BY DAVID SINGLETON (STAFF WRITER)
Three businessmen testified Friday they passed thousands of dollars in cash payments or cash campaign contributions to former Commissioner Robert C. Cordaro and Commissioner A.J. Munchak, as the first week of their public corruption trial wrapped up in U.S. District Court.
The three – Michael J. Pasonick, Louis A. Costanzo and Joseph Ferrario – were among seven witnesses who took the stand on the fifth day of the trial of the former Lackawanna County majority commissioners. Federal prosecutors will continue presenting their case when the trial resumes Monday at 9:30 a.m.
Michael J. Pasonick Jr. & Associates
Mr. Pasonick, owner of Michael J. Pasonick Jr. & Associates, a Wilkes-Barre architectural and engineering firm, testified he twice delivered $1,000 in cash to Mr. Cordaro in an attempt to keep lucrative work at the Wilkes-Barre/Scranton International Airport and land new contracts for sewer-related work.
Mr. Pasonick, who pleaded guilty last month to federal charges of bribing an unidentified school board member in Luzerne County in 2007, told Mr. Cordaro at a Dec. 2, 2003, fundraiser at Glenmaura National Golf Club that he would like to continue working at the airport and on what he described as “watershed” projects.
Mr. Cordaro and Mr. Munchak had been elected majority commissioners a month earlier. Mr. Pasonick wrote a $1,000 check to their campaign that he gave to Mr. Cordaro at the event.
Mr. Pasonick testified Mr. Cordaro told him he had not provided much financial support to the campaign but suggested he could “redeem” himself.
“If you want to meet me, you can give me some cash,” he quoted the commissioner-elect as saying.
Mr. Pasonick said he made an appointment and went to Mr. Cordaro’s office at the county Administration Building on Dec. 29, a few weeks later, when he gave Mr. Cordaro 10 $100 bills.
“I told him ‘I can give you a thousand dollars. â¦ I’d like to do county work and stay at the airport,’â” Mr. Pasonick said. “He said he would look into it.”
Another meeting at the commissioner’s office on March 17, 2004, went much the same way, with Mr. Pasonick giving Mr. Cordaro 10 $100 bills and Mr. Cordaro saying he would check into the work, the businessman said.
He went to the office a third time on May 5, 2005, when Mr. Cordaro told him there was no work available, Mr. Pasonick testified.
Under cross-examination by Mr. Cordaro’s lead counsel, William Costopoulos, Mr. Pasonick acknowledged the U.S. attorney’s office agreed to seek a reduced sentence on his bribery plea if he cooperated in Mr. Cordaro’s prosecution.
He also said he could not recall telling anyone other than his lawyer before Friday about Mr. Cordaro demanding cash during their Glenmaura conversation, including during an August 2009 interview with the FBI. Mr. Costopoulos produced an FBI memo about the interview, which said Mr. Pasonick could not recall Mr. Cordaro talking about cash.
“If that’s what I said, that’s what I said,” Mr. Pasonick said.
L.R. Costanzo Inc.
Mr. Costanzo, who owns L.R. Costanzo Inc. with his brother, Anthony, testified he and his brother twice gave $2,500 in cash to Mr. Munchak for his and Mr. Cordaro’s campaign committee.
The first was in 2003, when the former majority commissioners were running the first time, he said. Mr. Munchak came to L.R. Costanzo’s office, where the brothers presented with him an envelope containing $2,500.
The second time was in 2007, when the commissioners were seeking re-election, Mr. Constanzo said. He and his brother decided to make a $7,500 contribution by check to the campaign but then put together “a little bit” of cash totaling $2,500 and added it to the check they gave to Mr. Munchak, he said.
“We wanted to continue to support them. â¦ We thought they were doing the right things for the county,” said Mr. Constanzo, who with his brother also agreed to host a fundraiser for Mr. Munchak and Mr. Cordaro.
Assistant U.S. Attorney William Houser asked Mr. Costanzo whether either of the $2,500 cash contributions appeared on a summary of contributions made to Friends of Munchak and Cordaro between 2003 and 2008 that was prepared by the FBI and reviewed by the witness.
“No, I did not see them,” Mr. Constanzo said.
In 2006, L.R. Costanzo received two significant county contracts for the courthouse renovation project – one for $3.25 million for work on the building proper and another for $700,000 for rehabilitation of the grounds.
