Wednesday, April 18, 2012

The 'Kids for Cash' Scandal from 'Capitalism: A Love Story'


The Times Leader reported:  Attorney got defensive during the February 2003 ribbon-cutting ceremony for his newly opened Pittston Township juvenile detention center, saying he bit his tongue while the project was “politicized beyond belief.”

Amidst growing talk about a federal probe, Attorney Robert J. Powell announced last June he was selling his interest in juvenile detention centers in Pittston Township and in western Pennsylvania, and in a firm developing a proposed cargo airport in the Hazleton area.

Don Carey/the times leader

``I won’t let my name be drug through the mud anymore,” Powell told the audience of more than 100 friends, family and employees.

He maintained the project wasn’t about politics or profits and said he got the idea to build a local detention center after meeting a father who was scared that his son would be placed in Luzerne County’s aging North River Street detention center.

“This was about the children,” Powell said.

But the opposite picture is portrayed in the recent federal complaint, which alleges kickbacks were paid to two Luzerne County judges in exchange for favorable judicial rulings and other actions that led to the county’s use of the Pittston Township center and another center also owned by Powell and Greg Zappala in western Pennsylvania.

The $2.6 million in alleged kickbacks to then judges Michael Conahan and Mark Ciavarella were made by people identified as “participant 1” and “participant 2” in the 22-page complaint. Details in the paperwork indirectly identify Powell as participant 1.

Powell, who is 49 and a Hazleton area native, has declined requests for comment in recent days. Standing well over 6 feet, Powell attended St. Francis College on a basketball scholarship, receiving his law degree from the New England School of Law, according to the law firm Web site.

He was admitted to the Pennsylvania Bar in 1987 but didn’t noticeably crack into government work until the mid-1990s.

Powell’s sudden chain of public hirings generated cries of politics from some taxpayers, who questioned whether his selection was linked to political campaign donations.

In January 1996, then-county commissioners Tom Makowski, Frank Crossin and Joseph “Red” Jones hired him as county planning commission solicitor.

Around that time, Powell was also hired as West Hazleton and Hazleton City solicitor and as bond counsel for a Hazleton Area School District construction/renovation project and the Luzerne County Convention Center’s proposed arena project.

County minority Commissioner Stephen A. Urban complained in 2001 that Powell was hired for county bond work without a public vote or discussion.

By the spring of 2002, Powell and his firm had been paid more than $150,000 for county legal work. He and his firm contributed $12,400 to the campaigns of Democratic majority county commissioners from 1995 through 2002.

Powell’s involvement in PA Child Care, which built the Pittston Township detention center, was discovered by a reporter through mortgage documents in April 2002 – nine months after the court sent county commissioners the original proposal to lease the building.

Urban complained that Powell should have fully disclosed his involvement in the project to all three county commissioners from the beginning, in large part because he served as planning commission solicitor until his resignation in February 2002.

Powell ignored repeat written and verbal notices from county officials – including the county solicitor – to file financial disclosure forms as required by the state Ethics Commission covering his years of solicitorship employment with the county. These forms are supposed to publicly disclose information about real estate interests, creditors, significant gifts and direct and indirect income.

County officials said Thursday that Powell never filed the reports.

Commissioners were somewhat forced to use the Pittston Township center because Conahan announced, shortly before the center opened, that he would no longer send juveniles to the county’s River Street facility.

Though commissioners planned to build a new county facility, Commissioner Greg Skrepenak and former Commissioner Todd Vonderheid approved a $58-million, 20-year lease of the Pittston Township center in October 2004.

Powell enjoys great success, wealth

Meanwhile, Powell’s law firm thrived.

An online profile of Powell by Super Lawyers, a listing of “outstanding lawyers” from more than 70 practice areas, says Powell has received numerous multimillion-dollar verdicts in medical malpractice, nursing home negligence, automobile crashes, product liability and other cases.

The firm’s Web site lists the cases, with titles such as “Jury awards injured worker $3.25 million” and “Another one! $1.7 million verdict.”

