Kathleen Kane's legal problems costing taxpayers at least $436,285

HARRISBURG — Squabbles in state Attorney General Kathleen Kane's office haven't just embarrassed Pennsylvania taxpayers, they also have cost them. In the past year, Kane's office has charged the state nearly a half-million dollars in legal fees to defend her in lawsuits brought mostly by people who worked for Kane, billing and court records show.

The expenses, derived from legal bills obtained under the Right-to-Know Law, have surpassed $436,000. But that is only a partial accounting of costs associated with seven lawsuits filed by current or former agency employees who claim Kane slandered them, wrongfully fired them or both in a campaign of retaliation for perceived disloyalty.

The number of lawsuits against Kane and her administration is unusually high for a government agency, said Cory Iannacone, a labor and business lawyer in Harrisburg.

"It's not like this happened over 20 years," said Iannacone, who represents employers in labor disputes and is not associated with any legal claims against Kane. "It all happened within a year and those legal bills will keep going up. If this is the floor, where's the ceiling?"

Civil attorneys on the attorney general's staff carry heavy caseloads, working mostly on behalf of other state agencies, and do not have time to take on extra duties, said Jeffrey Johnson, Kane's spokesman. Still, he said, office staff supervises the outside lawyers and reviews their bills.

Kathleen Kane Cases

"Often the appropriate decision is to seek outside attorneys who are legal experts in the issue at hand," Johnson said. "There may also be conflicts of interest that exist in certain cases involving the office that require the use of outside counsel."

Costs are rising — and quickly.

The records include $436,285 paid to two private law firms to defend Kane, her staff and the state from four of the seven civil lawsuits. The publicly released invoices do not include costs associated with one lawsuit the agency is handling internally, two others for which the invoices haven't been processed, or several private labor grievances filed by union and nonunion employees, including the 19 percent raise and $80,000 payout the agency recently awarded Kane's twin sister, Ellen Granahan, to end her federal wage complaint that she was underpaid as a deputy attorney general.

Taxpayers, however, are not footing the bill for the criminal defense team that has represented Kane in a grand jury perjury case since November 2014. Kane, a Democrat from the Scranton area, has used private funds to pay her legal team, even though the law allowed her to be reimbursed by the state until criminal charges were filed in August 2015. Win, lose or draw in the trial that is slated to begin in 15 days, Kane can't be reimbursed for legal fees accrued after the charges were filed.

That doesn't mean the taxpayers are off the hook for Kane's perjury charges.

After Kane had her law license suspended for the perjury charges, she hired Bruce Castor, a former Montgomery County commissioner and district attorney, to the newly created position of solicitor general to handle the agency's criminal and civil affairs.

Castor's first day of employment was March 21 at an annual salary of $150,006. His salary did not increase when he was promoted last week to first deputy, a constitutionally mandated position that makes him next in line to become attorney general.

Castor's salary coupled with the legal bills Kane's office has accumulated so far have cost taxpayers about the same as the starting salaries for 10 state troopers.

At least one taxpayer is angry about that.

Taxpayers should not be forced to pay for Kane's poor policy, personnel and legal decisions, said Eric Epstein, a longtime government reform activist from the Harrisburg area. The money could be better spent hiring more police officers, he said.

"That is money that could be better spent putting more boots on the ground," Epstein said. "What a terrible diversion of precious tax dollars."

When Kane leaves office at the end of the year, the next attorney general — Republican John Rafferty or Democrat Josh Shapiro — will inherit the lawsuits and costs associated with them.

Here's a look at the cost and status of each case against Kane and her administration.

Commonwealth v. Kathleen Granahan Kane

In August and September 2015, the Montgomery County district attorney's office charged Kane with perjury and abuse of power for allegedly lying under oath before a grand jury in 2014. Kane's alleged lies centered on her claims that she did not know how a Philadelphia newspaper got the grand jury secrets that prosecutors claimed she leaked in a "cloak and dagger" campaign to discredit rivals Frank Fina and E. Marc Costanzo, two former state prosecutors.

Kane claims Fina and Costanzo and a cohort of other "angry men" trumped up the grand jury leak probe that eventually led to criminal perjury charges. The men were angry, Kane claims, because her administration unearthed a trove of pornographic emails they and scores of other government employees shared on taxpayer funded computers before Kane took office in January 2013.

Status: Aug. 8 trial date.

Taxpayer cost: None.

Thomas lawsuit

On March 12, 2015, Claude Thomas, a former state agent, sued Kane and one of her top agents, Kevin Wevodau, in Philadelphia Common Pleas Court. Thomas claims Kane and Wevodau tarnished his reputation in public statements made about a bribery investigation that had been the subject of a story in the Philadelphia Inquirer.

During a news conference in her Harrisburg office, Kane claimed an agent, whom she did not name, worked with Fina to only target black public officials in a poorly run probe.

In his lawsuit, Thomas, who is black and was the lead detective on the case, claimed Kane knew the allegations were false and made them to humiliate Fina. Thomas also pointed out that most of the officials pleaded guilty after the Philadelphia district attorney's office took over the case from Kane's office.

A Philadelphia judge initially tossed Thomas' lawsuit, ruling Kane, in her elected position, is protected from libel and slander claims by "absolute immunity." Thomas appealed. In December, Commonwealth Court granted him a hearing to determine if there are limits to absolute immunity because "reputation" is an "inherent and indefeasible" right in the state constitution.

Status: Sept. 12 oral arguments.

Taxpayer cost: None, agency staff are handling the lawsuit, records show.

