Lawyer: Political player to admit wire fraud

John H. Estey, a former top aide to Gov. Ed Rendell and a prominent player in city and state politics, will plead guilty to wire fraud, his lawyer and federal prosecutors said Friday, the latest turn in a pay-to-play corruption probe that already snared Pennsylvania's former treasurer.

According to people familiar with the case, Estey has been secretly cooperating with investigators, possibly for years.

He was caught in 2011 in an FBI sting by agents posing as businessmen seeking his influence with state legislators, according to court filings in Harrisburg. They gave him $20,000 to pass to lawmakers as illegal campaign contributions, but he secretly kept two-thirds of the money.

The investigation was part of a wider probe "of lobbying in the Pennsylvania General Assembly," prosecutors said. They provided few details and did not name any legislators or other subjects.

Estey could not be reached for comment. His Philadelphia lawyer, Ronald H. Levine, said his client was "sorry about the mistakes he has made," but declined to discuss the probe or say if Estey was cooperating.

Until Friday, the 53-year-old Philadelphia native and Democrat had been a top executive with the Hershey Trust Co., where he earned $738,000 yearly.

After his fraud case became public, the trust announced that its board had fired him. It also said it was unaware of the investigation and noted that his wrongdoing was not related to his work at Hershey.

The news of the plea comes a year after another prominent Democrat, former state Treasurer Rob McCord, admitted extorting potential donors for his gubernatorial campaign.

On Thursday, the Inquirer and the Daily News reported that McCord also was a federal cooperator and had secretly recorded conversations for the FBI before his case became public. Agents taped more than 2,000 of his phone conversations, sources said.

McCord's sentencing has been delayed for nearly a year - a sign that he still could be asked to testify or cooperate in other ways.

His case, like Estey's, is being handled by the U.S. Attorney's Office for the Middle District of Pennsylvania, based in Harrisburg. FBI agents there are supervised by the bureau's Philadelphia division.

Estey has had a high profile in both cities.

In the late 1990s, he served as deputy chief of staff to then-Philadelphia Mayor Rendell and later became Rendell's gubernatorial chief of staff. Rendell declined to comment Friday.

Estey also has served as chairman of the Delaware River Port Authority, the Philadelphia Regional Port Authority, and the Independence Visitor Center.

According to the court filings, which include an agreement signed by Estey, the FBI set up its phony business 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."

In 2008, Estey left the Rendell administration and returned to private practice at the Ballard Spahr law firm in Philadelphia. That same year, he registered as a lobbyist for the firm, state records show.

In October 2009, he began representing the company executives, not knowing they were undercover FBI agents, court records show.

Estey allegedly told them about a state lawmaker - unnamed in the filings - who could draft and introduce legislation to help their business.

In early 2011, the undercover agents gave him $20,000 that Estey said 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 told the business executives the money would be split four ways: $5,000 each to the campaign funds of three lawmakers, and $5,000 to a "particular leadership caucus."

None is identified in the filings.

In June 2011, Estey told an FBI agent that he had split up the money as promised and donated it.

He actually kept $13,000 for himself, authorities say. Where the other $7,000 went is unclear. Prosecutors didn't disclose that in the plea documents.

Campaign finance records show that Estey made several contributions in 2011 to Philadelphia Democratic lawmakers. The majority of them were made before he banked the $20,000 by undercover agents that May. But in July, Estey made a $1,000 donation to Sen. Vincent Hughes, the ranking Democrat on the Appropriations Committee, the records show.

Hughes did not return calls seeking comment.

Later in 2011, Estey left Ballard Spahr to become acting general counsel, acting corporate secretary, and acting chief compliance office at the Hershey Trust Co.

His case is being prosecuted by Assistant U.S. Attorneys Michael A. Consiglio, Christy Fawcett, and William S. Hauser.

Dawn L. Mayko, a spokeswoman for their office, said prosecutors would not discuss the case.

cmccoy@phillynews.com 215-854-4821

Staff writer Bob Fernandez contributed to this article.