Inquirer exclusive: How the perjury case against Kane was built

At 12:53 a.m. on March 24, 2014, Pennsylvania Attorney General Kathleen G. Kane's top aide shot her an e-mail with a stern warning: Divulging information about a secret criminal investigation could break the law.

Kane did it anyway, a grand jury found.

And when she was later questioned under oath, Kane gave a false account - even saying the very same aide had endorsed the leak, the panel found.

According to several sources familiar with the grand jury's work, these findings are at the heart of its call for criminal charges against Kane.

That late-night e-mail warning is among a range of previously undisclosed information that underpins the grand jury's decision to recommend the arrest of the state's highest law enforcement official.

The panel contends that Kane unlawfully released confidential information to the Philadelphia Daily News in a bid to punish a rival prosecutor. For doing so - and subsequently denying it - the panel recommended that Kane be charged with perjury, official oppression, obstruction, and other crimes.

Kane has said she did nothing wrong, and her lawyers say she will not resign if charged.

Lanny Davis, a lawyer and spokesman for Kane, issued a statement late Thursday denouncing "anonymous sources" and "cowardly leakers" who he said had lied about Kane to The Inquirer.

"They are attempting to try and convict Kathleen Kane in the media by whispering into a reporter's ear in the darkness of anonymity and non-accountability," Davis said.

Kane's lawyers argued before the state Supreme Court on Wednesday that the special prosecutor who led the grand jury had no legal authority to do so and that the case against her should be thrown out.

Her lawyers have also pointed out that Kane, a suspect in a leak inquiry, has been the target of repeated leaks herself.

The state grand jury, based in Norristown, sent its recommendation of criminal charges against Kane to Montgomery County District Attorney Risa Vetri Ferman. Unless the high court rules otherwise, Ferman must decide whether to bring a criminal case.

The grand jury presentment has not been made public.

Some of what the panel found was disclosed in legal documents filed before Wednesday's arguments. Sources familiar with the evidence presented to the grand jury filled in further details.

This story is based on interviews, the recent legal filings, and other official documents.

There is no doubt that the grand jury concluded that Kane, 48, the first woman and Democrat elected attorney general, was squarely behind the release to the newspaper of confidential documents from a 2009 investigation handled by her Republican predecessors.

The grand jury found that she did so to embarrass Frank Fina, a former top prosecutor in the Attorney General's Office with whom she had been warring. The panel called her protestations to the contrary false testimony.

The grand jury also concluded that Kane falsely testified that her top deputy at the time, Adrian R. King Jr., had endorsed sharing the investigative material with the newspaper and had knowingly helped deliver the leaked documents.

King told jurors that was not true - and his denial was corroborated by the March 24, 2014, e-mail he sent to Kane before the newspaper story was published.

"I fail to see how we can legally give . . . access to any OAG [Office of Attorney General] criminal division file materials," King wrote.

The e-mail was prompted by Kane's request to share grand jury material with a prominent Philadelphia law firm that she had consulted. But the advice from her deputy was unequivocal - investigative material developed by a state grand jury could not be provided to anyone outside the Attorney General's Office.

In a public pleading last month, Special Prosecutor Thomas E. Carluccio said Kane stood alone in her wrongdoing.

To challenge Kane, the grand jury cited testimony from a wide range of her former or current aides - not only King, but also her first assistant, Bruce Beemer; David Peifer, a top commander of the office's agents; and her grand-juries expert and appeals chief, James Barker.

In his legal brief, Carluccio wrote, "Kathleen Kane is the only employee of the OAG who was found to have allegedly committed perjury before the grand jury and leaked grand jury information."

Carluccio declined to be interviewed, as did King.

The case that threatens Kane's career involves her decision last year to reveal information about a long-dormant investigation of Philadelphia civil rights leader J. Whyatt Mondesire.

The material appeared in a Daily News article published in June of last year. Mondesire was not charged with a crime and has denied any wrongdoing.

The grand jury found that Kane, in releasing details of the closed case, was heedless of the possible damage to Mondesire's reputation.

The information given to the Daily News included a transcript of a 2014 interview with an agent, Michael Miletto, who had worked on the case five years earlier.

The agent contended that Fina ignored leads suggesting that Mondesire was diverting government grants for his personal use. This criticism made its way into the story.

Fina is a former top state corruption prosecutor who now works for the Philadelphia District Attorney's Office. He has rejected any suggestion that he did not properly pursue leads in the Mondesire case.

Kane leaked that information, the grand jury found, to retaliate against Fina. She blamed Fina for the barrage of criticism she received after The Inquirer revealed last spring that she had declined to prosecute Democratic officials from Philadelphia who were caught on tape accepting cash or jewelry during an undercover sting operation.

