SUBSCRIBE NOW
$5 for 3 months. Save 83%.
SUBSCRIBE NOW
$5 for 3 months. Save 83%.

DePasquale: Wolf mishandled business exemption program

Logan Hullinger
York Dispatch
Democratic congressional candidate Eugene DePasquale, of North York borough, tours businesses in York City, Saturday, Aug. 22, 2020. Dawn J. Sagert photo

The state's response to business waiver applications was inconsistent and flawed, and the governor's office may have been responsible for reversing approval decisions, state Auditor General Eugene DePasquale said Tuesday.

Giving an update on his ongoing audit into the state program, which earlier this year granted exemptions to some businesses during Gov. Tom Wolf's COVID-19 shutdown orders, DePasquale said that at least 523 applications had initial rulings suddenly reversed without explanation.

The audit focused on five industries: Notaries, hair salons, garden centers, pet groomers and massage therapists.

“There was changing guidance coming from the governor’s office that impacted the goal posts moving during the process ,” DePasquale said. “Either way, the lack of an explanation as to why the waiver answers change is still frustrating, and we’re still looking to get that. ... It is simply unacceptable."

More:DePasquale: Efforts to sway business waivers might trigger 'law enforcement' review

More:York County has 46 new cases of COVID-19

Gary Miller, spokesperson for DePasquale, said the office does not have information on how many of the 523 businesses were in York County, and officials at the Pennsylvania Department of Community and Economic Development did not immediately have a number.

But the auditor general gave multiple examples of faults with the program, which dished out waivers to more than 42,000 businesses.

For example, one business in Lackawanna County had a total of three applications listed: Two had responses changed from “yes” to “no,” while the third application had was initially denied.  

DePasquale also mentioned that one business in York County filed five separate waiver applications, offering different reasons for reopening each time. Two of those applications were approved, two were denied, and one was deemed "not required," meaning a waiver would not be necessary to open.

It was clear responses varied depending on certain buzz words and who reviewed the application, DePasquale said.

Wolf's administration, though, denies Wolf influenced the process, saying the DCED made decisions based on existing guidance from the U.S. Department of Homeland Security and the Cybersecurity and Infrastructure Security Agency.

"DCED did not make waiver decisions based upon predeterminations or pressure from the governor's office or other outside influence when reviewing applications, said DCED spokesperson Casey Smith.

Smith also said that "overall," the process was consistent, even though some changes in approvals stemmed from the fact some businesses had misrepresented themselves, 

But the allegation that Wolf played a role in reversing approval decisions was not the only potential problem uncovered by the audit, DePasquale said.

In other cases, state lawmakers and lobbyists actively worked on behalf of businesses to secure waivers. In the early stages of the program, lawmakers, including those from York County, openly spoke of helping local businesses receive waivers.

DePasquale in September said some attempts to influence the state's business waiver process may be turned over to law enforcement. But his office hasn't yet found any evidence that would merit law enforcement involvement, he said.

"We didn't see anything yet that would be anything that would be considered improper influence," he said. "But we do know there was a lot of contact with the governor's office, so we're asking the governor's office for that as well."

Shortly after the auditor general's audit update, the National Federation of Independent Business said it was clear that Wolf failed to properly administer the program.

“This travesty falls directly at the feet of our governor since we learned the Department of Economic and Community Development while running the program, had no say in what factors were used to determine what was life-sustaining," said Gordon Denlinger, NFIB’s Pennsylvania state director.

The state's business waiver program, though, had  been under intense scrutiny since it first appeared in March. Republicans in particular have expressed gripes about a lack of transparency in the process. 

Most recently, on Sept. 14, U.S. District Judge William S. Stickman ruled that the waiver program was unfairly applied and left some businesses closed while their competitors could open their doors.

But the governor refused to comply with subpoenas issues by Republicans in the state Legislature, which sought all notes, memos, emails and other correspondence having to do with the waiver program.

Republicans also have launched an intense pressure campaign in an attempt to fast-track the full release of the audit that began in April.

Yet there is no timeline for a complete audit, because DePasquale is awaiting additional documents and email correspondences from the governor's office to see why guidelines and answers to applications changed, he said.

— Logan Hullinger can be reached at lhullinger@yorkdispatch.com or via Twitter at @LoganHullYD.