BY BORYS KRAWCZENIUK AND JOE McDONALD (STAFF WRITERS)
A civil engineer and a funeral director delivered the details Wednesday on how they teamed up for three years to funnel $10,000 a month in bribes to former Lackawanna County Commissioner Robert C. Cordaro.
On Day 3 of the Cordaro-Munchak federal corruption trial, engineer P.J. McLaine testified he wanted his company, the now-defunct engineering firm Acker Associates of Moscow, to keep its county contracts and feared losing them because he supported Mr. Cordaro’s opposition in the 2003 election.
He asked for help from Mr. Cordaro’s “close friend,” Al Hughes, the undertaker who testified he took the money from Mr. McLaine and surreptitiously gave it to Mr. Cordaro.
Mr. Hughes testified the commissioner wanted $15,000 a month, a figure Mr. Hughes felt was too high and one for which he was too “embarrassed” to ask. Instead, he suggested $10,000 a month. After talking it over with his partner at Acker Associates, Mr. McLaine said he agreed to pay.
“I met P.J., got the money from him and gave it to Bob” in a letter-sized envelope, Mr. Hughes testified.
“What did Bob say when you handed it to him?” Assistant U.S. Attorney Lorna Graham asked.
“Thanks,” Mr. Hughes replied.
In all, Mr. Cordaro received $365,000 from the deal between January 2005 and January 2008, according to testimony and documents presented as evidence.
The former commissioner was the sole focus of almost all testimony on corruption Wednesday. Mr. Hughes and Mr. McLaine said they never dealt with or provided money to Commissioner A.J. Munchak, Mr. Cordaro’s co-defendant and former majority partner, when it came to the Acker dealings.
Mr. Cordaro and Mr. Munchak are charged with honest-services mail fraud and mail fraud, conspiracy to commit honest-services mail fraud and mail fraud, conspiracy, theft or bribery concerning programs receiving federal funds, conspiracy to commit extortion under color of right, extortion under color of right, racketeering, racketeering conspiracy, filing false tax returns and tax evasion.
Mr. Cordaro also is charged with money laundering, conspiracy to commit money laundering, engaging in monetary transactions in property derived from specified unlawful activity and conspiracy to defraud the United States.
Combined, the two prosecution witnesses jolted a trial that centered a day earlier on a lengthy and sometimes tedious explanations of election campaign paperwork, state laws and their nuances. Their testimony dovetailed almost exactly in key respects with Mr. Hughes picking up the money trail where Mr. Acker left off.
Both men said they were trying to be helpful. Mr. McLaine, Acker’s co-owner and vice president, said he wanted to ensure he did not have to lay off employees and the company had enough money to repay loans borrowed for new equipment necessary to carry out one big contract in particular.
Mr. Hughes offered a simpler reason for acting as the Acker-Cordaro money go-between.
“Because they were both friends of mine,” he said.
Mr. Hughes said he mostly gave Mr. Cordaro the money in cash, but on several occasions, Mr. Cordaro called for money when banks were closed so he wrote five checks totalling $40,000 and gave them to Mr. Cordaro.
“He said he needed the money,” Mr. Hughes said.
The prosecution produced the checks as evidence, displaying them on the courtroom’s television monitors.
What appeared to be Mr. Cordaro’s endorsement signature was visible on several checks.
Both witnesses acknowledged they were promised immunity from prosecution if they told the truth. Both said they lied about their involvement when first questioned by FBI and Internal Revenue Service investigators.
Under cross-examination by Jerry Johnson, one of Mr. Cordaro’s defense lawyers, Mr. McLaine acknowledged he never saw Mr. Hughes give Mr. Cordaro any money and said he sometimes lent Mr. Hughes money to pay his obligations and is still owed about $35,000.
He didn’t view the payments as bribes, he told Mr. Johnson.
“I was trying to keep my work, keep people employed,” Mr. McLaine said.
If it wasn’t bribery, why seek immunity? Mr. Johnson asked.
“I was advised to by my lawyer (attorney Sal Cognetti),” he replied.
Why didn’t he just call Mr. Cordaro instead of going through Mr. Hughes? Mr. Johnson asked.
Mr. McLaine replied by saying he was told to “go through Al” by Mr. Cordaro. “For me, Al Hughes saying something to me was like Bob Cordaro saying it to me.”
In cross-examining Mr. Hughes, Mr. Johnson asked if the $10,000 a month provided by Mr. McLaine gave him a way of paying huge debts he faced on two funeral homes and a concessions business.
Mr. Hughes said that was untrue.
“You did not give it (the money) to Bob Cordaro, but you put it in your own pocket,” Mr. Johnson said.
“That’s not true, sir,” Mr. Hughes said.
Mr. Johnson accused Mr. Hughes of paying back money he borrowed from Mr. McLaine with the monthly payments.
“Absolutely not,” Mr. Hughes shot back.
The alleged scheme to pay off Mr. Cordaro originated not as a scheme at all.
Mr. McLaine said he was just worried about losing his contracts because he supported Democratic Commissioners Joseph Corcoran and Randy Castellani for re-election in 2003. Mr. Corcoran lost, meaning Mr. Munchak and Mr. Cordaro, the Republican team, gained majority control of the commissioners office.
