Penn Pike associates found guilty of corruption in US Court in Philadelphia

March 16, 2009
By Peter Samuel

Vincent Fumo, the Pennsylvasnia Turnpike's leading legislative patron while a Democrat state senator and Ruth Arnao, wife of the chairman of the Pennsylvania Turnpike Commission have been found guilty on all 182 counts in the big corruption case against them tried in Philadelphia by the US Government. The result was announced today after a trial lasting five months and jury deliberations over six days.

Most of the charges on which they were convicted related to years of daily thievery from the state Senate and a couple of so-called "not-for-profits" operated by the state senator and Arnao in Philadelphia but they were also convicted of justice obstruction charges for destroying records.

Fumo was convicted on all 137 counts tried, and Arnao on all 45 counts she was charged with.  Arnao, a longtime aide and associate of Fumo was chief executive of a socalled Citizens Alliance for Better Neighborhoods. Arnao is married to Fumo's longtime friend, a gambling operator and lawyer Mitchell Rubin who Fumo sponsored for chairman of the Turnpike. The US Government indictment of Fumo said that Rubin had been on no-work 'contracts' with Fumo at the state legislature prior to being sponsored for the Turnpike position.

Prosecutors presented evidence the two had stolen, defrauded and extorted a documented $3.5 million by misusing creditcards on shopping sprees, airline flights, food, and entertainment split about equally between the not-for-profit and by putting personal costs on the state Senate. There was also evidence they ordered state employees to do personal work for them, put supporters on retainers for little substantial work, and steered state contracts to paying contractors.

Fumo managed to amass multiple multi-million dollar homes in a posh part of Philadelphia, on the Jersey Shore and in Florida, plus a weekender on the Susquehanna River north of Harrisburg, boats and an airplane, all the while living a lavish lifestyle using senate and not-for-profit staff as personal flunkeys and charge cards to each to cover his expenses.

Meanwhile he campaigned as a "reformer" and champion of honest government.

After his indictment he even had the chutzpah to sponsor a bill in the state legislature that he said would "strengthen the Turnpike's code of ethics."

The Philadelphia Daily News today summed up the trial neatly:

"Powerful state Senator Vince Fumo lived like a prince on Other People's Money, the government charged in its corruption indictment against him.
Today, the Other People spoke: Guilty on all counts."

He was convicted today of multiple counts of fraud, conspiracy, tax evasion, and obstruction of justice.

Fumo had beaten the rap twice previously on corruption charges.

A state senator since 1978, he was described as one of the most powerful Democrats in Philadelphia and in the state capital Harrisburg. He chaired the state Senate appropriations committee for many years and controlled the appointments and careers of nearly a hundred staffers and scores of consultants. He was reputed to influence elections for Philadelphia city council, judgeships, the state legislature, and a number of state boards including the Pennsylvania Turnpike Commission.

"I put Rubin in" to Turnpike chair, Fumo quoted

Fumo was quoted by the Philadelphia Inquirer (2007-03-18) as claiming credit for placing Mitchell Rubin as chairman of the Turnpike Commission in 2003.

The Inquirer reported: "For years, Fumo has had allies on the Pennsylvania Turnpike Commission, whose members are confirmed by the state Senate. His friend Bob Brady served from 1991 to 1998. Then, when Brady was elected to Congress, Fumo arranged for businessman Mitchell Rubin to fill Brady's turnpike seat. 'That was my call,' Fumo said then. Fumo and Rubin go way back."

Living high on taxpayers and charities

The US Government produced a whole cast of witnesses who testified that they had been ordered to work at the senators several houses, do campaigning, and act as 24/7 drivers and servants while on senate or charitable payrolls. They did his shopping, his cleaning, anything he needed doing. A private investigator was put onto spying on an ex-girlfriend who had dumped Fumo, all paid for by taxpayers.

Fumo engaged in constant shakedowns. Fumo's largest shakedown was getting Peco Energy a local power company to pay $17m to his Citizens Alliance after which Fumo was traced to looting the charity for about a tenth of that amount for his own personal expenditures.

He used his control of Independence Seaport Museum to arrange free yacht cruises for cronies. The former president of the Museum John S Carter is serving a jail term for his own thievery at the museum, having taken $1.5m.

Fumo once talked an old man into giving him $1 million, which it turned out came improperly out of a trust for the man's daughter.

The trial featured over 70 witnesses including the Governor of the state and former Philadelphia mayor, Ed Rendell. 1500 exhibits were produced. Fumo spoke in his own defense over six days of the trial. There were 26 hours of closing argument.

US attorneys said that Fumo was guilty of basing a lavish lifestyle on "other people's money." Fumo's attorneys said the prosecution had "demonized" the former senator and were engaged in proving "guilt by accumulation."

Turnpike didn't feature much in trial

In the trial itself the Turnpike did not feature much. But the US Government indictment of Fumo said (p43 #83) that between April 2003 and December 2004 the Pennsylvania Turnpike Commission paid $220,000 in checks of $10,000 a month to a man described as Senate Contractor #4 (SC4) identified later as Michael Palermo under a phony contract as a consultant.

The contract was signed two months after Mitchell Rubin became chairman of the Turnpike. The indictment said that Palermo worked on Sen Vincent Fumo's Susquehanna River "farm" in return for the payments he was getting from the Turnpike.

Quoting the federal indictment: "...at the same time that he began to take an active role at the farm, (SC#4) also received beginning in April 2003, a $10,000 a month check from the Pennsylvania Turnpike Commission (PTC) as part of a lucrative consulting contract. This contract was awarded to (SC#4) by the PTC within two months after (SC#5), a member of Fumo's inner circle of friends and the boyfriend (later husband) of Ruth Arnao was elected chairman of the PTC. Despite total payments of $220,000 to (SC#4) between April 2003 and December 2004 the Pennsylvania Turnpike Commission has no records reflecting that any work was ever performed by (SC#4) on that contract either." (p43 #83)

The indictment said (p138 #i) that between Nov 17 and 20 in 2001 Mitchell Rubin visited Cuba with expenses of $22,000 paid by Citizens Alliance - a non-profit controlled by Fumo and Ruth Arnao/Rubin. The Citizens Alliance declared purpose was "to promote public health, housing, safety and education in the city and county of Philadelphia." In fact Citizens Alliance was used for political work and to pay for all kinds of personal expenses for Fumo and Arnao. Citizens Alliance was, for example, hit up to finance equipment such as a bulldozer, all-terrain vehicle, and pickup truck used at the Susquehanna River farm being looked after by Palermo on the $120k/year "consulting fees" paid by the Pennsylvania Turnpike Commission.

Fumo misused his position on the Seaport Museum board to commandeer their boats for pleasure cruises. Catering bills and other expenses were incurred in a pleasure cruise in Florida with Mitchell Rubin Feb 21 2000, with expenses charged to the Museum. (p186 #10) Fumo's misuse of Seaport Museum boats is estimated by the feds to have cost it $100k, the indictment stated.

The Turnpike's official announcement of Rubin's appointment as chairman on Feb 4 2003 was extraordinarily terse for an announcement of a new chairman just calling him "Mitchell Rubin of Philadelphia." Not a word on his occupation, education, former jobs. The Turnpike still does not provide any biography on its chairman. He operates gambling establishments.

Fumo at least lost this gamble.

Now aged 65 he seems likely to spend his last years in a US jail.

Lots of detail on the trial:

http://www.philly.com/inquirer/special/fumo/

TOLLROADSnews 2009-03-16


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