Under cross-examination by Mr. Costopoulos and Christopher Powell, Mr. Munchak’s attorney, Mr. Costanzo said he did not believe he was doing anything wrong in making the cash contributions and did not consider them extortion or bribery.
Mr. Costopoulos asked Mr. Costanzo whether at any time during the Cordaro-Munchak administration Mr. Cordaro even hinted that he would like “a little support.”
“A little support … ” the witness said.
“Cash,” the attorney explained.
“No,” Mr. Costanzo said.
But Mr. Houser, who noted Mr. Costanzo, his brother and his son contributed more than $23,000 to Friends of Munchak and Cordaro, asked whether repeated requests from the candidates to buy tickets to their campaign events would be a “hint.”
“I guess it is in the sense you would make the contribution,” Mr. Costanzo said.
Hennigan Ferrario Inc.
Mr. Ferrario, a principal in Hennigan Ferrario Inc., which administered the county workers’ compensation fund until 2004, testified he gave two $2,000 cash campaign contributions to Mr. Cordaro in 2003, each time giving the money to Mr. Cordaro’s brother, Ronald.
Mr. Ferrario, who was granted conditional immunity by the government, said Mr. Cordaro called him in 2003 and asked for his support financially in the campaign.
Mr. Ferrario said he told Mr. Cordaro he preferred to make his contribution in cash because Hennigan Ferrario had an $85,000-a-year contract with the county and he did not want to “offend” the Democratic majority commissioners whom Mr. Cordaro and Mr. Munchak were challenging in the election.
“He said that was OK,” said Mr. Ferrario, who dropped off $2,000 in cash at Dunmore Lumber, Ronald Cordaro’s business.
A few weeks before the general election, Mr. Cordaro called again and asked for more money for the campaign, Mr. Ferrario said.
“He specifically asked if I would do what I did the last time,” said Mr. Ferrario, who went to Ronald Cordaro’s home with the second $2,000 contribution.
On cross-examination by Jerry Johnson, who is also representing Mr. Cordaro, Mr. Ferrario said he did not know whether the candidate actually received the money from his brother. But he also acknowledged under questioning by Mr. Houser that Mr. Cordaro’s request that he “do what I did the last time” suggested he got the cash.
Hennigan Ferrario lost the workers’ compensation contract after Mr. Cordaro and Mr. Munchak became majority commissioners.
Mr. Ferrario said Mr. Cordaro summoned him to his office in January 2004, where they discussed Mr. Ferrario hiring or partnering with Charles A. “Chuckie” Costanzo “in order to keep the business.” Regardless, Mr. Ferrario said, Mr. Cordaro made it clear his partner, Paul Hennigan, would not be part of it.
Mr. Ferrario said he was not willing to go along with the plan, and Mr. Costanzo, a childhood friend of Mr. Cordaro, took over as workers’ compensation administrator a few months later through a new company, Executive Claims Administration.
In 2009, Mr. Costanzo was convicted of stealing nearly $650,000 from the workers’ compensation fund. He is now serving a federal prison sentence.
Earlier Friday, defense attorneys got their chance to cross-examine Highland Associates principal Don Kalina, who was granted conditional immunity by prosecutors.
On Thursday, Mr. Kalina and two other Highland co-owners, who were also granted immunity, testified about the payment of $90,000 in cash in 2005 to the former majority commissioners – $60,000 to Mr. Munchak and $30,000 to Mr. Cordaro – to keep the company’s lucrative county contracts.
Mr. Costopoulos immediately zeroed in on Mr. Kalina’s extramarital affairs.
“Did you have a double personal life that required deception and concealment of expenditures?” he asked Mr. Kalina with his second question.
“I did not,” Mr. Kalina replied.
Mr. Costopoulos tried again, repeating the question.
“If you’re asking if my wife and I had bumps in the road during our marriage, the answer is yes,” the witness said.
Mr. Costopoulos eventually asked the question four times, and Mr. Kalina eventually acknowledged a 10-year affair with a woman employed by Highland, along with a relationship with a second woman. He testified he kept both relationships from his wife, who filed for divorce in 2006.
Under questioning, Mr. Kalina said he had two checking accounts, one a joint account with his wife and the second in his name for personal use. Pressed by Mr. Costopoulos, Mr. Kalina said the second account made it easier to conceal his expenditures.
