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Prosecutors: Fumo's actions went unquestioned

Former State Sen. Vincent J. Fumo never lacked for allies - or enablers. Time and again, the state's power elite joined in his maneuvering, looked the other way, or simply saw nothing amiss.

State Senator Vincent Fumo (center) gestures to lobbyist Steve Wojdak (left) while discussing education in Philadelphia's schools. Listening are State Senator John Wozniak (right) and Mike McLaughlin, another lobbyist for Wojdak & Associates. (MICHAEL FERNANDEZ / Staff Photographer)
State Senator Vincent Fumo (center) gestures to lobbyist Steve Wojdak (left) while discussing education in Philadelphia's schools. Listening are State Senator John Wozniak (right) and Mike McLaughlin, another lobbyist for Wojdak & Associates. (MICHAEL FERNANDEZ / Staff Photographer)Read more

Former State Sen. Vincent J. Fumo never lacked for allies - or enablers.

Time and again, the state's power elite joined in his maneuvering, looked the other way, or simply saw nothing amiss.

As the last days tick down to Fumo's sentencing Tuesday, prosecutors took one last swipe at the culture that permitted him to thrive.

"There are simply too many people in this case who never questioned defendant Fumo and who never stood up to him," they said Friday, demanding a long sentence to send a tough message to others.

The 66-year-old Philadelphia Democrat is virtually certain to receive a prison term for his sweeping conviction on charges of illegally extracting $4 million in benefits from the state Senate and a pair of nonprofit organizations, and then trying to cover it all up.

When Fumo pushed, few pushed back - and that went for everyone, from low-level apparatchiks to some of Pennsylvania's most powerful politicians, lawyers, and lobbyists. After all, Fumo's clout and his vengeance were both legendary.

Even when Fumo walked to the brink of extortion, the attitude was it was just "Vince being Vince."

But it was a meeting on the 51st floor of a major Philadelphia law firm that has come to exemplify best how Fumo flourished.

This was the crucial gathering in which the president of Verizon Pennsylvania asked two of Philadelphia's top lawyers - David L. Cohen and Arthur Makadon - for advice after Fumo began pressuring him for more than $50 million. The pair's recommendation, the businessman said, was that he "work it out with the senator."

The meeting was the talk of Philadelphia's legal community after Daniel Whelan testified in January during Fumo's trial.

The former Verizon president has been the only participant to publicly describe the session in detail. Since he spoke out on the stand, The Inquirer has put together a fuller picture of the session from new interviews and a review of trial testimony and documents, including exhibits.

In interviews, a series of veteran lawyers said they could not understand why Cohen and Makadon did not at least explore alerting federal prosecutors to Fumo's tactics.

"If I had a client that I thought were the possible victim of a shakedown, I would get him to the U.S. Attorney's Office as close to the speed of light as possible," said Gil Scutti, a former federal prosecutor.

The Peco playbook

In 2000, fresh off his success at secretly pressuring Peco Energy Co. for $17 million, Fumo put the squeeze on Verizon.

The playbook was the same as with Peco. Fumo attacked Verizon in the legislature, before regulators, and in the courts. He wanted Verizon cut in half, into retail and wholesale operations.

To Verizon, this was a death threat. Whelan set off on a risky path, walking a line between protecting his company and not buckling to the powerful antagonist.

A lawyer himself, like Fumo and virtually every figure in this story, Whelan, then 54, was no naif when it came to politics - he once served as his company's in-house lobbyist.

Whelan also was committed to civic involvement. Over the years his many civic efforts included chairing the Philadelphia School Reform Commission.

Whelan declined to comment for this article.

In his testimony, he said that when Fumo began to challenge Verizon, he called on his firm's outside lobbyist, Stephen R. Wojdak.

Verizon had hired Wojdak because he was thought to have an "in" with Fumo, Whelan told jurors.

Wojdak also declined to comment last week.

Impeccably dressed and genial, Wojdak, a lawyer by training, had built his Philadelphia firm into one of the most influential persuaders in Pennsylvania.

He had had his own brush with the law. While serving as a Democrat in the state House in the 1970s, Wojdak was indicted on charges of trying to secure a payoff to get a student into dental school. The indictment was dismissed before trial.

After Whelan contacted him, Wojdak, then 62, served as a conduit to give the company president an astonishing list of Fumo demands.

