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clock Feb 6, 2007 9:02 pm US/Eastern

Feds: Fumo Used State Workers As Personal Servants

(AP) PHILADELPHIA Powerful state Sen. Vincent J. Fumo used state workers and a nonprofit group to carry out his personal and political agendas, defrauding taxpayers and others of more than $2 million, a federal indictment charged Tuesday.

Fumo, 63, regularly deployed state workers to perform a litany of personal chores, from overseeing construction at his 33-room Philadelphia mansion to spying on his ex-wife to working his 100-acre farm near Harrisburg, prosecutors charged.

Fumo, one of the most powerful figures in Pennsylvania politics, misused $1 million in state resources and another $1 million from the nonprofit neighborhood group he controlled, U.S. Attorney Patrick Meehan said.

"Because he was delivering large amounts of money to his Philadelphia constituents on one hand, Vincent Fumo felt entitled to reach into the pockets of Pennsylvania taxpayers with the other," Meehan said at a news conference.

Fumo, a Philadelphia Democrat who has served in the Senate since 1978, was also charged with obstruction for ordering his staff to destroy years worth of e-mails from government computers.

The lost e-mails prevented investigators from determining whether Fumo extorted $17 million in donations that Peco Energy Co. gave the nonprofit as it lobbied lawmakers over deregulation, Meehan said.

The 141-count indictment also charges Ruth Arnao, executive director of the Citizens' Alliance for Better Neighborhoods, and two Senate computer technicians with obstruction and other counts. Fumo was charged in 139 of the fraud and obstruction counts. The U.S. Attorney's office said Fumo and Arnao were to surrender to the FBI on Wednesday.

The senator, through lawyer Richard A. Sprague, declined comment on Tuesday. But in a pre-emptive strike a day earlier, Fumo denied any illegal activity and accused investigators of strong-arm tactics.

"This investigation has been marked by threats, intimidation, and frequent leaks to the media intended to embarrass me," Fumo said in a lengthy speech on the Senate floor.

The 267-page indictment comes more than four years after federal authorities began investigating the Citizens' Alliance, a group started by Fumo aides in 1991 to serve the South Philadelphia community where he grew up.

Despite its charity status, the group covertly funded political activities, including a poll and a lawsuit filed against one of Fumo's political rivals. Fumo also used the group's coffers to pay for vehicles, farm equipment, trips and a $600,000 renovation to his South Philadelphia office.

Fumo, a board member of the Independence Seaport Museum, also commandeered its yachts each year when he traveled to Martha's Vineyard, the indictment charges.

Prosecutors described a loyal web of Fumo employees who were rewarded excessively for their hard work -- on the state's dime.

"If these allegations prove to be true, then I think it's an indictment of Pennsylvania state government as much as any individual, that a person could get away with those kinds of things," said Barry Kauffman, executive director of Common Cause of Pennsylvania.

Fumo, anticipating the indictment on Monday, temporarily stepped down as the ranking Democrat on the Appropriations Committee but remains in the Senate. The Philadelphia lawmaker, who has beaten two previous indictments, vowed to again clear his name.

"I know in my heart that I have not done anything illegal," Fumo, a lawyer and banker, said Monday.

Peco gave the Citizens' Alliance $1 million a year for seven years, and then another $10 million around 2002, when it was unable to fulfill a promise to bury utility lines in Fumo's neighborhood.

"We acted in good faith with reasonable assumptions that the donations would be used for community good," Peco spokesman Michael Wood said Tuesday.

Gov. Rendell's spokeswoman declined to say if he has spoken with Fumo about the indictment and would not comment on the allegations.

"The senator step(ping) down as Appropriations chairman is a big blow for Philadelphia, and certainly for the Senate, because he's very capable and has added a lot over our years in Harrisburg to the budget process," said Kate Philips, Rendell's spokeswoman.

(� 2007 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. )

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