The Quiet Don: The Untold Story of Mafia Kingpin Russell Bufalino

by Birkbeck, Matt

  “Mr. Brazil brought Ali and—”

  “I don’t know if it’s Ali. It’s two black people. That’s all I know.”

  “And it was for the purpose of doing business with sludge and—”

  “They wanted—they were interested in bringing sludge to the landfill.”

  “And that’s something you wouldn’t do for anybody?”

  “We don’t take sludge, no. We only take sludge from the local municipality. They got no—we were very in and out, have no interest.”

  “What year, approximately, did that take place?”

  “Four or five years ago, maybe.”

  “But that’s your extent of your contact with him?”

  “I don’t know what they were. Like I said, they were two black people.”

  “I’m showing you what is marked as Exhibit 18. It’s a photograph. Is that who we’re talking about, Mr. Ali?”

  “Yeah I couldn’t—no, I couldn’t—”

  “Maybe it is, maybe it isn’t.”

  “To me, black people all look alike.”

  Unbeknownst to DeNaples, Ali testified he met with DeNaples as many as four times. The first meeting was at DeNaples’ auto parts store, where DeNaples gave Ali a tour of the facility. And despite DeNaples’ testimony that he had no interest in sludge, he told Ali was he was receptive and reported his meeting to Billy D’Elia.

  According to the indictment, DeNaples had been interviewed prior to his testimony by John Meighan and Roger Greenback, agents from the gaming board’s Bureau of Investigations and Enforcement (BIE).

  During their investigation, the former FBI agents had learned that DeNaples had received a notice from the U.S. District Court in Philadelphia informing him that he had been captured on a wiretap talking with Ali. When they asked DeNaples about the wiretap, the two BIE agents said he was “vague in his response” and said he “might have received something from the phone company.” In fact, on December 19, 2003, DeNaples was personally served with the notice at his office by two FBI agents.

  DeNaples was charged with a fourth count of perjury for lying about his relationship with White, who was a close friend of Mayor John F. Street. White had been indicted in 2004 and charged with conspiracy to commit honest services fraud and twenty-two counts of wire fraud. DeNaples denied knowing White, who died while the charges were pending, though the grand jury determined that DeNaples had met with White and Mayor Street in Scranton in 1999. DeNaples later gave White and Street $50,000 but was angered when both men refused to return his phone calls.

  DeNaples’ arrest spurred the state Gaming Control Board to immediately issue an emergency order suspending DeNaples’ gaming license, and management of the casino was turned over to a three-person audit committee. DeNaples was barred from entering his casino. His attorney Richard Sprague called the charges “outrageous.” The perjury charges were felonies and could put DeNaples, if convicted, in prison for nearly forty years. The grand jury also called for the gaming board to revoke DeNaples’ gaming license and forfeit his $50 million licensing fee.

  DeNaples’ arrest was condemned by those closest to him, and he immediately drew the support from many of the large institutions that benefited from his charitable endeavors. The Catholic Diocese of Scranton stated, “Mr. DeNaples has generously supported many institutions in the community and many worthwhile endeavors including the Catholic Church, and we are very grateful for his support.”

  The Community Medical Center Healthcare System reported that “Louis DeNaples has been a great asset to Community Medical Center and the community of Scranton. His service on our board has been exemplary. I think we all should let due process take its course before passing judgment.”

  And the University of Scranton, which received millions from DeNaples, including a $35 million student center, stated, “Louis DeNaples and his wife and children are great friends of the University of Scranton. We are grateful for their steadfast support as trustees, alumni, parents, benefactors and volunteers. As always, Louis and his family remain in our prayers.”

  But the good wishes were tempered by concern over the revelations in the indictment that not only tied DeNaples to Billy D’Elia, but to Russell Bufalino.

  DeNaples had seven days to turn himself in, after which he’d have to appear at a preliminary hearing where prosecutors were planning to bring in Billy D’Elia to testify. The mere thought of putting D’Elia in the same room with DeNaples telling the world about DeNaples’ ties to organized crime petrified DeNaples’ attorneys, who filed an immediate motion with the state supreme court to intervene.

