Fumo family rift exposed in court

Between tears and tissues, Vincent J. Fumo's younger daughter said from the witness stand Tuesday that she no longer has faith in him.

"I don't trust my father, unfortunately," Allison Fumo, 23, testified.

Her brother, Vincent E. Fumo, 44, said much the same. He said his father wanted to win "at all costs" - even if it meant draining every dollar from a $2.5 million trust fund set up for him and his sister.

As the former state senator and Democratic powerhouse closes in on release from federal prison, the painful details of a new rift with his children were being laid bare in a fourth-floor courtroom in City Hall.

And, as with so many issues that roiled what once was called Fumoworld, the fight was about money.

Allison Fumo filed suit last year in Philadelphia Orphans' Court to wrest control of Fumo Family L.P. from her imprisoned father.

She complained that her father had installed a succession of ill-suited cronies in key positions in the partnership and that its leaders had made important financial decisions to benefit Fumo, to the detriment of his children.

In the latest twist, the turnpike maintenance worker Vincent Fumo picked as a trustee for Allison Fumo dropped out of the post after a devastating deposition in which he revealed he knew little, if anything, about her or his duties as a fiduciary. Fumo has now come up with a new trustee: his former doctor.

It was all different in 2006, before Fumo was charged in a sweeping federal corruption indictment and was closing in a multimillion-dollar payday for his stake in a small bank chain founded by his grandfather.

On Christmas that year, he told Allison and Vincent E. that he planned to put millions of dollars of bank stock into a special fund for them. That way, he said, their children wouldn't have the tough upbringing that he had, would "never have to suffer as he had suffered," Allison Fumo testified.

In all, Vincent Fumo ended up getting about $19 million in cash and stock from the bank sale. Of that, he gave the family partnership and related trusts about $2.5 million.

Left out of the trusts was Fumo's third child, Nicole. She has been estranged from her father for years, and her husband was a key witness against Fumo at his corruption trial.

Flash forward to 2009. Fumo stands convicted of defrauding the state Senate and a pair of nonprofit organizations, as well as staging a failed cover-up to thwart the FBI's investigation.

Fumo returned hat in hand at that time to borrow money from the partnership and the trusts set up for each child. He took out $1.4 million in a loan to pay about half of the massive fines and restitution he owed as part of his sentence.

At the time, his children had no second thoughts about lending the money.

"He is going away to prison," Vincent E. Fumo testified. "My sister and I love our father. If he needed the money, we were willing to give it to him."

Allison Fumo's lawyers, Don Foster and Bill Heyman, detailed how the partnership twice sweetened the terms of the Fumo loan. The interest rate ended up being lowered to 2.4 percent.

Under the trust, the children could not take out money until they turned 40. Vincent E. Fumo, a software expert with Comcast, reached that age four years ago and later withdrew $533,000. Allison is years away from qualifying.

For the children, the trust arrangement began to sour - turned into a disaster, Allison said - last year, when her father reshuffled his real estate portfolio.

He gave his farm outright to his fiancee, Carolyn Zinni, and made her a half-owner of his beach-block home in Margate, N.J. He also made Vincent E. a half-owner of his 33-room mansion in Philadelphia and a condo property in Ventnor, N.J. For reasons that have not been explained, he left Allison out of these deals.

Fumo's lawyers have said he made these transfers to avoid a possible increase in gift taxes. not to shield assets from federal prosecutors and the IRS.

In court Tuesday, Fumo's second wife, Jane Scaccetti, Allison's mother, provided another glimpse into Fumo's motives. She read from a letter he wrote her from prison:

"My goal is to become as judgment-proof as possible," he wrote. "I want to own nothing but control everything."

His children testified that their father, by adding people to the deeds of his properties - even Vincent E. himself - violated the terms of the $1.4 million loan. Fumo's Philadelphia house and his property in Margate had been listed as collateral for the loans.

After they raised the possibility of deeming the loan in default and demanding immediate payback, their father fought back. Without telling them, he and the chief executive of the family partnership, an old friend, modified the loan to strip away the threat of default.

Vincent E. Fumo testified that in April, when he last visited his father in prison, Vincent Fumo told him "it was our moral obligation to give him everything in the trust."

If Allison Fumo kept pushing for a new trustee, the former senator told his son, he would hire a phalanx of lawyers to challenge her, bill the trust for that - "and you guys will have nothing."

Under cross-examination from Fumo lawyer Thomas A. Leonard, the son - who once had Fumo's power of attorney - testified that he had threatened his father in turn. He told him he could destroy his credit.

Allison Fumo, a graduate of the University of Pennsylvania who works for the KPMG consulting firm, was a frail, quiet presence on the stand.

She said the fight with her father had made it hard for her to work and left her suffering from severe anxiety and depression.

"It's very hard to trust people because of it," she said.

There was no cross-examination. The hearing is to resume Friday.