Longtime Pennsylvania state senator indicted

SCRANTON - A federal grand jury has indicted longtime State Sen. Raphael J. Musto, the latest legislator to be caught up in an overlapping series of corruption investigations.

The indictment announced Tuesday alleges that Musto (D., Luzerne), 81, accepted bribes, gifts, and construction work from an unnamed contractor in return for his help in obtaining state grants and loans.

Known as "Ray," Musto, who is to retire next week after 38 years in the General Assembly, has been a political fixture in the state's northeastern region since 1972, when he succeeded his father to a seat in the state House.

Announcing the indictment at a news conference here, Peter J. Smith, U.S. attorney for the Middle District of Pennsylvania, declined to identify the company, describe the gifts, provide the amount of the grants involved, or say which property the work was allegedly performed on - except to say it was not Musto's residence.

Constituents "expect and deserve their public officials to perform their duties free of deceit . . . bias, self-enrichment, concealment, and conflict of interest," George Venizelos, special agent in charge of the FBI's Philadelphia office, said at the news conference. "Public corruption is quite simply a betrayal of the public trust. . . . It erodes public confidence, undermines the strength of democracy, and threatens the very integrity of our government."

Musto faces two counts of corrupt receipt of a bribe or reward for official action, two of giving a false statement, and one each of theft of honest services, wire fraud, and mail fraud. If convicted, he could face up to 10 years in prison and a $250,000 fine.

The veteran senator could not be reached for comment. His attorney, Jack Riley of Philadelphia, called the decision to charge his client "regrettable" and said he was confident that once a jury had "seen all the facts" it would "conclude the senator has done nothing wrong."

"As we all know, the prosecutors are far from infallible and have proven it again by their actions today," said Riley. "Now that the one-sided prosecution phase of the process is complete, we eagerly await the opportunity to have an impartial jury review all the facts related to the transactions referenced in the charges filed today."

According to the indictment, the grand jury found that in 2006 the unnamed northeastern Pennsylvania company performed $47,900 worth of work on property owned by Musto. The senator paid the bill, but company officials later gave back $25,000 in cash, the charges say.

In 2007, the same company performed $10,000 worth of additional repairs to the property but neither billed Musto nor was paid by him, according to the indictment.

Though neither the indictment nor the officials who announced it would identify the company or the contractor, federal prosectors in April subpoenaed Pittston Township officials for building permits related to nearly $40,000 in home renovations performed by a construction company owned by Robert K. Mericle. He is a northeastern Pennsylvania real estate developer and contractor; the work was done on a house owned by Musto.

Mericle is a major figure in the long-running federal corruption inquiry that centers on two former Luzerne County judges. He has pleaded guilty to withholding information in that case and is cooperating with investigators as he awaits sentencing.

State records show Mericle donated more than $31,000 to Musto's campaigns since 2005. Records also show that his company, Mericle Commercial Real Estate Services, has been the recipient of millions in state grants between 2006 and 2009.

Federal prosecutors allege that construction work on a Musto-owned house, along with holiday gifts from the same unnamed company, were payback for the senator's assistance in securing grants and loans for a development project and for "inducing local officials to assume certain highway and road obligations" related to the project.

The indictment also accuses Musto of failing to declare the holiday gifts on the annual statement of financial interests that Pennsylvania legislators must file.

Smith would not say if the unnamed person or representatives of the company were cooperating in the investigation, or whether they might be charged. He also declined to say what first sparked the probe, except to say it is part of a larger, ongoing investigation. Nor would he say if charges against any other officials are likely.

The FBI has been investigating Musto since at least April, when agents raided his Pittston home and found $6,500 in various envelopes and a $25,000 cash payment from the construction company, according to the indictment.

Musto is the latest lawmaker ensnared in a series of state and federal corruption probes that include the so-called Bonusgate investigation into use of state moneys and staff for political work, and the federal case that ended with former Democratic State Sen. Vincent J. Fumo's conviction and sentencing on corruption charges.

Headlines about the long-running Fumo probe appeared during some of the same years as the crimes now alleged in Musto's indictment.

"These are allegations, but if supported, combined with what was proven in Fumo's case, it implies a real period of exceptional corruption taking place," said Chris Borick, a political science professor at Muhlenberg College. "Fumo and Musto were long-established pillars in the legislature, and in the Northeast, Musto was every bit the institution Fumo was in Philadelphia."

In a retirement ceremony last week on the floor of the Senate where he served for 28 years, Musto was honored for his leadership on environmental issues, among them helping establish curbside recycling in the state. He served eight years in the state House in the 1970s and one term in Congress after winning a special election in 1980.