  It was an unusual request, but the answer was even more surprising—the court used its Kings Bench authority to intervene in the case and suspended the prosecution pending its review. Kings Bench was the rare use of extraordinary jurisdiction in cases the Supreme Court found to be unusual or grievous. There was nothing unusual or grievous about the DeNaples prosecution other than one of the richest men in Pennsylvania was facing a lengthy term behind bars. But the court stepped in, and its action saved DeNaples from having to face his longtime friend and now nemesis Billy D’Elia.

  With the DeNaples case on hold, Dauphin district attorney Ed Marsico was ready to expand his investigations, and he set his sights on other targets. DeNaples had always been the starting point, with the ultimate goal the prosecution of the gaming board and ultimately Governor Ed Rendell and his administration. Testimony before the grand jury supported the theory that the gaming board and Rendell administration had cleared the way for DeNaples to get his slots license. So Marsico impanelled another grand jury with the intent of going after the gaming board’s former chairman Tad Decker, with the road potentially leading to Governor Rendell. But since the investigation was tied to the DeNaples case, the Supreme Court order applied, and Marsico was forced to shut down the second grand jury before it heard from a single witness.

  * * *

  JUST A MONTH later, in May 2008, the League of Women Voters of Pennsylvania filed a federal lawsuit claiming that Governor Ed Rendell made a secret deal with the state Supreme Court to gain the court’s support of gaming legislation. The suit specifically claimed that former chief justice Ralph Cappy had an agreement with Rendell and several high-ranking lawmakers to support the state in any gaming cases that came before the court in return for judicial pay raises.

  Filed in the Middle District in Harrisburg, the lawsuit alleged the agreement violated the league’s constitutional rights to due process since the league was one of the groups that filed a previous lawsuit that challenged the constitutionality of the state’s slots laws. In that case, the Supreme Court sided with Rendell against the league by ruling in June 2005 that the gaming law, Act 71, was constitutional.

  Just two weeks later, on July 7, the general assembly approved a pay increase for all members of the legislative and judicial branches of government. The pay hike struck a nerve with a public that rarely paid much attention to any of the shenanigans occurring in Harrisburg. The public was so incensed over the pay raises that it forced the legislature to act to cancel the increases. But the Supreme Court justices ignored the public and kept its raise and those of more than one thousand other judges throughout Pennsylvania.

  The details of the lawsuit were astonishing. In May 2006, an unidentified state senator made the initial allegation that several members of the court made the deal with Rendell and legislative leaders. The account was confirmed by other unidentified lawmakers. Paul Rossi, the attorney representing the league, said in the lawsuit that the court initially began its corruptive quid pro quo with Republican legislators back in the 1990s and negotiated its decisions with lawmakers who sought rulings on certain cases before the court.

  The lawsuit also alleged that two other Supreme Court justices, Ronald D. Castille and Michael Eakin, were spotted leaving a closed-door meeting at then majority leader Sam Smith’s office just a few week
s before the gaming legislation was passed.

  Smith denied the allegation, saying it was ridiculous since he was an opponent of the slots bill. Castille called the suit “outrageous.”

  This wasn’t the first time the Supreme Court had been accused of being corrupt, which on the face of it was an astounding charge against the state’s highest legal authority. Word was also filtering down that Denyse Miskin, who headed the gaming board’s Bureau of Corporate Compliance and Internal Controls, was privately telling associates about an incident at a dinner just days before the slots licenses were awarded. Several people were questioning the suitability of Louis DeNaples and how, on an expected appeal from one of the losing applicants, the court would confirm the board’s decision to give him a license.

  Miskin’s story was stunning. She said that board chairman Tad Decker took out his cell phone and, in front of less than a dozen gaming board executives, called one of the justices.

  “I’m trying to reassure members of my staff that you will support any decision we make on gaming licenses,” said Decker.

  “Of course,” said a male a voice on the other end of the phone, affirming what Decker had said. Decker put the phone away.

  “See, we have nothing to worry about,” he allegedly said.

  As events unfolded, the court did nothing to disprove the allegations that it cut a deal with the Rendell administration, as it remained a thorn in the side of Ed Marsico.

