Kids for Cash Page 16
Mericle returned to his office, checked the three transactions, and confirmed the payments had gone to Powell. As he was about to leave and return to Ciavarella’s chambers, he was intercepted by his secretary, who told him there were people waiting outside to meet him. They were agents of the Internal Revenue Service, who questioned him about the $2.1 million in payments. He said they were intended for Powell. He lied to the agents because he didn’t see a choice. “I didn’t want to be the person to lay Mark out,” he said later. Three weeks later, Powell’s wife answered a knock at the door. She found IRS agents with a subpoena. “May we come in?” they asked.
Meanwhile, Ciavarella’s long-standing concerns about Conahan’s relationship with Billy D’Elia, the mobster, were well founded. D’Elia had come under the scrutiny of state and federal investigators as soon as he took over as organized crime boss in northeastern Pennsylvania upon the death of Russell Bufalino in 1994. The investigators learned that D’Elia often served as a mediator in disputes among mob families in New York, Philadelphia, and Pittsburgh. In 2001, raids were conducted on the homes of several northeastern Pennsylvania racketeers, including D’Elia, by the Pennsylvania State Police, U.S. Postal Service inspectors, and agents of the Internal Revenue Service. D’Elia escaped prosecution, but indications of extensive gambling operations led New Jersey officials to ban him from all Atlantic City casinos. Finally, in May 2006, federal authorities charged him with money laundering the proceeds from illegal drug sales. Five months later he was charged with attempting to have a prosecution witness in the money-laundering scheme killed. D’Elia eventually pleaded guilty to reduced charges of witness tampering and money laundering, but nearly two dozen other counts were dropped because he cooperated with federal authorities. Right up to the time of his arrest, D’Elia kept meeting with Conahan to share omelets and information at Perkins restaurant—sometimes as often as three times a week. Now Chester Muroski’s suspicions about Conahan, Ciavarella, Mericle, and Powell didn’t seem so far-fetched. The U.S. Attorney’s Office and the IRS joined in a grand jury investigation into the financial dealings among the quartet.
When the grand jury subpoenaed Powell, Mericle, and Barbara Conahan in early 2008, the judges went into full panic. They demanded a nighttime meeting with Powell and instructed him to wait for them in a parking lot behind Crestwood High School. They arrived in a car Powell did not recognize as belonging to either of the jurists. They asked to see his cellular telephone and then instructed him to leave it in his car. They said federal investigators could track his whereabouts, and therefore theirs, through the phone. Conahan was driving, Ciavarella in the front passenger seat. Powell got in the back. They told Powell that Mericle had “lied through his teeth” before the grand jury and testified that the payments to them were totally Powell’s doing. They said the three of them “need to get our stories straight” and suggested a strategy of discrediting Mericle and Jill Moran, Powell’s law partner who had delivered the cash in the Federal Express boxes. As Powell recalls the conversation, Ciavarella said, “We’ll take care of Mericle. Bobby, you’ve got to hold the water here. You’ve got to say those boxes never came to us.” They drove around for about ninety minutes without coming to a final agreement. Besides, Powell had other ideas. A few weeks later, he agreed to cooperate with prosecutors and secretly record conversations with the judges.
On July 30, 2008, Powell, Ciavarella, and Conahan gathered in the model unit of The Sanctuary, a townhouse the three were developing south of Wilkes-Barre. Unlike Rob Mericle nine months earlier, Powell was wearing a wire—a tiny microphone taped to his chest that was sending a recording to FBI agents parked in a van nearby. But Ciavarella didn’t ask his now-former friend if he was wired. Conahan did inquire about the cellular phone, and Powell reassured him that he had left it in his car. By this time, all three had been subpoenaed to appear before the grand jury, and there were eddies of fear all over the townhouse.
