Fumo defense fund casting for contributors

In their massive corruption case against State Sen. Vincent J. Fumo, prosecutors say he used "other people's money" to support his lifestyle.

As he fights those charges, Fumo has found a number of ways - all completely lawful - for other people to help pay his whopping legal bills.

Fumo, one of Pennsylvania's wealthiest politicians, has hit up taxpayers for $1.2 million and his campaign donors for $1.1 million.

For months now, his allies also have been quietly lobbying law firms and prominent businesspeople for contributions to a legal defense fund known as the Phoenix Trust - any amount accepted, a fund-raising letter says.

Philadelphia lawyer Jeffrey B. Rotwitt said his firm had pledged $10,000. He called Fumo "a very, very hardworking and productive public servant."

After making the gift, Rotwitt said, the firm got a request for more from Andrew Cosenza, a businessman with concessions at Philadelphia International Airport.

In his pitch, Cosenza, a major Fumo campaign donor, described the Democratic senator as "a guy in a pickle" with "a challenging and expensive year to come," Rotwitt said. Cosenza did not return calls seeking comment.

The identity of the fund's donors is supposed to be a secret, even from Fumo.

Fumo declared Wednesday that he wouldn't seek reelection this year. Because the fund is a blind trust, his aides say, there's no chance Fumo will have a conflict, or try to help one of his benefactors during his remaining eight months in office.

A Fumo legislative lawyer said a blind trust was the "gold standard" of how to raise contributions ethically.

It would be "legally and ethically irresponsible" if Fumo knew the source of the money, said Christopher Craig, Fumo's Senate counsel.

But some ethics experts doubt the donor list will remain secret. A better approach, critics say, would be to disclose all givers, as members of Congress must do when they have legal defense funds.

"We don't know if he really doesn't know," said Craig Holman, a Washington expert in government ethics. "It doesn't take so much for someone who chips in $100,000 to let the lawmaker know where the money comes from."

If the fund were not a blind trust, Pennsylvania's ethics rules would require Fumo to list all donors and the amounts they gave.

Even with a blind trust, other state officials have been required to disclose the total raised for their legal defense funds.

Moreover, the Phoenix Trust has not registered as a Pennsylvania charity. Under state law, trusts that raise at least $25,000 in a year must register, and identify trustees and fund-raisers, officials said.

Craig said the senator had no obligation to report donors, or a total.

"Simply stated, Sen. Fumo cannot disclose what he does not know," he said.

Last week, an emotional Fumo, 64, announced that he was pulling out of the April primary, saying he could not seek another term with "a cloud hanging over my head." On Sept. 8, Fumo is to go on trial on 139 corruption counts.

Though Fumo has put his Spring Garden mansion up for sale for $6 million to raise money for legal bills, he owns other homes at the Jersey Shore and in Florida and a farm near Harrisburg.

He got $15 million last year when he sold the bank founded by his grandfather. Philadelphia's Dilworth Paxson law firm has paid him as much a $1 million annually as a client "rainmaker."

Fumo previously covered much of his legal bills with state and campaign money. Both sources have dried up.

According to Pennsylvania records, Fumo billed the Senate for $1.2 million in fees to the firm of his former lawyer, Richard A. Sprague, during the four years of FBI investigation that preceded his indictment in February 2007.

The Senate stops paying legal fees after an indictment.

Meanwhile, Sprague's firm received more than $1.1 million from Fumo's campaign accounts, records show.

Now that Fumo has dropped out of the race, however, he can't use campaign money to cover legal bills. Election officials say people who aren't running cannot use the money for lawyers unless they say they are considering another bid for office.

Ken Snyder, Fumo's media consultant, said the senator had about $600,000 left in his campaign fund and would spread it around to other candidates. Fumo will not use the money to pay lawyers, Synder said.

Sprague's legal bills totaled $2.8 million, sources said. The remaining $500,000 came from the defense fund. In a statement, Fumo aides say the senator deposited $750,000 of his own money into the trust when it was created last year.

Sprague withdrew as Fumo's attorney in the fall amid reports of tension over the bills. He was replaced by Dennis J. Cogan, another well-known Philadelphia lawyer.

Fumo told the Philadelphia Daily News in June that the fund had been set up as a blind trust "to prevent me from going to somebody and saying, 'Hey, can you give me some money?' and the feds saying, 'A-ha, you're extorting money.' "

"If people ask me, 'Gee, what can I do to help?' I can say, 'Call those guys,' " Fumo said. "And frankly, I don't want to know any more."

The fund's trustees are Donna Gentile O'Donnell, a health-care expert, Anthony DiSandro, former chief executive of Fumo's bank and lawyer Jerry Segal.

O'Donnell, a close Fumo friend who was with him in the emergency room after his heart attack this month, said there were "many people who cared deeply" about Fumo.

"They believe in his leadership and believe that he is fundamentally a good man and a good public servant and deserves support in a time of great trouble," she said.

It's unclear whether the fund-raising effort for the Phoenix Trust has been successful.

Speaking on condition of anonymity because of the secrecy of the fund, a Philadelphia lawyer who has worked with Fumo in the past said the senator had called him three times to request he make fund-raising calls.

In interviews, many in Fumo's traditional circle of campaign donors said they hadn't given or hadn't been asked. The $10,000 pledge from Rotwitt's firm, Obermayer Rebmann Maxwell & Hippel, was the only donation that could be confirmed.

The firm's partners include some longtime Fumo allies. Its clients include the planned Foxwoods casino in Philadelphia.

In the fund-raising letter obtained by The Inquirer, its backers note that donors may legally give any amount. And the letter notes that Fumo won't reveal donors.

A separate legal defense fund for two of Fumo's computer aides, also charged in the corruption case, has raised only about $50,000. "People haven't been banging down the doors," said Ralph J. Teti, the Philadelphia lawyer who set up the fund.

Normally, state lawmakers must disclose gifts.

The state Ethics Commission says this rule does not apply to gifts made through a blind trust, but the agency has four times advised trusts to disclose the total amount per year.

The last time was in 2000, in a staff letter to then-Senate Majority Leader F. Joseph Loeper, later convicted of corruption charges. He later disclosed that his fund had raised $114,000.

Fumo's Senate counsel, Craig, said the earlier cases were not relevant or binding on the Phoenix Trust.

In Congress, members must disclose all donations to legal defense funds. Moreover, they're capped at $10,000 in the Senate and $5,000 in the House.

James Maule, a Villanova University law professor and blogger on legal issues, said the congressional mandate was good policy.

With a potentially big circle of Fumo fund-raisers and donors, Maule said, the wall of secrecy might be breached if a donor decides to try to call in a favor.

If that happens, he said, the only ones who would be blind would be the public.