Years ago, the late state Sen. Henry “Buddy” Cianfrani, Sen. Vince Fumo’s predecessor and one-time mentor, once mused aloud about the problem with having long-time staff:

“It’s great to have guys like that who are loyal and know what is going on,” Cianfrani told The Patriot-News of Harrisburg nearly a decade ago. “The problem is, you never who is going to stay loyal. And staff knows a whole lot.”

Cianfrani often made comments like that and no doubt made comments like that to Fumo, with whom he enjoyed a close if noisy and volatile relationship (in South Philly, if someone is with you two-thirds of the time, that is a deep and close alliance) for decades. In any case, it is indisputable that in the past two decades, Fumo, a South Philadelphia Democrat, has amassed power and behind-the-scenes clout unequal to perhaps any other state lawmaker. While doing so, he has maintained a ring of staff and political aides known for both their competency and loyalty to the boss. In recent days, however, Howard Cain, a long-time Fumo aide and Senate Democratic consultant, pled guilty to federal income tax evasion. As part of his plea agreement, he claims Fumo paid him with Senate money to do political work.

Vince Fumo

That is just the kind of evidence federal prosecutors are looking to put to in front of a jury as they prepare for Fumo’s fall trial on more than 130 charges of official corruption and other allegations. Fumo has said he is innocent of the charges and that they represent an attempt by the Bush administration to conduct a witch-hunt against Democrats.

The federal indictment alleges that Fumo defrauded the state Senate, a charity and a museum, and tried to block and impede an FBI investigation. Fumo elected not to seek re-election due to the charges and a recent heart attach. He then helped his successor, Larry Farnese, to win his seat in a tough primary against rival John Dougherty, head of the Philadelphia local of the International Brotherhood of Electrical Workers.

Sources close to U.S. Attorney Patrick Meehan of Philadelphia, who is spearheading the Fumo prosecution, have been predicting for months that they would get Fumo insiders to plead guilty and give up damaging information on the senator.

Cain is the first such insider who was clearly on the inside of Fumo’s various operations for more than a decade, and his turning of evidence against “the boss” buttresses the arguments of Capitol insiders that Fumo may be facing conviction and a prison sentence if his trial goes badly.

But Fumo insiders and many of Cain’s colleagues and competitors in the cutthroat world of political consulting say he is a nervous, hyperbolic type who is prone to exaggeration. They think he will be a poor prosecution witness.

One political insider who has known Cain and worked with or against him for 20 years said: “Howard will make a lousy witness in court. But Howard has been Mr. Gadgets forever. The question is not whether Howard will be a great witness. The question is how many e-mails does he have from Vince and what do they say?”

Cain is in federal legal trouble unrelated to Fumo court papers show, for not reporting $1.6 million in income from 1997 to 2006. Unbelievably, he failed to file income tax returns as far back as 1991.

Cain, in his plea agreement on the tax charges, for which he agreed to pay back $411,000, agreed to testify at Fumo’s trial that Cain conspired with Fumo and others to defraud the state Senate.

Federal court papers asserted, the Philadelphia Daily News reported: “that Cain's largest single source of income from 1991 to 2006 came from consulting services to the state Senate Democratic Appropriations Committee. Fumo chaired the committee from 1985 until his indictment in February 2007.”

The Daily News reported that from 1985 to 2006, Cain’s company had a consulting contract with the committee: “From 2000 through 2006, Cain's firm received annual payments between $73,500 and $88,000 under the contracts, court documents said.

As part of the plea agreement, Cain stipulated that he conspired with Fumo and others to bilk the state Senate by submitting bogus invoices under a contract with the committee that resulted in payments to Cain for doing political campaign work in violation of state law.”

Fumo’s attorneys and spokesman and Cain’s attorney denied comment, the Daily News reported.

Some sources close to Fumo said the Cain plea makes a plea bargain attempt by Fumo more likely, but Fumo has told various people he is getting ready for the trial “of my life” and told others “this fall, I am just doing the trial, nothing else.”

And another Fumo insider mused sadly: “We used to joke that Vince was the only guy who could make Howard shut up. We were wrong. Even Vince can't shut him up.

"And the sad part is that Howard turned on Vince not because of anything Vince did, but because Howard was too stupid to pay his taxes the last 15 years. I haven’t talked to Vince about it, but I know for sure Vince couldn’t imagine even Howard was that crazy, to not pay taxes for 15 years and just wait for the feds to find out about it and nail him on it.”

Go back to Insider Info

Deadline looms
Gov. Rendell and Senate Republicans haggle over both budget and prospect of state worker furloughs

The specter of furloughing 25,000 state employees during an extended budget impasse has generated questions anew about what the law says on the issue.

Gov. Ed Rendell said last week that budget talks were progressing well, and he and other administration officials and legislative leaders hold out hope that a budget deal can be struck in time to avert any temporary layoffs in July.

But Rendell has warned that this year, he will lay off workers beginning July 1, if a budget isn’t in place.

That is much earlier than in the past four budget cycles, when talks spilled over into July without immediate furloughs. It wasn’t until last year that a one-day furlough occurred, and that was not until July 9.

Rendell’s signal that furloughs were a more immediate possibility in July sent GOP lawmakers scrambling over the past two weeks to block the governor from doing that.

First, Rep. Jerry Nailor, a Cumberland County Republican whose district is home to many state employees, filed a motion to force the House Appropriations Committee to kick out a Senate bill that would prevent state employee furloughs.

That bill, sponsored by Sen. Jeffrey Piccola, R-Dauphin, and passed by the Senate in February, would declare all state workers as “critical” employees who cannot be laid off under state law.