Mr. Kalina testified he spent money on the woman employed by Highland, including paying for vacations and conferences the two attended together. He said he did not remember paying for a new roof on her house or keeping her on the Highland payroll after she left the company.
Mr. Costopoulos asked whether he spent money on the second woman.
“Maybe for dinners and going out,” Mr. Kalina said.
The attorney became more specific, asking whether Mr. Kalina paid for vacations, provided the woman with spending money and helped her with her credit cards.
“Yes,” the witness asked each time.
Mr. Kalina testified Thursday he delivered the first $30,000 payment to Mr. Munchak in a downtown bank parking lot and the second in the commissioner’s car while parked near the county Administration Building. He said Mr. Cordaro received the third payment during a visit to Highland’s offices in Clarks Summit.
Mr. Costopoulos asked Mr. Kalina who saw him hand over the cash in each instance.
“No one that I know of,” he answered three times.
Mr. Kalina testified he believed Mr. Cordaro came alone when the payment was made at Highland. Asked if Jenine Ikeler, who was Mr. Cordaro and Mr. Munchak’s spokeswoman, accompanied the commissioner, Mr. Kalina said he did not recall.
Mr. Kalina said Highland continued to receive county work, and company employees continued to make contributions to Friends of Munchak and Cordaro, even after he and his partners decided to end the cash payments to the commissioners. At his request, Mr. Cordaro even accompanied him on an outing at Drexel University in Philadelphia, he said.
In an apparent attempt to blunt a defense suggestion that Mr. Kalina diverted the money he said he gave the commissioners to his mistresses, Assistant U.S. Attorney Lorna Graham asked Mr. Kalina about his wealth. Mr. Kalina, who received a $1.3 million bonus in 2005 alone, did not dispute her description of him as a “very wealthy man.”
“I’m not a bragger,” he testified, “but I don’t need any money.”
County of Lackawanna Transit System
Mr. Kalina was followed by three witnesses who discussed the County of Lackawanna Transit System’s proposed intermodal transportation center.
In 2008, COLTS was ordered to repay more than $907,000 after the Federal Transit Administration found the agency improperly awarded the contract to do design work for the center to Highland.
James Finan, the former COLTS executive director who was named the county’s director of transportation in 2004, said Mr. Cordaro requested in the summer of 2005 that he contact L. Robert Kimball & Associates, which at the time was partnering with Highland on the intermodal project, and ask the company to step aside.
In a follow-up letter to Kimball that was shown to jurors, Mr. Finan said COLTS had decided “to go forward with just one architect.”
In October 2004, after what Mr. Finan said were a series of negotiating meetings with Highland in which Mr. Cordaro participated, the COLTS board awarded the contract to the company, which was to be paid 10.33 percent of the budgeted construction cost of $7.5 million. There were no other proposals sought.
When the FTA started asking questions about the contract, Mr. Finan testified he sent an email to a consultant in which he suggested he should send a letter to the federal agency about how the contract was “negotiated” – with the word “negotiated” in quotation marks.
“I really don’t know what my thought process was with ‘negotiated’ at that point,” Mr. Finan testified. “I can’t explain why I put it in quotes.”
Under cross-examination by Mr. Johnson, Mr. Finan was asked about another email, this one sent May 4 to Ms. Graham in which Mr. Finan complained about being “yelled at and threatened” by FBI agent Kevin Wevodau “if I don’t say the right thing.”
Mr. Finan reiterated that the contract with Highland was negotiated over the course of two or three meetings.
“I always got the feeling Kevin wanted me to say this was something that was concocted in a smoky room somewhere,” Mr. Finan testified.
Larry Bickford, Kimball’s senior vice president for corporate sales, said his company had actually been approached by Highland about participating in the intermodal project, and a Highland executive called him before he was contacted by Mr. Finan to tell what was coming.
“They were going to move in a different direction. They didn’t need our services,” he said.
Under cross-examination, Mr. Bickford acknowledged Kimball was frustrated by the lack of progress on the project, which had slowed considerably by 2002.
“It was taking up file space that wasn’t going anywhere. … We were ready to move on,” he said.
Kerry L. Miller, an FTA assistant chief counsel, said his agency flagged the Highland contract because there was no competition. The federal Brooks Act sets forth specific requirements for seeking proposals for architectural and engineering in projects involving federal money, he said.
“Primarily, there was absolutely no advertisement about the availability of this contract. There was no solicitation at all,” Mr. Miller testified.
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