Sneak peek of Fumo trial
By MICHAEL HINKELMAN
hin..._at_phillynews.com 215-854-2656
JESSICA GRIFFIN/Daily News
State Sen. Vince Fumo (left) leaves court yesterday after hearing on
whether Richard A. Sprague (right) should represent him.
A private eye hired by state Sen. Vince Fumo testified yesterday at a
court hearing that he stopped doing sweeps for listening devices in
Fumo's offices and his home because he was concerned he might be
arrested for obstruction of justice.
The private investigator, Frank D. Wallace, made the disclosure
during a hearing yesterday before U.S. Senior District Judge William
H. Yohn Jr. to determine whether Fumo's lawyers, from the firm of
Sprague & Sprague, should be booted over alleged conflicts.
Fumo's trial on corruption charges isn't supposed to start until
February, but yesterday's hearing offered a rare preview of some of
the government's evidence against Fumo.
In addition to Wallace's disclosure, there was also testimony
alleging that Fumo tried to get Verizon of Pennsylvania to steer its
legal business to the Sprague firm.
Fumo had intervened in a Verizon regulatory matter in 1999 and 2000.
In 2001, after the state utility commission and Verizon reached a
settlement, Verizon initially agreed to pay Sprague & Sprague $1
million a year for three years as part of its agreement with Fumo.
Verizon PA's then-chief executive, Daniel Whelan, and its general
counsel later shot down the idea.
FBI special agent Vicki Humphreys read portions of Whelan's
grand-jury testimony from November 2005 in which he said the Sprague
firm wasn't the type of "general-purpose law firm" Verizon needed.
Fumo was indicted in February, charged with bilking the state Senate;
a charity he founded, Citizens Alliance for Better Neighborhoods; and
the Independence Seaport Museum out of $2.1 million for his personal
and political benefit.
Fumo also is charged with trying to thwart the FBI probe by
destroying e-mails and other electronic evidence.
Wallace testified that he had been asked by Charles Hoffman, Fumo's
chief of staff in his Tasker Street office, to conduct sweeps for
bugs but that he became skittish in 2006 when he learned that the FBI
was investigating Fumo.
Wallace said that when he expressed concern to Hoffman that the
sweeps might be illegal, Hoffman tried to reassure him, telling him
that Fumo had checked with his lawyer, Richard A. Sprague, and that
Sprague said there was nothing improper about the bugging sweeps.
Wallace said he told Hoffman, "Fine, if Mr. Sprague wants to put it
in writing for me, I'll do it."
But Wallace told Assistant U.S. Attorney John Pease he decided to
stop conducting the bugging sweeps.
"I had been given advice by my attorney it could violate the law and
I could be arrested for obstruction of justice," he said.
Sprague said after yesterday's hearing there was nothing improper
about trying to determine whether the feds had planted bugs in Fumo's
office or home.
"There is nothing unlawful with anybody checking to see whether Uncle
Sam or anybody has put a bug or wiretap in your home or office,"
Sprague said. "Nothing was said about if you find something, you
should take it out."
The feds contend that three of the firm's lawyers - Richard Sprague,
Geoffrey Johnson and Mark Sheppard - should be kicked off the case
over alleged conflicts.
Prosecutors contend that the lawyers have represented both Fumo and
the entities he is alleged to have bilked.
The feds say the Sprague lawyers are so "entangled" with these
organizations' affairs and their simultaneous representation of Fumo
that they even plan to call some of the Sprague lawyers as witnesses at trial.
Sprague contends that they represented the entities on matters
separate from the investigation of Fumo, and, in any case, none of
the alleged victims in the case has legally opposed Sprague's
representating Fumo.
The hearing is scheduled to resume today. *
http://www.philly.com/philly/hp/news_update/20070626_Details_emerge_on_Fumo__Verizon.html
Details emerge on Fumo, Verizon
By Craig R. McCoy and John Shiffman
Inquirer Staff Writers
The president of Verizon Pennsylvania struck a secret "gentleman's
agreement" with State Sen. Vincent J. Fumo under which the phone
company agreed to pay millions to a law firm of Fumo's choosing,
according to court testimony yesterday.
As part of the deal, prosecutors allege, Fumo would drop his push to
break up the giant phone company.
Fumo (D., Phila.) initially lobbied Verizon to hire his own law firm,
Dilworth Paxson, but Verizon rejected that because it "would result
in money directly into Fumo's pocket," the firm's general counsel
told the FBI, according to testimony at a pretrial hearing in Fumo's
federal indictment.
Verizon eventually agreed to give work to the firm of another Fumo
ally, former City Controller Thomas A. Leonard, according to testimony.
At the same hearing, Fumo's private eye, Frank D. Wallace, spoke in
public for the first time and said his sleuthing for Fumo had been
"one-third Senate business, one-third political, and one-third personal."
Wallace also revealed that he had performed electronic "sweeps" of
Fumo's legislative offices and home, as well as of offices and homes
of Fumo allies, but had balked at continuing to do them once he
became aware that a federal investigation was under way. He said he
told a top Fumo aide, "I thought it would be obstruction of justice"
to continue.
Fumo faces federal charges of misusing his Senate staff and the funds
of two charities. The trial is not expected to begin until early next year.