The goal of the meeting, as far as the two judges knew, was to devise a defense strategy, and Powell began the conversation with a warning that Jill Moran had cleaned out her office at Powell’s law firm, had not picked up her paycheck, and was now communicating with him only via BlackBerry. “She’s the weak link.” Powell said. “That’s why she’s not here tonight. I think Jill is off the fuckin’ reservation.” Powell reminded them that she had seen him stuffing cash into the Federal Express boxes. Both judges replied that they would deny ever receiving the cash and warned Powell that he must back up their stories. “The problem Jill has is she never gave me anything,” Conahan said, crocheting lies and facts into an exoneration before the grand jury. “If anything was given to her, she has it.” Ironically, Conahan expressed concern that Moran might show up at a meeting wired by federal investigators. “The problem with Jill is you just don’t know what she is going to be wearing,” he said to the wired Powell.
Powell’s justification for calling the meeting was his concern that his business partner in PA Child Care and Western PA Child Care, Gregory Zappala, had become suspicious of the way the money was being handled in the two businesses. This was true. Powell had brought the companies to the brink of financial ruin because of his payoffs to the judges, and he feared that his partner might file a lawsuit against him. When Ciavarella suggested that Zappala would be placated by being paid off, Powell said it would be futile: “For Greg, it’s not about the money.” It was decided that Powell would sell his interest in both of the centers, because that might enhance the judges’ ability to lie about the cash extortion payments. Ciavarella volunteered that he was going to deny any knowledge of the cash payments delivered to Conahan through Jill Moran or about Powell’s condo rental payments to companies owned by the judges’ wives.
Nevertheless, Ciavarella launched into yet another tirade about the profits going to the two juvenile centers. “They’re making a shitload of money,” he complained bitterly. Ciavarella went on to claim that he did not believe there was anything wrong with accepting the finder’s fees from Mericle. “When he said to me, ‘I want to pay you a finder’s fee,’ I said, ‘You’re kidding.’ I would never approach Rob Mericle to ask him for a finder’s fee. I didn’t even know there was such a thing. Never in my wildest dreams did I ever imagine this was illegal money.”
Suddenly, Ciavarella stood up. “Shhhhhhh!” he said, walking slowly over to a kitchen window. He had spotted the FBI van. He pointed to it. The trio went outside.
“We better get the fuck out of here,” Powell said.
“Mark, do me a favor—would you go check that,” said Conahan, his voice high with nervousness. Terror bled into the room as Ciavarella left and walked quickly over to the vehicle. He looked in the windows, but they were tinted and the inside of the van was not visible. He tugged at the sliding passenger door. Then at the rear door. Both were locked. Inside, Agent James Glenn and a colleague had been monitoring the conversation and videotaping the townhouse. When they saw Ciavarella headed their way, Glenn turned off the equipment lest the electronic hum alert the judges to the surveillance. When Ciavarella returned to the townhouse to join Powell and Conahan, they resumed recording.
Now fear blossomed into full panic. Before Ciavarella reached them, Conahan and Powell had a whispered conversation.
Powell: “Listen, this is my story. I never got any boxes. We’re going to both have to stick to that because she’s going to testify otherwise.”
Conahan: “She’s going to testify that you gave her boxes, one box filled with cash. She doesn’t know what’s in the other one.”
Powell: “It’s going to be our word against hers.”
Conahan quickly outlined a plan to explain away the kickbacks: “Listen, you paid me rent for my condo. You didn’t pay me rent for my condo to shut the juvenile detention center down or fix cases. And I got no boxes from Jill. Nobody gave boxes to Jill. If somebody gave boxes to Jill, she still has them. The only thing Mark knows is the conversation with Mericle. He doesn’t know about the
rent to the condo. He knows you paid me rent. He doesn’t know about any boxes. That’s why he is our most credible witness.”
Then the three got in their separate cars and drove away. The agents waited fifteen minutes and left.