About 30 percent of Acker’s business was from municipal governments, most of that from the county, including about $7 million over more than a decade for Lackawanna Watershed 2000, a project to control acid mine drainage and sewage overflows countywide, Mr. McLaine testified.
The company hired seven people and bought a new truck to work on that project alone, he said.
Fearing the new majority could take that away, Mr. McLaine reached out to Mr. Hughes.
“He knew I was for Bob, and he asked me if I could talk to Bob,” Mr. Hughes testified.
In a face-to-face with meeting with Mr. Cordaro in the commissioner’s office early in 2004, the commissioner told him said he expected “flak” from supporters for keeping Acker around, but agreed to do it, the engineer said.
“And if we’re having a fundraiser, you’re going to have to participate and support us,” Mr. Cordaro told him, Mr. McLaine testified.
Once, before demanding the money, Mr. Cordaro intervened on Acker’s behalf when the county engineering firm, CECO Associates, wanted to take over design work on a Taylor bridge, Mr. McLaine said.
Things turned more serious, Mr. McLaine said, when he learned CECO wanted to split up the lucrative Watershed 2000 work.
He reached out again to Mr. Hughes, who remembered Mr. Cordaro asking if Mr. McLaine would be interested in “supporting me to keep his work.”
Mr. Hughes said he asked how much Mr. Cordaro wanted.
“He said maybe $15,000,” Mr. Hughes testified. “I said, ‘OK, maybe. I’ll ask him.’ ”
He was “embarrassed” to ask for $15,000 because he considered Mr. McLaine a friend, Mr. Hughes testified.
The way Mr. McLaine told it, Mr. Hughes said, “If you would give me $10,000 a month for Bob, I guarantee you keep all the work.”
“I was flabbergasted,” Mr. McLaine said. “Didn’t know if we could afford it.”
Mr. Hughes warned him he would probably lose county work unless Acker paid the money, he said. He and co-owner and company president E. Kenneth Acker mulled going to law enforcement, but they testified they decided the risk of losing the contracts was too great.
For four months, January through April 2005, they issued company “bonus checks” to themselves, cashed them and gave the money to Mr. Hughes.
After that, they paid Mr. Hughes with company checks or personal checks from Mr. McLaine, who said he actually put Mr. Hughes on the payroll as a consultant. Though Mr. McLaine said he considered Mr. Hughes a consultant for a while because Mr. Hughes knew some municipal officials who could throw business the company’s way, Mr. Hughes said he was no consultant.
Mr. Hughes said he cashed the checks and gave the money to Mr. Cordaro. Sometimes, checks from Mr. McLaine or Acker were less than $10,000, mostly because Mr. McLaine deducted payments on the loans he made to him, Mr. Hughes said. In those cases, Mr. Hughes said he made up the difference with his own money.
Because the company annually issued Mr. Hughes 1099 tax forms to prove to the IRS it paid him, Mr. Hughes complained he faced a $20,000 tax bill the first year. So Mr. McLaine gave him more money to pay the taxes, both men said.
“I was paying taxes on money he (Mr. Cordaro) was getting,” Mr. Hughes said.
Wired into the commissioners, Mr. McLaine offered to help in construction of a tower to serve the new 911 center. He joined a partnership called John Brayfee LLC that included him, Mr. Hughes, attorney Thomas Cummings, who had expertise in building cell-phone towers, and businessman Glen Gress, he said. The county hired the firm to build the tower at a cost of $257,933, but the profits were split into five $14,000 shares instead of four.
“I put in (for) two shares – one for myself and one for Bobby,” Mr. Hughes said.
Once federal investigators caught on to the scheme, both men lied at first, but eventually agreed to cooperate and allowed them to record telephone conversations with Mr. Cordaro.
On the calls, Mr. Cordaro never admits accepting money, but does get angry.
In a recording of a call with Mr. McLaine, Mr. Cordaro expresses worry about Mr. Hughes’ state of mind and comments on his lawyer’s view of FBI agents pursuit of witnesses.
“He thinks this is well in hand, and what they’re doing is desperate,” Mr. Cordaro says on the recording.
In a call recorded with Mr. Hughes, Mr. Cordaro says, “They’re trying to make a story out of something that didn’t happen.”
But in a later call, when Mr. Hughes started laying out the scheme, Mr. Cordaro said, “I’m not even talking about it. We’re on the phone, Al.”
“Stop!” Mr. Cordaro screamed. “Don’t talk to me about it.”
Before completing his testimony, Mr. Hughes recounted a conversation he had one day with Mr. Cordaro. He said Mr. Cordaro mentioned that officials from Highland Associates, an architectural firm in Clarks Summit, stopped by Mr. Munchak’s commissioner’s office one day with money.
Mr. Hughes said Mr. Cordaro told him that Highland dealt with Mr. Munchak because his cousin works there. According to Mr. Hughes, Mr. Cordaro said when he saw how much money was there, he told Mr. Munchak, “no, you keep it. There’s not enough for both of us.”
Christopher T. Powell, Mr. Munchak’s lawyer, at a sidebar, asked for a mistrial because he claimed there was no reference to that alleged incident in the voluminous documents prosecutors had provided to the defense so they could prepare for trial. He later withdrew the request.
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