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Attorney General Kane emcee McCaffery embroiled in legal feud

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HARRISBURG — As the emcee at Kathleen Kane’s inauguration on Jan. 15, 2013, Daniel McCaffery told a crowd in the Capitol Rotunda that her election as attorney general signaled a “new sheriff in town.”

The first Democrat and first woman to hold the job, Kane outpolled all others on Pennsylvania’s ballot, including President Obama, McCaffery said. She trounced Republican David Freed, the Cumberland County district attorney, and earlier defeated former U.S. Rep. Patrick Murphy in the primary.

McCaffery, 49, knew about what he called “the Kane train.” He, too, ran in the primary but bowed out as she gained steam.

A Philadelphia Common Pleas Court judge, McCaffery finds himself a prominent figure in the simmering legal feud between Kane, Philadelphia District Attorney Seth Williams and one of Williams’ deputies, Frank Fina, over the abandoned legislative sting case.

McCaffery’s campaign accepted — and later returned — a $10,000 campaign donation from Tyron B. Ali, a lobbyist who a year later became an undercover state informant. Ali recorded five Philadelphia Democrats, including four state House members, taking cash and jewelry in the sting from 2010 to 2012.

Reached by phone, McCaffery declined to comment about the case.

Kane last week delivered evidence from the case to Williams’ investigators so he can decide whether to prosecute. Fina, a former state prosecutor who supervised the sting, in an exit interview with Kane days after her inauguration, mentioned the case in a rundown of pending cases.

She recalls his saying “by the way” and telling her that he gave the case to federal investigators because she had a conflict of interest, which Kane staunchly denies. The U.S. Attorney’s Office did not keep the case.

The conflict Fina alleged was Kane’s association with McCaffery and his former campaign aide, Josh Morrow, in a 2009 run for Philadelphia district attorney. McCaffery, the brother of state Supreme Court Justice Seamus McCaffery, finished second to Williams among five candidates in that primary.

McCaffery and Morrow, who became Kane’s campaign spokesman, had campaign finance dealings with Ali, Fina said.

Sources close to the McCaffery campaign told the Tribune-Review that Ali showed up in early 2009 at McCaffery’s campaign office offering to assist with fundraising and “dropping names.” Weeks later, he returned with $10,000 for McCaffery’s campaign, arranged through four “straw donors,” and gave the checks to Morrow, sources said.

At the time, Ali was not an informant for state prosecutors.

Unlike Pennsylvania campaign finance law that imposes no limits on donations, one donor cannot give $10,000 in Philadelphia; the cap is $2,500. Yet political strategists say it’s common practice in Philadelphia to circumvent the limit by contributing in the name of a “straw” donor and reimbursing that person.

It’s not clear why Ali donated to McCaffery’s campaign, sources said. The Trib could not reach Ali nor his attorney, Robert Levant.

Straw donations are illegal, but they may or may not constitute a crime, officials said. No one was charged. A two-year statute of limitations has expired, Kane’s office said. Potentially applicable violations fall under the election code and state Ethics Act, according to Kane’s office.

A source close to Fina said prosecutors lacked sufficient evidence to charge anyone and, if the donation was a criminal violation, it would have been a misdemeanor. Over the next year, Ali became an informant and the Attorney General’s Office protected his identity.

McCaffery didn’t really know Ali — he met him once in the campaign office and then saw his picture in the newspaper when agents arrested Ali in early 2009 and accused him of overbilling the state $430,000 through his day care center. Ali’s attorney later said in court documents that evidence cleared Ali of many of the allegations.

McCaffery, one of seven siblings in an Irish Catholic, working-class family, became more than a little suspicious when he saw Ali’s picture. He directed Morrow to look into it, and one “donor” from New Jersey told Morrow that it was Ali’s money, not his.

McCaffery contacted state investigators. Prosecutors listened as Morrow called back the New Jersey tipster, confirming the straw contribution, sources said. McCaffery’s campaign returned the money to donors.

The Attorney General’s Office found no evidence of wrongdoing by McCaffery or Morrow, noting that Morrow assisted the investigation. The office found no evidence to support Ali’s claim that he made a separate $8,000 donation to McCaffery’s campaign, a top aide in the office said.

That allegation was contained in a court document Levant filed, which became public last month when the Trib successfully persuaded Dauphin County President Judge Todd Hoover to open Ali’s case file. The document did not name McCaffery and Morrow.

In a public statement in March, her office said Kane’s relationship with McCaffery and Morrow “was not a close or personal one,” referring to them as “the candidate and his staff member.”

Sources close to the McCaffery campaign said Fina’s allegations of a conflict of interest were bogus.

But the assertion drew fire from Kane, who claimed two of the lawmakers who took cash from Ali — Reps. Ron Waters and Vanessa Brown — endorsed Williams in 2009. Waters donated $300 to Williams’ campaign.

A source in Kane’s office said she raised the issue because Fina brought up the allegation of her conflict. About 60 organizations and individuals endorsed Williams; Waters and Brown were among 15 lawmakers who endorsed him.

Williams denied any potential conflict.

Sen. LeAnna Washington, D-Philadelphia, whom Kane is prosecuting for allegedly forcing staffers to perform campaign work, donated $1,000 to Kane in September 2012. Kane’s office determined that did not pose a conflict, spokesman J.J. Abbott said. But Williams raised it more than a week ago in the war of words with Kane.

When a conflict of interest is in question, “it’s up to prosecutors (to determine), unless someone can argue otherwise” before a judge, said Robert Davis, who teaches legal ethics as an adjunct professor at Widener University Law School in Harrisburg.

Kane has said myriad legal problems led her to close the legislative sting case. If Williams wanted the case, he could have it, she said.

Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or [email protected].

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