Fumo wanted Verizon to deposit $10 million in his bank. He wanted Verizon to give $2.5 million in legal work to his law firm, Dilworth Paxson L.L.C. He wanted it to donate $40 million to Citizens' Alliance for Better Neighborhoods - the nonprofit that received the Peco money - and other Fumo-backed charities.

And he wanted Verizon to join in with Peco to bury power and phone lines in the Spring Garden neighborhood around Fumo's Victorian mansion. This alone carried a $30 million price tag.

Wojdak was not much fazed by Fumo's tactics. He reportedly counseled Whelan that Verizon had no choice but to negotiate with Fumo.

As for the demands, Wojdak has told others he saw them as Fumo's standard method of bargaining, seeking far more than he expected ever to get.

Next, Whelan contacted Makadon. Their meeting took place on Wednesday, May 10, 2000, at the Ballard, Spahr, Andrews & Ingersoll law firm.

At the time, Cohen, then 45, was Ballard Spahr's chairman and Makadon, then 57, its managing partner.

By then, Cohen was already well-known for his relentless work ethic, prodigious memory, and formidable command of detail. He had returned to Ballard after winning renown as Mayor Ed Rendell's chief of staff when the pair rescued Philadelphia's finances in the early 1990s.

Makadon, a veteran defense lawyer and former assistant district attorney, was full of hard-driving energy. His manner was blunt, sometimes tactless.

Whelan testified that he went to Ballard Spahr for advice on the law regarding "white-collar" crime, one of Makadon's specialties.

Some have speculated that Whelan's real goal was to send a message to Fumo to back down. Under this theory, Whelan knew that Cohen was close to Fumo, and his hope was that Cohen would alert Fumo that Whelan was teetering on the edge of calling the FBI.

Whelan has denied that. He said it was Verizon's general counsel, Julie Conover, who picked Ballard Spahr.

Whelan said that he was surprised when Cohen joined Makadon at the meeting and that he was unaware Cohen and Fumo were close.

Cohen and Fumo have long been political allies and friends. As came out in the trial, Cohen and his family twice were guests of Fumo's on yacht cruises paid for by the Independence Seaport Museum on Penn's Landing. One of the crimes for which Fumo was convicted was illegally taking such cruises.

More recently, in 2006, Cohen's wife, Rhonda, joined the city's head of the NAACP and a former U.S. attorney to head a legal defense fund for a Fumo aide indicted as part of the corruption case. That former aide, Leonard Luchko, later pleaded guilty. He went to prison last week.

Unproductive session

Once they all gathered in the glass conference room, a meeting ensued that by Whelan's account was brief and unsatisfying, almost farcical.

The phone company executive carried with him a key document given him by Wojdak. It listed Fumo's requirements, the most drastic of which were handwritten by the lobbyist after conferring with the senator.

Whelan testified that he told Cohen and Makadon "that the document that I had with me had a number of demands from Sen. Fumo, and we were concerned about the propriety of agreeing to those demands.

"I took it out of the folder that I had and pushed it on the table, and it was pushed back to me. They specifically didn't want to see the document.

"After several minutes of discussion, Mr. Cohen said, 'Dan, find a way of working it out. That's our advice to you. Find a way of working it out.' "

Whelan added: "They said find a way to work it out with the senator. That was the sole and repeated language they used."

Conover, who was also at the meeting, declined a request for an interview.

According to a source, she corroborated to the FBI Whelan's failed attempt to show the lawyers the document.

Whelan also testified that he and Conover asked Cohen and Makadon whether they should report Fumo's demands to federal prosecutors, but never got an answer. Conover also corroborated this.

Cohen is now a top Comcast executive, chairman of the Greater Philadelphia Chamber of Commerce, and the incoming head of the board of trustees of the University of Pennsylvania.

He has declined to discuss the meeting.

"I'm not interested in talking about this," Cohen said recently.

Makadon spoke briefly with The Inquirer during the trial. Asked for a follow-up interview, he said, "I have nothing more to say."

In the paper's one interview, on Jan. 5, Makadon said he did not remember telling Whelan to "work it out" with Fumo.

"I don't recall that phrase," Makadon said.

Of the demand list, he said, "I never saw it. He didn't try to hand me a document."

