EASTON - P.J. McLaine repeatedly said "I can't dispute it" when subjected to a battery of questions by the Northampton County district attorney about the millions of dollars his company took from municipalities for the now-failed promise to save them money by lowering streetlight bills.

During an hour of sometimes testy cross-examination, District Attorney John Morganelli asked the former owner of the now-defunct Municipal Energy Managers if his company took an estimated $6 million from 18 municipalities, then failed to deliver on its promise to buy the towns' streetlights from PPL and save them hundreds of thousands of dollars.

"We just went over probably $6 million in cash payments," Mr. Morganelli said, after reading the names of the towns scattered across the state from the Lehigh Valley to the Williamsport area to West Pittston. "Where did all the money go?"

For nearly every mention of the town and the taxpayer money they forked over to the Lackawanna County-based company for a service that was never delivered, Mr. McLaine said, "I can't dispute it." He blamed PPL for holding up his company's plans to capitalize on what was once a promising idea.

"PPL stopped the process," said Mr. McLaine, 66, of Elmhurst.

After MEM tried to expand beyond Northeast Pennsylvania into the Lehigh Valley and beyond including the Williamsport and Harrisburg areas, its legal troubles worsened.

Following a bankruptcy filing last year and numerous lawsuits brought by towns throughout the state claiming the company never delivered on its promises, Mr. McLaine and his partner, Robert J. Kearns, 49, of Scranton, are now defending themselves in criminal court. Complaints of shoddy service arose as well, however, and Scranton disputed a $657,000 invoice the company said it was owed.

A former company president also claimed in court papers Mr. McLaine and Mr. Kearns operated a Ponzi scheme that may have defrauded cash-strapped municipalities out of millions of dollars. Mr. McLaine and Mr. Kearns are facing additional charges in a similar case involving Hampden Twp. in Cumberland County, near Harrisburg, Mr. Morganelli said.

MEM did successfully buy streetlights for 11 municipalities including Carbondale, Dunmore, Scranton, and Wilkes-Barre, and provided maintenance as part of the deal to lower the towns' power bills.

Mr. Morganelli is prosecuting the former MEM partners on charges of theft, conspiracy and the misapplication of entrusted government property involving Bethlehem Twp. in Northampton County.

On Wednesday, the defense asked Judge Leonard Zito to acquit Mr. Kearns and Mr. McLaine on the theft and conspiracy charges. The judge denied the motion.

Township officials paid MEM $832,460 in July 2007 to acquire their utility poles and streetlights from PPL. The acquisition never happened, according to court testimony.

After collecting Bethlehem's money, Mr. McLaine cashed out $777,232 in bonuses and Mr. Kearns cashed out $618,673 in bonuses from the company's corporate bank account, the DA contends. The town was never paid back, the DA said, though on Wednesday their attorneys said some services were performed and the company attempted to make good on the money.

During Mr. Morganelli's cross-examination of Mr. McLaine, the district attorney mentioned the nearly $500,000 bonus check Mr. McLaine cashed after inking the deal with Bethlehem Twp. and questioned where the township's and the other 17 towns' money went.

"You took their money and you put it in your bank account and you spent it," the DA said.

"I don't believe so, sir," Mr. McLaine refuted, saying MEM did do some work for Bethlehem and other towns. He added some of the money was paid to PPL, some was used to do work for the towns, and some is still part of the company's assets.

He said MEM spent $700,000 in Bethlehem Twp. alone.

"Show me the bills," the district attorney countered.

"Pardon me?" Mr. McLaine said, then paused. "I can get stuff to back that up."

Dunmore Mayor Patrick W. "Nibs" Loughney was one of six character witnesses called by defense attorney Paul Walker to testify on behalf of Mr. McLaine. Mid Valley School Director Peter Kolcharno also testified.

Mr. Loughney said the borough was MEM's first customer. Mr. McLaine was "very honorable," "reputable," "law-abiding" and a "friend," he said.

Mr. Kearns briefly took the stand later Wednesday, testifying he cashed out the bonuses on the advice of company's former attorney and now Dunmore borough solicitor Thomas Cummings, and their accountant. Efforts to reach Mr. Cummings late Wednesday were unsuccessful.

In court Wednesday, officials from four towns in the Allentown area - including Bethlehem - testified they signed agreements with MEM to have them purchase their streetlights and paid the company hundreds of thousands of dollars of taxpayer money. MEM never acquired their lights from PPL and never paid them back, according to court testimony.

Doug H. Bruce Jr., an assistant manager with Bethlehem Twp., testified he could not "get a straightforward answer to a straightforward question" from Mr. Kearns about how the project was going.

"I had a sense of uneasiness about the project," he testified. During former Lackawanna County Commissioner Robert C. Cordaro's public corruption trial, Mr. McLaine testified he funneled $10,000 a month in bribes to Mr. Cordaro to save his now-defunct civil engineering firm Acker Associates of Moscow from losing country contracts. Mr. Cordaro is serving an 11-year sentence in federal prison. Mr. McLaine was granted immunity from prosecution.

The district attorney will cross-examine Mr. Kearns today. The case then may go to the jury since closing arguments are expected to follow the cross-examination.

Contact the writer: smcconnell@timesshamrock.com, @smcconnellTT on Twitter