The sting was overseen by Fina, who left the Attorney General's Office shortly after Kane took office in 2013.

The Inquirer broke the news of Kane's decision, which had been kept secret under court seal, in an article published March 16, 2014.

In the week after the Inquirer story appeared, the grand jury found, Kane focused intensely on how Fina had handled the Mondesire case.

It was during this week that Peifer, who is in charge of special investigations in the Attorney General's Office, was dispatched to interview Miletto.

Peifer taped his March 21, 2014, interview as Miletto said Fina had not vigorously pursued the Mondesire case, which had grown out of a secret grand jury probe into a former employee of Mondesire's.

In defending herself in the leak case, Kane has said that she discussed the Mondesire investigation during a meeting in late March with several of her top staffers, including King, and that they concluded it was in the public's best interest to get information out about what had happened.

The grand jury found otherwise.

Amid the criticism of her decision to shut down the sting, Kane turned to the law firm of Sprague & Sprague for advice on how to respond.

She wanted to share information about the Mondesire case with the private lawyers - prompting King to warn against any such disclosure. He specifically cited the Mondesire documents.

Kane replied a day later, at 3:38 a.m.

"I am well aware of the limitations of disclosing criminal files," she wrote. "I have been in this business quite some time."

Lawyer Thomas Sprague declined to comment Thursday.

According to people familiar with the matter, Kane's position has been that when she and King spoke after that meeting, King agreed to deliver an envelope containing information about the Mondesire case from Harrisburg to Philadelphia.

She said King made the delivery, giving the envelope to Josh Morrow, a veteran political operative from Philadelphia, to get it to the Daily News.

She said she did not know who prepared the envelope and had not seen its contents.

The grand jury found that it was a full month after their e-mail exchange when Kane asked King, who lives in the Philadelphia area, to deliver an envelope to Morrow - without explaining what was inside.

King found the sealed envelope sitting on his desk after he agreed to ferry it to Morrow. He never opened it, wrongly assuming that it held campaign-related material, the sources said.

In its seven months of investigation, the grand jury was unable to answer a key question. While it blames Kane for the material given to the Daily News, the grand jury could not obtain any eyewitness testimony about who actually stuffed the envelope before it was sealed.

Kane's camp has said she authorized the release of only one record: a 2014 summary of Peifer's interview with the agent.

She has said she did not believe the summary was covered by grand jury secrecy rules and presumed that it, not other material, would be shared with the Daily News.

But the packet given to the newspaper contained no such summary. The documents shared - and the only ones quoted in the story - were the 2014 Miletto transcript and a memo written in 2009 by a prosecutor in the case detailing allegations of impropriety by Mondesire.

This last document quoted grand jurors in 2009 as pushing for Mondesire to be questioned.

Kane testified that she had not read or seen the 2014 Miletto transcript and was unaware of the 2009 memo before it was quoted in the newspaper.

The grand jury dismissed this. It cited testimony from Peifer that there was only one printed copy of the interview transcript, and that he gave it to Kane before the newspaper story was published. He said he saw her leafing through it - and never focused on it again until he saw it disclosed in the Daily News.

Efforts to reach Peifer were unsuccessful.

The sources said the grand jury also cited testimony from Peifer and Beemer, the career prosecutor who replaced King last June as first deputy attorney general.

Both said the 2009 memo was discussed with Kane. Peifer said he may have provided her with a copy.

Carluccio's investigation turned up another significant fact about the documents - at least in the form in which they were turned over to the Daily News.

He found that the names of all attorney general staff in the documents had been blacked out to protect their privacy - except for Fina's and that of former state prosecutor E. Marc Costanzo, a close friend of Fina's who now works with him as a prosecutor in Philadelphia.

Fina and Costanzo declined to comment Thursday, citing grand jury secrecy rules.

And virtually all Kane's current or former top prosecutors - King, Beemer, Barker, and Linda Dale Hoffa - said they viewed the 2009 memo as confidential grand jury material.

Kane's lawyers have argued that she was not bound by the secrecy rules applicable to the 2009 grand jury because she was not attorney general at the time.

Rather, as her lawyer Lanny Davis has said, she was a "stay-at-home mom."

Her lawyers have stressed that she signed no secrecy oath, unlike the prosecutors, stenographers, and others in the grand jury room at the time.

But sources say that Barker, Kane's chief deputy attorney general who oversees the office's grand-jury investigations, rejected his boss' view.

He told the grand jurors that the entire office, including the attorney general, was bound by confidentiality regardless of when a jury had met.

To argue otherwise, Barker said, would render secrecy rules meaningless.