News

December 27, 2009

Corruption County

By Terrie Morgan-Besecker tmorgan@timesleader.com
Law & Order Reporter
Terrie Morgan-Besecker on Facebook   |   @TLTerrieMorgan on Twitter

WILKES-BARRE – Luzerne County was just 26 days into 2009 when then-U.S. Attorney Martin Carlson stood before a room full of reporters in federal court in Scranton and dropped a bombshell.

Two county judges had betrayed the public trust by accepting millions of dollars in exchange for rulings that benefited juvenile detention centers owned by their one-time friend, Carlson announced.

It was shocking news that would only grow more shocking as the year progressed.

Michael Conahan and Mark Ciavarella were the first to be arrested on corruption charges. But it soon became clear: They would not be the last.

Eleven months and 23 people later, the corruption probe that brought down the former jurists is still in high gear.

Over the course of the year the U.S. Attorney’s Office, now headed by Dennis Pfannenschmidt, filed charges against a third county judge, seven school officials, five officials from Luzerne County or county-related offices, three area businessmen, two court employees, an attorney and a municipal employee.

Prosecutors added another high profile name to the list on Dec. 18 with the arrest of now-former Luzerne County commissioner Greg Skrepenak.

“The real story in Luzerne County is about a system of justice that has been totally corrupted,” said Frederick Martens, who formerly headed the defunct Pennsylvania Crime Commission, which investigated organized crime.

Juvie convictions overturned

The list of charges filed against the defendants in the various cases reads like a legal textbook: corrupt receipt of a reward for official action; extortion; embezzlement of public funds; destruction of evidence, intimidation of a witness, money laundering and racketeering are among the offenses alleged.

The impact of the arrests has reached far beyond those charged and the entities for which they worked.

The convictions of an estimated 6,000 juveniles who appeared before Ciavarella over a five-year period were overturned by the state Supreme Court based on the report of special master Arthur Grim, who determined Ciavarella violated the juveniles’ rights to a fair trial.

Hundred of juveniles who alleged they were wrongly incarcerated joined together to file several federal lawsuits. The scandal also prompted the state legislature to create a special panel to evaluate failings within the county’s juvenile justice system.

Other cases handled by Ciavarella and Conahan also came under scrutiny, including a $3.5 million verdict Ciavarella rendered in a defamation case.

The probe is also believed to have played a role in voters’ decision not to retain Judge Peter Paul Olszewski Jr. for a second term. For former Judge Ann Lokuta, it provided additional ammunition for her efforts to overturn the state Court of Judicial Discipline’s 2008 ruling that ousted her from office.

News of the probe also brought international notoriety to the county.

The ABC news program, “20-20,” aired a segment on the juvenile justice scandal in March. Numerous other publications, including some as far away as Europe, also profiled that aspect of the story.

Throughout it all, the remaining seven members of the depleted county bench struggled to keep up with the ever-burgeoning caseload and to restore confidence in the judicial system.

It’s not known if any more arrests are forthcoming, but one thing is for certain: the probe and its aftermath with continue well into 2010.

Of the 23 defendants, 19 have pleaded guilty. But only one – former Pittston Area School superintendent Ross Scarantino – has been sentenced.

Prosecutors and defense attorneys continue to prepare for the trial of Conahan and Ciavarella, which is not expected to start until near the end of the year.

As the probe continues, the public is left to ponder:

When will it all end?

Rumors began in 2008

Rumors of pending indictments against members of county government and the judiciary first began to circulate in 2008.

That June FBI agents seized records related to the placement of juveniles at the PA Child Care and Western PA Child Care juvenile detentions centers that were co-owned by Robert Powell, a powerful Butler Township attorney who had personal and financial ties to Conahan and Ciavarella.

Federal agents had been probing Conahan and Ciavarella’s financial records. They convinced Powell, a friend who frequently vacationed with the judges at a Florida condominium they owned, to wear a wire to record incriminating statements.

Powell maintains the judges extorted him into paying nearly $800,000, saying he was making a lot of money off his centers and had to “pay for the privilege.” His assistance, along with other evidence, led to the Jan. 26, 2009 plea agreement that called for the ex-judges to plead guilty to honest services fraud and tax evasion in exchange for 87-month prison sentences.

The deal fell apart in July, however, after U.S. District Judge Edwin Kosik refused to accept the plea, saying he did not believe the men had demonstrated they accepted responsibility for their crimes.

Two months later, federal authorities filed the 48-count indictment charging them with racketeering, extortion, bribery and numerous other offenses.

Although Powell maintained he was a victim, he did not escape unscathed. He and Robert Mericle, the prominent real estate developer who built the two juvenile centers, were charged with withholding information on a crime for failing to report the alleged wrongdoing of Ciavarella and Conahan.

They were not the only people to be ensnared in the juvenile justice scandal, however.

In February, Sandra Brulo, who once served as chief juvenile probation officer, was charged with altering the record of a juvenile to insulate herself from a federal lawsuit that alleged the youth was wrongly incarcerated.

