Bethlehem Press

Monday, June 25, 2018

Is crony capitalism making serious inroads? Pay-to-Play analysis in Bethlehem

Tuesday, October 27, 2015 by BERNIE O’HARESpecial to the Bethlehem Press in Local News

Just before Independence Day, federal agents descended upon Allentown City Hall with a search warrant and subpoena for information concerning numerous contracts with entities that just happened to be campaign contributors to Mayor Edwin Pawlowski. Just a week later, the same thing happened in Reading. Since that time, Reading’s then City Council President Francis Acosta and prominent Lehigh Valley entrepreneur Ramzi Haddad have both pleaded guilty to public corruption in what appears to be a major investigation into illegal pay-to-play.

Could the same thing happen in Bethlehem? Are special interests like the CRIZ and Martin Tower developers buying elections? An analysis of campaign finance reports filed in Bethlehem from 2013 to present indicate that crony capitalism, in which business interests and politicians co-opt each other, is making serious inroads.

Bethlehem Mayor Bob Donchez recently imposed a gift ban on all city employees to avoid even the appearance of impropriety. But roughly $1 out of every $3 contributed to his campaign, or 33 percent, comes from unions, developers, engineers and others who all have a vested interest in the Bethlehem’s CRIZ, TIF or other city-sponsored projects.

CRIZ participants Dennis Benner (Greenway Park), Lew Ronca and Norton Herrick (Martin Tower), J.G. Petrucci (Third Street), Jeff Trainer (Sands Convention Center, Mike Perrucci (Third Street) and Majestic Realty’s Ed Roski (LVIP) are all contributors. Is it coincidence that they, as one other developer puts it, “are controlling the cards and not letting anyone else at the table?”

Influence range

Their influence only begins with Donchez. It also extends to his political rival and opponent in the 2013 mayoral race, city council President J.William Reynolds. His finance reports show that 28 percent of his election funding comes from the same vested interests.

When major contributions from Ronca and Herrick were called into question at a recent city council meeting concerning zoning changes at the Martin Tower site, Reynolds called on Donchez, who accepts the same kind of contributions himself, to vouch for his integrity.

A similar pattern exists among incumbent council members Mike Recchiuti (36 percent), Bryan Callahan (31 percent), as well as incoming council member Shawn Martell (25 percent).

A defense

Recchiuti defends the practice.

“I am proud of the support I have received,” he has stated. He insists that contributions from Martin Tower interests only make up 13 percent of his total fundraising. “As a city councilman, I have always put the interests of the entire city of Bethlehem first, and will continue to do so for the remainder of my term.”

Not everyone is buying that explanation. Rod Holt, co-owner of the Apollo Grill, has said, “One look at the campaign expense reports says it all.” Jeff Fegley, co-owner of the Brew Works has told council, “Stop the pay-to play, guys.”

Another group of council members are much more sensitive to accepting money from developers and related business interests that depend on government favoritism to succeed. Eric Evans (12 percent) and Adam Waldron (3 percent) have much smaller contributions from these special interests. Newcomers Olga Negron (0 percent) and Michael Colon (0 percent) have accepted no money from CRIZ or TIF-related entities.

Does this matter?

This difference was on full display when Bethlehem Council met Oct. 20 to decide whether to advance the rezoning of the 53-acre Martin Tower development, despite the absence of a concrete plan. Reynolds (28 percent) apologized for his behavior at a previous meeting, in which he threatened to silence anyone who claimed they are influenced by campaign contributions. He acknowledged concerns about 1.3 million square feet of publicly subsidized destination retail that would compete against Historic Downtown and Southside merchants. But he said that problem could be solved with text changes to the ordinance down the road. It was an argument eerily similar to Nancy Pelosi’s “We have to pass the bill so you can find out what is in it” argument concerning Obamacare.

The problem with this solution is that, once the rezoning passes, Martin Hill developers can immediately file a plan that will have to be honored, even if text changes are later adopted.

Throat jamming?

Joining Reynolds in voting to pass the rezoning ordinance were Recchiuti (31 percent), Callahan (36 percent), Lou Stellato (appointed), Cathy Reuscher (appointed) and Adam Waldron (3 percent). Waldron did state that he had the feeling that “something’s being jammed down our throats,” but was persuaded by Reynolds.

The sole “Nay” vote come from Eric Evans (12 percent), who wanted the matter sent to a committee where an actual plan could be requested from the developer for review. Evans cautioned the nearly 70 merchants at Town Hall that many West Bethlehem residents have no desire to see a major residential development at that site.


Olga Negron and Michael Colon, elected from the Lehigh Valley’s growing Latino community, will join council in January. Both relied on grass-root support and family instead of developers and related entities. While Negron has stated that she supports the CRIZ, “We do not want to provide a license for [developers] to destroy our city’s historic treasures or diminish the character of our charming neighborhoods.” She is apparently referring to the Martin Tower development, one of the CRIZ projects.

It appears that those who accept no donations from entities seeking city favors do tend to look at requests like the Martin Tower rezoning with a more critical eye.

Council will take a final vote on rezoning Martin Tower Nov. 4. If it passes, no matter what council thinks it can do down the road, developers can file plans to create a third downtown the very next day.

According to Common Cause, Pennsylvania is one of only 11 states that impose no limits on campaign contributions. In 1992, then Governor Bob Casey called on the state legislature to “liberate the electoral process from the tyranny of the campaign dollar.” Instead, individual campaigns in local races are often in excess of what can be contributed to someone running for the United States Senate.