Ex-Pennsylvania Treasurer Charged with Extortion

by | February 3, 2015

By Jeremy Roebuck and Angela Couloumbis

When raising campaign cash last year, prosecutors say, former Pennsylvania Treasurer Rob McCord had a simple and crude message:

If he lost his bid for governor, he'd still be treasurer for two years. And you didn't want to be an enemy of the treasurer.

That was the picture that emerged Monday as McCord was charged with extortion.

Filed days after his abrupt resignation, the charging documents recounted how the state official allegedly shook down the managing partner of a Philadelphia law firm and a western Pennsylvania property management company for campaign contributions by threatening to disrupt their business with the state.

"It's sort of shocking to me who's coming through and who's not . . ." for donations, McCord allegedly told one of his targets in a conversation apparently recorded by federal agents or cooperating witnesses. "At the very least, I'm still gonna be the freakin' treasurer."

The documents didn't offer details about the origin of FBI investigation, say when McCord was confronted, name his alleged victims or say if they gave him the money he sought.

But they added substance to what for days had been speculation and, for the first time, offered an unvarnished glimpse of the threats and conduct that last week toppled the 55-year-old Democrat from office.

McCord, a former venture capitalist from Bryn Mawr, apologized Friday in a video statement released by his Philadelphia lawyer, Robert Welsh. The former treasurer also acknowledged he will plead guilty. His plea hearing is set for Feb. 17.

In a statement Monday, FBI Special Agent in Charge Edward J. Hanko, who heads the Philadelphia division, said: "The citizens of the Commonwealth expect and deserve public officials who perform their duties free of deceit, favoritism, bias, self-enrichment, concealment and conflict of interest,"

The charges stem from McCord's bid last spring to raise money for the four-way race for the Democratic nomination for governor.

At the time, Tom Wolf had become the unexpected front-runner, having launched a series of early and successful television ads, and after pouring millions of his own money into the campaign.

McCord spent $2 million of his own money on his candidacy but wasn't getting traction. By spring, he appeared desperate for an edge, according to snippets of conversations made public in court records.

In April and May, he targeted a Philadelphia law firm for a $25,000 campaign donation. Pennsylvania law places no limits on individual campaign contributions.

One of McCord's neighbors was a lawyer at the firm, prosecutors allege, and the treasurer had urged the lawyer to "browbeat" the firm's managing partner -- a financial backer of former Gov. Tom Corbett -- into allowing the lawyer to make a sizable contribution to McCord.

In an April 21 conversation recounted in the documents, McCord allegedly coached the attorney to tell the firm's managing partner that he could hurt the law firm, which has multiple state contracts, including with Treasury, if it did not make a sizable contribution:

"And that's fine, but you also run a law firm, so if you are not going to hedge your bet, don't think that I am so stupid that I am not going to read you the riot act down the road. You know what I mean?"

In a conversation with the firm's managing partner a week later, McCord allegedly said letting the lawyer be a conduit for the donation would shield the firm from exposure. The firm could then "somehow give credit" to the lawyer for the contribution.

"We're all free and clear, nobody's in trouble, and you guys have been there for me," McCord allegedly told the managing partner.

Around the same time, McCord directed one of his so-called campaign "bundlers" -- someone who solicits contributions from friends, business associates and others on behalf of a candidate -- to squeeze a western Pennsylvania property management firm for a $100,000 donation.

In a telephone conversation with the bundler, McCord allegedly complained the principals of the property management firm are "rich as gods," and urged the bundler to call them and say things that "I don't want to say."

The had firm received benefits and other incentives from the state that were approved, in part, by McCord.

The documents say McCord counseled the bundler to "get them learning" that as state treasurer, McCord was a "fiscal watchdog" -- the inference being that he could stop state benefits from flowing to the company.

Aside from managing state's money, the treasurer also is a key investor of state dollars. McCord told the bundler to convey that the campaign contributions didn't even need to be in the company's name.

"You can kind of say, 'Look, you guys, Rob will be fine with the checks not coming in your name. I can tell him that this is from you," McCord allegedly told the bundler. "But what doesn't work is you turning a friend into an enemy by breaking your word."

The maximum penalty for each extortion count is 20 years in prison and a fine of up to $250,000, though he is likely to face a far lighter sentence.

His lawyer, Welsh, stressed Monday that McCord wasn't looking to enrich himself.

"I think it's very important to examine the facts of what he's pleading to here," said Welsh. "It's not putting millions of dollars in his own pocket by selling his office. He's pleading guilty to crossing the line in fundraising."

In announcing the charges, officials said that Peter Smith, the U.S. Attorney in Harrisburg, had to recuse himself from the case because he once worked for McCord at the Treasury Department.

Instead, the case was overseen by First Assistant U.S. Attorney Dennis C. Pfannenschmidt.

"Public corruption cases are some of the most serious cases our office handles and this case indicates a serious breach of the public trust," Pfannenschmidt said in a statement. "Our office is committed to working with our law enforcement partners in holding public officials responsible for their violation of the public trust."

(c)2015 The Philadelphia Inquirer