Legislative panel continues its probe into former AG Kathleen Kane

HARRISBURG - A former top state prosecutor testified Monday that Kathleen G. Kane, as attorney general, thwarted an investigation involving a Scranton multimillionaire who later gave Kane a sizable campaign donation.

"I have an opinion that the investigation was interfered with, that it did not follow its natural course," Laurel Brandstetter, a former senior deputy attorney general, told a legislative panel.

Brandstetter delivered her account under oath to a committee still digging into Kane's tenure as attorney general, even though Kane stepped down in August following her felony conviction.

State Rep. Todd Stephens (R., Montgomery), who chairs the panel, says the investigation is worth continuing to develop a fuller picture of Kane's rocky 31/2 years as Pennsylvania's top law enforcement official.

A jury found Kane guilty of illegally leaking grand jury material and lying about it under oath. Kane was sentenced last month to 10 to 23 months behind bars, but is free pending appeals.

By Brandstetter's account, when she was a state prosecutor she met with the FBI and federal prosecutors to outline how Kane had quashed subpoenas issued to former casino magnate Louis DeNaples and William Conaboy, another political power from Kane's home turf in Northeastern Pennsylvania.

"I haven't experienced anything on this level in my 14 years of prosecuting cases," Brandstetter said. "I am still upset by it. . . . I think it's really wrong."

In an interview Monday, Kane's lawyer, Joshua D. Lock, rejected the accusation that Kane had improperly meddled in the casino investigation. He noted that federal authorities had not charged Kane with any wrongdoing in the matter. If Brandstetter had taken "umbrage" at her boss, Lock said, "it was an umbrage not shared by the FBI."

In other testimony Monday, a narcotics agent, Cynthia Pugh, said Kane asked her to appear on television, with her face disguised, to deny that she had been sexually harassed by Jonathan Duecker, a confidante whom Kane made chief of staff. The request came while Kane was facing a barrage of negative headlines about her decision to promote Duecker despite the accusations.

"She wanted me to say that I was not sexually harassed and that everything was fine and that we should all move on," Pugh said. She added: "The first thing on my mind was, 'OK, that's all a lie.' "

Chris Juba, the head of the Fraternal Order of Police lodge for the office's narcotics agents, testified that Kane promised to give his members a better labor agreement if the union, too, backed Duecker.

"I was disgusted," Juba said.

In her testimony, Brandstetter said that in 2013, Kane's first year in office, she was investigating whether a gambling hall once owned by DeNaples, Mount Airy Casino and Resort in the Poconos, had a spy inside the Gaming Control Board feeding confidential information.

The target of her probe, Donald Shiffer, a former lawyer with the gaming agency who became a top executive at Mount Airy for a period, has denied any wrongdoing.

Brandstetter, a veteran prosecutor of corruption cases, said she moved forward to interview DeNaples and Conaboy, but Kane quashed the subpoenas. Conaboy had helped Shiffer get his job at the gaming agency.

Brandstetter quit the Attorney General's Office the following year. She is now in private practice in Pittsburgh.

As a state prosecutor under Kane, she said, she felt that any investigation was at risk of being undermined by politics.

"I had the overwhelming sense that if I didn't find another job, I would be fired," she testified. "I can't understate how terrible it was working there. And I think it only got worse after I left."

Before departing, she leveled her accusation against Kane to the FBI and federal prosecutors in Harrisburg.

Dawn Mayko, spokesman for the U.S. Attorney's Office in Harrisburg, said Monday it would have no comment.

Brandstetter told the panel that she learned later, from an Inquirer article, that DeNaples, through one of his businesses, had given Kane a $25,000 campaign contribution several months after the subpoenas were dropped. Three months after banking the money, Kane returned it.

"I learned along with the public about that campaign contribution from that article," Brandstetter said. "I was shocked."

After opening his casino in 2007, DeNaples later turned over ownership to his daughter as part of a deal with prosecutors in Dauphin County. In return, they dropped charges that he had lied to the Gaming Control Board about his ties to two organized crime leaders.

cmccoy@phillynews.com215-854-4821@CraigRMcCoy

Karen Langley of the Harrisburg bureau contributed to this article.