At the Pa. Turnpike Commission, layoffs and other big business largely decided behind closed doors

On June 2, the Pennsylvania Turnpike commissioners gathered behind closed doors for a meeting that was about to dramatically change the lives of their workers.

Other than a brief public statement that they had talked about “modifications to staffing levels and benefits,” there was little hint of what was to unfold.

When the commissioners finally appeared before an online audience, they rolled through a series of votes on issues that included a half-million dollars in purchases, a six-figure contract, and the staffing matter.

In just 12 minutes, the meeting was over.

The commissioners had voted without a single word of public debate to lay off nearly 500 toll collectors and other workers in the largest mass layoff in the agency’s history.

Only weeks earlier, the commissioners had thrown a lifeline to the employees, approving a new contract amid pledges to keep the workers until 2022 — despite plunging revenues during the pandemic — as the turnpike moved to full automation.

“The whole way it was handled was just awful,” said Jock Rowe, principal officer of Teamsters Local 77, which represented a majority of the workers. “It should have never been done.”

The commission’s actions raise questions about a powerful state agency that meets mostly behind closed doors and fails to deliberate in public while making critical decisions that impact the lives of millions of people.

Though some meetings are exempt from the public, the termination of a quarter of the agency’s workforce last year amounted to the type of policy decision that should have been carried out in the open, say legal experts.

“This is public transparency 101,” said Terry Mutchler, the first director of the state’s Office of Open Records. “The play is not behind the curtain.”

In fact, the five commissioners for years have approved major expenditures, from billion-dollar bond issues to large contracts, while following a strikingly similar pattern: closed-door meetings followed by brief public voting sessions with no debate and few dissenting opinions, the Pittsburgh Post-Gazette found.

For an agency with the power to spend tens of millions of dollars and approve borrowing up to $1 billion in a single meeting, the practices of the commission have enraged some legislators and baffled open-government advocates who have long fought for transparency in the public sphere.

One government watchdog group has gone so far as to challenge the commission on its lack of transparency and seek delays of votes on major bond issues and other topics until more information can be shared publicly.

“There’s usually no discussion, no dissent, no dialogue, and we’re talking about tens of millions of dollars in contracts,” said Eric Epstein, of Rock the Capital, and a frequent meeting attendee.

During the last 11 decisions to raise the tolls on a road system that has become one of the nation’s most expensive to drive, there was no public debate, records show.

In the last five years, the commissioners have cast more than 700 votes to spend money — hundreds of millions of dollars in all — with only one dissent. The average length of the meetings: 12 minutes, records show.

Under the state’s Sunshine Act — a law first passed in 1957 to ensure open government — any votes and deliberations among a quorum of commissioners must be held in public. Exceptions allow members to speak one-on-one with each other and to gather to receive information from staff.

One of the goals is to allow everyday citizens to witness the decisions that impact their lives — in this case, people who drive on the turnpike as well as those taking mass transit in Philadelphia and Pittsburgh.

Commission Chairwoman Yassmin Gramian, who is also the state’s transportation secretary, said commissioners handle any disagreements in private so they can appear in public with everyone on the same page.

Gramian said she contacts her colleagues individually before every public meeting to discuss each issue coming up for a vote so that disputes don’t have to take place during the meeting.

“I don’t like the boards that debate in front of the public, and they start yelling at each other like the British Parliament,” she said.

To abide by the Sunshine Act, commissioners keep any conversations about agency business to one-on-one sessions, Gramian said.

“I can assure you that before we go to that public meeting there’s a lot of debate and evaluation and assessment that goes on,” Gramian said.

Commissioner John N. Wozniak, a former 36-year state legislator from Johnstown, described the chairwoman as a “clearinghouse” for individual commissioners.

“On occasion, we talk to other members or we use her as a focal point to say, ‘I’ve got an issue here,’” Mr. Wozniak said.

Nowhere is the commission’s impact more important than when making financial decisions.

During a single meeting last month, the commissioners approved a $400 million line of credit; $10.4 million in agreements; more than $500,000 for acquiring rights of way; nearly $17 million in purchase orders; a contract worth more than $600,000; and change orders totaling $1.8 million.

All with no public discussion.

Now, the commissioners are gearing up to award hundreds of millions of dollars in contracts to companies competing for jobs as the turnpike recovers from the pandemic.

They are also facing the cost of a staggering debt from past projects and other obligations that will impact motorists and consumers for decades to come.

With toll revenues plummeting during the pandemic, commissioners said they were forced to speed up the layoffs of 492 workers last year to save money. The estimated savings: about $100 million.

Nearly two weeks after the vote, the state Senate’s Transportation and Labor and Industry committees held a joint hearing during which senators expressed anger over the layoffs and being kept out of the loop by the very people whose nominations they had previously confirmed.

Gramian said the turnpike commissioners talked internally about the layoffs, including discussions during the executive session before their June 2 meeting to decide the matter.

Sen. John Sabatina (D., Philadelphia) pressed turnpike CEO Mark Compton for more detail about those private talks.

“We had extensive conversations with the commissioners about all aspects of the layoffs,” Compton replied.

Gramian testified she had also informed Gov. Tom Wolf about the layoff plan prior to the commission vote — which angered Pittsburgh-area State Sen. Camera Bartolotta, a Republican.

“This was not something that was decided upon and voted upon on June 2. It was a decision that was made prior to that, and the commission just basically went through the motions on June 2. Am I off base on that?” Bartolotta asked longtime Commissioner William K. Lieberman, a Pittsburgh insurance executive.

