Smyler
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Wadud Ahmad

HARRISBURG — General Counsel Denise Smyler’s aide approved using the Philadelphia law firm that Smyler co-founded to work for a state authority on a $357.5 million bond issue.

Smyler, top lawyer for Democratic Gov. Tom Wolf, “had no prior knowledge” that the Ahmad Zaffarese law firm she left as a partner in January was selected as co-bond counsel for the project financed by the Pennsylvania Higher Educational Facilities Authority, said Wolf’s spokesman Jeffrey Sheridan.

“There was a process in place to avoid a conflict of interest,” Sheridan said.

He said Deputy General Counsel Rodney Akers signed off on the selection.

Smyler could not be reached for comment.

“It’s interesting how, in one of the first bond issues by this administration, the general counsel’s law firm gets a piece of the action,” said Stephen Miskin, a spokesman for House Republicans. “It just raises some questions, as this administration considers itself above reproach.”

As governor, Wolf is president of the state authority. The authority sells bonds to pay for university projects but does not take responsibility for repayment, said Beverly Nawa, an administrative officer.

When a law firm works as bond counsel, it vouches for the legality of the debt issuance.

Wolf in January ordered competitive bids and transparency for state legal work, long a plum for the politically connected and large campaign contributors.

Banning no-bid contracts “was a major step forward on cutting back on cronyism,” said Barry Kauffman, lobbyist for Common Cause of Pennsylvania.

In part, Wolf wanted to open the process to small, diverse firms that had been “closed out of the process,” said Deputy General Counsel Shawn Smith. Ahmad Zaffarese was not on last year’s eligible list but landed on it in 2015, along with other smaller firms, said officials familiar with the process.

But the award to his general counsel’s former firm appears to “violate the spirit” of Wolf’s policy, said J. Wesley Leckrone, a political science professor at Widener University in Chester.

“Perhaps I’ve been in Philadelphia and Pennsylvania too long. I expect that sort of thing, even for someone with high ethical standards,” Leckrone said. “It’s something you expect in Pennsylvania politics.”

Ahmad Zaffarese, a minority business enterprise firm, was selected by bid winner Obermayer Rebmann Maxwell & Hippel, a large Philadelphia firm, as its partner to meet criteria for including a small, diverse law firm. Obermayer’s top civil lawyer could not be reached for comment.

Ahmad Zaffarese has 11 lawyers and is one of a few minority-owned firms in the state doing bond work, said Wadud Ahmad, a partner.

Obermayer is expected to receive about $50,000. About 40 percent of that goes to Ahmad Zaffarese. The governor’s office said seven firms submitted bids for the bond issue to provide financing for the University of Pennsylvania Health System.

Sheridan said Smyler “had no knowledge that Ahmad Zaffarese was listed by Obermayer. Denise only knew the identity of the prime firms, not the subcontractors.”

Smyler’s position had no part in securing the work, said Ahmad: “Not at all. There was no backdoor crap.”

The selection appears to comply with Wolf’s intention, Kauffman said.

“It sounds like it was Obermayer’s decision,” Kauffman said. “It appears Obermayer was selected on a merit basis.”

An evaluation board scored the proposals, Sheridan said, and the results initially were presented to the Office of General Counsel without naming the firms. They were disclosed once Akers signed off, he said.

The result is important for minority businesses, Ahmad said.

“The sad reality, in terms of minority law firms in this state, is there are not too many minority law firms, period,” Ahmad said. “We’re one of the few minority firms doing bond counsel work.”

Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or [email protected].

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