The ongoing Bonusgate investigation took an unexpected turn Wednesday when a former top staffer for the first time directly fingered House Majority Leader Bill DeWeese as being part of an alleged scheme to reward staffers for political work with taxpayer-funded bonuses.

DeWeese, a Greene County Democrat locked in a tough re-election battle this year, has denied any knowledge of bonuses being given for campaign work. He shot back a few hours after Mike Manzo made his explosive allegations during testimony at a court hearing, saying that his former chief of staff’s statements were “absolutely false.”

Manzo was forced out of his job along with six other House Democratic staffers nearly a year ago by DeWeese. He testified in court Wednesday that he believed DeWeese and former House Democratic Whip Mike Veon knew of and approved the alleged bonus-for-campaign-work scheme, according to reports in several media outlets that followed the two-day hearing.

Veon and Manzo are two of the 12 charged so far in the ongoing Bonusgate probe. DeWeese has not been officially accused of any wrongdoing so far.

“We knew we were going to be badly outspent by Republicans because we were in the minority [at the time],” Manzo testified. “Our goal was to have more feet on the ground. It was the only way we could compete.” DeWeese convened a press conference in the Capitol later in the day to rebut Manzo’s testimony. DeWeese called Manzo ''a desperate, disgruntled former employee whom I fired last year for dishonesty and self-dealing.” DeWeese further discredited his former top confidant, saying of Manzo: “He has lied to his wife. He has lied to his girlfriend, to investigators and to me. His motives are suspect, and his opinions are just not credible.”

Bill DeWeese

Manzo and wife Rachel, a suspended House Democratic staffer, are among the 12 facing charges in the Bonusgate probe. Manzo is also accused of installing a woman he was having a sexual relationship with in a no-work job with the caucus.

“'Now, he and his wife are confronted with serious criminal charges and long prison sentences, and he is telling a story that conflicts with the yearlong grand jury investigation,” DeWeese said.

DeWeese told reporters that in early 2007 Manzo “twice told law enforcement that I had nothing to do with it. He has since told several people inside our caucus that I had nothing to do with it.”

While Attorney General Tom Corbett has not charged DeWeese with any wrongdoing, he has signaled that more charges could be filed after the November election.

Now, with Manzo’s testimony, DeWeese faces yet another setback in his efforts to hold onto his House seat and his post atop the House Democratic caucus.

DeWeese is locked in a tough re-election battle, facing Republican Greg Hopkins, a former arena league football player whom DeWeese defeated by just over 1,000 votes in 2006. Hopkins has been hitting on the bonus scandal in making the case to voters that they need to make a change.

In addition, 15 House Democrats over the summer called for DeWeese to step down as leader, saying that he should be held accountable for the bonus scandal, since it happened on his watch. DeWeese has held on so far, but the caucus will gather on Nov. 18, after the election, to decide on its new leadership team for the 2009-10 term.

Wednesday’s preliminary court hearing was for only two of the 12 Bonusgate defendants – state Rep. Sean Ramaley, D-Beaver, and Annamarie Peretta-Rosepink, former district office manager for Veon. The remaining defendants, including Veon and nine former or suspended staffers, waived their right to a hearing.

At the close of the two-day hearing in Dauphin County Court, Judge Richard Lewis ruled that there was sufficient evidence for Ramaley and Peretta-Rosepink to go to trial. So now all 12 cases are ready to go forward.

All 12 defendants are accused of theft, conflicts of interest and criminal conspiracy, with the number and severity of the charges varying.

In addition to Manzo, former Veon aide Patrick Lavelle Jr. is also cooperating with prosecutors. He testified Wednesday that his sole job as a taxpayer-funded caucus employee was campaign fund-raising. He said that he raised $2.5 million in the capacity of his state job.

Philadelphia attorney Jim Eisenhower, who is representing Manzo, told reporters after Wednesday’s hearing that his client will plead guilty to the most serious charges against him, and that in exchange the sentencing judge will be told of his cooperation with prosecutors. “Mike has agreed to testify truthfully and will do so whenever he's asked to do it,” Eisenhower told The Morning Call of Allentown. “He's extremely remorseful for his conduct and will cooperate with the government.” (Editor’s Note: Astute political observers will remember that Eisenhower was the 2004 Democratic candidate for attorney general who was narrowly defeated by Republican Tom Corbett, who now controls the Bonusgate probe.)

Mike Manzo

Lavelle, meanwhile, got four of the six charges against him dropped in exchange for his testimony, several newspapers reported.

The Pittsburgh Tribune-Review quizzed Veon’s lawyer, Robert Del Greco of Pittsburgh, about whether the former House Democratic whip had cut a deal with the prosecution.

“I am not going to go down that slippery slope,” Del Greco told the newspaper.

“As I stand here right now, it is our intention to fight the charges,” he said.

At an unrelated campaign event Wednesday, Gov. Ed Rendell declined to comment on Manzo’s testimony until “they are made in a court of law where they can be cross-examined.”

During Wednesday’s hearing, an attorney general’s office agent, Michael Carlson, described a system in the House Democratic Caucus where six bonus payments were made between December 2004 and January 2007, for a total of $1.64 million. All four legislative caucuses awarded employee bonuses of roughly $4 million during that period of time.

