Dateline: February 6, 2007, Chicago
We have been waiting for over a year to see whether Pat Meehan, the United States Attorney for the Eastern District of Pennsylvania would indict Pennsylvania State Senator Vincent J. Fumo. The indictment came down today. Our very own Jack Siegel wrote about Fumo in his article, The Wild, the Innocent, and the E-Street Shuffle: Interactions Between Charities and Politicians, which first appeared in the November 2006 issue of the Exempt Organization Tax Review. Jack characterized the allegations reported in news accounts as falling within Category II, New Patronage. Scanning the indictment quickly, it appears that the allegations may also place this story in Category III, Soft Landings.
Here is what the U.S. Attorney had to say...
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in his press release.
The indictment, which supersedes an indictment of two Fumo aides returned on June 27, 2006, alleges the following four sets of crimes:...
2. Senator Fumo defrauded a nonprofit, tax-exempt organization, Citizens Alliance for
Better Neighborhoods, which he and his aides established to improve neighborhoods in the City and County of Philadelphia. The indictment charges that Fumo, along with defendant Ruth Arnao, the executive director of Citizens Alliance from 1999 to 2005, persistently used funds and employees of Citizens Alliance for their personal and political benefit. The indictment alleges that this fraud on Citizens Alliance caused a loss substantially in excess of $1 million.3. Senator Fumo defrauded the Independence Seaport Museum, on whose board of directors he sat, by using yachts and other property of the museum solely for his personal benefit. The indictment alleges that this fraud caused a loss to the museum of more than $100,000.
4. Senator Fumo, aided by Arnao and two Senate computer aides, Leonard P. Luchko and Mark C. Eister, engaged in extensive obstruction of justice, by endeavoring to destroy e-mails and other electronic evidence on Senate and Citizens Alliance computers once they learned of this federal investigation.
For the press release and the specific allegations, click here.
It will be interesting to see whether the IRS decides to invoke the intermediate sanctions. Moreover, there are allegations that Fumo caused Citizens Alliance to intervene in political campaigns. It also will be interesting to see whether the IRS decides to revoke Citizens Alliance's tax-exempt status.
We have previously reported on the record retention issues posed by the indictment.
Internal Revenue Service - Circular 230 Disclosure: As provided for in
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