•••
While Wilkes-Barre might have been firmly fixed in the public mind as a provincial dying coal town, it had something that was absent in Pennsylvania’s largest urban centers, Philadelphia and Pittsburgh—two rollicking, competitive newspapers. The Times-Leader, a broadsheet, and the Citizens’ Voice, a tabloid, had been dueling since 1978, when striking Times-Leader staffers broke away and started their own newspaper. It was a bitter strike that lasted nearly four years, and when it was over, the Citizens’ Voice opted to keep publishing. The papers have changed owners several times, but the rivalry has remained. In 2006, Wilkes-Barre was the nation’s smallest competitive newspaper market—good news for readers, bad news for crooked politicians. The Times-Leader had a slight edge in circulation—40,000 to 33,000—but the papers were battling to a virtual draw in attracting local advertising. And demographics didn’t hurt—an older population meant more newspaper readers. Reporters, editors, and photographers from both dailies were frequent award winners in the annual state newspaper contests. The battle was very real, and there were frosty relations between some of the top reporters.
The Times-Leader had produced a first-rate, widely ignored series on Ciavarella’s sentencing practices in 2004, and late the following year it was on the receiving end of the leaked documents outlining the damaging findings of the state Public Welfare Department’s audit of PA Child Care. As the federal investigation picked up steam, reporters at both papers pored over documents and relentlessly questioned courthouse sources. On May 29, 2008, the Citizens’ Voice published a story on the financial ties between the two judges and Powell. “Two Luzerne County judges who played key roles in closing the county’s juvenile detention center in 2002 have financial interests in a Mountain Top real estate project linked to Robert J. Powell, an investor who has reaped millions by leasing a private juvenile center that he co-owns to the county,” began a story by Dave Janoski, the paper’s projects editor. Janoski was back one week later with the first story on the investigation by the FBI and the IRS. The revelations piled up about the judges’ Florida condo and Powell’s use of the adjacent boat slip. When the FBI seized the juvenile probation records in August, it became evident that the two juvenile detention centers somehow were involved in the probe.
By autumn the judges were done for and were working with the feds on a plea bargain. Conahan had retired from the bench and was hearing cases on a part-time basis in drug treatment court, and Ciavarella had resigned as juvenile court judge though he was still on the bench full-time. The FBI already had carried cartons of documents out of the Probation Office. In addition to Powell, Rob Mericle and Jill Moran were cooperating with the U.S. Attorney’s Office. Despite all the payments from Mericle and Powell, Ciavarella was again desperately in debt. He had borrowed $265,000 from Conahan to cover credit card balances, college tuition, and household expenses. Even when Ciavarella was aware of the federal investigation, Powell said the judge tried to persuade him to give him another $40,000. And just a few weeks before he would plead guilty to corruption charges, he borrowed $50,000 from a local attorney.
While the feds’ focus was on the two judges, dozens of other Luzerne County officials were under investigation. Around the courthouse, there was a feast of rumors festering into fact. Indictments were dropping like cinder blocks, and there was talk of a “culture of corruption.” County officials, school administrators, school board members, and government contractors resigned and pleaded guilty, hoping for leniency. Yet there was a ho-hum attitude on the part of much of the public. This was northeastern Pennsylvania, after all, and this was how things were done. Politicians helped each other out, gave each other jobs, gave their relatives jobs, and then stayed quiet. Everyone had to pay for a job. Why let someone else take it? Why be a sucker? Payoffs and nepotism were okay so long as everyone was treated equally.
So what if the court administrator stole $70,000? If the superintendent of the Pittston Area School District took a bribe in exchange for a contract? That a member of the Wilkes-Barre Area School Board took payoffs to influence the hiring of teachers? That a magisterial judge stole $5,000 from the Wyoming Valley Sanitary Authority? That a member of the Wyoming Valley West School Board took money for getting a contractor approved for a tax-forgiveness program? So corrupt were the schools that eventually the FBI would make an amazing appeal that was carried by newspapers and broadcast media throughout northeastern Pennsylvania: “If you are a teacher, prospective teacher, employee or prospective employee of any kind who has been required to provide money, or anything else of value, to any individual in connection with being hired at any public school in northeastern Pennsylvania, you are requested to immediately contact either Special Agent Richard Southerton or Special Agent Joseph Noone in the FBI’s Scranton office.”
Almost immediately, the telephones were ringing.
