Sources: U.S. prosecutors made no judgment on sting case

Federal prosecutors in Philadelphia never deemed a sting operation that targeted public corruption as too weak to prosecute, according to District Attorney Seth Williams and law enforcement sources familiar with the brief federal review of the investigation.

The sources and Williams say the prosecutors never came to a judgment about the investigation one way or another before the state attorney general asked them to halt their review.

Their statements echo a declaration by the Philadelphia office of the FBI, which said it made no judgment about whether the case was suitable for prosecution.

Pennsylvania Attorney General Kathleen G. Kane has said "federal authorities" endorsed her view that the sting was fatally damaged. She has declined to identity the federal officials involved, saying they had asked for anonymity.

Williams, who has emerged as one of the toughest critics of Kane's decision to shut down the sting, said the attorney general should reveal precisely which agency had criticized the investigation.

"You can't just go back to, 'Oh, I don't want to tell anybody,' " Williams said. "Once you have told us what they said, then it's appropriate to say who and when."

Federal prosecutors reviewed the case in early 2013 after a top state prosecutor took it to them through a back channel.

When The Inquirer disclosed last month that Kane had ended an investigation that sources said had caught at least five Philadelphia elected officials on tape pocketing cash or gifts, Kane said that the officials had committed crimes, but that federal law enforcement officials agreed with her that the case was "flawed and nonprosecutable."

But Williams and the other sources say the U.S. Attorney's Office in Philadelphia never made such a judgment about the sting during the several months that prosecutors reviewed the case file.

"That didn't happen," Williams said. His knowledge of the federal handling of the investigation, he said, was based on information provided to him by colleagues in law enforcement and by private lawyers familiar with the case.

In separate interviews, three other sources said prosecutors had barely begun looking into the investigation's evidence when Kane's staff asked them not to proceed with the case, so her office could evaluate it. The U.S. Attorney's Office never did adopt the case or pursue it.

One of the sources said federal prosecutors in Philadelphia "didn't make some kind of judgment about this thing."

In response to detailed questions Monday from The Inquirer, Kane's office said she would have no comment.

A source close to Kane called "ridiculous" any suggestion that her staff had "taken the case back" from federal authorities.

During 19 months of taping, undercover operative Tyron Ali captured five leading Philadelphia Democrats - a Traffic Court judge and four state legislators - on tape taking money or gifts, according to interviews and investigative documents.

After taking office and conducting her own review of the evidence, Kane, a Democrat, shut down the probe without bringing charges - or notifying the state Ethics Commission that lawmakers had taken money.

She said she believed the sting was poorly conceived, badly managed, and possibly tainted by racial bias in the selection of targets. All five officials caught taking money or gifts are African American.

Frank G. Fina, the former chief deputy attorney general who launched the investigation, has said in an op-ed article that he and his colleagues "conducted our investigation honestly, ably, and with integrity."

Backers of the sting say that it developed powerful evidence against its targets and that had Kane not shut it down, the investigation would likely have swept up even more suspects.

Last week, The Inquirer asked U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania whether his agency had deemed the sting case unworthy of prosecution.

The reply came from his second-in-command, First Assistant U.S. Attorney Louis Lappen: "We do not comment on the existence or nonexistence of a federal investigation, and likewise, we do not comment on investigations that are being handled by other prosecutorial agencies."

In contrast, the FBI has officially said it made no judgment about the merits of the case.

"That's not our job," said Edward J. Hanko, the special agent in charge of the more than 200 FBI agents in the Philadelphia region. He said the FBI review was limited to determining whether any of the offenses might have violated federal law.

Kane has not made it clear whether she was referring to an official position taken by a federal law enforcement agency or an informal one made privately by prosecutors or FBI agents. She has rejected requests that she identify her federal advisers.

"I'm sorry I can't reveal that to you," she said at a news conference March 17, the day after The Inquirer broke the news of the aborted probe, "because, when we refer a case to a federal agency, they ask for it to be anonymous."

Fina declined to comment for this article.

Sources close to both Fina and Kane say that after Kane was elected in November 2012 - but before she took office the following January - Fina made a copy of the sting's investigative file, including all tapes, and brought the material to the U.S. Attorney General's Office in Philadelphia. Fina did so without checking with then-Attorney General Linda L. Kelly, according to those sources.

In a statement March 31 to The Inquirer, Kelly said her policy was to not comment on cases in which no one has been formally charged with a crime. She said she would have no comment on the sting investigation.

Fina went to the federal prosecutors because he believed Kane had a conflict of interest in making decisions regarding the sting case, sources say.

Before going undercover to win leniency in a state fraud case, lobbyist Ali had been involved in an illegal campaign-donation scheme. The donations went to a campaign involving people who later became supporters of Kane's.

Kane has said she faced no conflict. She said the people in question were not close political allies and were not implicated in the illegal donations.

Fina chose federal prosecutors in Philadelphia because Ali had done work for them in the past. According to an official document from the state Attorney General's Office that was reviewed by The Inquirer, Ali had worked with federal authorities in Philadelphia on cases unrelated to the sting. The document did not describe what kind of work Ali did or when he did it.

Robert J. Levant, Ali's defense lawyer, declined to comment Tuesday.

In her criticism of the case, Kane has singled out Ali, saying he lacked credibility and would have made the case impossible to win in court.

Fina told Kane - in a tense briefing during her first week in office - about his bid to interest federal prosecutors in the case. Fina later went to work as an anticorruption prosecutor for Williams in the Philadelphia District Attorney's Office.

According to the people familiar with the federal handling of the sting's case file, U.S. prosecutors had made little headway evaluating the material in the sting file when Kane's office asked them to stand down.

Federal authorities told Fina in April 2013 that they would not move forward with the case. By the following month, according to a source close to Kane, she had concluded that the case was fatally damaged.

In making her case against the sting, Kane said she had asked Dauphin County District Attorney Ed Marsico, a Republican, to give her a "second opinion." In an interview last month, Marsico said he considered the case "almost unprosecutable."

He said he reached this judgment by reading a summary of the case prepared by Kane's staff. He said he had not read the full case file, listened to tapes, or read transcripts.

Marsico said Tuesday that Kane's staff tried to arrange for him to interview Ali, but that the informant would not agree to meet. Levant declined comment on that.

215-854-4821 @CraigRMcCoy