But a flood of new details on Wallace's private-eye work and
Verizon's dealings with Fumo emerged during a hearing on the federal
government's attempts to disqualify Fumo's attorneys, Sprague &
Sprague. The hearing will conclude today.
Prosecutors have said Fumo used his power to extract $17 million from
Peco Energy Co. to fund his South Philadelphia charity, Citizens
Alliance for Better Neighborhoods.
In the indictment, prosecutors disclosed that they had investigated
Fumo for possible extortion in his dealings with Peco and Verizon.
FBI Agent Vicki Humphreys, who along with Agent Kathy McAfee
investigated Fumo for four years, took the stand and read the
accounts of three Verizon representatives involved in the Fumo
dealings: former Verizon president Daniel J. Whelan; the firm's
former top lawyer, Julia Conover; and lobbyist Stephen R. Wojdak.
Fumo's talks with Whelan took place in 2001, after the state senator
had joined a political effort to break up Verizon on the ground that
doing so would foster competition and lower phone rates.
As talks proceeded, prosecutors say, Fumo offered to drop his fight
and pushed Verizon to give $15 million to Citizens Alliance.
Unlike Peco, Verizon refused to do that. But according to the
testimony yesterday, Whelan did agree to give an unspecified amount
to the Philly Pops - orchestra conductor Peter Nero and Fumo are
close friends - and to hire a law firm designated by Fumo.
Wojdak, serving as a liaison between Whelan and Fumo, told the FBI
that Fumo first asked Verizon to hire Dilworth Paxson, which employs
Fumo. That firm has paid Fumo as much as $1 million a year to serve
as a "rainmaker" to get clients, The Inquirer has reported.
Conover, then Verizon Pennsylvania's chief counsel, told the FBI that
Whelan was adamant Dilworth not get the work, Humphreys testified.
Fumo's next pick: Sprague & Sprague. Whelan rejected that idea, too.
Whelan told the grand jury about the suggestion he hire Sprague & Sprague:
"I have to admit, I started laughing at that one. Sprague and Fumo
have been close friends and allies for a number of years."
Fumo then urged Verizon to use veteran lawyer Thomas Leonard of the
Obermayer, Rebmann, Maxwell & Hippel firm. Fumo and Leonard are
longtime political allies.
Verizon agreed, people involved with the matter said yesterday.
Conover told the FBI that her boss originally agreed that Verizon
would pay $500,000 a year for five years, but later upped the amount
to $1 million for three years.
It was not clear how much the Obermayer firm received as a result.
Eric Rabe, a spokesman for Verizon, said yesterday that the firm
would neither confirm nor deny that Whelan struck such a deal with
Fumo. "I'm just not going to answer that question," he said.
Rabe did say Verizon had been using Leonard and the Obermayer firm
before the 2001 negotiations with Fumo. Asked whether Leonard got
more work as a result of the deal, he declined to respond.
Leonard and Conover could not be reached for comment. Wojdak declined
to comment. Whelan, a former member of the School Reform Commission,
left Verizon at the end of 2002. He and Nero could not be reached for comment.
Fumo's dealings with Peco and Verizon did not result in charges.
Prosecutors contend that Fumo's destruction of documents - he also is
charged with obstruction of justice - prevented them from finding out
whether Fumo's negotiations amounted to extortion.
Prosecutors have been seeking to have Sprague & Sprague disqualified
as Fumo's attorneys because they believe the firm has too many conflicts.
Lawyers for the firm have represented Fumo and Citizens Alliance;
prosecutors believe the nonprofit is a victim in the case.
In his testimony, Wallace, a former Philadelphia police inspector who
headed the department's organized crime squad, said he worked as a
private eye for Fumo from 1997 to 2006. His contract paid him $45,000
annually from Senate funds.
According to Wallace, he started to become unsettled about his long
relationship with Fumo when he was asked to continue doing electronic
sweeps even though he knew a federal investigation was under way.
He said Fumo's aide told him that Fumo's lawyer, Richard A. Sprague,
had advised that it was legal to keep doing such sweeps.
Asked about that after the hearing, Sprague said any citizen had a
right "to see if Uncle Sam or anyone else had put in a bug or wiretap."
The key question, Sprague said, was what a person did once a bug was
found. Sprague left his question unanswered.
On cross-examination, Sprague, one of the city's most respected and
feared lawyers, still sharp and probing at age 81, asked Wallace,
"You didn't charge the Senate for personal and political [investigative] work?"
Replied Wallace: "That's incorrect. I did charge them."
Sprague then confronted Wallace with the FBI's notes of an interview,
quoting him as saying he was upset at having to do private and
political investigations "free of charge."
Wallace said that the notes were inaccurate and that Fumo aides had
instructed him several years ago not to itemize his services on bills.
Fumo lawyer Mark Sheppard declined to comment on yesterday's hearing.
He is expected to challenge the government's version of events when
the hearing resumes this morning and he cross-examines Humphreys.
Sheppard and Assistant U.S. Attorney Robert Zauzmer are expected to
offer closing arguments to Senior U.S. District Judge William H. Yohn Jr.
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World Class, Professional, Ethical, and Competent Bug Sweeps, and
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Received on Sat Mar 02 2024 - 00:57:17 CST