Ex-Pa. treasurer pleads guilty to lying to the FBI

HARRISBURG – Former state Treasurer Barbara Hafer pleaded guilty Friday to lying to the FBI as part of a sweeping pay-to-play investigation of Pennsylvania government.

Hafer, 73, of Indiana, was charged last summer along with one of her largest campaign donors, Richard Ireland, a Chester County businessman. She was accused of misleading the FBI and IRS about nearly $700,000 in payments to her consulting firm by Ireland between 2005 and 2007, after she left office.

She had faced two counts of making false statements and was to go on trial next week, but pleaded guilty to one such count before U.S. District Judge John E. Jones III. The maximum penalty for that offense is five years in prison and a $250,000 fine, although under sentencing guidelines, the judge could impose a punishment ranging from probation to six months in prison.

Hafer, a longtime Republican turned Democrat, had no comment as she left court. Her lawyer, Thomas Farrell, also declined to comment on her plea, which made no mention of cooperation with federal authorities.

During the plea hearing, Hafer kept her responses short as Jones asked whether she understood the nature of the proceedings. She listened intently as Assistant U.S. Attorney Michael Consiglio outlined the case against her, and she gave a brief response when Jones asked whether his words were an accurate reflection of her actions.

"They are," she said.

Hafer's decision to plead guilty on the eve of her trial brought to a close the last case — at least, the last one in which charges were filed — in the long-running federal investigation into corruption in Harrisburg. The probe led to a guilty plea from John Estey, the onetime chief of staff to former Gov. Ed Rendell, and toppled one of Hafer's successors, Rob McCord.

McCord, a Democrat, pleaded guilty in 2015 to attempting to shake down campaign contributors and resigned in the middle of his second term.

Hafer had initially claimed lapses in memory in denying that she accepted $675,000 in consulting payments from Ireland after leaving office. According to the indictment against her, Ireland, who served as a middleman helping money managers land government work, made more than $10 million in fees while Hafer ran the Treasury Department between 1997 and 2005.

Ireland went on trial in March, but Jones dismissed all charges against him mid-trial. Ireland had been accused of attempting to bribe McCord with campaign contributions in return for government contracts.

In dismissing the charges, Jones said Ireland's case showcased Pennsylvania's lax campaign finance laws, but ruled that federal prosecutors fell short of meeting the high bar required to criminalize Ireland's campaign donations.

McCord, who unsuccessfully sought the Democratic nomination for governor in 2014, cooperated with federal authorities in Ireland's case. He secretly recorded his conversations with Ireland while working undercover to help the FBI and to try to gain a more lenient sentence, and was the government's star witness during Ireland's trial. He has not been sentenced.

One of those secret tape recordings by McCord led federal authorities to question Hafer in late 2014 about her relationship with Ireland, Consiglio said during Hafer's plea hearing Friday.

On the tape, Ireland is heard telling McCord that he had taken care of Hafer, who after leaving office opened a consulting firm called Hafer & Associates. During her interview with agents in May 2016, Hafer denied receiving money from Ireland or any businesses with which he was associated.

Agents later discovered that in 2005 alone, Ireland paid Hafer's firm $500,000 — nearly two-thirds of her firm's business that year.

"Our system of justice depends on federal law enforcement agents receiving complete and accurate information from individuals who are being interviewed as part of a criminal investigation, particularly a high-profile public corruption investigation," said Bruce Brandler, the acting U.S. attorney for the Middle District of Pennsylvania, adding, "Today's guilty plea will hopefully deter others from engaging in similar misconduct in the future."

On Friday, Jones scheduled a pre-sentencing conference in Hafer's case for late September, and said Hafer's sentencing would be set for a date after that.