Categories: Courtroom Buzz
      Date: February 26, 2009
     Title: Defense Lawyer Assails "Overblown, Overreaching Prosecution"

Live from the Fumo trial: Defense lawyer tees off on the "venom and vitriol" of federal prosecutors as well as the "voodoo accounting" of the FBI's special agents

By Ralph Cipriano

Defense lawyer Eddie Jacobs tore into the prosecution in the Vince Fumo political corruption trial today, slamming the "venom and vitriol" of prosecutors, as well as the "voodoo accounting" methods of the FBI's special agents.

"This is an overblown, overreaching prosecution," Jacobs told the jury as he concluded a defiant day-and-a-half closing statement on behalf of Vince Fumo's co-defendant, Ruth Arnao. Jacobs said the government's case against Fumo and Arnao was riddled with reasonable doubt, and should have never gotten past the grand jury.

Jacobs began a day of fiery oratory by taking jurors back 19 weeks, to the prosecution's opening statement. He talked about how the prosecution told the jury two things that weren't true, namely that Vince Fumo's nonprofit, the Citizens Alliance for Better Neighborhoods, was not allowed to spend money for political purposes, and also, that the nonprofit was prohibited from spending money outside of Philadelphia.

Prosecutors have ripped the Citizens Alliance for expenditures such as a junket to Cuba, and an investment in a campaign to defeat a plan to build sand dunes at the Jersey Shore that would have blocked the view of beachfront property owners.

Jacobs went through the Citizens Alliance's charter as well as federal regulations governing nonprofits to show jurors that the prosecution was wrong about both claims. He said what made things worse was that the government had all the evidence he read to the jury "for five years."

But, Jacobs said, prosecutors and investigators were so fixated on the crusade against Fumo that they took a faulty case to the grand jury, where it's just "prosecutors and lay people." At the grand jury, proceedings are secret, and there's "no judge and defense lawyers" to protect the rights of the innocent, Jacobs said.

"No wonder they got the indictment, because I wasn't there to point out these documents," Jacobs told the jury. "Is the venom and vitriol for Sen. Fumo so overwhelming that they can't see these things? They're just plain wrong here."

Jacobs' client, Arnao, was the former executive director of the Citizens Alliance. Prosecutors have charged that Arnao was Fumo's enabler. She acted as a rubber stamp, prosecutors said, signing all the checks as Fumo allegedly looted the nonprofit, to spend money on power tools for himself, as well as shopping sprees at Sam's Club.

Jacobs fired back at the prosecution today, slamming the "voodoo accounting" of FBI agents assigned to the Fumo investigation, as well as the prosecution's "zeal to criminalize every blessed thing that Senator Fumo touches."

Specifically, Jacobs talked about the prosecution's charge that Fumo had stolen some $85,000 from the Citizens Alliance by borrowing construction equipment such as a bulldozer and a bobcat for use on his 100-acre farm outside Harrisburg.

Jacobs said the government's chart drawn up in 2004 relied on 1999 values for equipment that was in need of repair and was so old it wasn't even listed on depreciation guides.

Jacobs also savaged a government exhibit that charged Fumo with stealing $387,000 from the Citizens Alliance to buy himself and Arnao luxury vehicles such as a Cadillac Escalade and a Chevrolet Town and Country minvan with all the options.

The government exhibit omitted $100,000 worth of vehicles that the Citizens Alliance still owned, as well as $22,000 that the alliance had collected from the sale of two vehicles, Jacobs told the jury. The government exhibit, Jacobs said, also did not factor in depreciation on vehicles to arrive at the prosecution's figure of $387,000 allegedly stolen from the nonprofit.

Jacobs said the government didn't tell jurors the bottom line, that a nonprofit worth $20 million had owned 8 cars in 9 years that were driven by 15 people, including Fumo and Arnao.

That works out to about $21,000 a year that the Citizens Alliance spent on vehicles, and the Alliance usually owned just two vehicles per year, Jacobs said.

"We're getting crucified for two cars for 15 people," the defense lawyer lamented.

Jacobs's mantra to the jury was that there was both a rational and a radical explanation for the things that Citizens Alliance did, and that the government prosecutors always went for the radical explanation.

"We're not entitled to spend $21,000 a year on cars?" Jacobs said. "They're making a federal case out of it?"

He recounted how government prosecutors ripped Fumo and Arnao for ordering vehicles with all the options.

"We're commiting a crime if we get three-speed window wipers?"

"Maybe we should have gotten us a Hyundai instead of a Chevrolet," Jacobs said. "Because of the venom pent-up for Senator Fumo, even this becomes a federal crime."

While Jacobs was ripping the prosecution's 137-count case, jurors were attentive, and laughed at the lawyer's jokes. They definitely looked more awake then during the last day-and-a-half of the prosecution's two-and-a-half day closing statement.

Prosecutor Bob Zauzmer objected several times during Jacobs's oratory, but Judge Ronald L. Buckwalter overruled almost every objection.

Jacobs also attacked the prosecution for what he described as "the ultimate voodoo accounting injected into this case," namely the charge that Citizens Alliance had misused $63,836 out of a $295,000 state grant to buy vehicles for Senator Fumo.

