Feds want Fumo lawyers off case

Federal prosecutors think lawyers for state Sen. Vince Fumo and former top Fumo aide Ruth Arnao should be disqualified for conflict of interest and want U.S. District Judge William H. Yohn Jr. to hold a hearing on the issue.

Fumo, Arnao and two ex-Senate computer aides were indicted by a federal grand jury in February on conspiracy, fraud, tax and obstruction-of-justice charges. Their trial is slated for next February.

The feds said yesterday in a 66-page court filing that there's ample reason to believe that Fumo's attorneys, Sprague & Sprague, "face numerous conflicts of interest" and should be disqualified.

Prosecutors also said Sprague attorneys are witnesses to allegations in the indictment and may be called to testify for the government.

Fumo's lawyers said the government filing reeked of politics.

The feds also charged that one of Arnao's attorneys, Edwin J. Jacobs Jr., faced an "irreconcilable" conflict because he was an "unwitting participant" in a trip to Cuba with Fumo and four others that was sponsored by a political-advocacy group that received money from Citizens Alliance for Better Neighborhoods, a South Philadelphia charity the feds allege is controlled by Fumo.

The feds also said Jacobs' legal fees, as well as those of two other Arnao lawyers, have been paid by Citizens Alliance.

Fumo and Arnao, who was formerly executive director of Citizens Alliance, are alleged to have stolen more than $1 million from the charity for their personal benefit.

In addition to representing Fumo, the feds said, the Sprague firm also has represented the state Senate, Citizens Alliance, and the Independence Seaport Museum on matters directly related to the Fumo indictment.

Fumo allegedly defrauded these entities of $2.1 million for his personal benefit.

Prosecutors said that these organizations paid legal fees to Sprague & Sprague during the course of the investigation and that their interests now may be adverse to Fumo's.

Citizens Alliance, for example, paid Sprague & Sprague more than $272,000 from 2000 to 2006 for legal advice, the feds said.

Prosecutors concluded that the issues raised in their court filing yesterday "create the disturbing possibility that the Sprague firm knowingly and simultaneously represented multiple clients for the single purpose of protecting Fumo's position even at the expense of others."

A lawyer with Sprague & Sprague said a legal response to the government's filing would be forthcoming.

"It's curious [prosecutors] filed this motion after Dick [Sprague] said he intended to vigorously investigate the U.S. attorney's motivation for pursuing a very effective and high-profile Democrat, a motivation which is now even more in question given the revelations coming out of Washington," said Fumo lawyer Mark B. Sheppard.

U.S. Attorney Patrick Meehan, a Bush appointee, has said politics plays no role in his investigations.

Prosecutors also took aim at Arnao's attorneys - Jacobs, William Lamb and Joel Frank.

According to the feds, Citizens Alliance paid Jacobs a $350,000 retainer last year and has shelled out more than $680,000 to Lamb's firm. (Frank is a partner of Lamb's.)

Prosecutors said Lamb's firm also represented John Carter, former president of Independence Seaport Museum, who may be called as a government witness at trial. (Fumo is alleged to have used museum yachts for personal benefit while Carter was president.)

Frank said yesterday that he and Lamb intend to "vigorously contest" the government's motion.

"It's peculiar. The government has known of our representation [of Arnao] for over three years and only chose to raise this issue after a trial date was set," he said.

The feds said Jacobs will "definitely" be called as a witness to testify about the Cuba trip. Jacobs and a friend were included on the trip after Fumo directed Arnao to give the trip's sponsor a $10,000 donation.

The feds said that Jacobs' testimony would be "germane" to their argument that Fumo controlled Citizens Alliance and that Arnao exercised no independent judgment and simply carried out Fumo's whims.

Jacobs told the government that at the time of the trip, he had never heard of Citizens Alliance and did not know that it had sponsored his trip. He was out of the country yesterday and unavailable for comment, his secretary said. *