Details on the FBI’s Pay-to-Play Investigation

EsteyFBI agents posing as executives of a Florida-based textbook recycling company used Gov. Ed Rendell’s former top aide to make illegal contributions to five state lawmakers between 2009 and 2011, according to a new report by Mark Fazlollah, Craig R. McCoy and Angela Couloumbis of the Inquirer.

In May 2009, FBI agents established Textbook Bio-Solutions LLC and soon after began pushing its agenda in Harrisburg. The fake company’s goal was to require certified recycling centers to dispose of used textbooks, according to the report.

A month later, a federal agent posing as company executive John Miles hired Harrisburg lobbying firm Long Nyquist & Associates – run by two former aides of Senate President Pro Tempore Joe Scarnati.

Scarnati himself received $5,000 from Miles in June 2010 and picked up a $17,500 contribution from Long Nyquist’s political action committee in April 2011. Scarnati said he accepted the money in good faith and will donate the money from Miles to charity.

In October 2009, the recycling company hired Estey to lobby state lawmakers on their behalf and began pushing legislation that would require certification for recyclers looking to enter the textbook disposal industry.

Seven months later, State Sen. Ray Musto introduced a bill requiring certifications for textbook recyclers, co-sponsored by Scarnati, Sen. Larry Farnese and 17 other lawmakers.

Weeks after the bill was introduced – and just two days after Scarnati got his $5K contribution – federal agent “John Miles” made a $10,000 donation to State Rep. Dwight Evans, who served as chairman of the House Appropriations Committee at the time.

One year after Estey was hired by federal agents, the much-lobbied-for textbook recycling bill unanimously passed the State Senate, 49-0.

Last week, federal prosecutors and lawyers for John Estey announced the former Rendell chief of staff will plead guilty to wire fraud charges for his involvement in the FBI corruption probe that began seven years ago.

On April 28, 2011, federal agents posing as company executives gave Estey $20K, which he said would pass on to three lawmakers and a leadership caucus, court documents show.

Estey kept $13K for himself and there had been initial confusion as to the whereabouts of the other $7,000.

The Inquirer’s report shows that three State Senators received money from Estey during 2011: Sen. Vincent Hughes ($2K), Sen. Larry Farnese ($1K) and Sen. John Yudichak ($500).

Yudichak replaced Musto as the 14th Senatorial District’s delegate in Harrisburg. Musto died while awaiting trial on unrelated corruption charges.

Also in 2011, Estey contributed $2,500 to then-State Rep. (and current Democratic nominee for Attorney General) Josh Shapiro, as well as giving State Rep. (and Congressman-elect) Dwight Evans $1,000 on the same day he advised federal agents to give him the $20K, according to the report.

The FBI’s investigation into pay-to-play politics in Pennsylvania is ramping up, with many wondering who will be the next fish to get fried. Estey served as chief of staff to Gov. Ed Rendell in his first term, while former Treasurer Rob McCord has also been taken down by FBI agents.

Allentown Mayor Ed Pawlowski and former Reading Mayor Vaughn Spencer are sweating their involvement in an FBI investigation into their cities’ contracting practices, though neither have been charged by authorities.

Estey and McCord have both worn wires for the FBI after being caught, while Pawlowski’s former campaign manager Mike Fleck also wore wires for the agency.

Timeline

May 2009

  • Textbook Bio-Solutions LLC is registered as a new business in Davie, FL. The address – 15751 Sheridan St. – is a mailing and shipping business run out of a strip mall and has been used by federal agents in a previous sting.

July 2009

  • A federal agent posing as John Miles, a Textbook Bio-Solutions executive, hires Harrisburg lobbying firm Long Nyquist & Associates. The firm, run by two former senior aides to Senate President Pro Tempore Joe Scarnati, are given a $15K initial payment by Miles.

October 2009

  • John Estey, as head of Ballard Spahr’s lobbying arm, begins representing Textbook Bio-Solutions.

May 26, 2010

  • State Sen. Raphael Musto introduces Senate Bill 1379, outlining certifications for recycling companies disposing of textbooks. The measure is co-sponsored by Scarnati and Sen. Larry Farnese, along with more than a dozen other lawmakers.

June 2010

  • Federal agent/company executive “John Miles” contributes $5,000 to Scarnati
  • Two days later, Miles contributes $10,000 to State Rep. Dwight Evans, who served as chairman of the House Appropriations Committee at the time. Estey also contributes $5,000 to Evans on the same day.

October 14, 2010

  • The State Senate unanimously passes SB 1379, 49-0. The measure never made it to a House vote.

April 28, 2011

  • Estey advises Textbook Bio-Solutions LLC to contribute $20,000 to several state lawmakers. Estey tells the executives he will donate $5,000 each to three different lawmakers and one leadership caucus.
  • Estey contributes $1,000 to Evans. Estey ends up pocketing $13,000 of the bribe money from federal agents.

