BY BORYS KRAWCZENIUK (STAFF WRITER)
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.”