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By Jerry Lynott jlynott@timesleader.com
Business Writer
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SCRANTON – Michael Conahan wanted money, and he made it known to Robert Powell on Christmas Eve 2001, in what federal authorities said was the beginning of a $2.8 million kickback scheme connected to the closing of one juvenile detention center, the opening of others and filling them with young offenders.

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The date was the earliest mention of the scheme’s creation and was among the many details contained in a court document filed Tuesday by the U.S. Attorney’s Office against former Luzerne County judges Conahan and Mark A. Ciavarella.

Conahan and Powell traveled to the site in Pittston Township where PA Child Care, a company formerly co-owned by Powell, would build a juvenile detention center, according to the court document.

“During this visit, Conahan indicated to Powell that Ciavarella was going to have to be compensated in connection with the facility,” the document said.

But the compensation would be for Conahan and Ciavarella “in exchange for Conahan’s assistance in closing the county-run detention facility and in exchange for Ciavarella making sure that the facility was kept full of juvenile offenders.”

The payments were at the heart of charges filed against the former judges; first in plea agreements with the pair, but later contained in a 40-count indictment against them after their pleas were rejected by a federal judge last year.

Late last month Conahan pleaded guilty to a single count of racketeering, severing his case from Ciavarella who challenged the charges and sought to bar evidence from his upcoming trial.

The prosecution’s filing was in response to Ciavarella’s pre-trial motions.

The document contained new information that detailed the indictment and revealed secretly recorded conversations Powell had with Conahan and Ciavarella about how they would tell the same story to investigators.

Powell, a Butler Township attorney caught up in the ongoing public corruption probe in the county, cooperated in the investigation of the former judges and entered a guilty plea to concealing their crimes.

He agreed to wear a recording device and met six times with Conahan and Ciavarella between July 21 and Sept. 4, 2008.

In one meeting Conahan attempted to calm a purportedly panicky Powell worried about a possible lawsuit by Gregory Zappala, his former partner in the juvenile detention centers owned by PA Child Care and Western PA Child Care.

“Okay,” said Conahan. “Let me tell you something. If you want to check me, I’m not wearing a wire.”

Powell responded, “Neither am I.”

The conversations were reviewed and edited by a special team assembled by the U.S. Attorney’s Office to ensure the recordings could be used in court and did not infringe on the rights of the former judges.

The excerpts refer to an unnamed female intermediary from Powell’s law office who acted as a courier delivering FedEx boxes of cash payments to Conahan.

The money was in addition to the checks and wire transfers made by Powell and Robert Mericle, who built the detention centers in Pittston Township and Butler County and paid more than $1 million in referral fees to the former judges.

Mericle, a major real estate developer in Northeastern Pennsylvania, also pleaded guilty to concealing the crimes of the former judges and is awaiting sentencing like Powell.

Conahan and Ciavarella failed to declare any of the payments as income and created false records to disguise the payments, federal authorities said.

Conahan lamented Mericle’s dealing with Zappala about the payments, according to one recorded conversation.

“If Rob Mericle had never gone to him, we wouldn’t have this problem. It would never have come up,” said Conahan.

Mericle testified before a grand jury investigating the former judges and Powell somehow learned of it, saying Mericle’s testimony “is that I was the grand orchestrator of everything.”

Ciavarella spoke up, “ Well I guarantee you, Bobby Powell, that will not be the testimony comes out of my mouth because I’m gonna tell that f------ grand jury exactly how that deal came down. You had nothing to do with it (sic) He had nothing to do with it. I had nothing to do with it, other than Rob Mericle coming to me and saying want (sic) to do this for you. That’s how that deal came down.”