Fumo associate defends Peco dealings

Former State Sen. Vincent J. Fumo's top legislative lawyer broke down in tears in federal court yesterday as he defended his role in a legal battle that led Peco Energy to donate $17 million to a Fumo-backed charity.

Christopher B. Craig said his and Fumo's success in getting Peco to freeze customer rates was lost in news coverage about the utility's secret side deal to give millions to the Citizens' Alliance for Better Neighborhoods.

"I was proud of the litigation," Craig said through tears. "I was upset that The Inquirer was taking years of my work and crapping all over it."

Craig lost his composure again moments later when he added: "Let me be clear. I to this day see nothing wrong with what I did."

Assistant U.S. Attorney John J. Pease struck a sympathetic tone in his cross-examination of Craig, the sixth witness presented by the defense in Fumo's corruption trial. But Pease suggested that Craig had been victimized by his old boss and not by The Inquirer.

Pease got Craig to acknowledge that he never knew that Fumo had dipped into the $17 million to pay for tens of thousands of dollars worth of personal tools and consumer goods. Fumo's defense team argues that benefit was lawful compensation for the powerful Democrat's success at squeezing Peco for the millions.

Craig, 42, was paid $152,000 a year while serving as chief counsel to the Democrats on the Senate Appropriations Committee. Widely considered to have one of the best legal minds in the Capitol, he resigned from his Senate post at the end of last year.

Fumo has complained bitterly that Democratic leaders in the chamber now want to distance themselves from Craig because of the former senator's indictment.

Under Pease's questioning, Craig told the federal jury how he fought to keep the Peco donation secret. The Inquirer disclosed the $17 million contribution in 2003, five years after Peco first agreed to make its payments.

After rumors of the donations spread, Enron, then a major power company seeking to compete with Peco, filed legal challenges demanding that Fumo disclose any side deal with Peco.

Craig informed Enron that Fumo had reached no legally enforceable agreement with Peco. Because Fumo's deal with the utility had never been put in writing, Craig said, he decided that Peco could have backed out of it and thus it did not need to be disclosed.

"The fact is that Enron asked for that information every way they could think of, and you didn't give it to them," Pease said.

"I did not want to give it to them, that's correct," Craig replied.

To shut down Enron's inquiry, prosecutors established that Craig also cited a provision of the state constitution known as the speech and debate clause, which bars outsiders from looking into the actions of legislators.

Acting both as a state senator and a Peco customer, Fumo fought the power company in court and in pleadings before regulators. Craig was the lawyer who wrote those challenges. Fumo dropped his opposition as part of a deal with the utility under which it capped its charges and made the massive charitable donations.

By underscoring that Fumo relied on his governmental role to defeat Enron, prosecutors seemed to be seeking to undercut the former senator's argument that it was lawful for him to extract personal benefits from the Peco money.

The $17 million donation was the initial focus of investigation by the FBI as possible extortion by Fumo, but he was not charged with a crime in connection with it. The indictment said that virtually all e-mail about the Peco matter had been destroyed as part of Fumo's effort to obstruct the investigation.

Fumo, 65, a state senator from 1978 until late last year, is charged with defrauding Citizens' Alliance by getting it to pay for more than $150,000 in power tools, vacuum cleaners, expensive paint and other items.

He also is charged with obstructing the FBI inquiry, defrauding the Senate by getting employees to do personal errands and political work on state time, and getting free trips on yachts provided by the Independence Seaport Museum.

A week after developing an erratic heartbeat in court, Fumo looked better yesterday. His color had improved and he seemed more spirited.

After Craig started crying the second time, U.S. District Judge Ronald L. Buckwalter immediately recessed the trial for lunch. At that point, Fumo quickly crossed over to the witness box and consoled his old ally.