FBI Probe

Pay-to-play defense: No 'quid pro quo'

Defense asks federal judge to toss indictments

PHILADELPHIA, Pa. - Defense attorneys in the alleged Allentown pay-to-play scheme argued in federal court that prosecutors failed to show over and over again that their clients agreed to make political donations in exchange for city contracts.

“The grand jury was not just misinformed, but uniformed,” defense attorney Megan Scheib argued.

But federal prosecutor Anthony Wzorek countered that he’s under no obligation to make his case to the grand jury and that pretrial arguments weren’t the place for the defense to make what he deemed closing arguments.

Federal Judge Juan Sanchez heard arguments Tuesday in the pay-for-play case against Allentown Mayor Ed Pawlowski, who’s accused of trading city work for campaign contributions. Business consultant James Hickey and attorney Scott Allinson are accused of funneling donations to Pawlowski in exchange for some of that business.

The judge heard arguments from Pawlowski defense attorney Jack McMahon, who asked that the indictment against his client be dismissed. Scheib, Allinson’s attorney, and Hickey’s attorney, Ron Goldman, also argued that the bribery indictments against their clients be dismissed. They also asked that their trials be severed from Pawlowski’s.

Sanchez did not rule Tuesday on the motions. He did agree, however, to a gag order at the request of the federal prosecutor, preventing attorneys from publicly discussing the trial that it set to start on Jan. 16.

McMahon earlier this month filed a motion asking the courts to dismiss the government’s case against Pawlowski, arguing prosecutors repeatedly provided the grand jury with false information to secure an indictment.

On Tuesday, McMahon suggested prosecutors engaged in a “reckless misleading of the grand jury.” The prosecution’s key witness, Mike Fleck, did not testify before the grand jury, despite being a close confidant of the mayor and former campaign manager for Pawlowski’s U.S. Senate campaign, McMahon argued.

In one taped conversation, Fleck “opened his soul” and told others that Pawlowski “has never done anything wrong” and that he was going to set him up, according to McMahon. Prosecutors failed time and again to provide evidence that the mayor was selling city work in exchange for donations, he said.

The judge questioned whether McMahon was essentially challenging the entire grand jury system. The defense appeared to be arguing the evidence that was presented to the grand jury, which should more appropriately be done at trial, Sanchez said.

But McMahon countered that prosecutors failed to even provide grand jurors with evidence that a crime may have occurred.

He cited the case Bethlehem businessman Ramzi Haddad, who pleaded guilty to bribery. McMahon argued Haddad had a zoning issue he needed to address, so Pawlowski told his former managing director “to look into it” and that’s where the mayor’s involvement stopped, calling it "basic political constituent services."

The mayor asked a design firm for a donation, a request that was rejected, McMahon said. The firm, however, still received a contract to design the new Cedar Beach pool, he said.

“This is a pay-to-play allegation,” McMahon said. “They didn’t pay.”

McMahon argued several times that the indictment failed in many cases to provide any evidence or testimony that supported alleged crimes.

“You could say someone killed somebody, but not provide any testimony,” McMahon said. “Your putting it in an indictment doesn’t make it true.”

Scheib argued that legal precedent dictates prosecutors must show a “clear, unambiguous” link between political donations and an official act from an elected official. And the modern political system allows for professionals to donate to politicians, who support their positions, she told the judge.

Prosecutors have made only vague references to legal work being sent to Allinson’s firm, and Allinson was even heard on tape complaining that a $25,000 donation was a “big ask” with no additional work coming the firm’s way, Scheib said.

McMahon made a similar argument about a recording involving the head of an engineering firm, who has pleaded guilty to conspiracy. McMahon said he’s heard complaining that he gets no “bang for his buck” from his contributions, essentially bemoaning that Allentown doesn’t “pay to play.”

While careful to note she wasn’t challenging the grand jury system, Scheib also argued that prosecutors “maneuvered the facts” in order to secure an indictment against Allinson. It’s not a question of the credibility of the evidence, but rather a question of where did it come from, Scheib argued.

