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Ex-Rendell aide pleads guilty in campaign cash sting
May 10, 2016 | Associated Press
By Marc Levey
A onetime top aide to former Democratic Gov. Ed Rendell snared in an FBI sting pleaded guilty Tuesday after he was caught pocketing thousands of dollars in supposed campaign contributions from a fake company set up by the FBI to investigate public corruption in Pennsylvania. -
Capitol Hill insider John Estey is now officially a criminal, pleads guilty to scamming the FBI
May 10, 2016 | PennLive
By Matt Miller
Capitol Hill insider John Estey has been a top aide to former Gov. Ed Rendell, a lobbyist and, until rather recently, a top-level lawyer for The Hershey Trust Company. -
More charges coming after guilty plea of Ex-Rendell aide?
May 10, 2016 | ABC 27 - WHTM
By Dennis Owens
John Estey wasn’t talking when he left the federal courthouse in Harrisburg on Tuesday after meekly admitting his guilt to Judge John Jones in a half-hour proceeding. -
(UPDATED) Estey to plead guilty in pay-to-play sting
May 10, 2016 | Estey admits role in pay-to-play corruption case
By Angela Couloumbis and Craig R. McCoy
John H. Estey, a former top aide to Democratic Gov. Ed Rendell, pleaded guilty Tuesday to funneling illegal campaign contributions to Pennsylvania legislators to help a phony company set up by the FBI in an elaborate pay-to-play sting.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
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Ex-Rendell aide pleads guilty in campaign cash sting
May 10, 2016 | Associated Press
By Marc Levey
A onetime top aide to former Democratic Gov. Ed Rendell snared in an FBI sting pleaded guilty Tuesday after he was caught pocketing thousands of dollars in supposed campaign contributions from a fake company set up by the FBI to investigate public corruption in Pennsylvania.
John H. Estey said little in front of Judge John E. Jones, and federal prosecutors revealed nothing more about the sting. Left unanswered are questions about what led the FBI to Estey, whether any other targets took the bait and whether Estey cooperated in recording the conversations of other potential targets.
Asked by Jones during the 30-minute hearing whether he intended to plead guilty to wire fraud, Estey said, “I do, your honor.”
Estey and his lawyer, Ronald H. Levine, left court without speaking.
Jones set no sentencing date for Estey, 53, who had been prominent in Pennsylvania’s political and legal circles. When the plea agreement made the case public April 29, Estey was promptly fired from his senior executive post at the $12 billion Hershey Trust Co., which oversees the majority stake in The Hershey Co.
The plea agreement said Estey faces a maximum sentence of 20 years in prison and a $250,000 fine, but Assistant U.S. Attorney Michael Consiglio told Jones that prosecutors will recommend a lighter sentence if Estey accepts responsibility.
Asked later if prison time is likely for Estey, Consiglio said that will be up to the judge.
The case has fueled speculation that Estey led investigators to former state Treasurer Rob McCord, who resigned his post and pleaded guilty to federal extortion counts last year after he was recorded in 2014 trying to strong-arm contributions to his failed gubernatorial campaign.
McCord awaits sentencing.
Former federal prosecutors say the extent of the FBI operation leads them to believe that investigators had significant intelligence about wrongdoing and that a successful sting would yield more arrests.
In court filings, federal prosecutors said the FBI set up the fake company, which they did not name, to investigate allegations of public corruption. They did not reveal the nature of those allegations, but agents posing as its executives first made contact with Estey in 2009, after he had left the Rendell administration. Estey represented the company through mid-2011 as an owner of an unidentified Philadelphia-based lobbying firm, court papers said.
The plea agreement said Estey told agents in 2011 that lawmakers would help the phony company in exchange for $20,000 in campaign contributions.
The Philadelphia Inquirer identified the FBI’s front company as the Florida-based Textbook Bio-Solutions LLC, which spent about $135,000 on lobbyists, records show. One of the phony executives, named “John Miles,” even gave $15,000 in campaign contributions, the Inquirer reported.
The front company even won the Senate’s unanimous passage in 2010 of legislation to require state schools and universities to dispose of unwanted textbooks through “certified” recycling centers that Textbook Bio-Solutions wanted to run, the Inquirer reported. It did not see House action and never became law.
Corporate campaign donations are illegal in the state, as is tying campaign donations to promises by public officials to take any sort of official action. Estey had agreed to distribute the donations in a way that would hide the company’s role, but ended up keeping $13,000 for his use after distributing just $7,000 to lawmakers, court papers said.
Prosecutors have not detailed which lawmakers received the $7,000.
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Capitol Hill insider John Estey is now officially a criminal, pleads guilty to scamming the FBI
May 10, 2016 | PennLive
By Matt Miller
Capitol Hill insider John Estey has been a top aide to former Gov. Ed Rendell, a lobbyist and, until rather recently, a top-level lawyer for The Hershey Trust Company.
