FILE PHOTO: Joe Scarnati

A rapidly expanding business-consulting and lobbying firm that counts the state Senate's newly retired leader as a partner is gearing up to become a major player in Pennsylvania political circles with ties to a $432,000 campaign slush fund.

Joe Scarnati joined the new firm, Allegheny Strategy Partners, after retiring in December from a two-decade career in Harrisburg, most of which he spent in the upper echelon of power as Senate president pro tempore.

The Jefferson County Republican teamed up with partners Nick Varischetti, a former prosecutor and Pittsburgh lawyer, and Tommy Johnson, a former energy company lobbyist. The firm, launched in November by Johnson and Varischetti, has since added Megan Crompton, a veteran lobbyist and ex-Senate staffer from a politically connected family.

Scarnati is far from the first state political leader to immediately register as a lobbyist or take a prominent private sector role. 

But new campaign finance filings show he may be entering that world with access to one of the largest political funds in recent memory.

A successful fundraiser, Scarnati had about $650,000 left between two political action committees in the final months of his tenure, according to campaign filings. 

Some of that went toward Senate Republican candidates, who won enough seats to keep their long-held majority in Harrisburg. 

At the same time as Scarnati was spending on those races, he transferred the majority of the funds in his main campaign account to a brand new political committee – Northwest Leaders PAC, registered in DuBois, Clearfield County, near where his campaign had previously been headquartered.

The PAC’s chairman and treasurer, Peter Varischetti and Mark Freemer, respectively, are the top executives at Varischetti Holdings in Scarnati’s hometown.

Scarnati’s new business partner, Nick Varischetti, is the sibling of Peter Varischetti and is also a partner at Varischetti Holdings, which is described on Allegheny Strategy Partners’ website as a “family-owned and operated organization consisting of several different businesses, including real estate investments, powder metal manufacturing, an oil and gas field services company, and waste industry consulting.”

Scarnati, Johnson and Nick Varischetti did not return requests for comment.


'Pro-business agenda'

In a statement upon joining the firm, Scarnati said, “I am excited at the prospect of joining two people I know and trust at a time when they’re building something from the ground up. There is no question that the landscape in the advocacy space is changing. This team’s approach, coupled with the talent being assembled will make this firm a market leader.” 

Peter Varischetti, when asked whether Northwest Leaders PAC would have any restrictions around Allegheny Strategy Partners, said in an email the PAC “is engaged in supporting candidates locally and statewide with a pro-business agenda.”

The PAC has not fundraised at all aside from the two large transfers from Scarnati’s other political action committees, according to new filings updated as of Dec. 31.

After forming in early October, the PAC received $200,000 from Scarnati’s primary campaign account, which was left with a balance just under $60,000 after some other spending in December.

And Northwest Leaders PAC received another $232,000 when the other Scarnati-linked political committee, Citizens for a Better Pennsylvania, emptied out its account at the end of December. That committee, which had also been chaired by Peter Varischetti and whose treasurer was Scarnati’s wife, Amy, collected donations for decades but had not spent in large sums until this past year, according to campaign finance reports. 

[Citizens for a Better Pennsylvania spent about $400,000 in early 2020 to mostly support the failed campaign of Scarnati’s hand-picked successor. And in the waning days of that primary, Scarnati also used the PAC to collect $42,500 from four top executives of a gaming company. They were the largest donations the committee had received in the entire year, and they came as Scarnati and other top Republicans were quietly pushing to expand gambling in the state, The Caucus and Spotlight PA reported.]

Now equipped with the combined $432,000, it’s unclear how Northwest Leaders PAC will use that money beyond support of pro-business candidates. Other retired legislative leaders have held onto campaign cash for years, giving the money to other like-minded campaigns and allies, or spending it for their own purposes, including legal costs.

“It’s not uncommon and it’s legal,” said political analyst G. Terry Madonna, of Millersville University. 

The amount might be a bit unusual, he said, but the practice of having campaign money left to spend on elections is commonplace, Madonna said. 

“Money brings influence, but so do acquaintances throughout state government. When you get a person who had been in senior leadership, there’s a tremendous advantage when you talk about their contacts in the administration and the Legislature,” he said.

There’s another path for survivors of clergy sex abuse to get justice. It faces an uphill climb in the legislature.


Influential insiders

Ethics laws prevent Scarnati from lobbying senators for one year, though he can lobby the House and executive branch. 

Laws do not prevent him from donating to the campaigns of legislators he is lobbying, and Pennsylvania remains one of the few states without limits on state-level campaign contributions. Plans to bolster Pennsylvania’s weak campaign finance laws repeatedly came up short over Scarnati’s career, during which close scrutiny was applied to how he raised and spent his own campaign cash.

It’s also unclear who Allegheny Strategy Partners’ clients are or will be. The firm and its handful of lobbyists have registered with the Department of State but have not filed any of the reports necessary to begin working for specific companies.

The lobbyists themselves have far-reaching connections, though.

Crompton, whose husband Drew was appointed in late 2019 to a position on Commonwealth Court after a long career as Scarnati’s chief of staff and top counsel, comes from another top Harrisburg lobbying firm, Long Nyquist. Lobbyist disclosures indicate Megan Crompton and her previous firm represented a litany of companies including those in energy, pharmaceuticals and gaming. She also spent almost a decade as an aide to Sen. Tommy Tomlinson, R-Bucks County. Her sister, Merritt Reitzel, serves on the Gaming Control Board as a Scarnati appointee.

Scarnati was one of the most prominent Republicans in Harrisburg over the past 15 years. He began his career working in his family’s restaurant business. He was elected to the Senate in 2000 and became president pro tempore, the Senate’s top-elected post, in 2006. Upon the death of former Lt. Gov. Catherine Baker Knoll in November 2008, Scarnati succeeded Knoll as called for in the state Constitution but also remained in his Senate seat and leadership post.  He filled Knoll’s term through January 2011. 

Johnson came with 15 years of experience at Pittsburgh-based CONSOL Energy and CNX Resources.  Johnson is a former legislative aide to Republican U.S. Sen. Rick Santorum and a campaign energy advisor to former President Donald Trump.  

Varischetti is a Pittsburgh lawyer and former federal prosecutor. He remains “of counsel” at Burns White, the law firm where he spent the past decade. Varischetti is a shareholder and director of Guardian Elder Care Holdings, Inc., a health care provider with more than 60 nursing facilities statewide and related interests.

The latest addition to the firm is Will Dando, a former top Senate staffer and director of government affairs for the Pennsylvania Coal Alliance, a Harrisburg-based trade association.

 – Follow The Caucus on Twitter @CaucusPA. Janesch is on Twitter @SamJanesch, and Bumsted is @BEBumsted.

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