‘Bonusgate’ aftermath: Why government workers don’t get holiday cash

Most city and state employees could theoretically be awarded end-of-year bonuses — but they’re not.

cityhalltower-lookingup-miguelmartinez
Miguel Martinez / Billy Penn
maxmarin-square

A decade ago, Pennsylvania was embroiled in a huge controversy about end-of-year bonuses for elected officials.

Thanks to pesky reporters, the public learned about a common Harrisburg practice that diverted tax dollars into cash handoffs for favored bureaucrats. After the “Bonusgate” scandal, Democratic and Republican leaders in the capitol made hand-to-heart vows to win back taxpayers’ trust. However, no law was ever passed to permanently ban bonuses once within the state legislature.

Somewhat shockingly, Philadelphia does not have a recent “bonusgate” scandal of its own.

City policy does allow for performance-based pay bumps, but cash-strapped coffers and a working accountability system (!) means they’re rarely sought out. For lower-paid municipal employees, bonuses have come up during union contract negotiation time as a pot sweetener — but only as a concession to avoid doling out regular pay raises.

Philly: No city bonuses since 1989?

The City of Philadelphia employs more than 30,000 workers. According to Pew’s latest report on the city workforce, the vast majority — 81 percent — of these jobs are filled through the city’s civil service system, established by the 1952 charter to codify fair hiring practices. (Another major goal of the system? “Reduce nepotism and cronyism and establish personnel policies based on merit.”)

For that four-fifths of city personnel, extraordinary work could theoretically be rewarded with a cash infusion.

There’s a provision in the civil service regulations that allows for a “performance-based bonus.” However, it’s not simple as some higher-up signing off a check to a favored employee. As codified, any department head seeking to hand out extra cash would have to present an evidence-based argument to the Civil Service Commission for final approval — and also identify the source of funding for the bonus (likely from the department’s own budget). Even so, the commission could end up vetoing the request.

Neither of those scenarios appear to happen often, or so city officials say.

Chief Administrative Officer Christine Derenick-Lopez, who oversees the city’s human resources department, couldn’t recall a single instance of the provision being used before to win a bonus.

“Since November 1989, I’m not aware of any performance bonuses being paid in accordance with this Civil Service Regulation,” Derenick-Lopez, who oversees Human Resources, said in an email. A caveat: Derenick-Lopez noted that she was left city employment between 2014 and 2016. Billy Penn has not yet checked city records to see if bonuses were issued that year.

And as for the other 19 percent of city employees — which include elected officials and their appointed aides — who aren’t required to pass civil service exams? No go. “Bonuses are not available to exempt employees,” said Kenney spokesperson Mike Dunn.

There are cases of quasi-governmental organizations in recent history doling out questionable bonuses to staff. In 2008, the city-controlled Delaware River Waterfront Corporation, then known as Penns Landing Corporation, approved a $25,000 bump to the agency’s acting president who was already making $172,200 annually.

Of course, it’s no big secret that overtime is a far more effective way to pad your city salary.

The city’s prison workers and police officers ate up the majority of the city’s nearly $250 million overtime bill in the last fiscal year. Even as detectives struggle to crack cases and spike up the city’s declining homicide clearance rate, overtime represents a constant source of tension within the Roundhouse.

Cases of rampant overtime abuse arise in other departments as well. Every few years, egregious cases are spotted and officials threaten to crack down on overtime accountability. One such case was discovered by the Inquirer this year, in which a youth-detention worker was able to triple her $49,551 salary with overtime billing. That worked out to 71 additional weeks (2,872 overtime hours) on top of the normal 40-hour workweeks throughout the year. Who needs a bonus with those hours?

Aftermath of the ‘Bonusgate’ scandal

Meanwhile in Harrisburg, hearken back a decade to Bonusgate.

In 2007, then-Attorney General Tom Corbett began investigating millions of dollars being funneled to legislative staffers who were doing side work for their political bosses. Former State Rep. Mike Veon led the vast House scheme that slurped up more than $3 million, courtesy of taxpayers, to help himself and fellow Democrats get re-elected. The sweeping corruption investigation resulted in more than a dozen indictments.

Bonuses have been a thorny subject in the General Assembly ever since.

The bonuses themselves were never illegal within legislative offices. But state law has long forbidden taxpayer-funded employees from doing campaign work while on the job — and especially from getting compensated for that work out of taxpayer funds. But lawmakers at the time — some Republican, most Democrats — found a way, until news reports began surfacing about their dubious payouts.

In the wake of the scandal, then-freshman State Sen. John Eichelberger introduced a bill to ban bonuses in the General Assembly once and for all. It seemed like a no-brainer to stitch the wound in the public trust — but it was throttled by Democratic leadership, Eichelberger said at the time.

Both party caucuses did establish internal policies eliminating bonuses, and Eichelberger’s bill went into hibernation.

With no law, bonuses are technically still legal.

Eichelberger left the Senate earlier this year without reintroducing the bill. Jenn Kocher, a spokesperson for the Senate Republican majority, said she was unaware of any pending legislation about legislative bonuses coming up.

“I do know that the Senate has not awarded bonuses for 12 years and has no plans to,” she added.

Dubious bonuses have appeared in other state-controlled offices, however; most recently the scandal-plagued Philadelphia Parking Authority.

‘I don’t want the lousy bonuses’

Outside the chambers of the capital and City Hall, bonuses aren’t always considered a positive. In past labor wars with public sector unions, Philly negotiators have use them as a bargaining chips to avoid increasing salaries.

In 2008, then-freshman Mayor Michael Nutter’s administration sat in lockjaw negotiations with District Council 33, the government’s largest labor union which is comprised of thousands workers. Nutter had just taken over a dire fiscal situation in City Hall, and now had to contend with the blue-collar union, the lowest-paid in the city, whose workers were demanding a salary bump.

The city couldn’t afford the raises, but offered a $1,100 signing bonus for each of DC33’s members to sweeten the pot on an agreement. Some workers were insulted.

“I don’t want the lousy bonuses,” Bob Deck, a city employee represented by DC33, wrote to the Philadelphia Daily News in 2008. “I need regular raises. Bonuses do nothing to help. I haven’t had a raise in 12 months.”

Eventually, both sides reached a one-year contract — no raises, but no changes to healthcare, either. And most DC33 workers did take the signing bonus.

Thanks for reading another Billy Penn story

Seems you’re the kind of person who really digs in. Want more? Sign up for our free morning newsletter, the easy way to stay on top of Philly news.

Thanks for reading Billy Penn

Like the story above, everything we publish is powered by our members. If you enjoy reading, join today: Just $5/month makes more difference than you’d think.

Thanks for reading! We need you.

Reader donations power our newsroom. If Billy Penn helps you feel more connected to Philly, we’d love to count you as a member. Will you join us?

Lock in your support

Reader support powers our newsroom. A monthly membership helps lock it in.

Can we count on you as a Billy Penn sustainer?

Winning the local journalism game

Thank you: Member support powers our newsroom.

Know someone else who might like our work? Invite them to sign up for our free morning newsletter.