Details emerge on Fumo, Verizon

As part of the deal, prosecutors allege, Fumo would drop his push to break up the giant phone company.

Fumo (D., Phila.) initially lobbied Verizon to hire his own law firm, Dilworth Paxson, but Verizon rejected that because it "would result in money directly into Fumo's pocket," the firm's general counsel told the FBI, according to testimony at a pretrial hearing in Fumo's federal indictment.

Verizon eventually agreed to give work to the firm of another Fumo ally, former City Controller Thomas A. Leonard, according to testimony.

At the same hearing, Fumo's private eye, Frank D. Wallace, spoke in public for the first time and said his sleuthing for Fumo had been "one-third Senate business, one-third political, and one-third personal."

Wallace also revealed that he had performed electronic "sweeps" of Fumo's legislative offices and home, as well as of offices and homes of Fumo allies, but had balked at continuing to do them once he became aware that a federal investigation was under way. He said he told a top Fumo aide, "I thought it would be obstruction of justice" to continue.

Fumo faces federal charges of misusing his Senate staff and the funds of two charities. The trial is not expected to begin until early next year.

But a flood of new details on Wallace's private-eye work and Verizon's dealings with Fumo emerged during a hearing on the federal government's attempts to disqualify Fumo's attorneys, Sprague & Sprague. The hearing will conclude today.

Prosecutors have said Fumo used his power to extract $17 million from Peco Energy Co. to fund his South Philadelphia charity, Citizens Alliance for Better Neighborhoods.

In the indictment, prosecutors disclosed that they had investigated Fumo for possible extortion in his dealings with Peco and Verizon.

FBI Agent Vicki Humphreys, who along with Agent Kathy McAfee investigated Fumo for four years, took the stand and read the accounts of three Verizon representatives involved in the Fumo dealings: former Verizon president Daniel J. Whelan; the firm's former top lawyer, Julia Conover; and lobbyist Stephen R. Wojdak.

Fumo's talks with Whelan took place in 2001, after the state senator had joined a political effort to break up Verizon on the ground that doing so would foster competition and lower phone rates.

As talks proceeded, prosecutors say, Fumo offered to drop his fight and pushed Verizon to give $15 million to Citizens Alliance.

Unlike Peco, Verizon refused to do that. But according to the testimony yesterday, Whelan did agree to give an unspecified amount to the Philly Pops - orchestra conductor Peter Nero and Fumo are close friends - and to hire a law firm designated by Fumo.

Wojdak, serving as a liaison between Whelan and Fumo, told the FBI that Fumo first asked Verizon to hire Dilworth Paxson, which employs Fumo. That firm has paid Fumo as much as $1 million a year to serve as a "rainmaker" to get clients, The Inquirer has reported.

Conover, then Verizon Pennsylvania's chief counsel, told the FBI that Whelan was adamant Dilworth not get the work, Humphreys testified.

Fumo's next pick: Sprague & Sprague. Whelan rejected that idea, too.

Whelan told the grand jury about the suggestion he hire Sprague & Sprague:

"I have to admit, I started laughing at that one. Sprague and Fumo have been close friends and allies for a number of years."

Fumo then urged Verizon to use veteran lawyer Thomas Leonard of the Obermayer, Rebmann, Maxwell & Hippel firm. Fumo and Leonard are longtime political allies.