An auditing supervisor in the Pennsylvania Department of Labor and Industry is charged with soliciting and receiving bribes in exchange for favorable treatment of businesses insured through the State Workman's Insurance Fund (SWIF).

James McDonnell, 53, of 1432 Sanderson Avenue, Scranton, was arrested today by agents from the Pennsylvania Attorney General's Public Corruption Unit, along with his wife, Michelle McDonell, 44, who is charged with criminal conspiracy. Attorney General Linda Kelly says James McDonnell received more than $80,000 between 1999 and 2011 through a scheme where he solicited and promised Pennsylvania business owners, who were insured through the SWIF program, that he could reduce their insurance premiums in exchange for kickback payments.

All businesses in Pennsylvania are required to carry worker's compensation insurance, which can be purchased through any private insurance company or can be obtained through the SWIF program. The charges state that there were at least 15 instances where James McDonnell released refunds to businesses without documentation to support the transactions. Kelly said that the bribes James McDonnell allegedly solicited were either paid directly to him in cash or by the solicited businesses putting his wife, Michelle McDonnell, on the company payroll as a ghost employee. James McDonnell is charged with five counts of bribery in official and political matters, three counts of conflict of interest – restricted activities, three counts of conflict of interest – statement of financial interest required to be filed, two counts of dealing in proceeds of unlawful activity, and two counts of criminal conspiracy. Michelle McDonnell is charged with two counts of criminal conspiracy. Kelly noted that the investigation was initiated based on a referral from the Pennsylvania Office of Inspector General and it continues to be part of an ongoing investigation. The case will be prosecuted in Lackawanna County by Senior Deputy Attorney General K. Kenneth Brown, II of the Attorney General's Criminal Prosecutions Section.