April 29, 2011

  • Long Nyquist’s political action committee contributes $17,500 to Scarnati.

May 10, 2016

  • John Estey is scheduled to plead guilty to wire fraud charges.

May 9th, 2016 | Posted in Front Page Stories, Harrisburg, Top Stories | 39 Comments

39 thoughts on “Details on the FBI’s Pay-to-Play Investigation”

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  4. Rhonda says:

    Question – a Bill passes 49-0 in the Senate and never makes it to the House? The big question here is WHY? That sounds more fishy than anything.

  5. Theron G Terry Noble says:

    Legal, yes; ethical no….the quid pro quo is the speed in which this went through the Senate, while other and hopefully more meaningful legislation sat idly bye; prime example, in fact Exhibit “A”, as to the stench we allow to linger over Harrisburg

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  7. HaHaHa says:

    DD – this cannot be all they have … Could it?!?!?

    If so – my faith in the FBI just took a major hit. There must be more – or why would they have given Estey the favorable deal and the reduction in sentence?

    With Estey and McCord wearing wires for so long, there must be other shoes that are gonna drop.

    Not sure if the Press is calling it “pay-to-play investigation” or the FBI.. Because – so far no one has been indicted for “pay-to-play” crimes.

  8. David Diano says:

    Robert Guzzardi

    The timeline shows they gave money around the time of the legislation. Sure. But does it mean there was a quid pro quo, or even a cause and effect?

    This was 5 years ago, and this is all they have? It’s like a joke.

  9. Robert Guzzardi says:

    “Pay to Play” is illegal. Look at the time line. Is it not obvious there is a quid pro quo? And John Estey was wearing a wire.

  10. David Diano says:

    Sick and Tired-

    Just saying that the reporting doesn’t indicate where the crime is. Without a quid-pro-quo, where’s the beef?

  11. Sick and Tired says:

    Marie-David is sitting in his parents basement, pretending that he is somebody!
    He has NO clue what the FBI is doing. He has No Clue what anyone except his Mom is doing.

  12. Marie says:

    David – I really don’t get what the FBI was doing here. I am hoping there is more to come. But, Fattah’s defense attorneys better be getting some documents soon. Because – right now it looks like the FBI helped make sure he lost the election.

  13. Guzzardi for dog catcher 2016 says:

    Bob you are just the sorest loser on this site

  14. David Diano says:

    The timing indicates the FBI “tried” to peddle influence. However, the vote indicates that everyone was for it.

    Also, a bill to require recycling, was no guarantee that this Florida fake company would get the work over existing PA recycling companies. I wonder if any of them got wind of the bill and lobbied for it?

    Estey is going to be a dream witness for the defense, considering how much he stole from his FBI handlers.

  15. Robert Guzzardi says:

    The evidence may be more than circumstantial.

    FTA Estey and McCord have both worn wires for the FBI after being caught

  16. Robert Guzzardi says:

    The timing of the contributions to Long & Nyquist and others, including the likely next Attorney General, and and the passage of a phony bill for a phony company seem more than a co-incidence. Circumstantial evidence is evidence sufficient to convict in a court of law beyond a reasonable doubt.

    It does make one become cynical about the Rule of Law, does it not, aaron?

  17. aaron says:

    Stop being dramatic, Bob. And stop saying “rule of law.” You sound like a tool.

  18. Robert Guzzardi says:

    Some of us think “unfortunately” is an understatement. This did not just happen to happen, an “unfortunate” accident that could not have been foreseen or prevented. Some think it is cynical, pre-meditated manipulation of the political process. “Unfortunately”, we all seem to be desensitized to the corruption enveloping us. Some might even begin to question the “Rule of Law” if this is how laws are made. A phony company has a phony bill passed! Is this a law we have to obey. I think so because “the law is the law”, is it not?

    “But, unfortunately, that is the American way.”

  19. HaHaHa says:

    Robert – I agree that it looks really shady that a company that wants to make money recycling books can so easily get a law passed requiring that books be recycled. But, unfortunately, that is the American way. Unless they have more (and I am sure they do), the FBI just took a Civics lesson. I will be very curious to see if Evans is a target. If not – the FBI, with it’s $10,000.00 donation, just helped Evans defeat a person they are criminally prosecuting (Fattah). That seems shady too.

  20. Robert Guzzardi says:

    The Senate passed 49-0 a phony bill for a phony company. This does not give one a lot of confidence that the Senate knows what it is doing, does it?

  21. Robert Guzzardi says:

    The Timeline is the story. There are those who can see what there is to be seen and it is not a pretty picture. Long & Nyquist have not gotten the attention they deserve.

    We can expect more.

    fta Estey and McCord have both worn wires for the FBI after being caught, while Pawlowski’s former campaign manager Mike Fleck also wore wires for the agency.

  22. Jimmy D says:

    So the FBI set up a fake company that nobody knew was fake, hired a lobbyist and made campaign contributions for the fake company, politicians accepted the donations, then gave them back. Apart from Estey taking the campaign cash for himself, where’s the story?