Powell showed signs of his growing wealth. He owned a 56-foot yacht named “Reel Justice,” and a 12-seat Rockwell International jet is registered at his business address, according to Federal Aviation Administration records.

In 2005, Powell and his wife, Debra, built a 7,100-square-foot home on five acres in the Ice Ponds section of Rice Township. The reassessment company has valued the property at $1.46 million.

A new moniker – John Doe – was attached to Powell in 2007 when The Times Leader discovered that county Prothonotary Jill Moran – his law partner – switched Powell’s name in her office database so he wasn’t linked to an Internal Revenue Service tax lien filed against him.

Moran said she had reason to believe the IRS filed the lien in error, but other county residents and businesses did not have the luxury of John Doe anonymity on liens filed against them.

Experts said her action was illegal. Federal officials were looking into the matter, but it’s unclear if any official action was taken against Moran. Moran later put the lien under Powell’s name in the office database.

Amidst increasing chatter about the federal investigation, Powell announced in June 2008 that he was selling his interest in the Pittston Township detention center, the western Pennsylvania center and the company developing a proposed $1.6 billion regional cargo airport in the Hazleton area.

Zappala bought Powell’s interest for an undisclosed dollar amount.

“In the last few weeks, as some have focused on rumor and innuendo, the projects I have helped create have continued to thrive and make progress,” Powell said in a news release. “Now is the perfect time for me to step away, allow development and operations professionals to take over and begin to focus on new opportunities.”

Powell defended the Pittston Township detention center lease in his press release, saying the facility has been an “unquestioned success” for the county, taxpayers and children.

“I am very proud of the company and the hundreds of kids’ lives I have helped change for the positive,” Powell wrote. (source:By Jennifer Learn-Andes jandes@timesleader.comLuzerne County Reporter )

The 'Kids for Cash' Scandal from 'Capitalism: A Love Story' from MMFlint on Vimeo.


  1. Michael Moore uses logical fallacies to support his millionaire status ever since his first, and last legit expose in "Roger and Me". Free market capitalism has nothing to do with what is described here. The marriage of gov't and the private sector is not capitalism - never was and still isn't. Adam Smith wrote that someone who worked for the accumulation of money was mentally ill. They may have value to society as accumulators of capital, but he saw them as deranged. It is the voluntary, force free trading of goods, capital and ideas that is the bedrock of capitalism. The Elite hated Smith, and his publisher, William Playfair even wrote an intro dismissing Smith in Smith's own book! It is impossible to think of a topic less studied in America today than Capitalism. It has nothing to do with greed. I use as a good reference.

    Last point - Smith also was very clear that there was no difference whatsoever between the children of Dukes and the children of street sweepers. The only difference, he said, was early training and education. This got Smith into seriously hot water, as the slave / mercantilist / guild / central bank order of the West simply could not handle that knowledge.


    1. There is NOTHING FREE in so called "free market capitalism."

      Perhaps you need to read this blog a little bit closer, because time after time it exposes the BIG LIE of the so called free market.

      Let me just cite you a couple of examples. Slavery in and of itself was a capitalistic institution. The header of this blog is an image from the engraving of a $100 Confederate Note from South Carolina. Along the sidebar of this blog you will find "coinage" (for lack of a better term) that were used in the slave trade, like cowry shells, manila bracelets, and trade beads. The money sits center stage, because it was all about the money. The ruling powers used racism and white supremacy to keep the money flowing, don't ever get confused on this point.

      Was it a "free trade"? No, no, and hell no. The Kings and Queens of England (which later became Great Britain), France, Spain, Portugal, the Netherlands, Holland, Denmark, Oman, Belgium, etc. wrote very specific laws of monopoly. They called it "free trade" they even printed coins that said "free trade," but companies like the Virginia Company of London (later became the states, or Common Wealths of Virginia, West Virginia, Kentucky, Tennessee, and Bermuda) or the Plymouth Company, or the Massachusetts Bay Company (which becomes the states of Maine and Massachusetts) or the 8 Lord Proprietors of the Providence of Carolina (North and South Carolina and parts of Georgia) ... This wasn't free trade, it was king cronyism.