On Tuesday, standing before a federal judge, he added convicted criminal to his resume.
That entry came when the 53-year-old Estey pleaded guilty before U.S. Middle District Judge John E. Jones III to a wire fraud charge for scamming the FBI out of $13,000. Estey's plea, which Jones accepted at the end of the 30-minute hearing, was delivered under a deal with the U.S. Attorney's Office.
Estey's plea deal doesn't specify what sentence the 53-year-old Ardmore resident will receive when Jones sentences him later this year. The maximum penalty for the felony wire fraud count is 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Michael Consiglio said Estey is being given credit for pleading guilty and accepting responsibility for the crime. It will be up to Jones to determine Estey's punishment.
The gray-haired, grim-faced Estey kept his answers to mostly "Yes, your honor," and "No, your honor" as Jones asked him a required series of questions to ensure that his guilty plea was voluntary.
"Did you enter into this plea agreement of your own free will because you are in fact guilty?" the judge asked.
"Yes, your honor," Estey replied as he stood beside his attorney, Ronald Levine.
Jones stressed that the plea may cost Estey some civil rights - the right to hold elected office, for example - and may bar him from holding professional licenses. That means his law license might well be in peril.
The whole affair has left those who know Estey more than a little befuddled.
Ex-Rendell aide, Hershey Trust exec John Estey charged with scamming FBI in legislative corruption probe
Lobbyist and lawyer John Estey kept $13,000 of the $20,000 the FBI gave him to influence state legislators, investigators contend.
Investigators say the charges date to mid-2011, when FBI agents posing as officials of a bogus out-of-state company gave Estey $20,000 to pass around to influence members of the state Legislature. Estey owned his own Philadelphia-based lobbying firm then, having previously served a stint as Rendell's chief of staff.
The feds were conducting an undercover probe of legislative corruption and approached Estey as a conduit to see which legislators would accept bribes to back measures that would forward the sham corporation's supposed business interests.
Consiglio said in court that Estey, who didn't know about the FBI probe, identified legislators he thought would be open to such financial manipulation. Undercover agents posing as executives of the bogus firm met with Estey repeatedly, then gave him a $20,000 check. He was supposed to give $5,000 each to three unnamed legislators and a like amount to a "particular leadership caucus" that aren't named in court documents.
The bribes were to be camouflaged as personal campaign contributions from Estey, a violation of the state law that bars corporate campaign contributions, investigators contend.
Estey didn't follow the script, however. The FBI claims he only passed on $7,000 to the legislators and kept the rest for himself. "Estey acted with the intent do defraud," Consiglio said.
His arrest, announce late last month, followed an investigation by the FBI, state police and the IRS.
Even before his court appearance, the charges cost Estey deeply. Immediately after he was charged Hershey Trust fired him from his post as its executive vice president.
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More charges coming after guilty plea of Ex-Rendell aide?
May 10, 2016 | ABC 27 - WHTM
By Dennis Owens
John Estey wasn’t talking when he left the federal courthouse in Harrisburg on Tuesday after meekly admitting his guilt to Judge John Jones in a half-hour proceeding.
Estey, a former chief of staff to Governor Ed Rendell and former executive with the Hershey Trust, was caught in a 2011 FBI sting and pleaded guilty to one count of wire fraud.
Court documents say the feds created a bogus out-of-state company, UCC, in 2009. In 2011, UCC hired Estey to lobby lawmakers on its behalf. UCC gave Estey $20,000 to contribute to three lawmakers and a leadership caucus in exchange for legislation. Estey told undercover FBI agents that he had made the campaign contributions on UCC’s behalf but he, in fact, pocketed $13,000 of it. Because he made those claims on the phone to the out-of-state “clients,” it was wire fraud.
Estey admitted the scheme and the wrongdoing.
“I think a lot of us were stunned. I know I was,” Senator Rob Teplitz (D-Dauphin/Perry) said. Teplitz chairs the so-called “reform caucus” and says the Estey saga is another setback to good government.
“I think we’re seeing now a drip-drip effect like we did with Bonusgate 10 years ago,” Teplitz said. “That’s unfortunate because many of us are committed to trying to create a culture of reform here, and it’s hard for us to dig out when the hole keeps getting deeper. It’s disappointing.”
Legal analysts predict the drips from the FBI faucet will keep dropping.
“I can assure you, you’re going to see more,” said prominent defense attorney Bill Costopoulos, who has no ties to the Estey case but is familiar with federal investigations.
He says it’s likely that more charges are coming against more people. The Philadelphia Inquirer reports that Estey’s been wearing a wire for the feds since being caught in its sting in 2011. That’s four or five years of recorded conversations with prominent Pennsylvanians. Former Treasurer Rob McCord has also reportedly been wearing a wire for the feds. They do it, Costopoulos says, in exchange for lesser charges and lesser sentences.
