Witness against Fumo could get jail sentence today

January 27, 2010
By Michael Hinkelman
Philadelphia Daily News

Friends of Howard Cain, a key government witness at Vince Fumo's trial, are miffed that Fumo's one-time political-campaign guru will likely be sentenced to prison today.

In fact, Cain, 61, could conceivably spend more time behind bars than Fumo's co-defendant and longtime aide, Ruth Arnao.

Prosecutors are recommending a prison term of 12 to 18 months for Cain; Arnao got 12 months and a day, meaning that, with time off for good behavior, the sentence amounts to 10 months.

Although the recommended sentence includes credit for cooperating, Cain's lawyers said that he should get probation with house arrest. But prosecutors said in court papers that Cain's post-plea conduct - in particular, not paying any federal income taxes in 2007 and 2008 - is an "aggravating factor" that U.S. District Judge Michael Baylson should balance against his cooperation.

Cain pleaded guilty to tax evasion in June 2008, admitting that he hadn't paid more than $411,300 in taxes on $1.6 million of income from 1997 through 2006.

Prosecutors concede that Cain's testimony was "very significant" to their case against Fumo. As a member of Fumo's inner circle, Cain was in a "unique position" to tell jurors how Fumo's fraud scheme worked and why it lasted so long, prosecutors wrote.

Fumo was convicted by a jury last March of 137 corruption counts and is serving a 55-month prison sentence.

Were it not for his tax problem, Cain's cooperation might be viewed in a more favorable light.

Prosecutors had expected Cain to begin addressing the tax obligations - put at more than $1 million - after he agreed in March 2008 to cooperate and plead guilty.

But they said that it was only after they informed him in October 2009 that he was in violation of his plea agreement to pay a minimum of $25,000 towards his tax liability prior to sentencing that he did so.

The feds said that Cain, who works for a scrap-metal recycler, had earnings of more than $100,000 in both 2007 and 2008, but had not paid any income tax.

Cain's attorney, Peter J. Scuderi, said in court papers that Cain's failure to pay taxes had been the result of "untreated depression manifesting itself as simple avoidance."

"He can't print money, he doesn't own a casino," said attorney and friend Mark D. Schwartz, who is expected to testify on Cain's behalf today. (Scuderi said that Cain paid $10,000 toward his 2007 tax bill yesterday.)

Schwartz is peeved that Cain, who walked the plank for the feds, could potentially face more jail time than two other convicted Fumo associates, Arnao and Michael Palermo, neither of whom cooperated.

Arnao went to trial and was convicted of multiple counts of fraud and obstruction. Palermo pleaded guilty and was sentenced last week to probation in connection with receiving a $287,000 no-work Senate contract from Fumo. (Arnao and Palermo were sentenced by different judges.)

Scuderi said in court papers that Cain, having decided to help the feds, had now "sentenced himself to a solitary life as an outcast" from Philadelphia's elite.

Schwartz wonders what kind of message is being sent to would-be cooperators in future public-corruption investigations if and when Cain is slammed.

"Howard took a stand and that's worth something," said Schwartz. "For somebody who testified and could get a longer prison sentence than [Arnao], who obstructed and went to trial, that just blows my mind."