Day 2: Testimony focuses on finances, ethics


The state’s top ethics enforcer testified Tuesday that Lackawanna  County  Commissioner A.J. Munchak and former Commissioner Robert C.  Cordaro filed  annual financial interest statements that showed no income  from people who  federal prosecutors say paid them bribes and kickbacks.

The forms were a major focus of the first prosecution witness, John  J.  Contino, executive director of the Pennsylvania Ethics Commission,  who said  public officials must disclose all the sources of income of  more than $1,300 a  year.

Prosecutors allege Munchak and Cordaro received tens of thousands of  dollars  in bribes and kickbacks from owners of companies who wanted to  keep or get  county contracts.

In great detail, Assistant U.S. Attorney Lorna Graham walked Contino  through  the state’s Ethics Act, which requires public officials to file  financial  interest statements annually, and the forms they use to  comply.

The act requires public officials to disclose, in the statements,  sources of  income, creditors, affiliations with businesses, charities or  other groups and  other information.

Contino said Munchak’s and Cordaro’s forms from 2003 to 2007 showed  no  payments from any of the men or companies at the heart of the  indictment.

In her questioning of Contino, Graham named them: Michael J. Pasonick  and  the engineering firm named after him; Joseph Ferrario and the  company he  co-owns, Hennigan Ferrario; P.J. McLaine and the company he  served as vice  president, Acker Associates; Al Hughes, a West Scranton  funeral director; Al  Magnotta, president of CECO Associates; Don Kalina,  Dominic Provini, Kevin  Smith, all principals in Highland Associates,  the architectural design firm;  Charles “Chuckie” Costanzo and his  workers compensation claims administration  company, Executive Claims  Administration; Robert Conway and his environmental  cleanup company,  Alicon Environmental Inc.; John Grow; Dan Marion and his  janitorial  company, Marion’s Maintenance; attorney Thomas Cummings; John  Brayfee  LLC, a company that built Lackawanna County’s 911 tower; Louis Costanzo  and Anthony Costanzo or their company L.R. Costanzo and Marc Boriosi,  who  worked with Costanzo.

Prosecutors allege all the men came up with money paid to either  Cordaro or  Munchak as part of their bribery and extortion scheme while  they were the  county’s majority commissioners from 2004 to 2008 or  within the year before  that period.

Contino’s testimony and Cordaro’s and Munchak’s actual forms were  meant to  establish they intended to conceal receiving the payments. U.S.  District Judge  A. Richard Caputo cautioned jurors considering the forms  as evidence of hiding  something unless they believe prosecutors later  prove beyond a reasonable doubt  that payments were made.

Contino’s testimony laid the groundwork for future testimony expected  by the  men Graham named. Much of the testimony Tuesday also just laid  groundwork.

For example, Marion Medalis, Lackawanna County director of elections,  who  followed Contino’s testimony, spent almost all of her time as a  witness simply  explaining other forms, the campaign finance reports  filed by people who run  for elected office, and identifying Munchak’s  and Cordaro’s reports.

It was during the defense cross-examination of her that attorney  Jerry  Johnson, one of Cordaro’s lawyers, asked a question likely to be  repeated  during the trial: Did Cordaro ask her to do anything  inappropriate?

No, she replied.

Medalis was followed to the witness stand by Thomas P. Durkin, the  director  of administrative services and chief financial officer for the  county. He  started as county CFO under Cordaro and Munchak’s reign and  doubled as  treasurer to their campaign committee.

Durkin said he listed himself as a certified public accountant on  their  first campaign committee’s finance report, but not later.

He became concerned that labeling himself as a CPA implied that he  was  “attaching some sort of assurance that the numbers were all correct  and valid.”  He felt uncomfortable doing that because he had not analyzed  the information in  detail and found the campaign’s record-keeping  lacking.

For example, Durkin said he filed campaign reports based on paperwork   provided by Munchak, who sometimes gave him copies of contribution  checks with  deposit slips attached and sometimes without deposit slips.  For much of his  time as treasurer, he was not given copies of bank  statements to match up to  finance reports, he said.

In early 2004, he found the campaign could not account for the source  of  $25,150 in contributions, he said. Munchak suggested listing the  money under  contributions of $50 or less. The sources of such  contributions do not have to  be disclosed.

“I said I wasn’t comfortable doing that,” he said, because the  campaign knew  nothing about the sources. “I said I would be willing to  do just what we  did.”

What the campaign did was list the $25,150 on its first campaign  finance  report for 2004 as “unidentified contributions deposit details  lost.” Asked by  federal prosecutors later to look over bank statements  and other documents, he  found all the money came from checks, he said.

After the federal investigation of Cordaro and Munchak began, Durkin  said,  Munchak asked him what he told investigators. Specifically, the  commissioner  asked if $2,500 in cash given to him by Louis Costanzo in  2003 could have been  reported in 2004 as part of a $25,000 Costanzo  contribution.

Never before that had Munchak told him he received cash from Costanzo, Durkin  testified.

The contribution is part of the charges against Munchak.

Also, Durkin said a revised Munchak-Cordaro campaign finance report  in 2007  added disclosure of a $1,500 contribution by Charles Costanzo.  But when he  looked over records later provided by federal investigators,  he found no record  the contribution was deposited, Durkin said.

On cross-examination, attorney William C. Costopoulos, Cordaro’s  other  lawyer, asked if Cordaro or Munchak ever asked him to do anything  improper?

“No sir, they did not,” Durkin replied.

He also asked a question that will almost certainly be the subject of later  testimony.

Did Cordaro, he asked, ever ask him to withhold a payment from “any vendor  for any reason?”

“Not to my recollection,” Durkin replied.

Attorney Christopher T. Powell asked almost the same question about  Munchak.

“No sir,” Durkin answered.

McLaine, among others, is expected to testify that he feared losing  county  business when Cordaro and Munchak became the majority county  commissioner and  paid hundreds of thousands of bribes to Cordaro to  ensure he kept the  business.

The day’s final witness was Lackawanna County Commissioner Mike  Washo, who  spent most of his testimony explaining why he opposed major  projects or  contracts that Cordaro wanted to carry out: the sale of the  Montage Ski Resort,  the courthouse renovation, the construction of the  911 center and others. Most  of his objections were to their costs or the  process of carrying out the  projects, such as not bidding them.

The point of the testimony seemed to be to show Cordaro’s control of county  government as majority commissioner.

Repeatedly, Costopoulos objected to the testimony’s relevance, once  calling  it “political rhetoric.” Graham pointed out the defense had  asked Durkin to the  recount the county’s poor financial condition and  the Munchak-Cordaro  administration’s accomplishments in reversing the  county’s plight.

But several times, Judge Caputo urged Graham to get to the point.

Afterward, Cordaro called the testimony “nonsensical” and said it amounted to  evidence of the case’s “political component.”


Read more: http://thetimes-tribune.com/news/day-2-testimony-focuses-on-finances-ethics-1.1158973#ixzz1QbiLLyGw

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