      It STILL exists! The family crest of Lord Baltimore is STILL the state flag of Maryland. The slave owners in Washington DC were PAID by the FEDERAL GOVERNMENT for their slaves, the slaves of course just got the middle finger.

      I have researched slavery from across 6 continents and 5 centuries, I haven't seen any FREE MARKET. You tell me where the free market is. Maybe on the land of purple unicorns flying on cotton candy rainbows, but on the planet Earth, free market capitalism doesn't exist. Please show me where and when it does occur.

      Furthermore, the prison system is the ONLY PLACE in the USA where slavery is legal, according to the 13th Amendment of the Constitution.

      This story of judges getting kickback for incarcerating kids just ticks me off. Just unpack that statement for a minute. Judges (one of the three branches of government, the Judicial Branch) who are PAID for by the TAXPAYERS and CITIZENS of the USA. Judges. They changed the law to "privatize prisons" that already sounds like king cronyism to me. The divert the tax dollars from state-run prisons to the pockets of an unaccountable private prison firm. Then, the judges send kids to be locked up in said private prison for a remuneration. WTF! We the citizens of the USA are paying judges so they can close down state prisons and divert public money into private hands. This story makes me so mad.

      Sorry for the extended rant.

      --Ron Edwards, US Slave Blog

  2. Thanks for responding to both comments. I'm surprised there isn't more comment activity here, with what seems to be a large amount of readership and traffic.

    I don't think we disagree. What I'm saying is that 'free market capitalism' isn't what people say it is. The atrocities that are described above by you may be called 'free market capitalism' by historians or the players themselves but they are NOT. What you are describing is not captialism. Keeping the money flowing is exactly what Adam Smith described as 'deranged'. Using force in any way is not capitalism. Anytime I see 'free market capitalism' connected to gov't or slavery or prisons I laugh (in a sad way) because is shows a profound misunderstanding of what free market capitalism is intended to be.

    I don't believe FMC exists either on planet Earth. The reason why is that you and I would become intellectual competitors to the Oligarchs and the Ranchers who run things. This is something that they simply won't allow. It's why the natural and free learning process is stifled in "school". It's why the Trivium was taken out of the curriculum 100 years ago. It's why we get "what to learn in fragmented 'subjects'" and not "how to learn" via grammar, logic and rhetoric.

    Because the slaveholders and oligarchs of the past called it free market captitalism doesn't mean I buy their definition. I think we do the same things in many ways. I go to the source material and when I read the "father of capitalism" saying that we're all made equal, and that if everyone is given a chance, a street sweepers's son can go toe to toe with the son of a Duke - well that didn't fit the "capitalist" narrative I had been "taught" in "school". You, I think, see the contradiction in the horrors of the past (psychotically chasing after the almighty dollar) being called 'free market capitalism' when it is no such thing.

    The word 'liberal' has also been bastardized beyond recognition, but that is for another day.


    1. Doug:

      It absolutely surprised the hell out of me that not only do I get traffic, but actual followers. Don't get me wrong, I'm absolutely thrilled to find others who are also knowledge seekers; folks who don't want the kindergarten version of history-lite, but who are willing to take a more complex view and analyze the national narrative more critically.

      By using primary sources (first person narratives, written records, newspaper accounts and photographs) along with serious secondary sources like documentaries, books, historians, professors, and others who have thoroughly researched their subject, I think we can explore difficult topics.

      I use to call it the "haunted house of history," but my daughter corrected me. She said that haunted houses are fake, this stuff is real; therefore she calls it a graveyard where the voiceless dead speak. I'll admit, she gets a bit dramatic.

      My sister hates this site, she just wants me to find a way to draw a smiley face on history. My spouse barely tolerates it. My friends cringe when they check out the site. It's a bit macabre, grim, painful and prickly...but, history is an argument, not a story.

