Fumo excused from Citizens' Alliance lawsuit

A Commonwealth Court judge excused former State Sen. Vincent J. Fumo from a civil suit against Citizens' Alliance for Better Neighborhoods because he was not an officer or director of the South Philadelphia nonprofit that he once said under oath was "my baby."

Judge Dan Pellegrini ruled yesterday that Fumo, now in federal prison, had no fiduciary duty to Citizens' Alliance because he had no official role with the nonprofit, which Fumo and his aides founded in 1991.

The ruling was directed at a suit filed by Pennsylvania Attorney General Tom Corbett in April against Fumo and others seeking a full accounting of the nonprofit's assets and spending and repayment of any wasted or mismanaged money.

Corbett's suit alleged that Fumo and Ruth Arnao, former executive director of Citizens' Alliance and a longtime Fumo friend, had "unlawfully diverted" $1.9 million from the nonprofit for "personal use and political advantage."

Arnao, who is named in Corbett's suit, is also serving time in federal prison. Fumo and Arnao were found guilty in March by a federal jury of defrauding the charity out of about $1.4 million.

Pellegrini said that Corbett is allowed to reargue his case that Fumo controlled Citizens' Alliance.

But for now, Pellegrini has ruled that Fumo is not legally responsible for what Citizens' Alliance did.

"That's exactly how this whole thing should have come down," said Fumo lawyer Dennis J. Cogan, referring to Fumo's guilty verdicts related to the nonprofit.

"In terms of Citizens' Alliance," Cogan said last night of Pellegrini's ruling, "that's exactly correct."

Chief Deputy Attorney General Mark A. Pacella declined to comment last night.

Joseph Lundy, an attorney for Citizens' Alliance, also declined to comment.

Corbett wants to shut down the nonprofit, or at least have all current officers and board members replaced.

Citizens' Alliance was formed to revitalize neighborhoods in South Philadelphia by sweeping streets, and removing snow and graffiti. It grew with infusions of public and private money to purchase real estate and invest millions in a brokerage run by a Fumo friend.

Corbett's suit contends that the federal convictions established that the nonprofit used its money to buy power tools and household items for Fumo, and to provide cars and equipment for Fumo and his staff. Citizens' Alliance also paid for political work.