Day 8: Munchak says he never pocketed money


Lackawanna County Commissioner A.J. Munchak flatly denied Wednesday receiving  any bribes or kickbacks, but acknowledged taking cash campaign contributions  that he said he either turned over to someone else or used to pay tips and a bar  tab at a campaign fundraiser.

Before a courtroom full of his supporters, including his NFL Hall-of-Famer  nephew, Mr. Munchak testified he never put any money in his own pocket.

“Let’s turn to the key question that everybody wants to know,” Mr. Munchak’s  lawyer, Christopher T. Powell, said almost immediately after Mr. Munchak took  the witness stand.

“Did you at any time accept any cash or currency or U.S. $100 bills from one  Don Kalina in May or July 2005?”

“Absolutely not,” Mr. Munchak responded.

In succession, Mr. Powell quickly ticked off other key questions: Did Mr.  Munchak pocket cash contributions in 2003 and 2007 from Louis Costanzo? Did he  accept $500 to place John Grow on the county stadium authority board?

“No sir, I did not,” he said to both.

“Did you accept cash campaign contributions from John Grow or Louis  Costanzo?” Mr. Powell asked.

“Yes, I did,” he said, but explained he never used the cash for his own  purposes.

Mr. Kalina, a co-owner of the Highland Associates architecture and  engineering firm, Mr. Costanzo, owner of a construction company that helped  renovate the county courthouse, and Mr. Grow, a car dealer and former stadium  authority board chairman, all have testified they gave Mr. Munchak differing  amounts of cash.

Mr. Munchak’s testimony dominated the eighth day of his and former  Commissioner Robert C. Cordaro’s trial on federal corruption charges. They are  accused of taking hundreds of thousands of dollars in bribes and kickbacks. The  testimony Wednesday focused almost exclusively on Mr. Munchak. Mr. Cordaro is  also expected to testify in his own defense, perhaps as early as today.

Mr. Kalina’s testimony is especially critical to the prosecution case against  both men because he testified he twice gave Mr. Munchak envelopes stuffed with  $30,000 in $100 bills and gave another $30,000 to Mr. Cordaro.

Prosecutors rested their case first thing Wednesday without calling another  witness and Mr. Munchak’s testimony comprised most of the day’s proceedings as  his defense began to fight back.

Munchak tells his story

After answering the crucial questions, Mr. Powell had Mr. Munchak recount his  professional life as an accountant and controller, his political career and a  lengthy history of charitable works that included membership on the boards of  various nonprofits and donation of 22 gallons of blood since he was young.

He recalled his father, Michael, teaching him the importance of charity after  they helped nuns shovel mud after Hurricane Diane flooding in 1955.

“He says, ‘You have to help people that need it,’ ” Mr. Munchak said.

As commissioner, he and Mr. Cordaro reversed the sagging fortunes of the  county prison, nursing home and 911 center, almost always voting together just  as commissioner majorities have always done to get things done, he said.

“That’s the way it’s done,” Mr. Munchak testified. “That’s the way you  accomplish things.”

Cash used for tips

Then, Mr. Powell turned to a more detailed attempt to unravel the prosecution  case.

During a charity golf game, Mr. Munchak said, he agreed to Mr. Grow’s request  for an appointment on the stadium authority board because Mr. Grow’s  father-in-law helped bring minor league baseball back to Northeast  Pennsylvania.

“He (Mr. Grow) then proceeded to slice the ball into the woods,” Mr. Munchak  cracked.

A few months later, Mr. Grow attended a $500-a-person pool party fundraiser  where Mr. Munchak’s nephew, football Hall of Famer Mike Munchak, and another  former NFL player, Chet Parlavecchio, were the attractions. Ron Cordaro, Mr.  Cordaro’s brother, hosted the party at his home.

“John Grow comes in, and he handed me an envelope with $500 in it,” Mr.  Munchak testified. “I gave it to Ron” and assumed the money was deposited.

Never before, during or after that party did Mr. Grow say the money was in  exchange for the stadium authority seat, Mr. Munchak said, and they never  discussed it being for that reason.

Mr. Powell turned to $2,500 in cash contributions that Mr. Costanzo testified  he gave Mr. Munchak in 2003 and 2007. The first was in late September 2003, Mr.  Munchak said.

“He (Mr. Costanzo) said he and his brother were backing us, and he handed me  an envelope with $2,500 in it,” Mr. Munchak said. “I never pocketed any  money.”

Mr. Munchak said he was unaware it is illegal to accept cash contributions of  more than $100 under Pennsylvania law, but the money was deposited in the  Munchak-Cordaro campaign committee account. Mr. Powell produced a deposit slip  for $2,495 in cash.

“I think they might have ordered pizza at the campaign headquarters or  something,” Mr. Munchak said, explaining the $5 difference.

At a September 2007 fundraiser, Mr. Costanzo gave him $2,500 cash and $7,500  in checks, Mr. Munchak said. He invited Mr. Costanzo to attend an Oct. 8  fundraiser for free at Whistles Pub & Eatery in downtown Scranton, he  said.

Mr. Munchak said he kept the money, figuring he might need it at the upcoming  fundraiser. At Whistles, he gave the money to Dorothy Zak, the administrative  assistant at his commissioner’s office and a campaign volunteer. On Mrs. Zak’s  sheet that tracked contributors who attended that night, Mr. Munchak said he  noted Mr. Costanzo’s contribution. At the end of the night, he used the money to  tip bartenders, waitresses and others and to pay a bar tab that attendees ran up  after the fundraiser.

“Tipped everybody,” Mr. Munchak said.

