Fumo friend faces probation for accepting no-work contract

A longtime friend of former State Sen. Vincent J. Fumo's is looking at five years on probation after pleading guilty to conspiracy for accepting a state contract that paid him $287,000 for virtually no work.

S. Michael Palermo was awarded the contract by Fumo. He was on the state legislative payroll between 1999 and 2004. During that time, he ran personal errands for the senator and helped manage Fumo's Harrisburg-area farm.

Palermo, 69, pleaded guilty yesterday morning in U.S. District Court. Sentencing is scheduled for January, but court documents indicate prosecutors have agreed to 12 months of home confinement and five years of probation.

Palermo, a former police officer, had worked on and off for Fumo since the 1970s, including as chief of staff of Fumo's Philadelphia office. He also served as associate executive director of the Pennsylvania Turnpike Commission until 1999.

Under his Senate contract, Palermo was supposed to provide "fiscal and operational analysis of intrastate transportation issues," but that work for the state legislature was done by three other full-time Senate staffers.

Assistant U.S. Attorney John J. Pease handled Palermo's plea yesterday. Prosecutors maintained that "Palermo . . . provided little or no services to the Senate at all. In particular, there is no written record of any work he ever did under the contract."

Before yesterday's plea, Palermo told federal investigators that he did sometimes discuss highway projects with the senator and occasionally discussed road projects with another member of Fumo's staff. But Palermo admitted "those conversations [with staff] totaled no more than 10 hours over five years," court documents state.

Palermo's defense attorney, Robert Scandone, did not immediately return a call for comment.

Palermo's contract expired and was not renewed in 2004 after Fumo became aware that he was under federal investigation.

Fumo began serving a 55-month prison sentence last month after a jury convicted him in March of 137 counts of fraud, tax offenses, and obstruction of justice.

Palermo, who suffers from heart ailments, has also agreed to pay $50,000 in restitution, while the remainder is expected to be paid by Fumo.

The proposed sentence will not be official until accepted by U.S. District Judge Stewart Dalzell at the sentencing hearing, scheduled for Jan. 22.