Back at Juvenile Law Center headquarters in Philadelphia, there was an uneasy expectancy. The Pennsylvania Supreme Court was not responding to the urgent King’s Bench petition that was filed by Juvenile Law Center in April 2008 asking the state’s highest court to end the abuse of the rights of child defendants in Luzerne County. Laval Miller-Wilson, Robert Schwartz, and Marsha Levick all waited with unraveling nerve endings to hear from the court. Just a week after the petition was filed, Levick took a call from an FBI field agent, who asked a lot of questions. It was clear to her they were investigating juvenile court in Luzerne County. Juvenile Law Center lawyers were hoping for an immediate and affirmative reaction from the Supreme Court, but realistically they expected to hear by September. Spring came and went, then summer ebbed and rusted into autumn. Nothing.
Finally, in December 2008—nearly eight months after the original King’s Bench petition was filed—Juvenile Law Center filed an amended petition that added more cases of injustice in Ciavarella’s courtroom and urgently asked the Supreme Court to intervene. But on January 8, 2009, came the shocker. The Supreme Court, without comment or explanation, rejected the petition in a single sentence. Schwartz and Levick were aghast. How could Pennsylvania’s highest court ignore its own statistics? Kids were appearing without lawyers ten times more often in Luzerne County than in the rest of the state! They were being taken out of their homes at two-and-a-half times the statewide rate! In a single year, Luzerne County—with about 3 percent of the population—was responsible for 22 percent of all placements in Pennsylvania. Miller-Wilson never recovered. He had already been planning to leave Juvenile Law Center to pursue a career in public health, but this accelerated that process. He resigned, effective February 1: “I was disillusioned by the Supreme Court’s disregard for this massive injustice. I thought this case was my best achievement and my biggest failure, I didn’t want anything more to do with the juvenile justice system.” Levick and Schwartz began looking at options.
But over the Thanksgiving-Christmas holiday period, local lawyers and courthouse insiders in Luzerne County were speculating that two or more judges, including Ciavarella and Conahan, were in trouble. The near-unanimous assumption was that the wrongdoing involved fixing cases, especially arbitration cases. Ciavarella’s harsh treatment of children was well known, but his no-nonsense stance was still very popular among a large portion of the population. The idea that two judges had been taking millions of dollars in bribes from a private juvenile detention center was known only by the federal investigators and a few others, like Chester Muroski, the judge who was now cooperating fully with the feds.
January 26, 2009, dawned sunny and cold in Wilkes-Barre. It was only sixteen degrees outside when Muroski stood somberly before a news conference in Wilkes-Barre and announced that Ciavarella had resigned as president judge. Muroski released copies of a single-sentence letter from Ciavarella to Governor Edward
Rendell: “Please accept this letter as my official notice to you that I am resigning effective immediately from my position as President Judge of the Eleventh District.” Muroski said that as the judge with the most seniority, he would take over running the courts until a successor was elected by the full bench. He added pointedly, with an arch of his bushy brows, that he and his colleagues would attempt to restore public confidence in the courts by “acting the way judges should act.”
Two hours later, at the federal building in Scranton, U.S. Attorney Martin C. Carlson held a news conference that elicited inhalatory gasps from many of his listeners and left others staring at the ceiling in disbelief. Terrie Morgan-Besecker of the Times-Leader and her media colleagues had come prepared for something big—something to do with case-fixing, PA Child Care, or kickbacks. But nothing like this. Carlson, in a matter-of-fact tone, said Ciavarella and Conahan had agreed to plead guilty to “a scheme to defraud the citizens of Luzerne County and the people of Pennsylvania.” They had “abused their positions and violated their fiduciary duty by secretly deriving more than $2,600,000 in income in exchange for official actions and anticipated official actions. The actions from which they derived improper income included directing that juvenile offenders be lodged at the juvenile detention facilities operated by PA Child Care and Western PA Child Care.” In some cases, Carlson said, Ciavarella ordered children into detention even when juvenile probation officers did not recommend it. Added Deron Roberts, chief of the Scranton office of the FBI: “They sold their oaths of offices to the highest bidders.” The elaborate kickback scheme was detailed in a twenty-two-page list of charges (called an “information”) that did not name Mericle or Powell, but instead referred to them as “Participant #1” and “Participant #2.”