The cash was no bribe and he never extorted Mr. Costanzo, he said.

In defense testimony later in the day, Daniel J. Rinaldi, owner of  now-defunct Whistles, and Mrs. Zak confirmed Mr. Munchak’s account. Mr. Rinaldi  remembered Mr. Munchak distributing the tips.

“I didn’t ask how much, but it was quite a bit,” Mr. Rinaldi said.

Gambling history

Expecting the prosecution cross-examination, Mr. Munchak testified he gambled  at casinos but always reported winnings on tax returns and public official  statements of financial interest.

He also confirmed that after he was elected a commissioner, he sold the  client list for his former business, Northeast Billing Services, for $42,000 to  Ronald Halko, an experienced nursing home operator later hired by him and Mr.  Cordaro to run the county nursing home.

“I knew being a commissioner was a full-time job,” he said. “There was no way  I could serve both masters on a full-time basis.”

The hiring of Mr. Halko to operate the nursing home and sale of the client  list were unrelated, he testified.

After more than 75 minutes of listening to Mr. Munchak, prosecutors had their  shot to cross-examine.

The cross examination would last almost 3½ hours.

Assistant U.S. Attorney William Houser started with Mr. Munchak’s 2005 tax  return, which showed he had taxable income of more than $91,000, including  $19,000 in gambling winnings and $17,000 in gambling losses.

Mr. Munchak said he would take $500 or $1,000 in cash on trips to casinos,  mostly in Atlantic City, but also Las Vegas, New Orleans and Connecticut, but  would obtain “markers” from casinos – a form of credit to gamble that he would  have to repay after 30 days.

Mr. Houser ran through the list of markers – 36 totaling $43,000 in 2005  alone including $8,000 just on New Year’s Eve of that year. The year is critical  because that’s when Mr. Kalina said he paid Mr. Munchak the $60,000.

‘I was wrong, yes, sir’

Mr. Munchak revealed he did accept one benefit from Mr. Kalina – a three-day  stay at Mr. Kalina’s West Palm Beach, Fla., condominium in 2005, which was not  reported as a gift.

“It didn’t cost Don Kalina $650, if that’s what you’re getting at,” Mr.  Munchak said.

By state law, gifts of $650 or more must be reported on statements of  financial interest.

Mr. Houser asked if renting a condo cost $1,000.

“Perhaps $1,000,” Mr. Munchak replied.

Mr. Houser then focused on the cash contributions from Mr. Costanzo and Mr.  Grow.

Mr. Munchak acknowledged his and Mr. Cordaro’s campaign committee violated  state law by failing to report them on campaign finance reports.

“I have to take responsibility for that,” he said. “I was wrong, yes,  sir.”

Mr. Houser questioned whether the $2,500 in cash that accompanied checks from  Mr. Costanzo wasn’t a way of saying “Thanks for the work, keep it coming.”

“Sir, I’m not like that,” Mr. Munchak said.

Mr. Houser asked if it ever occurred to him that that might be why Mr.  Costanzo provided cash and checks.

“That’s not the type of man he is; that’s not the type of man I am,” the  commissioner said.

Mr. Houser’s next tack was to question why Mr. Munchak signed checks for  “thousands and thousands” of dollars from the Munchak-Cordaro campaign committee  to pay Mr. Cordaro’s Country Club of Scranton membership fees. Membership fees  also were paid in 2004 and 2005 when the two men were not facing  re-election.

“What campaigning was going on at the Scranton Country Club in 2004 and  2005?” Mr. Houser asked.

“That I couldn’t tell you,” Mr. Munchak replied. “If he (Mr. Cordaro) had  people that he was entertaining and it was campaign-related, he would say, ‘This  is a campaign expense.’ I would approve.”

Helping ‘friends’

Mr. Houser also targeted Mr. Munchak’s connection to Mr. Halko.

On May 23, 2005, the county paid Mr. Halko $12,000, half the amount of his  contract to evaluate the nursing home. Three days later, Mr. Halko’s New Hope  Healthcare company issued Mr. Munchak a $10,000 partial payment for the client  list. Mr. Munchak denied it was a conflict of interest to do business with Mr.  Halko while contracting for the nursing home evaluation.

“I didn’t look at it that way,” he said.

Mr. Houser pointed out there was never a written agreement for the client  list sale.

“There should have been a written contract,” Mr. Munchak said.

Those dealings with Mr. Halko weren’t his only dealings with the nursing home  operator.

Mr. Munchak testified he rented an apartment to Mr. Halko at 615 Mulberry  Street starting in 2007 for $1,700 a month, more than double the previous  tenant’s rent.

Mr. Munchak said the rent was hiked sharply because Mr. Halko also wanted two  additional parking spaces and basement storage.

“He could have rented a house for $1,700, but he chose you of all people,”  Mr. Houser said.

“That’s what friends are for,” Mr. Munchak replied.

On redirect questioning by Mr. Powell, Mr. Munchak said he had plenty of  money with which to gamble, including money from the client list, gifts from an  aunt and the sale of stock. Mr. Houser had made an issue of $49,000 in cash  deposits to Mr. Munchak’s bank account in 2005.

Mr. Munchak also emphasized he cut Mr. Halko’s nursing home compensation from  $30,000 to $20,000 a month after a company helping him run it backed out.

“I just said to him, ‘You’re getting a haircut,’ ” Mr. Munchak said.

Contact the writer:  bkrawczeniuk@timesshamrock.com

Read more: http://thetimes-tribune.com/day-8-munchak-says-he-never-pocketed-money-1.1162811#ixzz1QblZssgn

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