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Informant in closed corruption case spent freely, AG says

| Wednesday, April 9, 2014, 11:27 p.m.

HARRISBURG — An undercover informant in a failed legislative sting paid for cigars, booze, high-end dinners, had a “safe house” in nearby Steelton and ran up tabs at two of the capital city's top hotels, according to a report by Attorney General Kathleen Kane's office.

Overall, the internal report Kane ordered last month found $91,056 in expenses for informant Tyron B. Ali, who recorded his conversations with four Philadelphia Democratic legislators to whom he allegedly handed cash while posing as a lobbyist. Kane declined to prosecute last year, saying the case had substantial legal flaws.

The money spent includes $22,100 in “payments to suspects,” the report said.

The report, obtained by the Tribune-Review, found $32,600 in expenses without receipts. Ali's attorney, Robert Levant, declined comment.

“The troubling amount of unsubstantiated expenses in violation of office protocols raises new questions about the poor management of this case,” said J.J. Abbott, Kane's spokesman.

The report's release occurs as the state's newspapers await a decision by Dauphin County President Judge Todd Hoover about releasing sealed court documents in a criminal case against Ali, which Kane dismissed. The Tribune-Review last week asked the judge to open the records.

Kane ordered the report shortly after the Philadelphia Inquirer in mid-March published a story about the sting, naming Reps. Ronald Waters, Vanessa Brown, Louise Bishop and Michelle Brownlee. Their offices have declined comment. Ali wore a wire and made recordings in 2010, 2011 and 2012.

The investigation began under Gov. Tom Corbett, the former attorney general, who has declined to comment through an aide. It continued through 2012 under former Attorney General Linda Kelly, Corbett's appointee after he became governor in 2011.

The report found Ali had no receipts for 43 percent of expenses.

While trying to impress lawmakers and political movers and shakers, Ali bought a $119 shirt, a $60 bow tie, a $55 silk handkerchief, tickets to basketball games, and $1,474 worth of cigars, according to Kane's office. An agent would cash checks and give cash to Ali. The agent and the informant would sign separate forms to account for the money.

Told the expenses included alcohol and food costing $8,351 — including meals at the Continental and the Palm in Philadelphia in 2011 — former Acting Attorney General Walter Cohen said Ali “has good taste in restaurants and got a tremendous deal for someone who had faced years of imprisonment on charges of theft of $430,000.”

The former head of a day care center, Ali was charged with fraud in 2009 for allegedly overbilling the state Department of Education. Kane dismissed 2,088 counts against him, saying she had no choice because of an extremely lenient cooperation agreement signed by former Chief Deputy Frank Fina shortly after her November 2012 election. The case had been dormant for nine months before she assumed office, Kane said. Fina declined to comment.

Daniel Feldman, professor of public management at John Jay College of Criminal Justice in New York City, said there's no easy way to weigh the costs of public corruption investigations. Legislators essentially serve as the “board of directors” of a state. In Pennsylvania, they oversee a $28 billion state budget.

Although lawmakers can influence a relatively small portion of state spending, corrupt legislators theoretically could cost taxpayers substantial amounts of money, said Feldman, co-author of “The Art of the Watchdog,” on fighting fraud and corruption in government.

Corruption often is cyclical, Feldman said. A wave of corruption sometimes prompts citizen outrage and reform, he said. If public officials aren't charged, “outrage is replaced with cynicism” and there's “no genesis for reform.”

It's valid to apply a cost analysis to potential public corruption cases, Cohen said. In his view, a $430,000 fraud and some of Ali's expenses don't stack up well against $22,400 in payments to public officials.

The attorney general's office spent $12,600 to rent a so-called “safe house” for Ali while spending $6,778 at the Hilton and Crown Plaza. Of those hotel bills, $3,967.24 was spent after May 2011, when the safe house was secured, the office said.

Ali spent $2,052 for eight items of jewelry. The Inquirer reported that an ex-traffic court judge, Thomasine Tines, acknowledged receiving a $2,000 bracelet from Ali. It was not clear whether the $2,052 expenditure included that bracelet.

The last expense by Ali was in April 2012 until an isolated $15.79 expense in December 2012.

“This confirms OAG early statements that the investigation was stalled and dormant by the time the current (administration) took office,” the report said.

Brad Bumsted is Trib Total Media's state Capitol reporter. Reach him at 717-787- 1405 or bbumsted@tribweb.com.

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