HARRISBURG, Pa. (AP) — The FBI's approach to a campaign cash sting that snared a onetime top aide to former Pennsylvania Democratic Gov. Ed Rendell suggests that it is a prelude to more public corruption arrests, former federal prosecutors say.
The sting that targeted John H. Estey raises many questions, but mostly one: Who else may have taken the bait from a phony company set up by the FBI in an effort to root out public corruption in the state Capitol?
"I would anticipate that there are a lot of people who are nervous and looking over their shoulder right now, because they know they had conversations with John Estey," said Jeffrey Lindy, a Philadelphia-based defense attorney and a former prosecutor.
Estey, 53, is scheduled to plead guilty to wire fraud in federal court in Harrisburg on Tuesday. Last month's court filing of the plea agreement is bumping up against the five-year statute of limitations after Estey apparently created a scheme to funnel illegal campaign contributions to state lawmakers in exchange for their help on legislation benefiting the FBI's phony company.
The case has grabbed the attention of the political and legal circles in which Estey was prominent, and prompted speculation that he led investigators to former state Treasurer Rob McCord. The extent of the FBI operation that ensnared Estey is also noteworthy, and former federal prosecutors say they would expect a successful sting to yield more arrests.
In court filings, federal prosecutors said the FBI set up the phony company, which they did not name, to investigate allegations of public corruption. They did not reveal the nature of those allegations, but agents posing as its executives first made contact in 2009 with Estey, who represented the company through 2011 as an owner of an unidentified Philadelphia-based lobbying firm, court papers said.
"You're not going to set up a fake corporation and go to all the trouble just to take down one guy," said L. George Parry, a Philadelphia defense attorney and a former prosecutor who has helped set up fake businesses.
Said Bruce Antkowiak, a former federal prosecutor who runs the criminology program at Saint Vincent College in Latrobe, "They don't do this on the fly. There is a tremendous amount of intelligence information they would have that would indicate to them that if something like this was set up and if it was done right, it would yield a significant law enforcement achievement."
On Saturday, The Philadelphia Inquirer identified the FBI's front company as the Florida-based Textbook Bio-Solutions LLC, registered in 2009 to a mail drop in a strip mall near Fort Lauderdale. The mail drop had been used before in another federal sting, the Inquirer reported.
The company spent about $135,000 on lobbyists, records show. One of the phony executives, named "John Miles," even gave $15,000 in campaign contributions, the Inquirer reported.
The front company had sought passage of legislation to require state schools and universities to dispose of unwanted textbooks through "certified" recycling centers that Textbook Bio-Solutions would run, either donate to poor counties or recycle into pellet fuel as an alternative heating source, the Inquirer reported. In October 2010, the bill passed the Senate, 49-0. It did not see House action and never became law.
Federal prosecutors and Estey's lawyer have not revealed what led the FBI to Estey, or whether Estey cooperated after authorities said he pocketed some of the corporate campaign donations he had agreed in 2011 to illegally funnel to state lawmakers. If he did cooperate, he could have helped prosecutors penetrate powerful circles.
Former federal prosecutors say there was enough time for federal authorities to confront Estey with recordings and persuade him to cooperate for at least a portion of the intervening period to lead investigators to more targets in exchange for a reduced sentence.
Estey was a senior executive at the $12 billion Hershey Trust Co., which oversees the majority stake in The Hershey Co. He has served as chairman of Philadelphia's Independence Visitor Center; the Delaware River Port Authority; and the Philadelphia Regional Port Authority. He was well-known among Pennsylvania's political elite and had been a partner at the prominent Philadelphia-based Ballard Spahr law firm.
In the meantime, federal investigators netted a guilty plea last year from McCord, who resigned his post as Pennsylvania's elected treasurer after he was recorded in 2014 trying to strong-arm contributions to his failed gubernatorial campaign. He awaits sentencing.
Authorities may never reveal how they came to target Estey or whether Estey helped ensnare McCord.
"There is no requirement for the government to put into a criminal information everything they may have against a particular defendant," Parry said. "They can withhold information."
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