Pa. student-loan agency details spending on board retreats
March 12, 2007
By MARTHA RAFFAELE
Associated Press Writer
HARRISBURG, Pa. (AP) _ The state's college-loan agency Monday released records detailing how its board spent hundreds of thousands of dollars on trips to lavish resorts as far away as California between 2000 and 2005.
The records were the second and final batch of documents that the Pennsylvania Higher Education Assistance Agency made available to three news organizations after 19 months of ultimately unsuccessful efforts to block public access through the state courts, largely on grounds that the documents contain "trade secrets."
The records, which filled nearly 700 pages, covered eight retreats at luxury resorts and hotels attended by many members of PHEAA's 20-member board, most of whom are state legislators, as well as PHEAA staff members and guests. The names of business clients wined and dined at the events were obscured in the documents.
Charges for hotel rooms, elaborate banquets and transportation, including thousands of dollars in reimbursements for use of state-owned airplanes, accounted for a large part of the more than $768,000 in expenditures, according to the records. But bar bills, golf outings and spa treatments were among the other expenses common at events that were short on business and long on recreation and relaxation.
PHEAA, which paid for the retreats out of income from its student-loan business, has defended them as an essential part of doing that business. But the agency dispenses around $500 million a year in state taxpayers' money in the form of grants and subsidies, and the agency's leaders have vowed to rein in their entertainment budget following news stories that have raised questions about past practices.
The last retreat was held at the Nemacolin Woodlands Resort and Spa in southwestern Pennsylvania in 2005.
"There won't be any more" such gatherings involving the full board, said PHEAA spokesman Keith New.
"We believe that by working smarter and with more integrity than our competitors, we will achieve the same high level of business success without the need for those types of events," he said.
The most expensive retreat covered by the records was the November 2001 event at the Meadowood Napa Valley resort in the heart of California's wine country, where the tab exceeded $156,000.
Back-to-back gatherings were held at The Greenbrier resort in White Sulphur Springs, W.Va., which boasts three championship golf courses and a 40,000-square-foot spa, in September 2000 and May 2001. Together, the cost exceeded $185,000.
Other retreats have been held at the Hyatt Regency Chesapeake Bay Golf Resort and Marina in Maryland; the Hotel duPont in Delaware; and The Homestead resort and Colonial Williamsburg, both in Virginia.
At the Nemacolin retreat, about 50 miles southeast of Pittsburgh, the three-day tab for about 50 people totaled $135,638.
Dinners alone amounted to more than $47,000 over three days, including one that featured not only a "Tour of Italy" themed dinner buffet, but a mashed-potato bar and carving stations with bourbon honey mustard-glazed ham and southern-fried turkey breast. Bar tabs for the three dinners totaled more than $10,000.
Another category included $21,308 in expenses related to "client appreciation." Spa treatments totaling $9,542 accounted for the largest single expense in that category, followed by almost $9,000 for golf outings.
The Associated Press and The Patriot-News of Harrisburg filed requests seeking records of retreats by PHEAA's board, which includes 16 elected state legislators. On Feb. 28, PHEAA released more than 13,000 pages of receipts and vouchers sought by WTAE-TV in Pittsburgh for airfare, hotel rooms, meals and other expenses incurred by PHEAA's 2,700 employees between 2003 and 2005.
The news organizations filed requests for various financial information under the state Right-to-Know Law in the summer of 2005. Their dispute with PHEAA set the stage for litigation that the state Commonwealth Court decided in the news companies' favor. The state Supreme Court upheld that decision in an order last month.
•Associated Press writer Peter Jackson contributed to this report.
© 2007 The Associated Press — Reprinted with permission. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Timeline in the effort to obtain PHEAA financial records
By The Associated Press
Milestones in a 19-month effort by three news organizations to review financial records from the Pennsylvania Higher Education Assistance Agency:
• July 22, 2005: WTAE-TV in Pittsburgh requests PHEAA documents such as travel vouchers, credit cards bills and financial audits.
• July 31, 2005: The Patriot-News of Harrisburg reports that PHEAA spent about $885,000 since 2000 on retreats as far away as California's Napa Valley.
• Aug. 1, 2005: The Patriot-News requests expense records related to PHEAA retreats between 2000 and 2005.
• Aug. 15, 2005: The Associated Press requests records related to expenses for a June 2005 retreat at Nemacolin Woodlands.
• Sept. 6, 2005: PHEAA denies the requests by the AP and Patriot-News and files a lawsuit in Commonwealth Court seeking permission to withhold the documents or to black out any information that it deems confidential.
• Sept. 9, 2005: PHEAA files a similar lawsuit against WTAE.
• Oct. 4, 2005: The news organizations sue PHEAA for its spending records in Commonwealth Court.
• November 2005: Both sides agree to suspend their litigation and air the dispute in an administrative hearing.
• April 4, 2006: Both sides testify during a hearing before retired Dauphin County Judge Warren Morgan, the hearing examiner in the case.
• June 7, 2006: PHEAA releases Morgan's nonbinding recommendation calling for it to release the records, but says it will continue to withhold most of the documents.
• June 30, 2006: The news organizations appeal to Commonwealth Court.
• Nov. 15, 2006: Commonwealth Court rules that PHEAA violated the state's Right-to-Know Law.
• Dec. 18, 2006: PHEAA asks the court to stay its order and files papers seeking permission to appeal to the Pennsylvania Supreme Court.
• Dec. 22, 2006: The news organizations file a request with Commonwealth Court to enforce its Nov. 15 ruling.
• Jan. 16, 2007: A Commonwealth Court judge denies PHEAA's request for a stay and orders the immediate release of the records.
• Jan. 26, 2007: PHEAA says it will release its first batch of documents on Jan. 29, but cancels that after the state Supreme Court grants its request to temporarily stay the Commonwealth Court ruling.
• Feb. 21, 2007: The state Supreme Court dismisses PHEAA's appeals and lifts the stay.
• Feb. 28, 2007: PHEAA releases 13,470 pages of receipts and vouchers for airfare, hotel rooms, meals and other expenses incurred by its 2,700 employees between 2003 and 2005 — about half of its response to WTAE's request.
• March 12, 2007: PHEAA releases the remaining records requested by all three news organizations.