Barker lawsuit

On Oct. 5, James P. Barker, the agency's former appellant court chief, sued Kane in U.S. District Court in Harrisburg.

Barker claims Kane unjustly fired him and then besmirched his name because he "truthfully testified" that Kane broke grand jury secrecy laws by leaking confidential investigative material. Barker, like other agency employees who testified in the grand jury probe, was protected by a Montgomery County judge's order barring retaliation.

The lawsuit claims Kane slandered Barker by inferring in the media that he had spilled secret information about the Montgomery County grand jury that was investigating Kane's alleged leaks.

Status: Stalled after a judge ruled it cannot proceed until Kane's criminal trial is complete.

Taxpayer cost: $132,600.

Noonan, etc. lawsuit

On Nov. 12, 2015, Kane was sued in federal court in Philadelphia for defamation, retaliation and invasion of privacy over her handling of the porn email scandal. The lawsuit was filed by former state police Commissioner Frank Noonan, Fina, Costanzo and former state prosecutor Richard Sheetz, and Randy Feathers, who oversaw the attorney general's regional office that handled the Jerry Sandusky pedophilia probe.

The suit claims Kane selectively released to the public the porn emails those men either distributed or received because they criticized her 2012 campaign pledge to review the Sandusky case. The lawsuit also names as defendants state Agent Michael Miletto, the Philadelphia Daily News, its parent company, and reporter Chris Brennan, now with the Philadelphia Inquirer.

Status: Dismissed last week by a federal judge who ruled Kane's statements were protected free speech as a candidate and then as an elected official.

Taxpayer cost: $115,375.

Moore lawsuit

On Dec. 14, George Moore, the agency's former human resources analyst, sued the state, Kane, Chief of Staff Jonathan Duecker and Kane's former spokesman Chuck Ardo, alleging wrongful termination and slander.

Moore's lawsuit claims he was unfairly fired for recommending Duecker be dismissed for a "pattern of sexual harassment in violation of the federal and state civil rights of [agency] employees."

Rather than fire Duecker as Moore recommended in April, the lawsuit states, Kane promoted him to chief of staff in charge of personnel.

On June 23, the lawsuit claims, Kane's administration accused Moore of leaking emails to the media and the next day fired him, with Ardo telling media he was let go "for cause."

Duecker has denied the harassment claims in a response filed with the lawsuit. Duecker also is facing harassment claims in a federal Equal Employment Opportunity commission complaint filed by a female agent.

Status: Ongoing but a source told The Morning Call a settlement is in the works and Ardo has been dropped from the lawsuit.

Taxpayer cost: $101,498.

Carlson-Cranga lawsuit

On Dec. 21, Agents Michael Carlson and Michael Cranga sued Kane and Duecker in federal court in Harrisburg.

Carlson and Cranga claim Kane tried to stop them from testifying before a Philadelphia grand jury that the city's district attorney started after he took over a bribery case that Kane had refused to prosecute. Carlson and Cranga say they did testify and allege that because of their testimony, they were passed over for promotions. They say Kane selectively released porn emails they received.

Status: Stalled until Kane's criminal trial is over.

Taxpayer cost: $86,812

Horvath lawsuit

On Feb. 24, former narcotics agent Charles Horvath sued the agency, Duecker and his two former supervisors, David Carolina and Jodi Canady, in federal court in Allentown.

Horvath claims he was harassed and then fired after he made official complaints that his direct supervisor, Carolina, compromised a drug case by allegedly ordering another agent to flush an informant's hypodermic needle down a toilet in May 2013.

Horvath claims Carolina, Canady and Duecker then worked to damage his career in part by falsely claiming Horvath refused to help Carolina with a drug arrest and that Carolina and other supervisors then unfairly put him on desk duty. The agency then dismissed Horvath on Aug. 28, alleging he violated policy by using cooperating witnesses not registered with the office and had discrepancies in his paperwork, among other claims, the suit alleges.

In December, unemployment compensation records show, Horvath won an unemployment hearing when a state-sanctioned referee determined Duecker and his internal affairs investigator provided "unreliable" testimony about Horvath's firing.

"The employer witnesses offered evasive and inconsistent testimony," the Dec. 16 ruling states. "Further, both witnesses were not familiar with the details of the incidents that resulted in the claimant's discharge and admitted that they could not remember basic facts about the claimant's employment or the employer's policies. Therefore, the employer's witnesses are rejected as unreliable. The claimant's testimony is accepted as credible."

Status: Ongoing with a settlement conference scheduled for Oct 6.

Taxpayer cost: Unknown. "There were no final invoices related to this case at the time your records were produced," agency spokesman Jeffrey Johnson said last week.

Wevodau lawsuit

On April 4, Wevodau, who is being sued by Thomas, filed his own lawsuit against Kane and the agency in Commonwealth Court.

In his lawsuit, Wevodau, a former FBI agent, claims Kane falsely linked him to her claims that Thomas and others targeted minorities in their undercover bribery investigation. After Wevodau protested internally, Kane blacklisted him and requested his resignation, while insinuating he was a mole for federal authorities, the suit claims.

Wevodau refused to resign and took a leave of absence for an unspecified health condition from June 22 until Oct. 22, the suit states. Kane, however, has not allowed him to return to work unless he completes a fitness test, which the agency will not schedule, the suit states.

Status: Ongoing, with no trial date set.

Taxpayer cost: Unknown. The agency says no records are available because it has not finalized its contract with the private law firm involved.

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