The president of Allinson’s law firm was not brought before the grand jury, and a video in which Allinson allegedly discussed a bribe not played, Scheib said. A grand jury’s job is to evaluate evidence, she argued, but jurors weren’t given a chance to do that.

Wzorek summarily rejected any request to dismiss the indictments, arguing in each case that Tuesday’s hearing wasn’t the forum to adjudicate the weight or sufficiency of the evidence. He also rejected Scheib’s narrow interpretation of a quid pro quo or a promise of city contracts in exchange for campaign donations.

Wzorek alleged that Allinson was aware of other law firms that received more work than his firm, but failed to donate enough to Pawlowski and acknowledged that his firm needed to cobble together enough money to keep the work flowing.

And he argued that it’s irrelevant whether an elected official acts on a promise to trade contracts for donations. It’s enough to agree to take money in the expectation that the favor will be returned, he said.

Pawlowski has staunchly maintained his innocence and refused to drop out of this year’s mayoral race. He ultimately won his fourth term in office, staving off Republican Nat Hyman and a write-in challenge from council President Ray O’Connell.

The FBI’s investigation into City Hall first became public in July 2015, when agents served a subpoena and searched the controller’s office, mayor’s office, information technology department and other city offices. The city solicitor’s office issued a statement at the time indicating officials were unaware of the reasons behind the search, but believed it may have been linked to Allentown’s contracting process.

Haddad was the first to plead guilty to bribery charges only about two months after the raid. He was also the first person to link Pawlowski to the investigation.

Haddad admitted in court to donating food, drinks and money to the campaigns of Public Official #3 to get a “fair shake” on his building projects in Allentown. He told federal investigators he feared the official would interfere or block his projects.

Pawlowski was never named until his indictment, but he was the only person to match the description of Public Official #3, which prosecutors repeatedly referenced.

Former assistant city Solicitor Dale Wiles pleaded guilty in November 2015 to rigging the bidding process in favor of a Pawlowski campaign donor. Prosecutors alleged that Wiles formed a review committee that included two other city officials to evaluate proposals to collect Allentown’s delinquent real estate taxes.

In January 2016, Garret Strathearn, Allentown’s former finance director, also pleaded guilty to conspiracy in connection to the alleged bid rigging of the delinquent real estate tax collection contract. Prosecutors said Strathearn told Wiles that the bidding process was being rigged under the direction of Public Official #3, who was dissatisfied with the campaign contributions coming in from the city’s then delinquent tax collector.

Mary Ellen Koval in January 2016 resigned her post as Allentown’s elected controller about two months after winning her second term in office. Then she appeared in federal court days after Strathearn and pleaded guilty to her role in the FBI probe. She pleaded guilty to conspiracy.

In April 2016, Fleck pleaded guilty to conspiracy to commit extortion and bribery. Fleck is also linked to a probe into former Reading Mayor Vaughn Spencer, who has also been indicted in a pay-to-play scheme in Reading.

Prosecutors allege Fleck worked in concert with others to extort campaign contributions for Pawlowski’s aborted U.S. Senate run. Fleck reportedly leaned on the law firm awarded the delinquent tax collection contract to donate toward Pawlowski’s campaign and assure that associates did the same. Prosecutors said he made it clear that the firm’s ability to land future contracts was in peril.

Matthew McTish pleaded to conspiracy to commit bribery after prosecutors accused him of funneling thousands in campaign contributions so his firm, McTish, Kunkel & Associates, would be considered for municipal contracts in Allentown and Reading.

In March, former city Managing Director Francis Dougherty pleaded guilty to manipulating the bidding process to steer city contracts toward companies willing to donate to Pawlowski’s state and federal campaigns.

Find all the information related to Pawlowski's alleged pay-to-play scheme on 69 News' Timeline of FBI probe in Allentown.

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