      There are so many voices that I can't locate. In America we're some great storytellers, perhaps that would explain why our entertainment industry is so widely distributed. Even the most degraded, illiterate, marginalized Americans tell their stories either through songs (gospel, spirituals, work songs, protest songs, folk music, bluegrass, blues, country, you name it and we'll sing about it), poetry, diaries, orations, movies, etc. BUT, in other countries/cultures, the voices from down below are silent.

      I keep searching for the stories of Chinese coolies, not stories ABOUT Chinese coolies, but their stories in their voice--or their songs, poetry, something, anything, but alas it's just crickets.

      Also Afro-Latina women are muted; black women who were in the Contraband Camps during the Civil War--nothing. Where's the voice of the Virginia Tobacco Brides? Some right-wing author wrote a fictional novel on these mail-order brides, but she used a 19th century historical background for 17th century women--200 years is a big difference between frontier Virginia of 1619 (not even a viable colony) and Antebellum Virginia of 1840 (that was a mature slave society).

      Back to Adam Smith, when he wrote "The Wealth of Nations," the ENTIRE WORLD was enslaved. Europe had its serfs and when the USA won its independence, the UK started exporting its surplus prison population to Australia.

      I don't know, free market capitalism works just fine in ones imagination; but, the cold harsh reality is that you can't do business in ANY COUNTRY ANYWHERE on the globe, without the blessing of the government (king, queen, parliament, junta, dictator, congress, chief, whatever the piper must be paid). You can't just hang a shingle and start a business anywhere on this planet without having to glad-hand some kind of government official.

      --Ron Edwards

  3. Interesting info about your friends' and family's reactions to your site. One usually assumes that the people around the site creator are automatically supportive. I have found much of the same thing as I become less connected to the status quo and search out the "non smiley face" version of things historic and economic. This has placed me at this point in my life in the Austian / libertarian side of things. Because I work in a public school, my colleagues have labeled me as someone odd, although, tellingly, my students appreciate my candor.

    True what you say about free market capitalism. I guess it is the ideal that keeps me going, that at some point we'll be able to be able to just exchange and do as we please without the 'blessing' of The Powers That Be. It's idealistic, yes, but the past two or three years I've renewed vigor in trying to move toward such a place. It harkens back to when I was in my idealistic '20's and a person of the Establishment Left - emotional and driven.

    - Doug

    1. Doug:

      Yes, sadly my family and friends do not share my passion for history. That's okay, because thanks to the internet I can cast my net wider out of the constraints and confinement of my myopic inner-circle. I'm not breaking any news, I'm just culling sources.

      As far as economics is concerned, the Austrian/Libertarian thing is okay. They happen to be too ideologically driven for my personal taste. The only economists that I take seriously are the ones that "got it right" about the subprime meltdown and the economic crisis. Other than that they're just blab, blab, blab. Who got it right? Well, it might surprise you, but there were economists from all across the ideological spectrum. Peter Schiff (he's one of those Libertarian guys), Bruce Bartlett, Jimmy Rodgers, Kevin Phillips (from the right), Thomas Frank, Dean Baker, Gillian Tett, Elliot Spitzer (yes, he called it right), Naomi Klein, Nassim Taleb, and Dr Nouriel Roubini. They are from all across the political and ideological spectrum, but they know their stuff. All of the aforementioned predicted the financial meltdown and they knew the triggers and causes.

      You have to read two of the late Molly Ivans (left for sure) articles from 1999. She's chillingly prescient:

      Okay, full disclosure, my degrees are in Business and Economics, my passion is history. Heck, I called the financial meltdown, too. That's how I found my motley list of economists; because, I wanted to find "truth tellers" not a bunch of goofy flag waving buffoons. The media was tripping about "girl 9," instead of reporting on Elliot Spitzer's report, here's a link:

      Perhaps our media should have covered the content of Spitzer's economic red flags with the same verve that they covered the hooker.

      We have a winning hand in this country, but we keep playing it like a pair of deuces. We're cutting public education, erecting untenable barriers to entry for small business and a university education, we're so quick to scapegoat and run into our xenophobic corners it's crazy.

      --Ron Edwards



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