Makadon also said that it was "unlike me to tell somebody I wouldn't read a document."

In general, Makadon said, "the only thing I remember from the meeting was there was a [Verizon] case up on appeal. I don't remember anything about demands, or anything like that. I told him he should try to win that appeal . . . get the best offer possible. That's all that I remember."

Makadon's private view reportedly was that Fumo's tactics were nasty, hard-edged bargaining, but not obviously criminal. He also thought that Verizon was in a tough spot, given Fumo's clout in Harrisburg, with judges and state regulators.

Once he realized that Whelan was only seeking advice and not looking to hire Ballard long-term, Makadon has said, he zoned out of the discussion.

As for Cohen, he reportedly told investigators he did not recall being shown a document or any discussion of going to prosecutors. In general, Cohen did not view the matter as potentially criminal because that was not his area of specialty.

Puzzling response

In recent interviews, veteran lawyers said they were surprised by Makadon's and Cohen's responses.

L. George Parry, a defense lawyer and former prosecutor, said that assuming Whelan's version of events was correct, he found puzzling the lack of advice about contacting law enforcement.

"I would hope if I was ever in that position as an attorney, I would do the right thing and tell the person who sought my advice, if the person feels that he's a victim of a crime, that they need to contact the authorities."

Dan Richman, a former federal prosecutor who is a law professor at Columbia University, said much depended on how blunt the discussion was.

If it was a clear criminal demand, Richman said, then "their advice to work it out with the senator is problematic."

Stephanos Bibas, a law professor at Penn and a former federal prosecutor, agreed that the details of the conversation mattered. He noted that Whelan apparently had not used the magic word bribe to characterize Fumo's demands.

Bibas said that, all things considered, the Ballard pair might have handled matters well.

"These are professional lawyers," he said. Provided no crime was suspected, "you could make an argument that Verizon's interest might be better served by playing ball" with a powerful senator.

The lawyers agreed on one thing: Had prosecutors been contacted, the FBI almost certainly would have launched an aggressive undercover investigation.

"The individual could be wired," said Thomas DiBiagio, a former U.S. attorney in Maryland.

"Then you can convict him with his words."

No police, no charges

As it happened, nobody, not Whelan or Cohen or Makadon, called the cops. The FBI learned of Fumo's pressure on Verizon only years later.

Nor did the government ever charge Fumo with any wrongdoing in connection with Peco or Verizon. That was because, prosecutors said in the indictment, Fumo's scheme to obstruct justice "succeeded in destroying virtually all e-mail evidence regarding the Peco and Verizon matters, thwarting the investigators' ability to determine whether federal crimes were committed." Instead, prosecutors chose to indict Fumo for how he spent money, not for how he raised it.

After the session at Ballard Spahr, Whelan relented on a few of Fumo's demands but held firm against anything he thought would put money in Fumo's wallet.

Whelan refused to deposit any Verizon funds in Fumo's bank. He also would not give any money to Citizens' Alliance.

But he did agree to give to another nonprofit on Fumo's list, the Philly Pops. Fumo has long been a close friend of Pops conductor Peter Nero's. Verizon donated $500,000 to the Pops.

On the demand for legal work, Whelan tried to find a middle ground.

He refused to give any Verizon legal dollars to Dilworth, the firm that paid Fumo almost $1 million yearly to drum up business.

Whelan rejected Dilworth in the face of considerable pressure. "What's wrong with Dilworth?" Whelan testified that Wojdak kept asking.

"I just kept telling Steve, 'It isn't going to happen,' " Whelan recalled.

Whelan also turned down hiring Cozen O'Connor, another major Philadelphia firm, after learning it would split its fee with Fumo. He also rejected hiring the law firm of Richard A. Sprague, then a close Fumo comrade.

Finally, Verizon agreed to give $3 million of legal work to the Obermayer, Rebmann, Maxwell & Hippel law firm of Philadelphia. The work was overseen by another Fumo ally, Obermayer lawyer Thomas A. Leonard, Whelan said.

Leonard, a former city controller, is an an old Fumo friend and political compatriot who lived a block from him on the same street in the Spring Garden section.

Like Cohen, he has not agreed to talk about Fumo.

And, like Cohen, Leonard was among the more than 250 people who sent the judge a letter urging leniency for the former state senator.