HARRISBURG - A battle between Gov. Rendell and Senate lawmakers intensified yesterday as a panel warned that two Rendell cabinet members would be violating ethics law if they approved grants to groups that employed their spouses.
In its 7-0 ruling, the State Ethics Commission said there would be a conflict of interest if Kathleen McGinty, secretary of the Department of Environmental Protection, and Michael DiBerardinis, secretary of the Department of Conservation and Natural Resources, continued to oversee the grant-application process involving such groups.
The ethics commission's review did not look at the two grants that set off the controversy, and its executive director, John Contino, would not say whether such an investigation was underway.
Rendell, in a statement late yesterday, defended the grant process as being open and competitive and praised McGinty and DiBerardinis' records. He said he would await the commission's written ruling before deciding whether to appeal to Commonwealth Court.
"As the commission made clear, today's decision is an advisory opinion that is completely detached from, and is no reflection on, past practices at either DEP or DCNR," the governor said.
McGinty and DiBerardinis must undergo confirmation votes because, under state law, cabinet secretaries must be confirmed by the Senate again when a governor is elected to a second term.
When news of two grants to groups employing McGinty's and DiBerardinis' spouses came to light last week, Rendell questioned whether partisan politics was in play, and challenged the Senate to vote on his nominees, who have served in his cabinet since he took office in 2003.
But several hours later - after it became apparent that he did not have enough bipartisan Senate support to confirm the two cabinet members - Rendell reversed himself and asked the ethics commission for the expedited review.
Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi (R., Chester), said yesterday's ruling vindicated Senate Republicans who sought the review.
"It made it clear that the Senate had a right to ask for an opinion and the governor was wrong to resist it," Arneson said.
Some Democrats said that although they had respect for both McGinty and DiBerardinis, they had concerns about the ethical questions raised.
"We're here because of ethical considerations," said Sen. Anthony Williams (D., Phila.). "We should get clarity over what they should be doing or not doing."
The Senate has scheduled a vote on the cabinet members' confirmations for May 8.
The ethics commission yesterday said the grant application guidelines are open and fair, but said that, in the future, Rendell must choose someone outside the agencies to consider grants for groups that employ either McGinty or DiBerardinis' spouses.
McGinty's husband, Karl Hausker, received $3,700 as a consultant for Pennsylvania Environmental Council and its subsidiary, Enterprising Environmental Solutions Inc. Together, the groups have received $2.6 million in grants from the DEP since 2003 to support agricultural conservation, watershed protection and abandoned mine cleanups.
DiBerardinis' wife, Joan Reilly, runs the parks program of the Pennsylvania Horticultural Society, which received $1.7 million in grants from the Department of Conservation and Natural Resources in 2003.
Rendell said Reilly was not directly involved in the Philadelphia area tree-planting program that was the focus of the grants.
Both groups received state funding before Rendell and the cabinet secretaries took office.
Some observers say the ruling could have broad implications in grant administration in a state where agencies typically dole out tens of millions in state grants each year to groups of all sizes, from hospitals and universities to small neighborhood groups.
"They have opened a Pandora's box," said John Hanger, president of PennFuture, a statewide environmental advocacy group and supporter of both McGinty and DiBerardinis. "If this is the rule of the road going forward, every state grant program will have to be re-engineered.
Barry Kauffman, executive director of Common Cause of Pennsylvania, said he doubted that many individuals or institutions involved in grant programs would be affected.
"How many people are in the grant approval loop that would have this applied to immediate families members?" he asked.