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Pennsylvania sting scouted private liquor store sites

| Thursday, April 17, 2014, 11:15 p.m.

PHILADELPHIA — A Trinidad liquor producer sought to sell rum in Pennsylvania's state-owned booze stores. Another company, thinking lawmakers might privatize the state stores, wanted to secure private retail licenses.

These fictitious entities were represented by an undercover informant posing as their lobbyist. Tyron B. Ali intended to get legislators to discuss properties in their districts that might become locations for private liquor stores. Investigators wanted to emphasize “personal gain and advancement,” says an internal memo the Tribune-Review obtained.

It was one of many cover stories Ali, a former lobbyist, needed to expand his sphere of influence and tap into the vast private market for liquor, wine and possibly beer sales — if privatization happened, according to the memo establishing guidelines for him from his law enforcement handlers.

In the sting operation, Ali would wear a body wire and video recording device to document corrupt transactions. The sting did not target legislators; it was meant to uncover corrupt practices in grants and nonprofits throughout state government from 2010 through 2012, sources familiar with the investigation said.

Republican Gov. Tom Corbett's proposal to privatize the state store system has stalled over the past two years. A scaled-back plan to expand private sales is pending in the Legislature before its July 1 recess.

The aborted sting recorded four Philadelphia Democratic lawmakers taking cash. Attorney General Kathleen Kane's decision not to prosecute the case, contending it was a rogue operation with a sweetheart deal for Ali, a former day care operator charged with fraud, has heightened legislative activity to reform General Assembly rules.

Kane argued that investigators and Ali had no underlying reason to offer the legislators cash and may have targeted black Democrats, even though his contacts included almost an equal number of blacks and whites and extended to Republican legislators and lobbyists.

Claude Thomas, a black agent who oversaw the case, has said no one ever suggested or ordered him to target blacks and he would not have done so.

“The notion of a racially motivated case seems a little far-fetched, given the breadth of (Ali's) contacts,” said J. Wesley Leckrone, political science professor at Widener University in Chester. “The Philadelphia legislators were a microcosm of what he was dealing with.”

The guidelines for Ali's operation suggest prosecutors had a plan for going after corruption in state grants and contracts.

Asked about the guidelines, Kane's office said it “cannot confirm or deny these claims, but they do not refute or even address the flaws we have enumerated.”

The general strategy for Ali, a Trinidad native, was “realism,” the guidelines say.

In one cover story, he would represent a day care and after-school care center. This would be a public-private partnership seeking grants through the state's departments of Public Welfare, Education, and Community and Economic Development. The backdrop for his pitch to Philadelphia lawmakers to help obtain grants: a 2011 state budget crisis.

“Specifically, the election of Governor Corbett and Republican majorities in the House and Senate, as well as the state budget crisis, will mean far more limited resources available for Philadelphia, and available in general,” the memo says. Ali was to seek lawmakers' suggestions on “how to overcome this reality.”

Ali knew the operation of day care centers. He had headed one in Philadelphia before prosecutors accused him of defrauding the state Department of Education of $430,000 in tax money. In 2009, he was arrested on 2,088 charges.

Kane dismissed those charges last year under an agreement arranged by former chief deputy Frank Fina.

When the sting became public last month, Kane blamed Fina for dismissing the charges, without disclosing that she gave final approval. She later said she had no choice because Fina effectively signed a contract with Ali. That undermined Ali's credibility, she said.

The pitch to get grants for day care never took off, sources say.

The liquor divestiture shtick did gain Ali some traction in his goal to become known as a guy with cash available for the asking.

Sources say Thomas closely monitored and logged Ali's expenses. Thomas withdrew cash for Ali's use. The tab over three years totaled $91,000, including $22,000 in cash payoffs.

Though Kane criticized more than $32,000 in expenses without receipts as “a troubling amount of unsubstantiated expenses,” the office knew how much money Ali spent and where, sources said. He could not use a credit card, and he did spend freely in order to attract lawmakers' and lobbyists' interests.

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

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