TRAFICANT ON TRIAL Cafaro describes boat scheme

The congressman says the multimillionaire is lying to stay out of jail.
CLEVELAND -- U.S. Rep. James A. Traficant Jr., with Christmas shopping in mind, took an envelope with $13,000 cash from the armrest of J.J. Cafaro's car.
"I said, 'That's for you,' and he put it in his pocket," Cafaro testified late Monday in U.S. District Court. "I said, 'That's just between us.' He got out, and I went home."
Cafaro, leaning into the witness box microphone, said the exchange took place Nov. 14, 1998, as the two men drove around the campus of Youngstown State University after an economic development tax committee meeting. Cafaro said he'd told the congressman they "had to take a ride."
Earlier that week, Traficant had asked for the $13,000, half the purchase price ($26,948) of his 37-foot, barely afloat wooden boat in the Anacostia River near Washington, D.C., Cafaro said. Cafaro rubbed his thumb, index and middle fingers together, imitating how Traficant had silently asked for the cash.
Cafaro's older brother, Anthony M. Cafaro, oversees a mall development empire, the Cafaro Co., based in Youngstown. J.J. Cafaro is a vice president with the company.
Has admitted guilt: J.J. Cafaro has been described in court as a break-from-the-pack investor with questionable business acumen, whose ventures, Avanti Motors and USAerospace Group, lost $26 million and $10 million, respectively. In May 2001, his association with Traficant resulted in a guilty plea to conspiracy to violate the federal bribery statute.
Cafaro admits he provided an illegal gratuity to Traficant -- nearly $40,000 in cash and boat repairs -- in return for congressional favors. His plea agreement mandates his testimony, and he faces zero to six months' incarceration when sentenced.
Cafaro was back on the witness stand today as the last key prosecution witness in Traficant's racketeering trial, now in its seventh week. Traficant, of Poland, D-17th, faces 10 counts, including bribery, obstruction of justice and tax evasion.
Cafaro testified Monday that he first suggested to Traficant that he send the partial payment of $13,000 to Albert Lange Jr. at USAG in Manassas, Va., but Traficant said no and gave the silent request for the cash. Cafaro said the congressman explained that he needed money for Christmas in 1998, saying his wages were attached by the IRS for back taxes and penalties.
Lange's testimony has revealed that he served as the "front man" in a scheme to conceal Cafaro's paying nearly $27,000 for repairs to the boat and its purchase. At the time, in the late 1990s, Lange served as chief operating officer at USAG.
Needed FAA certification: USAG had acquired technology for laser-landing lights to be used at commercial airports, and Cafaro sought Traficant's help in getting Federal Aviation Administration certification. At the time, in 1998 and 1999, Traficant served on the House Transportation and Infrastructure subcommittee on aviation.
With FAA certification, potential profits could reach hundreds of millions, Cafaro testified.
Was it similar to a new drug's needing Food and Drug Administration approval? asked Craig S. Morford, lead prosecutor.
"Exactly," Cafaro said.
Cafaro said that he had other contacts in Washington but that Traficant steered him away from them. "He said I'd probably screw it up and to leave it in his hands," Cafaro testified.
Morford used the overhead projector to illustrate how, at the time Cafaro was paying for repairs to Traficant's boat, the congressman was issuing glowing press releases announcing his efforts to mandate enhanced vision technology for airports. The technology was owned by only one company -- USAG.
Lange emerged as the fake buyer when those involved in the scheme figured Cafaro's buying the boat from Traficant might catch the eye of "nosy reporters."
Before Lange's involvement -- which Cafaro described as a nightmare for Lange -- the initial cover story to conceal Cafaro's buying Traficant's wooden boat was that it would be used for maritime application of the USAG technology. Cafaro said it really didn't make sense to buy Traficant's boat, which needed $30,000 in repairs.
Cafaro said the congressman was "in a jam" with his boat because of the repairs needed and high mortgage. Fixing it and buying it was a "favor for a favor," Cafaro said.
Cafaro, who has a 100-foot wooden yacht, said "one never wants to own a wooden boat -- it's a money pit." Smiling, he described how each winter you take a wooden boat out of the water and spend each summer getting it fixed.
Cafaro testified that Traficant achieved a significant step forward for USAG when Jane Garvey, FAA director, agreed to a test flight of the landing-lights technology. In the end, USAG's lack of funds prevented it from fulfilling a government contract Traficant had secured, and it never did get FAA certification.
Cashed checks: Patricia DiRenzo, cash management supervisor at the Cafaro Co., testified that two of Cafaro's personal checks, for $5,000 and $8,000, were cashed and 130 $100 bills given to him Nov. 13, 1998. She said it wasn't unusual for him to write checks for cash, but typically not more than $10,000 once a week.
Cafaro testified that he delivered the cash to Traficant the next day at YSU.
After charging personal items such as jewelry on the Cafaro Co. American Express card, J.J. Cafaro was denied use of the card and given $60,000 per month for expenses plus his regular (undisclosed) paycheck, DiRenzo testified. Of the $60,000, $20,000 is wired to Cafaro's wife's account each month, DiRenzo said.
DiRenzo said that on Dec. 22, 1999, Traficant sent a $7,000 check to Cafaro's wife, Janet, for the purchase of a Jeep and an Avanti sports car. The congressman's office and phone records had been subpoenaed by the government Dec. 8, 1999.
When questioned by Traficant, DiRenzo acknowledged that Cafaro contributed large sums to political parties, recalling one check for $200,000, but she wasn't sure for which party.
Traficant asked DiRenzo if Cafaro had been thrown out of the company after a fight with his father, the late William Cafaro. The time frame was the early 1990s, the Avanti years. DiRenzo said yes.
Did J.J. Cafaro punch his father? Traficant wondered. DiRenzo didn't know.
The government, meanwhile, said that, in the end, Traficant ended up with the $13,000, the boat repairs and the boat. Had the full scheme materialized, testimony has shown, Cafaro would have paid $27,000 in repairs and $27,000 to pay off the mortgage on the boat worth no more than $42,000.
Alleged in conspiracy: The government said the boat conspiracy included Cafaro, Traficant, Lange and another USAG official, Richard E. Detore.
Detore is under indictment. Lange testified with immunity from prosecution.
Lange testified that Cafaro fired Detore in December 1999 after Detore talked down the capabilities of the Cafaros and spread untrue rumors about Capri Cafaro's leaving the country for drug rehabilitation.
Cafaro said his daughter served as a vice president at USAG, her role there as his eyes and ears. At the time, she was a graduate student at nearby Georgetown University.
Traficant, in his questioning of Lange on Monday, focused on Lange's attorney fees' being paid by the Cafaros and accused Lange of protecting them. Lange, though, had previously testified that he had sought out the FBI and provided incriminating evidence against J.J. Cafaro and Traficant.
Denies taking money: "I didn't take any money from J.J. and he knows it," Traficant said after court Monday. "J.J.'s company would have been audited for five years. J.J. would have been put in jail for perjury in the [Phil] Chance trial.
In July 1999, Chance, former Mahoning County sheriff, was found guilty of racketeering crimes, including taking money from mob boss Lenny Strollo.
"I hold nothing personal against J.J., but I know exactly what happened. J.J. is trying to keep his a-- out of jail, and you know what, as crazy as it might sound, J.J. I still consider a friend," Traficant added. "You know why? They [FBI and prosecutors] have pressured people to the point where their lives would be destroyed."
Traficant said it will all come out when he puts on his defense, which could begin late today.

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