“The feds run more wire on informants than electricians do in homes,” Costopoulos said with a chuckle. He said it’s a painfully difficult decision for an ensnared official to make, and stressful to consent to wearing a wire.
“Do I want to take my closest affiliates down?” Costopoulos asked.
So, Estey may have been quiet leaving the courthouse, but the big question swirling across the commonwealth is who has he been talking to for the past few years? Who’s been caught up in the FBI net? Estey’s former boss, Governor Rendell? Prominent lawmakers in Harrisburg? Associates at the Hershey Trust? Estey certainly traveled amongst a who’s who of prominent Pennsylvanians.
There’s no way of knowing now, Costopoulos said, but we’ll likely find out in due time.
“When they ask you to wear a wire, they own you,” Costopoulos said of the FBI. “And they will tell you who to call. They don’t ask you to bring them who you would like to take down. They have very specific agenda.”
An FBI spokeswoman would not confirm the existence of a wire or whether more indictments are coming as a result of Estey’s cooperation, but Teplitz agrees there’s much more to the story and there are likely nervous officials waiting and worrying.
“Those of us that have nothing to worry about have nothing to worry about,” Teplitz said, “but if I were someone who did something wrong, I would be concerned.”
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(UPDATED) Estey to plead guilty in pay-to-play sting
May 10, 2016 | Estey admits role in pay-to-play corruption case
By Angela Couloumbis and Craig R. McCoy
John H. Estey, a former top aide to Democratic Gov. Ed Rendell, pleaded guilty Tuesday to funneling illegal campaign contributions to Pennsylvania legislators to help a phony company set up by the FBI in an elaborate pay-to-play sting.
Estey, a lawyer from Ardmore, pleaded guilty to a single count of wire fraud committed in 2011, when he was snared in an investigation in which FBI agents posed as businessmen seeking influence with state legislators, according to court documents.
The Inquirer has reported that Estey, 53, has been secretly cooperating with federal authorities, possibly for years, and wore a digital recording device to surreptitiously record his conversations for the agents as he traveled in the state's political, legal and business circles.
Sources familiar with the matter have suggested that the investigation, which federal authorities have said involves "lobbying in the Pennsylvania General Assembly," has the potential to lead to more arrests.
During the 30-minute hearing, Estey, appearing weary, said little, mainly affirming that he understood his rights and the terms of his agreement to plead guilty. Asked if he was satisified with his lawyer's work, he replied: "Very much so, your Honor."
He declined to comment as he left the courtroom Tuesday, as did his lawyer, Ronald Levine.
Assistant U.S. Attorneys Michael Consiglio, Christy Fawcett and William S. Houser of Pennsylvania's Middle District are prosecuting the case.
Consiglio said in court that the former chief of staff to Rendell had acknowleged acting as a pass-through for the fake company to distribute campaign donations to state lawmakers, but kept two-thirds of the money for himself.
Though Estey could receive a maximum term of 20 years in prison under the law, sentencing guidelines call for Estey to receive a sentence of probation to six months, reflecting his cooperation and the relatively small amount of money involved in his fraud.
U.S. District Court Judge John E. Jones III reminded Estey in court that he would impose any sentence he deemed appropriate. Jones didn't schedule the sentencing.
According to the court filings, the FBI set up its phony business in 2009 to "investigate allegations of public corruption in Pennsylvania." The documents repeatedly call it "the undercover company" or "the UCC" but do not identify the company's name or purpose, except to say it was an "out-of-state business."
The Inquirer has reported that the undercover business was a Florida-based textbook recycling company called Textbook Bio-Solutions that purported to want to buy textbooks from public schools to give to "impoverished nations," or to recycle into pellet fuel as an alternative heating source.
The fake firm hired Estey, as well as a top Harrisburg lobbying firm, to help it get legislation to benefit its business, and made campaign contributions to further its goals.
Through his plea agreement, Estey acknowledged that he concocted a plan to ensure legislation was introduced to help the firm, a process to be aided by campaign contributions that would "not be prohibitively expensive."
In 2010, a bill was introduced that would have required schools to send unwanted textbooks to licensed recycling centers. It passed the Senate unanimously but never got a vote in the House, and was reintroduced the next year.
Around that time, court documents say the undercover agents gave Estey $20,000 that he promised he would pass along as campaign contributions in his name, circumventing state laws that ban corporate gifts and the use of lobbyists as "pass-throughs."
Estey kept $13,000 of that money for himself, according to court records. Which lawmakers received shares of the $7,000 is unclear. Prosecutors didn't disclose that in the plea documents.
In the late 1990s, Estey served as deputy chief of staff to then-Philadelphia Mayor Rendell and later became Rendell's gubernatorial chief of staff.
Estey also has served as chairman of the Delaware River Port Authority, the Philadelphia Regional Port Authority, and the Independence Visitor Center. Up until recently, Estey was a top official at the Hershey Trust Co., which fired him after federal authorities announced the charges.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
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