06.10.2011

Day 5: Businessmen detail payments, campaign contributions

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. … I’d like to do county  work and stay at the airport,’ ” 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. … 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.

Highland Associates

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.

Contact the writer:  dsingleton@timesshamrock.com

Read more: http://thetimes-tribune.com/news/day-5-businessmen-detail-payments-campaign-contributions-1.1160495#ixzz1QbjIO87o

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