Lieberman said commissioners did have a “very long and extensive discussion” about the layoffs in the executive session but made no decisions until the public vote.

Legal experts said executive sessions are supposed to be held to protect individuals in personnel matters, not to shield officials when talking about massive staffing changes.

“The statute uses the word ‘specific’ — a specific employee, public official or public appointee,” said Melissa Melewsky, media law counsel for the Pennsylvania NewsMedia Association.

Since 2016 there have been only six meetings — less than 5% — when “no” votes have been cast — all by Lieberman.

Of the five commissioners, only two agreed to be interviewed for this article — the chairwoman and Wozniak; the others either declined or did not respond to repeated requests.

But in an interview two years ago with The Inquirer, the longest-serving member of the commission, Pasquale “Pat” Deon Sr., who is also chair of SEPTA, explained his philosophy about running the board of a public agency.

Deon said he tries to reach consensus through private discussions and could recall only two votes of the 15-member board that weren’t unanimous.

“We have dissent; we have debate,” said Deon, who has been on the turnpike commission for 18 years. “But the bottom line is we don’t do it at the board meeting.”

Although the commissioners have raised tolls every year since 2009 to help fund a mushrooming debt that has reached record levels, at no point in the past five years have they publicly debated any of the strategies they’ve adopted to take on what’s grown into a financial crisis, records show.

David Thornburgh, president and CEO of the Committee of Seventy, a Philadelphia group that promotes openness in government, said that because the agency has such a dramatic impact on the lives of everyday Pennsylvanians, it has more of a duty to be open.

“This is also an agency that hits people in their pocketbooks. [I]t’s a substantial chunk of money that it takes when you drive,” Thornburgh said.

The turnpike owes a record $14.5 billion from prior projects, mass transit and the funding of the state’s maintenance of roads, bridges and tunnels.

Created in 1937 as the country emerged from the Great Depression, the turnpike commission was launched to oversee the birth of what was dubbed “America’s first superhighway.” What began as a 160-mile stretch of mostly four-lane road has evolved into a 552-mile network of roadways critical to commerce and tourism — and notorious for its cost.

In Pennsylvania, a five-axle truck crossing the state on the turnpike pays 68 cents per mile, while in New York it costs 28 cents, and in Ohio,18 cents, according to Darrin Roth, vice president of highway policy for the American Trucking Association who called it “one of the most expensive” toll roads in the country.

For decades, the commission’s duties were primarily to manage the turnpike system. Its role would change dramatically in 2007 when the legislature and then-Gov. Ed Rendell tasked the agency with addressing the state’s crumbling roads and bridges and helping fund mass transit through payments to the Pennsylvania Department of Transportation — $9.65 billion by 2057. The turnpike would have to take on new debt to carry out those functions.

But toll revenue isn’t enough to fund the payments, leading the commission to turn to borrowing money through issuing bonds. The strategy would lead the commission to make more than $168 million in payouts to law firms, banks and financial consultants over the past decade to oversee its bonds, records show.

But the terms of nearly all of those arrangements have never been divulged to the public or discussed at an open meeting.

On March 2, for instance, the commission unanimously approved the hiring of several law firms and underwriters — including Duane Morris in Philadelphia and PNC Capital Markets in Pittsburgh — to shepherd a bond issue of up to $250 million.

The details of those arrangements were not disclosed during the meeting, providing no hint as to how much was paid out or why one firm was selected over another.

The lack of transparency comes after the agency was overhauled in the wake of a “pay-to-play” scandal years ago that involved top turnpike officials.

An investigation by a grand jury led to charges in 2013 against eight people, including the turnpike commission’s then-CEO, a powerful state senator and vendors. The probe exposed how campaign contributions and secret gifts of travel, entertainment and cash paved the way for some vendors to secure contracts from the turnpike commission.

That same year, the commission was warned by the state auditor general that it was allowing too many people — including consultants and contractors — to travel for free on the turnpike, costing the state millions of dollars.

The agency responded that it was allowed to grant the perks, and that it would do a better job of tracking the costs.

But in two subsequent reviews, the auditor general continued to point out the perk was still in place and recommended the agency, in the interest of transparency, post the amounts of toll-free travel given to contractors and others.

The agency repeatedly rejected the suggestion.

Other business the turnpike commission has been reluctant to detail publicly is its “swaps,” used to lower the cost of borrowing funds on the bond market to pay for its enormous obligations.The process involves trading the interest rates of its bonds with the interests of another bond issuer, hedging against the risk of rising interest rates.

Former state Auditor General Jack Wagner warned in 2013 that such a strategy can backfire for many reasons, including a slight change in interest rates, resulting in net losses.

In a recent interview, turnpike Chief Financial Officer Richard Dreher said the agency has been “good stewards of our customers’ revenues” and that its swaps have involved “minimal to low risk.”

When the Post-Gazette requested the most recent report that details any potential losses with the transactions, the agency refused to release it until the newspaper appealed the decision to the state Office of Open Records.

To keep floating the bonds, the commissioners regularly cast votes to hire dozens of consultants — including lawyers, underwriters and bankers — to bring them to market.

But at no point do they explain in public how much they would be paid.

Year after year, the agency spends millions of dollars — ranging from nearly $8.2 million in 2019 to over $61 million in 2012 — to cover the costs of one of its most critical functions.

As recently as this month, Mr. Epstein, of Rock the Capital, appeared at a meeting and openly complained the agency was failing to disclose the fees that would be paid to the firms chosen to manage a $600 million bond issue.

“I ... urge you to actually discuss these issues. You’re talking about a $600 million bond,” Mr. Epstein said.