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Not over yet
Despite double-digit leads in some Pa. polls, Democrats are worried about racial voting patterns in Keystone State

The latest Quinnipiac University Poll has Sen. Barack Obama, D-Ill., up by 15 percentage points, 54 to 39 percent over Republican rival John McCain in Pennsylvania.

The Muhlenberg University Poll through Oct. 9 showed Obama up by 13 points, 51 to 38 percent in the state.

So what’s going on? Is the race over both here in Pennsylvania and nationally? Polls show that in Pennsylvania and across the nation, a clear majority of voters thought Obama out-did McCain in their two televised campaign debates so far. Thanks to the economic crisis, Obama is starting to pick up momentum in most battleground states and even some Republican red ones. So why are Pennsylvania Democrats still worried enough that the Obama campaign trotted out Gov. Ed Rendell on Wednesday, with all of this good polling news, to call McCain a “liar” repeatedly – 30 times in a 20-minute news conference to be exact. And Rendell is a politician who abhors that word and never uses it. Because while the economy remains the story and voters trust Obama more on the economy than McCain, two worries are driving Democrats: the first is that many voters still are willing to distrust Obama for his lack of experience, if they get a reason to, polls show.

Barack Obama John McCain

The second was summed up on CNN by David Gergen bluntly: ““I think it’s too early to declare this election over, Anderson, because Barack Obama is black,” said Gergen, who has advised presidents of both parties. Gergen said no one knows how much of an effect that will have and how Obama’s race will affect turnout for whites as well as blacks.

And Gergen is right. And there isn’t enough data statewide to say whether white working class voters will vote for a black candidate. Gov. Ed Rendell, who said earlier this year, when campaigning in the primary for U.S. Sen. Hillary Clinton, that there were some white voters “who will not vote for a black candidate” now says: “I am very reassured about that, I am feeling better.

“We are in an economic crisis now and it’s like when you are drowning in a river and a man with a coiled rope is on the riverbank. You don’t care if he is black or white, you just hope he is strong enough to throw the rope so you can grab it and not sink.”

One place where you can study how white working class voters react to black candidates for major office is Philadelphia, where Rendell is the only white mayor since 1983, as Wilson Goode was elected to two terms before Rendell, and John Street and Michael Nutter – all three African-Americans -- have followed Rendell.

In 20 white working class Philadelphia wards targeted by Republican State Committeeman and GOP powerbroker Bob Asher and the McCain campaign, which he chairs in Pennsylvania, Democratic 2000 nominee Al Gore and John Kerry and Nutter all got two-thirds of the vote when they ran.

Street fell shy of getting a quarter of the vote, and many voters in those 20 wards, largely in South Philadelphia and Northeast Philadelphia, say that controversial hate-speech-making Rev. Jeremiah Wright makes them equate Obama more with Street than the sunny, change-preaching Nutter. And Republicans know it, which is why mini-flaps like the McCain campaign disowning itself from the Lehigh Valley Republican rally speaker who referred to Obama by his full name this week: "Barack Hussein Obama."

This stuff drives the Obama campaign crazy, and they are registering many black and liberal voters in the once-all-white and Archie-Bunker-ish Northeast.

But if they run 25 percentage points behind Kerry and Gore there, a result Asher believes can be obtained in those 20 wards, and many Democrats quietly agree, that could cut 60,000 votes from Kerry’s margin over President Bush in 2004. Since Kerry only won the state by 144,000 votes, that would be 40 percent of his margin.

Rendell believes Obama will win the rest of the city by more than enough to make up any losses in those white and more conservative wards.

But the worry for Democrats is, what if there is even half that level of fall-off among white working class Democrats in Lackawanna, Luzerne, Allegheny, Beaver and Washington counties?

Kerry won Allegheny by 90,000 votes in 2004, helped by his billionaire wife, Teresa, a charity-donating legend in Allegheny.

One Democrat said: “If they can cut 60,000 from Philly and half of Allegheny’s and [Washington and] Beaver’s margin, you are down 50,000 from the Kerry margin out west. That leaves you 30,000 up, and in the whole rest of the state, you could have some people there who have issues about a black candidate.”

Rendell and his strategist Neil Oxman reply that Obama has registered so many more new Democrats that for the first time in decades, there are more than 1 million more registered Democrats than Republicans, and they expect them to stick with their new party this year.

But as one top Democrat said: “The difference between our voters in Philly and the rest of the state is not that the Philly voters are more racist. It’s just that high-profile blacks have run there so we can see the voting patterns. This is the first test for the rest of the state on whether they will elect a black to high office.”

Plus Republicans are trying to taint that incredible registration surge – there are 4.4 million registered Democrats to 3.2 million Republicans, the latest state numbers suggest – by saying it was achieved by fraud.

Today, Republican State Committee Chairman Rob Gleason and former Supreme Court Justice Sandra Newman alleged major voter fraud in registering new voters. This is partly to pave the way for massive GOP-funded voter challenges on or after Election Day.

But more importantly, it is an attempt to taint Obama, to depict him not as someone so inspiring that voter rolls are at all-time high, but as a Chicago-style political machine politician trying to win on ghost votes.

Hold on tight. Because you can be assured that if Rendell, who never called any of his opponents for mayor or governor a “liar”, is already tarring McCain with that word, and Republicans are charging voter fraud a month before anyone votes, this ride will get nastier than any campaign in recent state history.