PHILADELPHIA – Attorney General Tom Corbett today filed a lawsuit to begin the legal process of shutting down Citizens Alliance for Better Neighborhoods, the nonprofit organization former state Senator Vincent Fumo started in 1991.
In the lawsuit, Corbett asks the Commonwealth Court to revoke the corporate franchise of Citizens Alliance and distribute its assets to an appropriate successor or successors. As an alternative, Corbett seeks to permanently remove Citizens Alliance officers and directors and appoint new individuals to serve going forward.
Corbett said in addition to Fumo, the lawsuit names Ruth Arnao, who worked at various times as the organization’s executive director, vice-president, assistant secretary and director. Several of Citizens Alliance’s former officers and directors have also been named in the lawsuit.
Fumo and Arnao were found guilty by a Federal jury on March 16, 2009 of conspiracy, fraud, obstruction of justice and tax violations. They are each awaiting sentencing.
Corbett said that the Attorney General’s Charitable Trusts and Organizations Section began a civil investigation of Citizens Alliance in March of 2007 after Fumo and Arnao’s federal indictment listed excessive expenditures for non charitable purposes.
Corbett explained that the Attorney General’s Charitable Trusts and Organization Section has oversight of nonprofit organizations in Pennsylvania. The section only has civil jurisdiction and today’s court action was delayed until after Fumo and Arnao’s trial and conviction was complete.
The filing of the complaint initiates the discovery phase of the investigation, which enables investigators to take a closer look at the matters alleged.
Corbett said the lawsuit alleges that Fumo and Arnao unlawfully diverted approximately $1.9 million of Citizens stated charitable funds for personal use and political advantage. The nonprofit allegedly solicited both public grants and private donations to fund its activities.
According to the lawsuit, charitable funds were used to not only purchase high-end equipment, tools and motor vehicles, but were also used to purchase and renovate the building in which Fumo’s senatorial district and campaign offices were located, to fund political polls, and to oppose a sand dune project along beaches in New Jersey ocean-front communities to protect the property value of Fumo’s beach house.
“The purpose of Citizens Alliance for Better Neighborhoods was to promote the public health, housing, safety and education in Philadelphia,” Corbett said. “Using nonprofit money to fund a lavish lifestyle and finance political campaigns is unacceptable.”
The lawsuit claims that none of the officers or directors of the nonprofit ever objected or took action to prevent the massive waste of the organization’s assets. These individuals also allegedly failed to oversee the investments Fumo and Arnao made on behalf of the organization.
“The misuse of nonprofit organization funds is an area of concern to my office,” Corbett said. “We will continue to aggressively pursue the abuse of nonprofit and taxpayer money, whether it is a large organization in Philadelphia or a small local nonprofit.”
As part of its lawsuit the Attorney General’s Office seeks to:
-Order the defendants to provide a complete and accurate accounting of their administration of Citizens Alliance assets from 1998 through 2009;
-Surcharge the individual parties responsible for the full amount of any assets determined to have been wasted, mismanaged, misappropriated or diverted as a result of their defendants’ collective or individual acts or omissions;
-Revoke the Articles of Incorporation granted to Citizens Alliance and direct the disposition of its assets to an appropriate successor or successors to fulfill as nearly as possible its stated charitable purpose;
-As an alternative to revoking Citizens Alliance corporate franchise, the Commonwealth seeks to permanently remove Citizens Alliance officers and directors from its board of directors and appoint new individuals to serve going forward.
A complete list of individuals named as co-defendants in the lawsuit are listed below.
–Vincent J. Fumo, former state senator, and the founder of Citizens Alliance.
–Ruth Arnao, employee of Fumo’s senatorial staff, Executive Director, Vice-President, Assistant Secretary and Director of Citizens Alliance.
–Joseph Russo, served as the Chairman, President, Secretary, Treasurer and Director of Citizens Alliance.
–John Sfrisi, served as the Secretary and Director of Citizens Alliance.
–Albert Mezzaroba, served as Director of Citizens Alliance.
–Jeffrey Travelina, served as Treasurer and Director of Citizens Alliance.
–John Travelina, served as Director of Citizens Alliance.
–Amel Hammad, served as Director of Citizens Alliance.
–Christian DiCicco, employed as member of Fumo’s senatorial staff as well as Executive Director and Director of Citizens Alliance.
–Todd Baritz, served as Director of Citizens Alliance.
–Patricia Evers, served as Director of Citizens Alliance.
–Kenneth Baritz, served as Director of Citizens Alliance.
–Reverend Gary Pacitti, served as Director of Citizens Alliance.
The lawsuit was filed today in Commonwealth Court in Harrisburg by Chief Deputy Attorney General Mark Pacella of the Attorney General’s Charitable Trusts and Organizations Section.
To view a copy of the lawsuit, click here.