The arrests of Conahan, Ciavarella, Powell, Mericle and Brulo brought that chapter of the corruption probe one step closer to resolution. But another one was just beginning.

School officials targeted

Nepotism has long been viewed as a way of life in Luzerne County. It wasn’t what you knew, but who you knew, that determined who got a job, locals believe.

That was particularly true in area school districts, whose rosters are filled with family and friends of area school directors. There also were rampant rumors of people paying to get teaching jobs.

On April 21 federal authorities revealed those rumors to be all too true.

That was the day Brian Dunn, a Wilkes-Barre Area school director, was charged with accepting money for helping a teacher obtain a job and a businessman to obtain a contract within the district.

Prosecutors quickly expanded the probe. Over the next several months, James Height and Frank Pizzella, who also served on the Wilkes-Barre Area School Board, were charged.

They also turned their sights on other school districts, leading to charges against Pittston Area superintendent Scarantino and Joseph Oliveri, a school director. They were followed by the arrests of Anthony Spinozza, a Hanover Area board member, and Jeff Piazza, an employee at the Wilkes-Barre Career and Technical Center.

Most of the school officials were charged with accepting money or other items of value in exchange for exerting influence in the awarding of contracts in their districts.

Attorney Peter Vaira, who formerly served as U.S. Attorney for the Eastern District of Pennsylvania, credited the U.S. Attorney’s Office for the quick action it took in filing charges against others outside the courthouse dome.

Prosecutors have revealed little information regarding how the probe developed. But Vaira said it’s obvious they had some very good sources.

“They started with the judges, but I’m sure the prosecutors were working on these others at the same time. It’s a natural progression,” he said. “They had people giving them information, telling them where to go. Once they did that, they established focal points and the thing moved much faster.”

Those involved in the crimes were no match for federal investigators, Vaira said.

“These are not master criminals. They’re average citizens,” Vaira said. “It’s not like you’re battling the Mafia where you go down to the waterfront and nobody will tell you anything. Once they started hitting soft spots, people realized they were in trouble and started caving in.”

The arrests have focused on officials who took the payoffs. To date, only one of the contractors – Richard Emanski, the owner of King Glass and Paint in Swoyersville, has been charged. He’s admitted he installed free carpeting in the home of a school official.

Another of the defendants, Pittston businessman Barton Weidlich, is accused of threatening a witness who was cooperating with prosecutors. Weidlich owns a warehouse that was raided by agents seeking records from Luzerne County.

Other than Emanski, the U.S. Attorney’s Office has not publicly identified the other persons who paid the bribes. It’s possible the public will never know who they are if charges are not brought against them, said William Costopoulos, an attorney from Lemoyne who specializes in federal law.

Costopoulos said prosecutors are under no obligation to identify the bribe payers. Unless their names are contained in sealed documents that are later unsealed or come out during a court hearing, their identity may never be known.

“It’s no different than a confidential informant who is not prosecuted for drug possession who makes controlled buys for the government,” Costopoulos said. “If that person is not charged, then you don’t know.”

Allegations of bribes and kickbacks did not stop with school districts. Federal agents delved into other public offices as well, leading to charges against several public officials with the county or county-related offices.

Doug Richards, who served as Luzerne County’s director of human resources, and Bill Brace, who retired as deputy chief clerk, each were charged with taking bribes in exchange for influencing the awarding of county contracts.

Allen Bellas, head of the Luzerne County Redevelopment Authority and William Maguire and Gerald Bonner, members of the Luzerne County Housing Authority, also were charged with taking part in bribery schemes that benefited persons who did business with their agencies.

For other persons charged in the corruption probe the illegally-obtained rewards were more direct.

Former Court administrator William Sharkey was charged in February with pilfering more than $70,000 in illegal gambling proceeds that were supposed to be turned over to the county treasurer’s office.

In Hanover Township, Karen Holly, an employee of the Wyoming Valley Sanitary Authority, was charged with stealing several thousand dollars paid by ratepayers.

All the while federal authorities continued to probe the finances of other prominent public officials. By the end of the year the trail led them to two more high-ranking officials within the court system and county.

A third judge under scrutiny

Word that a third Luzerne County judge had come under scrutiny first heated up in June, when Tom Marino, tipstaff for Judge Michael Toole, testified before a federal grand jury.

His testimony came three months after it was revealed federal investigators had begun to probe allegations of biased rulings being entered in court cases involving uninsured motorist insurance disputes.

That probe led to directly to Toole.

In September, Toole signed a plea agreement, admitting he improperly intervened to appoint an attorney as a neutral arbitrator in an uninsured motorist arbitration case. He also admitted to failing to report on his income taxes money he received for referring a case to another attorney.

Toole served on the bench for another two months before federal prosecutors filed the charges against him. The decision to allow him to continue hearing cases was roundly criticized by court and legal officials.

Former commissioner Greg Skrepenak would later say the criticism of how the Toole case was handled impacted the U.S. Attorney’s Office decision to charge him in December as opposed to after the start of the new year.

