FBI Corruption Probe In Pennsylvania Had More In Its Sights

Apr 3, 2017

Fresh revelations show how federal authorities tried to use disgraced former state Treasurer Rob McCord to implicate others in a broad pay-to-play investigation of Pennsylvania government, but it leaves the question of whether the FBI probe is effectively finished.

The investigation dates to 2009, when the FBI set up a fake company with phony executives who began hiring lobbyists in Harrisburg and making campaign contributions. It has thus far produced charges against four people, including McCord and John Estey, a onetime chief of staff to former Gov. Ed Rendell.

Ripples of fear washed through Pennsylvania's political circles two years ago when federal authorities began to notify people that they had been recorded or targeted. But the investigation may be at an end.

"If I were a betting man, I would bet there's nothing else, because (otherwise) you would see it," said Jeffrey Lindy, a Philadelphia-based defense attorney and a former federal prosecutor.

Testimony in the just-ended bribery trial of a wealthy suburban Philadelphia investment adviser, Richard Ireland, answered some questions about the federal investigation. The trial testimony also suggested the FBI had other people in its sights.

The trial hinged on four days of testimony and hours of recordings by McCord, who recorded conversations for the FBI as Pennsylvania's sitting treasurer before resigning and pleading guilty to two extortion counts in early 2015.

With McCord on the stand, Assistant U.S. Attorney Michael Consiglio brought up McCord's Nov. 20, 2014, interview with the FBI. In it, McCord and agents reviewed what he knew about a half-dozen to a dozen people "on a whole array of topics," Consiglio said.

McCord's testimony also revealed that he had made what he acknowledged were illegal promises — using Estey as a middleman — in exchange for campaign contributions to his failed campaign for governor in the Democratic Party's 2014 primary.

McCord acknowledged that that included promises to help a campaign donor's son land a government investment contract and offering to slow down a state payment to the competitor of a donor. He also revealed he had accepted pass-through campaign contributions from a contact in Scranton.

Those donors have not been identified by authorities. It remains unclear whether the federal government will charge any of them, or whether any of them became FBI cooperators in exchange for leniency. The clock is ticking on a five-year federal statute of limitations.

During the trial, federal investigators revealed that Estey, cooperating with the FBI, had taped conversations with McCord before agents tapped McCord's phone calls for two months in the spring of 2014. McCord taped weeks more of calls for the FBI in late 2014 after he began cooperating.

Ireland's defense lawyer, Reid Weingarten, asked McCord if he was asked to incriminate people every time he taped a phone call for the FBI.

"I mean, let's not beat around the bush," Weingarten told McCord, who agreed.

In an interview Monday, U.S. Attorney Bruce Brandler, the lead federal prosecutor for Pennsylvania's 33-county U.S. Middle District, would not say whether the investigation was continuing.

"I could say this: Public corruption is a high-priority area for this office and for the Department of Justice as a whole, and that we will continue to investigate allegations of public corruption where ever they occur," Brandler said.

Besides McCord, Estey and Ireland, the investigation has yielded charges against former state treasurer Barbara Hafer.

Ireland was acquitted Monday when U.S. District Judge John E. Jones III took the rare step of throwing out his charges in mid-trial. Hafer's trial on a charge of lying to federal agents is scheduled to start June 12. Estey pleaded guilty last year to wire fraud and is scheduled to be sentenced April 11. Estey never testified, and much less has become public about how he cooperated with investigators.

McCord pleaded guilty to two counts of attempted extortion and is awaiting sentencing. Once McCord's sentencing date is scheduled, that most likely means the federal government is done with him as a witness, according to Lindy and other former federal prosecutors.

During the trial, McCord told Weingarten that federal authorities had held out the possibility that he may yet testify in another trial.

If, however, there isn't another trial, "this is it, this is showtime for you. Right?" Weingarten asked.

"I would hardly call it showtime," McCord responded, "but yeah."