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Judge dismisses all charges in Chesco businessman's bribery case

HARRISBURG -- In an extraordinary decision midway through the trial, a federal judge on Monday dismissed the corruption case against Chester County businessman Richard Ireland, saying prosecutors had failed to prove he tried to bribe former state Treasurer Rob McCord with campaign contributions.

While suggesting the case offered a stark example of Pennsylvania's lax campaign finance laws, U.S. District Judge John E. Jones III nonetheless ruled that federal prosecutors fell short of meeting the high bar required to criminalize campaign donations, which he called a form of "political expression … as old as this nation."

To prove a crime, Jones said, the government would have had to show there was an explicit agreement between the two men to swap donations for state contracts.

"No reasonable jury could find that any explicit or implicit quid pro quos took place between Mr. Ireland and Mr. McCord," the judge told a shocked courtroom. He added: "This is a tough call, but it is a call that has to be made."

The ruling, which cannot be appealed, was a striking blow to federal authorities who have led a long-running pay-to-play investigation into lobbying and other political activity in Harrisburg, one that held out the possibility of more indictments.

For McCord, the decision cast an even darker shadow over an already uncertain future.

The trial was the first to feature him as a prosecution witness.  He had become a government cooperator only after the FBI confronted him with evidence gathered in an investigation in which the treasurer was recorded by another Democratic power broker-turned-secret informant, John Estey, a longtime top aide to former Gov. Ed Rendell.

McCord's turn as the star witness at Ireland's trial was widely expected to help him win leniency at his own sentencing. But it was his testimony, Jones said, that helped doom the government's case against Ireland.

As Jones announced the ruling in the courtroom, Ireland's attorney, Reid Weingarten, dropped his head and smiled. Family and friends flocked to shake Ireland's hand.

"It's unusual," Weingarten later said, "but in this instance, it's right on."

Assistant U.S. Attorney Michael Consiglio, who tried the case along with Assistant U.S. Attorney William Houser, declined to comment.

Bruce D. Brandler, the U.S. attorney for the Middle District of Pennsylvania, said he was "extremely disappointed," but he would not say what, if anything, his office would try to do.

"We respect the judge's decision although we disagree with it," Brandler said. "We believe this was a righteous case that needed to be brought, and that hopefully, despite the result, it serves a salutary purpose in terms of revealing the relationships that go on between public officials and campaign contributions relating to official acts."

McCord pleaded guilty two years ago to attempted extortion after being caught strong-arming donations from campaign contributors, including some who had state contracts. He let agents secretly record his conversations with others.

Among them was Ireland, now 80, who lives on a sprawling horse farm outside West Chester and made millions as a middleman brokering deals between government agencies and potential investors of public funds. Prosecutors alleged he sought to bribe McCord with more than $500,000 in campaign donations.

But during his three days on the stand, McCord provided such lukewarm support for the government's case that prosecutors grew increasingly short with him, almost treating him as a hostile witness.

Ireland's lawyer noted in a motion filed last week that McCord repeatedly testified that he did not believe he and Ireland did anything illegal – at least until prosecutors convinced him otherwise.

"It is true, is it not, that in 2008, you never believed yourself to be in a bribery conspiracy with Dick Ireland? Correct?" Weingarten had asked him during cross-examination.

McCord replied: "That's correct."

Jones noted in his ruling that McCord said several times on the witness stand that he did not believe any of his conversations with Ireland constituted an explicit agreement to trade money for contracts.

"Conspicuously absent from Mr. McCord's testimony was any allusion whatsoever to Mr. Ireland asking for treasury contracts in exchange for campaign contributions to Mr. McCord," Jones said.

McCord's testimony was not the only evidence for prosecutors. At trial, they showed jurors that Ireland had handed McCord a written sheet in which he listed campaign contributions as simply another business expense, along with "overhead" and taxes.

The government also played tapes secretly of the men's conversations. In one, McCord asks for a $100,000 campaign contribution and Ireland replies:

"Well, let's work on it. You've been a great friend. I'm with you a hundred percent. And, you know ... like we tell everybody, we're on Broad Street."

McCord replied: "Two-way street."

There are no limits on individual campaign donations in Pennsylvania.

In another tape played by prosecutors, Ireland also speculated about whether McCord's personal financial problems would be helped "if we put you on the payroll after you left Treasury."

In their motion seeking dismissal, Ireland's lawyer dismissed that comment as a "half-hearted" remark that came well after Ireland's firms had won many contracts.

The prosecutors also argued that Ireland had surreptitiously funneled $150,000 in campaign donations to McCord from executives of his firm for gifts that were really from him. They said he even used two charities – a food bank and program to fight cancer – as cut-outs to hide his secret campaign gifts.  The defense had argued these money-laundering charges had no merit if the main corruption case collapsed.

The judge apparently agreed, a conclusion that elated Ireland's supporters.

"We knew dad played by the rules, but the judge's verdict really gratified us," said his son, Tim Ireland. "It's a complete vindication."

If or how the decision affects other pending corruption cases in Harrisburg is unclear.

Former state Treasurer Barbara Hafer is scheduled to go on trial in June.  She is charged with lying to the FBI in denying that was given a $675,000 consultant's contract by Ireland after leaving office in 2004 – the very sort of arrangement that figured in the McCord trial.