As the Pennsylvania Budget Stalemate was getting underway, the General Assembly sent Senate Bill 397 to the Governor’s desk with a unanimous vote from both chambers. The bill, which is now Act 16 of 2015, completes a multi-session effort to loosen the state’s bail bond system while adding specific credentialing processes that only allows bail bond companies backed by insurance agencies to operate within the Commonwealth.
The efforts were started by former State Senator and current Democratic Lieutenant Governor Michael Stack. The history of SB 379 reveals the relationship between the former state senator and Nicholas Wachinski, a bail bond industry representative who is now the current president of the American Legislative Exchange Council’s (ALEC) newest project, the American City County Exchange.
Since 2010, State Senator Mike Stack expressed interest in the way the state or the City of Philadelphia handles their bail bond operations. One of the earliest documented instances occurred in August 2010 when members of a Senate panel heard ideas to “improve [Philadelphia’s] bail bond collection system – including using private bondsmen to chase after the money and providing alternatives to cash bail.” The Philadelphia Inquirer noted that there was “$1 billion in bail owed to the city” and 47,000 bench warrants were outstanding for fugitives who did not show up to court by court estimates. According to the article, the panel took ideas from private bondsmen to recuperate the money the city failed to collect.
Two of the men testifying at that hearing were Brian J. Frank, the president of Lexington National Insurance Corporation, and Nicholas Wachinski, a lobbyist for the industry trade group American Bail Coalition and future Chief Executive Officer for Lexington National Insurance Corporation. Frank stated at the time that “firms kept in close touch with defendants that their families to make sure that the accused showed for trial,” and “we could not have thousands of fugitives or else we would be broke.” Wachinski testified that “private bail firms outperformed government-run bail systems,” and went on to say “defendants are only going to appear for court if the money bail we levy against them is truly a number that we set. If they feel there is no threat – that we won’t seek justice – they’re not going to come to court.”
Then in September 2012, State Senator Stack introduced Senate Bill 192, which began the movement toward Act 16 of 2015. The bill died in committee and never saw a vote. A year later Senator Stack received a $5,000 campaign donation from Nicholas Wachinski. Seven months later, Wachinski made two more campaign donations to Stack totaling $6,750. Three months after Senator Stack received the last installment of donations from Wachinski, Senators Alloway and Stack reintroduce Senate Bill 192 as Senate Bill 1441. The bill’s cosponsorhip memo proclaimed that it “will privatize and regulate the Bail Bondsman industry in Pennsylvania” and “provide a uniform collection of rules to regulate this serious profession.” SB 1141 was sent to State Senator Stack’s Banking and Insurance Committee.
At the hearing where the Senate Bill 1441 cleared the Banking and Insurance Committee by a unanimous 14-0, Nicholas Wachinski was called to testify on behalf of the industry trade organization, the American Bail Coalition. In his testimony, which is archived on the Pennsylvania Senate Republican’s Banking and Insurance Committee website, Wachinski thanks “Senator Alloway for his enthusiasm in this legislative project,” and Senator Stack for “his commitment and help in moving this bill forward as an effective criminal justice tool.” One of the major deregulations that Wachinski lobbied for was the removal of the “county by county” barrier bail bondsmen had to go through if they wanted conduct business in the Commonwealth.
According to previous regulations, bail bondsmen had to be registered, have an office and have a listed phone number, in every county in which they wanted to operate. Wachinski testified that removing this barrier would allow the “industry to truly become a criminal justice partner” on a statewide level. Another major part of the bill hands those who handle bail over to companies – like Wachinski’s Lexington National Insurance Companies – that meet the requirements of Pennsylvania’s 95 year old Insurance Department Act. Thus creating a specific market for those who can operate as bail bondsmen. After this hearing, the bill was sent to the Senate Floor and passed by a unanimous 48-0 vote. However, the bill never sees action in the House.
Between the time the bill was introduced in the Senate and Wachinski was called to testify before the Senate Banking and Insurance Committee, Nicholas Wachinski was named the president of the American City County Exchange, an organization within the American Legislative Exchange Council (ALEC) whose mission is to “advance limited government and free market principles in local government through model policies, conferences and online collaboration.” This is basically what the American Legislative Exchange Council has been doing in state houses for past 43 years, but on the local and regional levels of government. A 2013 Guardian article reported that memberships cost $25,000 a year for “founders committee” members and $10,000 a year for “council committee” members. Council committee members and corporate lobbyists will be able to “participate in policy development and network with other entrepreneurs and municipal officials from around the country.”
ALEC is a corporate, right-wing think tank funded by the Koch Brothers and their corporate sponsors. The organization has a history drafting free-market friendly model legislation that is distributed to lobbyists and state legislators who are members of the organization. That legislation eventually finds its way to committees and floor debates.
The American Bail Coalition, the organization that Wachinski represented before the Senate committee, has been an ALEC member since 1993 and was part of the disbanded “Public Safety and Elections Task Force,” which was responsible for drafting the Stand Your Ground Law in Florida and Arizona’s anti-immigration law, which allowed commercial bail bondsmen profit off the potential deportations that immigrants were facing. In a 2010 American Bail Coalition newsletter, the organization highlights that they were responsible for writing “twelve model bills fortifying the commercial bail industry” in the organization’s two decade involvement with ALEC because “the major reason behind this was to offset the threat posed to commercial bail.”
Finally, earlier this year, the multi-session effort to deregulate the state’s bail bond industry came to an end in the shadows of the Pennsylvania budget stalemate between Governor Wolf and the Republican leadership. State Senator Richard Alloway introduced a bill to deregulate the industry for the third consecutive session. It was sent to the Banking and Insurance Committee, cleared the committee by a unanimous vote and then cleared the senate by a 48-0 vote. The bill then went to the House and did not begin to move until the middle of June where it cleared the lower chamber 189-0. The Senate adopted the House’s amendments and was signed by Governor Wolf on July 2nd, two days into the budget stalemate.
This example is the first look into the connections the president of a new ALEC backed organization has with a prominent Pennsylvania legislator. It also demonstrates how the organization uses bi-partisan support to push their agenda through on the state level. We recently witnessed it with Senate Majority Leader Jake Corman, who told reporters late last year and a local radio program earlier this year, that ALEC fully supports the General Assembly’s plan to push for pension overhaul. The only difference between the deregulation of the bail bond system and the plan to overhaul Pennsylvania’s pension system was that it was able to be kept a secret.