  For the next year, Marsico and his deputy Fran Chardo negotiated with DeNaples’ attorneys, with the ever-present shadow of the court hanging over those discussions. They finally reached an agreement on April 14, 2009, when Marsico dropped the perjury charges against DeNaples in return for DeNaples agreeing to give up ownership of Mount Airy. The casino would be transferred to his daughter, Lisa, though DeNaples would retain a financial interest in Mount Airy as the guarantor of $250 million in financing he had received from JP Morgan Chase.

  DeNaples, who also agreed to pay for the cost of the prosecution, issued a statement, saying, “I am relieved and gratified that the district attorney has recognized that the criminal charges against me are baseless. I have said from the start that I am innocent, and that’s the truth. I have said from the start that I have no contact with organized crime, and that’s the truth. I am glad that we have finally put these issues to rest.”

  The charges pending against the Rev. Joseph Sica were also dropped.

  Marsico’s consideration of a plea deal for DeNaples was first broached to the state police during a meeting the week before the announcement. Marsico explained that the Supreme Court had interfered in his case twice already, and he feared that no matter what he did, the court would see to it that the DeNaples prosecution would never move forward. The court’s use of its Kings Bench authority in a simple perjury case was unusual at best, said Marsico, and at worst downright suspect. But there was nothing he could do, and given the unrelenting pressure by the court and by DeNaples’ attorney Richard Sprague, who seemed to have the court’s ear, reaching a plea agreement and getting DeNaples out of gaming, at least on paper, was the next best result.

  Sprague had been a thorn in Marsico’s side since the perjury charges were filed. The aging attorney, now in his eighties, had an illustrious legal history, having served in the Philadelphia district attorney’s office from 1958 to 1974 and finishing up his last eight years there as the first assistant district attorney. It was during his tenure in the district attorney’s office that he met other notable figures, including Ed Rendell and Supreme Court justice Ronald Castille.

  In 1976, Sprague was appointed chief counsel to the Church Committee and was on the inside of the new probe into the assassination of John F. Kennedy and the CIA’s assassination attempts on world leaders, including Cuba’s Fidel Castro. Sprague had assembled a large staff of attorneys, researchers and investigators, but his tenure was marked by one controversy after another, including his battles with the CIA over demands for sensitive information, which were universally rejected. Sprague was forced to resign from the committee in 1978, and over the course of the next thirty years, he would become one of the most powerful and influential attorneys in Pennsylvania.

  In 1990, he was awarded $24 million in a successful libel suit he filed against the Philadelphia Inquirer stemming from articles in 1973 that questioned whether he failed to prosecute a 1963 murder case as a favor to a friend.

  Coincidently, while defending DeNaples, Sprague had an interest in a Philadelphia casino, SugarHouse, and a new lobbying firm, the Pennsylvania Casino Association, which had engaged former State Supreme Court justice Stephen Zappala Jr. to lobby on its behalf. Zappala was paid more than $500,000, but it wasn’t clear exactly who or what he was lobbying.

  The funding for the casino group was provided by Louis DeNaples.

  The state police were furious with Marsico and vehemently argued to continue the prosecution. The police had spent five years probing gaming, and its best witness, Billy D’Elia, had yet to sit in a courtroom and tell the world all he knew about Louis DeNaples. For his cooperation, D’Elia had been sentenced in November 2008 to serve nine years in federal prison after pleading guilty to money laundering and witness tampering. He had faced up to thirty years. His attorney, James Swetz, sought a reduced sentence, given D’Elia’s cooperation in the DeNaples case, but the judge believed nine years was short enough.

  Federal prosecutors couldn’t have been happier.

  “The sentencing of William D’Elia comes after a series of carefully coordinated investigations conducted by state and federal law enforcement agencies, including the Federal Bureau of Investigation, the Department of Homeland Security, Immigration and Customs Enforcement, the Internal Revenue Service–Criminal Investigation Division, the Pennsylvania State Police and the U.S. Department of Labor,” said U.S. attorney Martin Carlson. “Today’s sentencing sends a powerful message about the commitment of law enforcement to break the grip of organized crime . . . and to ensure that the people . . . can live free of the influence of organized criminal figures.”

