Fumo campaign fund manager discloses big payments to himself

PHILADELPHIA When things were good between Vince Fumo and Andy Cosenza, they saw themselves as brothers. Fumo would sign off his e-mails from prison as "Big Bro." Cosenza was "lil bro."

Then, from behind bars, the former state senator accused Cosenza of misappropriating money from Fumo's old campaign fund. Fumo claimed in a lawsuit that Cosenza in 2010 had steered some $20,000 to himself and one of his businesses.

Now, Fumo may have more reason to be incensed.

In a belated disclosure, Cosenza has made a startling admission: The Fumo political fund he chairs made $253,000 in payments to Cosenza and his companies in early 2011.

That flurry of spending drained virtually all the money from the Fumo for Senate account. And the new disclosure revealed that the money left the fund in just six weeks.

The new report says the money paid for Cosenza's work as a political consultant, covered planning political fund-raisers, and reimbursed him for expenses.

The report, filed with the state, amended one submitted about 18 months ago that made no mention of any money flowing to Cosenza in 2011 and that said the fund ended that year with a big balance.

Of course, Fumo wasn't running for office in 2011. After serving in the state Senate for three decades, he was in the middle of his prison sentence following his conviction in 2009 on charges of defrauding the Senate and two nonprofit organizations.

Before Fumo's downfall - before a federal jury convicted him of illegally using "other people's money" - he was one of Pennsylvania's most productive Democratic fund-raisers.

In 2011, the fund that bears Fumo's name had more than a quarter of a million dollars in the bank. Now, it has just $4,720.50, according to the new report.

After being hospitalized this month for internal bleeding, Fumo, 70, is back in his Fairmount mansion, serving out the final 21/2 months of his sentence under home confinement.

He declined to comment Friday. He said he wanted to refrain from talking to the media until his sentence is over.

Fumo's lawyer, Dion G. Rassias, described the fees Cosenza paid himself from the Fumo for Senate fund as exorbitant and "really laughable."

"For the money he charged," Rassias said, "Vince Fumo could have hired Henry Kissinger and gotten more results."

Cosenza, 45, a New Jersey restaurateur, said Friday his withdrawals from the fund were proper. He said they were fair payment for his labor assisting a diverse array of politicians and staging fund-raisers. He declined to identify the candidates.

"These are legitimate expenses," said Cosenza, whom Fumo made chairman of the fund before they had their falling-out.

Cosenza also said that money raised at events went into the coffers of other candidates but that the candidates reneged on vows to pay some of the proceeds back. That, he said, defeated his plan to replenish the campaign chest.

Cosenza said the fund spent about $100,000 to rent a plane or hire cars to transport political figures to Ashland, Ky., to talk politics with Fumo while he was in prison there and to pay for their lodging. He has declined to name the visitors but said Fumo welcomed them.

The feud between Fumo and Cosenza was a split between a pair who were once very close.

When Fumo was fighting the corruption charges, Cosenza raised money for his legal defense fund.

And, along with the former senator's fiancée and son, Cosenza was at Fumo's side in 2009 when he checked into prison.

While he was away, Fumo put Cosenza in charge of his campaign fund and his family's financial trust.

Early this year, a Fumo ally, Tom Myers, filed a separate suit against Cosenza. The suit said that in 2010, Cosenza, then president of the Fumo Family Limited Partnership, tapped the trust to write five checks totaling $340,000 that was paid to Cosenza's main business.

Eleven months later, in September 2011, Cosenza said the money had been withdrawn "in error," repaid the money, and resigned as president of the partnership, the suit alleges.

Myers, who filed the suit, is a Fumo friend who replaced Cosenza as head of the partnership.

While running Fumo's fund, Cosenza had been grappling with what he described in an Inquirer interview last year as the rockiest period in his 23-year business career.

In February, Cosenza, whose businesses are headquartered in South Jersey, filed for bankruptcy protection from creditors, saying his six food concessions at Philadelphia International Airport owed a total of almost $5 million.

He has since closed four of the food stands, leaving him with two Philly Steak & Gyro stands. He also runs a Philly Steak concession at the Echelon Mall in Voorhees and licenses steak-shop concessions at three stops along the Pennsylvania Turnpike.

Cosenza faces massive tax bills. According to court records, Pennsylvania has filed liens to recover almost $1 million in back business taxes.

The IRS has pursued him, too, seeking more than $200,000 in unpaid taxes from a Cosenza business, plus more than $800,000 from him personally.

Fumo's dispute with Cosenza over the campaign fund spilled into public view in 2012, when Fumo sued Cosenza and his youngest brother, Dominic, who has served as treasurer for the Fumo for Senate fund.

According to Andy Cosenza, that suit forced him to huddle with his lawyer and go over receipts and other fund documents, ultimately spurring him to file the amended report in August.

Asked why the original report for 2011 hadn't listed a series of big payments to him and his businesses - such as two $50,000 consulting fees a day apart - Cosenza replied, "There's no excuse for that other than sloppiness."

In court papers, Cosenza's lawyer, Joseph P. Grimes, has advanced a novel argument: that although the fund bears the name Fumo for Senate, Fumo no longer has any official role with it.

In sum, Grimes said in an interview last week, "Fumo has no legal authority to challenge the expenditures of the PAC when he is not a candidate."

Fumo's lawyer, Rassias, said Cosenza was trying to hijack the account, even as it kept Fumo's name and traded on his fame.

The Fumo suit seeks to have the Cosenzas removed from any role with the campaign committee.

At one time, Fumo considered using the campaign fund to help pay part of the financial restitution he owes the government for his crimes. Cosenza said that when he and Fumo were still friends, Cosenza tried in vain to find a lawyer who would endorse that strategy.

Pennsylvania law says campaign donations cannot be spent on personal matters; the money must go toward "the purpose of influencing the outcome of an election."

But legal experts caution that the law has been interpreted broadly - permitting, for instance, a politician to tap campaign money to pay club dues on the grounds that that is where donors are courted.

Lawrence M. Otter, a Bucks County lawyer who specializes in election law, said Cosenza's new filing raised questions.

"If one did an actual audit of this," Otter said in an interview, "I sure as hell would like to see, 'What did you exactly do for the money and who did it benefit?' "

With the Cosenza brothers serving as the campaign fund's chairman and treasurer, Otter said, "one can see there is some potential for self-dealing here."

cmccoy@phillynews.com

@CraigRMcCoy