Skrepenak has admitted he accepted money as a reward for supporting a real estate developer’s acceptance into a tax incentive program. County commissioners were in the midst of deciding the 2010 budget. Skrepenak agreed it would not be proper for him to vote on the budget, knowing charges were pending against him, he and his attorney, Peter Moses, said.

Dealing with the aftermath

As each of the individual cases works its way through the court system, county and judicial officials are left to deal with the aftermath.

The judicial system has perhaps borne the biggest impact, both in terms of the loss of judges and increased workload brought on by the actions of Conahan and Ciavarella.

District Attorney and Public Defender’s offices were forced to defend their handling of juvenile cases after the Juvenile Law Center, an advocacy group, filed a petition seeking to vacate the convictions of all juveniles who appeared before Ciavarella from 2003 to 2008, the time frame in which he allegedly accepted money from Powell and Mericle.

The state Supreme Court granted the JLC’s petition in October. District Attorney Jacqueline Musto Carroll is now preparing to retry roughly 50 cases involving juveniles who are still in placement or who owe fines or restitution.

For others, the legal battles related to ruling the judges issued continue to wage on.

The Citizens’ Voice newspaper is preparing to defend itself in a new trial that was ordered after the $3.5 million verdict Ciavarella entered in the defamation case filed by area businessman Thomas Joseph was overturned.

Testimony at a hearing held in July before Lehigh County judge William Platt, who was appointed to examine the case, revealed Conahan met regularly with reputed mobster William “Billy” D’Elia for breakfast. It was alleged the men routinely discussed fixing court cases, including the Joseph case.

Platt ruled there was evidence that the case was tainted and recommended the verdict be tossed. The state Supreme Court agreed and sent the case back to county court for a new trial.

State appellate courts also intervened in several other cases handled by Conahan or Ciavarella.

In April, the state Supreme Court ordered a case in which Conahan threw out a jury verdict and awarded a woman $1 million be returned to county court to determine if a new trial should be granted.

The court was following up on a previous ruling issued by the state Superior Court, which said it could find no justification for Conahan’s decision to override the jury’s verdict in the case of Linda Ferris vs. Asit Patel.

In August, the court again intervened in a case, directing a county judge to hold a hearing to determine if Ciavarella was biased in his handling of a land dispute case involving Emil Malinowski against First National Community Bank. Conahan had served as a director on FNCB’s board of directors.

Attorneys for a Hazleton law firm are also continuing their efforts to have a $3.4 million verdict entered in a case of Bernadette Slusser overturned. The case was tried by attorneys in Powell’s firm before Ciavarella, who failed to disclose he had financial ties to Powell.

The Supreme Court also interceded in former Judge Ann Lokuta’s case. In March, the court ordered the Court of Judicial Discipline, which removed Lokuta from office, to re-examine the case in light of new evidence that was revealed from the corruption charges against Conahan and Ciavarella.

Lokuta has long maintained she was the victim of a conspiracy orchestrated by the two ex-judges to oust her because she was a whistleblower. The Court of Judicial Discipline held hearings on the new evidence, but has not yet issued a decision.

As the county judiciary continues to deal with challenges, Judge Peter Paul Olszewski Jr. is preparing to return to private practice.

Olszewski lost his bid for retention in November. It’s believed voter backlash from the corruption probe, coupled with a controversial photograph that showed him posing with a convicted drug dealer at the Florida condominium owned by Conahan and Ciavarella, led to his ouster.

The county court system also continues to struggle to keep current with its case load given the departure of Conahan, Ciavarella, Toole and Lokuta.

Two new judges – William Amesbury and Tina Polachek Gartley – will join the bench in January, but the court still remains short two jurists. Gov. Ed Rendell has nominated attorney Joseph Cosgrove to temporarily fill in one of those spots. Rendell is expected to nominate a second temporary replacement some time in 2010.

And the public still awaits the recommendations of the Interbranch Commission on Juvenile Justice, the committee created to evaluate what went wrong in Luzerne County. The committee has held several hearings and will issue its report in May.

As the new year begins, speculation remains strong that additional public officials will be caught up in the probe.

Federal authorities are known to have seized records from several other public entities, including the Wilkes-Barre/Scranton International Airport, Luzerne County Community College and the Wyoming Valley West and Crestwood school districts. To date, no persons from those entities have been charged.

Prosecutors are also believed to be continuing their investigation into the uninsured motorist arbitration cases in Luzerne County.

Martens, the former head of the Pennsylvania Crime Commission, said he expects the U.S. Attorney’s Office will remain active in Luzerne County for a long time to come.

The county has long had a reputation as a place where one had to “pay to play,” Martens said. He believes the arrests so far are just “the tip of the iceberg.”

“The sad part of it is that people who are learning about it are actually shocked. Normal, everyday people knew this was going on for the last 50 years. Now all of a sudden everyone is shocked that 23 people got indicted?” Martens said. “You could work these cases for years. Every time you turn over one rock, another seven lizards crawl out.”

Terrie Morgan-Besecker, a Times Leader staff writer, may be reached at 570-829-7179.

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