  23. Valerie Kean Staab says:

    ??

  24. Observer says:

    Uh oh – is somebody in Crawford County on that gravy train, Valerie?

  25. Observer says:

    That charter school PAC (Students First) is backed almost exclusively by that high-speed trading fund Susquehanna – which has extensive investments in the for-profit charter and test-writing industries. Joshie failed to disclose that donation before the primary, although he was required to. The PFT wouldn’t endorse him because of it. Susquehanna wasted $5 Million on Anthony Hardy Williams’ failed governor campaign – shows just how much money they stand to make off charter scool options trading.

  26. Observer says:

    Ha – didn’t mean to exclude anybody. I agree that Scarnati is in just as much jeopardy. I believe in Equal Opportunity indictments.

  27. Valerie Kean Staab says:

    OMG the world could be coming to its end. . I quarter agree with Diano. Never thought I would type those words. When a bill passes with zero “no” votes it’s a little hard to sell the conspiracy theory.
    The comments of FBI and Charter school donations is just some BS roll eyes statement.
    As for the rest of the story it will be interesting to watch truth and not conspiracy theories unfold.

  28. Pat Unger says:

    Serious Q – what is illegal about contribution(s) from that PAC?

  29. David Diano says:

    Pat Unger-

    I’m far more concerned about the $150,000 Shapiro has received from a single charter school PAC ( $100,000 in one donation this past March).

    I hope the FBI is looking into that.

  30. HaHaHa says:

    Scarnati is getting nervous. Scarnati on down – were all on the gravy train. That money didn’t all go into campaign coffers – bet on it. And Estey didn’t wear a wire for nothing. They have had him by the short hairs for a couple of years now, and they are only just now announcing his plea in order to put the pressure on the next crooks in line. Can’t wait to see who’s next! Will Scarnati be doing that perp walk before or after the Election?

  31. Observer says:

    Fast Eddie is getting nervous. Who here believes that Estey was doing this on his own, the little weasel? Rendell on down – including little Joshie – were all on the gravy train. That money didn’t all go into campaign coffers – bet on it. And Estey didn’t wear a wire for nothing. They have had him by the short hairs for a couple of years now, and they are only just now announcing his plea in order to put the pressure on the next crooks in line. Can’t wait to see who’s next! Will Fast Eddie be doing that perp walk before or after the convention? Popcorn, please!!

  32. Reasonable Rep says:

    I can understand making *illegal* bribes to individual elected officials as part of a sting operation, but is there a precedent for making legitimate campaign contributions like this? Regardless of political party, etc…you have the federal government choosing sides and propping up candidates in elections that determine what should be the freely elected legislature of an independent state.

    Article IV of the U.S. Constitution contains the Guarantee Clause, which provides that the federal government “shall guarantee to every State in this Union a Republican Form of Government.” The Supreme Court has declined to define a “republican” form of government, labeling it a political question for Congress. But the term clearly relates to the idea that the people of each state must freely consent to the governance by their legislature, executive and judiciary.

    Here, the federal government is hardly guaranteeing such a form of government in Pennsylvania by taxing its people, only to turn around and expend those tax dollars to tip the scales – intentionally or not – in favor of certain candidates in what should be free elections. Not good.

  33. Pat Unger says:

    David – OK. Thanks. Makes more sense now. Unless he is on the wire, where is there anything wrong with what Shapiro did?

  34. David Diano says:

    I Shapiro was still a state Rep then. He didn’t become commissioner until 2012.

  35. seriously says:

    Jason,
    please review the first paragraph of your story. I do not believe that the word “illegally” is accurately used. The FBI created this company to give donations. The donations were not made illegally or all of the folks you mentioned would have been charged. Estey kept some of the money. that was his crime. To say that the donations were illegal is a serious allegation and that is NOT what the inquirer article said. You should review and clarify

  36. Pat Unger says:

    Whistleblower – of what import is the contribution to Shapiro. How would it be illegal in any way? Did Shapiro (as MontCo Commissioner) have a vote on the legislation passed to “help” the fake Florida company?

  37. Whistleblower says:

    Estey gave Josh Shapiro then State Rep 5k also on the same day he gave to Evans. Why leave that out? Everyone knows Chakka is an embezzler; Dwight Evans is shady.

  38. HaHaHa says:

    David – I have similar questions. And I am really curious to hear how the FBI is going to explain the $$$ it gave to Evans’ campaign to help him defeat Fattah (who they are currently prosecuting).

    If Evans is not a “target,” why is the FBI giving his campaign $$$? And if he is, shouldn’t we find out soon!?!

    There is obviously a whole lot more to this story. But, right now, it looks like a whole lot of money spent on a Civics lesson on how this lobbying works (legally) in this country.

  39. David Diano says:

    I don’t see how any of the law makers gets in trouble for a bill that passed 49-0, unless they specifically asked for bribe money as a condition of their vote/support.

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