McCord to plead guilty to federal charges

McCord to plead guilty to federal charges

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February 2015 rob mccord 8Rob McCord has taken full blame for improperly soliciting money from two potential contributors to his campaign for governor, admitting that he said he could “make things difficult for them” and that they “should not risk making an enemy of the state Treasurer.”

“The facts are these: I stepped over the line by trying to take advantage of the fact that two potential contributors hoped to continue to do business with the commonwealth and by developing talking points to remind them that I could make things difficult for them,” McCord said in a two and a half minute video where he looked directly at the camera.

“I essentially said that the potential contributors should not risk making an enemy of the state Treasurer. Clearly, that was wrong. I was wrong. It was a mistake,” he said. “I stand ready to pay the price for that mistake.”

“I’ve always believed in accountability and talked about accountability. Now I have to live it,” he added.

Rob McCord is being charged with two federal counts of attempted extortion for pressuring a business and a law firm for campaign contributions, and threatening their business with the commonwealth, documents show.

During his failed bid for governor last year, McCord, a Democrat, demanded campaign contributions from a western Pennsylvania-based property management company engaged in interstate commerce and a Philadelphia-based law firm, according to documents filed with the U.S. District Court in Harrisburg.

In one conversation, McCord said “it’s sort of shocking” who’s contributing and who’s not.

“At the very least I’m still going to be the freakin’ Treasurer. What the hell are they thinking? You know,” McCord said, according to the documents.

With regard to the Philadelphia law firm, the 55-year-old McCord “counseled” a lawyer at the Philadelphia firm to pressure the managing partner to contribute. In the other instance, he counseled a so-called “bundler” – a person who collects contributions from friends, family and other groups – into pressuring principles of the property management company. None of the participants, other than McCord, are named in the documents. The incidents happened during the months of April and May of 2014.

The documents show McCord has signed a plea agreement on two Hobbs Act extortion charges, but don’t say if McCord actually received any of the campaign funds he sought. He abruptly resigned as state Treasurer, which is part of the plea agreement. The maximum penalty for each count is 20 years in prison and a fine of $250,000. He could face lesser penalties for pleading and not fighting the charges.

“The citizens of the Commonwealth expect and deserve public officials who perform their duties free of deceit, favoritism, bias, self-enrichment, concealment and conflict of interest,” said Special Agent in Charge Edward J. Hanko of the Philadelphia Division of the FBI. “Public corruption is an erosion of the public’s trust in our system of government, and the FBI stands committed to holding public officials accountable when they violate their oaths of office and betray that trust.”

During April and May of 2014, the law firm had contracts with the commonwealth and the Treasurer’s office to provide legal services and had billed hundreds of thousands of dollars in legal fees to the commonwealth in the preceding years, the documents said.

McCord had numerous conversations with the managing partner who agreed to make a $5,000 contribution to the McCord campaign, but prosecutors say McCord “threatened economic harm” on multiple occasions to the firm if the contribution wasn’t $25,000.

Prosecutors say McCord gave one of the firm’s lawyers, who the documents say was a neighbor of McCord’s, “talking points” to convince the managing partner to authorize at least an additional $25,000 from the law firm. McCord advised the attorney to tell the managing partner “every time you are trying to get something done through state government you are going to have the State Treasurer looking to screw you.”

McCord also suggested using the attorney or the attorney’s wife as “a conduit” for the contribution to shield it from public disclosure, since the managing partner was a supporter of former Gov. Tom Corbett, the documents say. In a later conversation, McCord told the attorney to “brow beat” the managing partner into authorizing a $25,000 contribution – a sum at which McCord could say the law firm “didn’t totally bone him.”

Prosecutors say in the second scenario, McCord believed principles of the unnamed property management company, who McCord said were “rich as gods,” had failed to honor a campaign contribution pledge of $100,000.

McCord suggested the company would be “part of the problem” if the principles didn’t come through on contributions.

“…you need to be really careful about breaking your political word because you … start break … breaking your political word to a guy who is the sitting State Treasurer…” McCord instructed the bundler to say, the documents said.

McCord told the bundler to relay to the principles that “you could hurt yourself” if a contribution weren’t made. He also indicated to the bundler that the principles “could be embarrassed” into making the $100,000 contribution.

“I’m going to be the Treasurer either way,” McCord told the bundler.

U.S. District Judge John E. Jones III was assigned the case. McCord’s arraignment is scheduled for Feb. 17 at 10 a.m. Out of as four person field of Democratic candidates for governor, McCord came in third in last year’s primary election. He loaned his campaign $2.1 million as he and the rest of the field struggled to keep up with Gov. Tom Wolf’s self-funded contribution of $10 million.

Gov. Tom Wolf, who initially praised McCord’s service to the commonwealth after McCord announced his resignation Jan. 29, said “this is a sad day for the Commonwealth of Pennsylvania and for Rob McCord’s family.”

“As elected leaders we should be stewards of democracy and we should act to protect hardworking taxpayers, not take advantage of them. This type of behavior leads to the erosion of the public’s trust – it is simply unacceptable,” Wolf said in the statement. He said he’ll “act as quickly as possible” to nominate a replacement for Senate confirmation.

McCord said he had planned to step down in mid-February because he said he didn’t expect the federal investigation to become public until around then. McCord’s top lawyer at Treasury, Christopher Craig, will take over until a successor is nominated and confirmed.

House Democratic Leader Frank Dermody, D-Allegheny, also praised McCord’s service Thursday but said McCord’s admission is “disappointing.”

“I am shocked and dismayed at this news from a man whose achievements in the private sector and in public office I admired,” Dermody said in a statement. “The apology and resignation are a necessary first step, but this betrayal of public trust is tremendously disappointing.”

McCord said he hopes the people of the commonwealth will evaluate his service to the commonwealth and find that he served as Treasurer “well and in good faith.”

“But I know my improper efforts to raise campaign contributions will forever be a stain on my record,” McCord said.

He apologized to his family, supporters and staff at the Treasury Department: “I’m sorry, I let all of you down.”

Here is McCord’s full statement:

“Good afternoon. I owe an apology to the people of Pennsylvania. I owe an apology to my incredible staff at Treasury, people who have, for the past six years, served the commonwealth with nothing but professionalism, honor and integrity. The mistake and fault here is mine and mine alone. And of course, I owe a big apology to everyone who has supported me, most especially my amazing family. I’m sorry. I let all of you down.

The facts are these: I stepped over the line by trying to take advantage of the fact that two potential contributors hoped to continue to do business with the commonwealth and by developing talking points to remind them that I could make things difficult for them. I essentially said that the potential contributors should not risk making an enemy of the state treasurer. Clearly, that was wrong. I was wrong. It was a mistake. I stand ready to pay the price for that mistake. I’ve always believed in accountability and talked about accountability. Now I have to live it.

I do want people to know I did my best as treasurer to serve the people of Pennsylvania and I’m proud of the many accomplishments and innovations of our talented team at treasury and I do hope that, over time, people will evaluate my service to the commonwealth and conclude that I did serve them well and in good faith. But I know my improper efforts to raise campaign contributions will forever be a stain on my record.

Yesterday, I tendered my resignation to Governor Wolf and it was to be effective on February 12. That was when I did not expect these matters to become public for quite some time, though I always expected to be accountable. I’m now deeply concerned that my continuation in office, even for a day, might interfere with the operation of the Office of the Treasurer and so I’m now resigning effective immediately in order to be certain that the staff of that fine office can continue to perform the essential job of protecting the public’s resources. Again, I deeply regret my actions and apologize for any harm or any embarrassment I’ve caused for anyone. Thank you.”