Philadelphia Inquirer staff writers Mark Fazlollah, Craig R. McCoy, and Dylan Purcell report:
For decades, millionaire Main Line businessmen Richard Ireland and Brian McElwee have plied politicians with campaign money while landing government contract after contract.
None of it has provoked much attention. But now the two little-known partners are drawing scrutiny beyond political circles.
That’s when another state treasurer, Barbara Hafer, dramatically increased state business given the two men – after each, on the same day, made a $150,000 campaign contribution to her.
For connecting Treasury to an investment firm they once owned, the two men eventually pulled in $2 million a year in finder’s fees for that single placement alone.
Their donations to Hafer were the biggest one-day donation she ever received from anyone.
A detailed look at McElwee and Ireland’s thriving business model – an operation marked by $3 million in campaign donations since 2000 – shows how the clubby culture has benefited select businesses and political figures in Pennsylvania.
In the lexicon of high finance, Ireland and McElwee are known as “finders.” They have been paid big finder’s fees for serving as middlemen, connecting financial professionals with government officials who control public money and where it is invested.
The two men also have earned millions in finder’s fees for helping financial advisers win contracts to manage billions of dollars in public money, including funds from Bucks, Chester, Delaware, and Montgomery Counties, the Pennsylvania Turnpike Commission, and SEPTA – all the while contributing to politicians who were influential for each entity.
Critics, such as the SEC, good-government groups, academics, and others, have long worried that the pay-to-play culture means financial advisers nationwide aren’t being selected on merit to manage public money, but because of political juice.
Craig Holman, a finance expert with Public Citizen, a national government-watchdog organization, said that when pay-to-play becomes business as usual, some firms avoid government contracting because of the corruption taint, and taxpayers get less for their money.
“I’ve seen more pay-to-play scandals in Pennsylvania than any other state,” Holman said. “It hurts government, it hurts taxpayers, and it hurts legitimate businesses.”