But before Nailor could call that bill out, the Appropriations Committee’s chairman, Rep. Dwight Evans, D-Philadelphia, agreed to hold a vote on it. He also amended the bill to allow the state to tap into the Rainy Day Fund to pay workers during a budget impasse.

Evans’ amendment appropriated $20 million from the reserve fund to pay workers who otherwise would have been furloughed, and authorized the transfer of the remaining $724 million to the General Fund. The amendment and the bill were approved in the Appropriations Committee by votes of 22-13, mostly along party lines.

Evans said the transfer from the reserve fund was necessary to pay workers facing potential furloughs. Republican leaders in both chambers say Evans’ amendment is a non-starter with them.

Meanwhile, Secretary of Administration Naomi Wyatt was called before the Senate State Government Committee this week to discuss the Rendell administration’s furlough policy.

During that hearing, Wyatt was grilled by Piccola, the committee chairman, on how the state constitution and a federal law combine to force the administration to furlough workers during a budget impasse, as Rendell has claimed.

Wyatt explained that state employees can only be paid when there is a budget in place to pay them. But some critical workers, like state police troopers or prison guards, have to be kept on the job, even during a budget impasse, and state courts have ruled that federal regulations require those workers to be paid when they work.

Still, Rendell has to limit the number of those “critical” employees kept on the job in order to obey the constitution and not abuse federal regulations and risk a $3.5 million per day fine, Wyatt said.

Piccola said her assertions were not true, and that the administration’s position on furloughs was a moving target. He and Sen. Jake Corman, R-Centre, acknowledged that Rendell had the authority to furlough workers, just not the legal mandate Rendell keeps citing.

Wyatt and her aides said that the administration was relying on a 1993 court case for its furlough policy. Piccola aggressively questioned her on that. She later conceded that neither the court case she cited nor the state constitution required Rendell to follow this particular furlough policy.

Legislative Republicans contend that Rendell’s furlough policy is simply an attempt to gain leverage over the Legislature in protracted budget fights to get his way.

“The governor is doing this to ramp up artificial pressure to extract things, in a budget, or in budget season, that the Legislature is unlikely to pass” without that pressure, Piccola told Capitolwire, the Harrisburg-based internet news service. “They want to threaten layoffs so it will be another pressure point so they can pass their agenda and spend more of the taxpayers' money.”

Administration officials say the whole furlough question is a sideshow, and that more effort should be put into resolving budgetary and legislative issues by the June 30 deadline.

Rendell and legislative leaders say their goal is to do just that, but they acknowledge it’s not a sure thing.

Evans and House Democrats have positioned an amended budget bill to be debated and voted in the House the week of June 23. Evans said he hopes a deal can be reached by that time to avoid debate on 250 to 300 amendments that House lawmakers will likely offer.

“What we’re attempting to do is to work with the Senate and the governor’s office to try to come up with something that we all can generally agree on so that we can finish by June 30,” Evans said on the House floor Wednesday.

“If we should not be successful, then obviously that week of June we will vote on the budget bill.”

Evans said one of the biggest sticking points in the budget talks is the revenue estimate for 2008-09. Republicans have said that the numbers Rendell presented in February don’t reflect the economic downturn that has hit the state and the country since then.

The budget secretary, however, doesn’t typically update the revenue numbers until the end of the budget process. But concerns over that revenue estimate prompted most Republicans on the Appropriations Committee to vote against the amended budget bill, which passed by a vote of 21-13. Evans amended that bill to restore millions of dollars in legislative-favored spending cut that had been made by the governor. That increased total spending by close to $148 million over what Rendell proposed. The amended budget bill now bumps Rendell’s $28.3 billion budget proposal to nearly $28.5 billion, a 4.8 percent increase from the current fiscal year. Rendell’s budget proposed a 4.2 percent increase.

Evans said more than $130 million from the expected end-of-year surplus, which Rendell initially proposed spending on tax rebates for low-income workers, would be used to fund the increased spending under his amendment. His revised budget also cuts in some place, such as $114 million that Rendell proposed to fund the Public School Employees Retirement Fund.

So far, Rendell has held a handful of budget negotiation meetings with legislative leaders. Administration and legislative staff, meanwhile, have been working daily in five workgroups on budget and ancillary legislative matters. The workgroups are focusing on: alternative energy and conservation programs; health care expansion legislation; education adequacy funding; economic stimulus proposals; and the budget itself.

While all sides seem to agree on some key points that will mostly boil down to details – like the need to invest in alternative energy development, infrastructure borrowing and some economic stimulus tax cuts – Rendell and Democrats are more at odds with Republicans on issues such as health care expansion and the overall level of budget spending

Education adequacy funding, meanwhile, is a mixed bag, since it is based on a legislative-commissioned “costing-out” study, which recommended changes in the public education funding formula. That means some districts would get 5 percent or 6 percent boosts, while others would get a mere 1.5 percent.

So that issue is more likely to result in regional battles between lawmakers representing the have and the have-not school districts.

For now, all eyes will be on the progress of budget talks next week. Rendell is scheduled to meet with legislative leaders on Tuesday.

If even a preliminary deal cannot be reached by the start of the following week, the prospect for an impasse and furloughs becomes much more likely. That’s because internal rules in both chambers require the budget bill to be considered over the course of several days. If there’s no deal, then the chances of a budget bill reaching the governor’s desk by June 30 become slimmer.

And with furloughs looming on July 1, a budget standoff would take Rendell and lawmakers into new and uncharted political territory.