  John P. Kelleghan, special agent in charge of the Immigration and Customs Enforcement office of investigations in Philadelphia, commended the Pennsylvania State Police and FBI for dismantling a “long-standing criminal enterprise.”

  “With the sentencing of William D’Elia today, we close a chapter on the Bufalino organized crime family and its leadership. Thanks to the collaborative efforts of all the agencies involved, we have dismantled an organization that has exploited our community for decades,” Kelleghan said.

  But Marsico was firm, even against the objections of Chardo, who supported the police in their argument to roll the dice and allow a jury to decide DeNaples’ fate. To that end, Chardo never once believed the case would ever be tried. DeNaples would certainly agree to a different set of plea terms before engaging in such a spectacle, but Marsico firmly believed that the Supreme Court would again find a way to interfere with the prosecution. Marsico was resigned that DeNaples had the support of the court, as he did Ed Rendell.

  The governor had remained strangely quiet throughout the entire DeNaples prosecution. He once hailed DeNaples as a “salt of the earth” kind of guy, but he refrained from making any public comments until the plea deal was announced.

  “When Mr. DeNaples was charged every newspaper in the state editorialized about how this was so bad and showed a weakness in the gaming law. But now that the charges have been dropped, what does that stand for?” said Rendell. “I happen to know Mr. DeNaples, and I know him well. He had a run-in with the law years ago but he’s been a good citizen, and you can ask any charity or community or civic association, and they will tell you that. He’s licensed by the U.S. banking department to be a banker. I don’t think that the charges were dropped will be bad for Pennsylvania.”

  Rendell never addressed the hundreds of thousands in campaign contributions he received from
DeNaples, his associates and business partners. Nor did Rendell address the allegations in the League of Women Voters lawsuit.

  The FBI and state police knew about the contributions and believed the money was being funneled from DeNaples to Rendell, but their review in 2007 ended quietly.

  Although DeNaples himself was technically out of gaming, his family still owned the casino, which had been DeNaples’ plan all along. Now approaching seventy, DeNaples intended to leave Mount Airy under the control of his children, so the plea result merely moved his plans ahead a few years.

  What DeNaples did not expect was to lose his Dunmore-based bank. He had served as a director at First National Community Bank since 1972 and over the years became its largest stockholder and chairman. After the perjury charges were filed, the bank’s regulator, the Office of Comptroller of Currency (OCC) in Washington, D.C., took action to permanently separate DeNaples, saying that it was required to prohibit anyone who had agreed to “enter into a pretrial diversion or similar program” from any involvement, including working, owning or controlling, a national bank. In effect, since the perjury charges stemmed from allegations that DeNaples lied about his organized crime contacts, he did not meet that standard set by the OCC.

  DeNaples fought the ban, arguing that he never admitted to having organized crime contacts, and filed a federal lawsuit against the OCC seeking reinstatement. But the suit was dismissed by U.S. District Judge Thomas I. Vanskie in February 2010, who ruled that the OCC and not the federal courts had jurisdiction over the case.

  DeNaples subsequently filed an appeal with the Third Circuit Court of Appeals in Philadelphia, but again he was rebuffed. DeNaples was subsequently ordered to divest himself of all interests in the bank, including the sale of his shares.

  While DeNaples fought for his interests in the bank, regulators swarmed over the bank’s books, looking for evidence of lax lending practices and suspicious transactions. For years, First National had been a source of easy money for a host of people close to DeNaples and other bank officers. Billy D’Elia had accounts there, as did DeNaples’ constant companion, the Rev. Joseph Sica, who on his paltry salary somehow was approved for tens of thousands in loans. Through the years numerous businesses, knowing they wouldn’t be approved elsewhere, turned to First National. The terms were usually onerous, and failure to pay meant foreclosure, as was the case with the Pocmont Resort in the Poconos. After undergoing a multimillion-dollar renovation with financing from First National, the resort defaulted on its debt, and the bank took over the note.