Jacobs said the $63,836 included $31,250 that the grant specifically authorized the Citizens Alliance to spend on auto insurance. The defense lawyer said the money spent on auto insurance was clearly permissble under the rules of the grant, but that the prosecution made its charges anyway "to make you think we're really thieves."

Jacobs recounted for the jury how the defense had hired accountants to reconstruct the accounts at Citizens Alliance that included the allegedly misspent state grant money. He reminded the jury that defense accountants had testified that Citizens Alliance had deposited $198,454 into those same accounts, leaving a surplus of $134,421.

"To make us look like thieves," Jacobs said of the prosecution, "they violated every accounting principal known to man." 

Jacobs said when he confronted two FBI agents, both of whom were accountants, with the defense's findings, the FBI agents responded by saying that the defense accountants had overlooked another state grant.

So Jacobs recounted how he rehired his accountants to go through those Citizens Alliance accounts one more time, to include the other grant. After reconstructing all transactions, Jacobs said, the defense accountants came to the same conclusions --- that the government had overlooked $198,454 in deposits from Citizens Alliance, and that the accounts had ended up with a $134,421 surplus.

"You're the conscience of the community," Jacobs told the jurors. "Can you look me in the eye and say the FBI properly presented this to you?"

"You talk about a federal crime? This is one," Jacobs told the jury. "You talk about a fraud? This is one."

Jacobs also ripped prosecutors for taking Fumo to task for things that weren't against the law, such as lying to reporters. Even if it were true, Jacobs said, would Fumo be "the only politician in the history of the commonwealth to lie to a newspaper reporter?"

Jacobs concluded his rant against the prosecution by talking about the $63,000 in power tools and other goodies that the Citizens Alliance had given to Vince Fumo over a period of five or six years. That works out to less than the $16,000 annual salary that the lowest paid laborer makes at Citizens Alliance, Jacobs said.

Jacobs said it was another example of the prosecution seeing everything Fumo did as evil. He told the jurors how the government never informed them that under federal nonprofit law, fundraisers for nonprofits are allowed to pocket a portion of the monies that they raise. A typical percentage that nonprofit fundraisers collect, Jacobs told the jury, is 24 percent.

Now about that $17 million that Fumo got from PECO, on behalf of the Citizens Alliance. If you do the math, Jacobs said, 24 percent comes to more than $4 million.

Fumo was entitled to compensation because he was the organization's founder, main benefactor, and most effective fundraiser, Jacobs told the jury. Federal law also allows nonprofits to bestow gifts on benefactors, Jacobs said.

Jacobs said if the Citizens Alliance had known what a stink the government made over the power tools bestowed on Fumo, the nonprofit would have done things differently. And if it did, Jacobs told the jury, the defendants would have "missed the pleasure of your company for four and a half months, with an indictment hanging over our heads."

If the Citizens Alliance knew then what it knows now, Jacobs said, it would have made a public fuss about compensating Fumo every year with expensive but pefectly legal gifts.

While jurors smiled and laughed, Jacobs then went through a catalog of annual presents that Citizens Alliance could have dropped on Fumo. "And nobody would blink," Jacobs said.

The imaginary gifts began with a $25,000 gold Rolex watch. Next, Jacobs said, the Alliance could have spent $50,000 on a big party at a fancy hotel to honor Fumo, "and nobody would have blinked."

The Citizens Alliance could have also spent $15,000 to take out a full-page ad honoring Fumo in "his favorite newspaper, the Philadelphia Inquirer," Jacobs cracked. They could have spent $10,000 to send Fumo and his entire family on a junket to San Francisco. They could have donated $150,000 in Fumo's honor to the Fumo family library on South Broad Street, "and nobody would blink at it," Jacobs told the jury.

Instead, the Citizens Alliance decided to bestow $63,000 in power tools and other gifts on "a guy who doesn't want or need anything . . . and we're getting crucified for it."

Jacobs told the jury that the Citizens Alliance spent $400,000 on accountants who admitted on the witness stand that they didn't know the IRS rules for bestowing gifts on nonprofit benefactors. Jacobs went through the nonprofit's tax returns prepared by those accountants and pointed out ten errors, including reporting grants and allocations on the wrong line, as well as accounting fees.

The CPAs made all these mistakes, Jacobs said, "and they indict Ruth for those mistakes." Jacobs recounted how prosecutor Zauzmer had told the jury that the case did not turn on the actions of accountants, and that some of the accounting mistakes pointed out by the defense were "silly."

"You can also call it negligent," Jacobs said. "They (accountants) make a mistake and it's a mistake. We make a mistake, and it's a crime."

The case resumes at 10 a.m. Monday, for it's 20th week, when the final closing statement will be made to the jury by defense lawyer Dennis Cogan, on behalf of Vincent Fumo. When Cogan is finished, Prosecutor Zauzmer will get a chance to rebut the defense's closing statements. Then the case will finally be presented to the jury.

Judge Buckwalter suggested that the jury might get the case as early as next Tuesday. But he added, "Every promise I've made has not even been close," so he declined to make a firm prediction on when the jury would get the case.