Fumo faces long fraud trial

PHILADELPHIA (AP) - September 8, 2008 Yet the freewheeling Philadelphia Democrat used little of his own money as he took yachting vacations with friends, spent lavishly on a 33-room city brownstone and hired operatives to spy on ex-wives and political foes, prosecutors say.

Fumo, 65, goes on trial Monday in U.S. District Court on charges he used $3.5 million in what he called "OPM" - other people's money - to keep his political machine well-oiled and fund a high life that included three vacation homes and heated sidewalks outside his mansion. Jury selection is expected to last a week, and the trial three months.

Jurors must decide whether Fumo misused nearly $2 million in Senate funds and also raided the coffers of a neighborhood charity to which he used his political clout to steer $27 million in corporate donations.

He argues that he did nothing illegal and worked tirelessly to serve his constituents in blue-collar, parochial South Philadelphia. He takes credit for securing more than $8 billion in government and corporate benefits for the region.

"I spent half my life here and I spent it here with every fiber in my body," Fumo said in a farewell speech to the Senate this summer, after deciding not to seek another term this fall.

Fumo served as ranking Democrat on the Senate Appropriations Committee until his 2007 indictment. Over three decades in the Senate, he had come to control 90 state jobs and many more on civic boards and agencies.

He unabashedly assigned many of those loyalists to carry out his near-manic lists of personal and political chores, the indictment states.

"Fumo made demands on Senate employees regarding everything in his life, from the significant to the trivial," the indictment says.

Co-defendant Leonard Luchko, a state Senate computer technician, has admitted he spent his days packaging "Vincent J. Fumo" bobblehead dolls; driving cars back from Martha's Vineyard after Fumo's vacation; and, as the FBI closed in, destroying e-mail evidence from computers at Fumo's homes and office.

Senate staffer Christian Marrone, who would go on to marry Fumo's daughter, says he spent 18 months on the state payroll mostly overseeing the Fumo mansion renovations. In one harshly worded e-mail, Fumo orders him to get the heated sidewalks fixed before the next snowfall.

"Fumo not only abused the Senate purse by paying employees who solely or partly did political work for him, but further defrauded the Senate by overpaying employees who did both official and personal tasks," the indictment charges.

Fumo also awarded little- or no-work contracts to friends, including state turnpike authority chairman Mitchell Rubin, prosecutors said in court filings. Rubin's wife, Ruth Arnao, did little Senate work for her $95,000 salary as Fumo's executive assistant, they said. The couple vacationed with Fumo, and she later ran the neighborhood nonprofit, Citizens Alliance for Better Neighborhoods.

Arnao is Fumo's sole remaining co-defendant, after Luchko and a second computer technician pleaded guilty to destroying e-mail evidence. They are expected to testify against Fumo.

Peco Energy gave Citizens Alliance $17 million while the Delaware River Port Authority, on which Fumo served, gave another $10 million. Some of the money went to fund charter schools and sweep streets.

But Fumo also tapped the charity for free campaign office space and $600,000 in furnishings; $250,000 for political polling; and a $27,000 bulldozer for his Harrisburg-area farm, prosecutors say.

Fumo is charged with 139 counts of fraud and obstruction. But prosecutors believe that Fumo bested them as they pursued evidence of extortion, successfully destroying e-mails about the Peco donation and funds he unsuccessfully sought from Verizon. Both companies had regulatory issues pending before the Pennsylvania Legislature.

"The conspiracy ... thwart(ed) the investigators' ability to determine whether federal crimes were committed in connection with those matters," prosecutors said in court papers last month.

Fumo, who beat two indictments early in his political career, made his mark on nearly every major Pennsylvania law enacted in the past 20 years, from the state's school funding formula to the 2004 law that legalized slot-machine gambling.

Through spokesman Gary Tuma, he declined comment Friday on the criminal case. Defense lawyer Dennis Cogan has also declined comment as the trial nears.

Legal warrior Richard A. Sprague, a longtime Fumo confidante, represented Fumo until an apparent falling out last year. Sprague had hinted in court at one line of defense: that Fumo aides were free to toil day and night for the boss after fulfilling their Senate duties.

Cogan has not revealed his strategy, other than to vigorously challenge the prosecution witnesses, including Marrone.

Marrone's expected testimony will likely offer a painful glimpse into Fumo's personal life. The twice-divorced Fumo is estranged from his daughter and Marrone - both now Republicans - and has never seen their children, his only grandchildren.

The trial may also test Fumo's endurance after a March heart attack. A conviction could bring a lengthy prison term.

And despite his apparent wealth, Fumo appears concerned about his finances. He has spent heavily on lawyers; the family bank sale last year brought him millions less than the $24 million forecast; his ties with the Philadelphia law firm are on hold; his $7 million mansion is for sale; and he could lose his state pension if the jury convicts him. A 2004 e-mail, in which Fumo seeks to learn the extent of the FBI probe, foreshadows his current legal posture. "There is no middle ground on this one!! You know how serious and almost life threatening this is."

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