For months, undercover operative Tyron B. Ali had been secretly recording conversations with elected officials and offering them money and gifts.
Fina told Kelly that she had three choices: expanding the probe, arresting "selected legislators" and shutting it down, or confronting targets with evidence in hopes of turning them into informants.
Kelly, a Republican who served as appointed attorney general for 19 months after Tom Corbett resigned to run for governor, took no action in response to the memo.
She did not return phone calls Friday seeking comment. Nor did she return other calls left at her home by The Inquirer recently seeking her views on the sting operation.
Attorney General Kathleen G. Kane, who inherited the investigation, has criticized it as deeply flawed. Among other things, Kane has said the probe had lost energy months before she took office. Of the 113 tapes made during the course of the undercover operation, she said, only 10 were recorded after the summer of 2012. The case, she said, had "been dead for years."
In his 2012 memorandum, Fina said he and the team deliberately put the investigation into "a more conservative and aloof approach" because of worry about leaks.
Without providing details, he wrote that "a number of incidents occurred during operations that raise concerns for the safety" of confidential informant Ali and "the integrity of our secrecy efforts."
Ali "appears to be viewed suspiciously by several members of the political and lobbying community," Fina wrote. "We could identify those who are raising suspicions about the CI, but have yet to be able to trace the source of their information."
To make sure that Ali's cover was not blown, Fina wrote in the memo, prosecutors decided he should be less active in political events.
"In this manner, we hoped that suspects would begin to doubt their concerns and reach out to the CI . . .," he wrote.
The slowdown, Fina said, also reflected the "significant manpower issues" facing the Attorney General's office.
He noted that of the original four agents assigned to the case, one had been reassigned to work drug cases and two had been put on the team investigating Jerry Sandusky, the Penn State assistant football coach accused of molesting children. The Attorney General's office in past years has been the target of criticism that it devoted too few resources to the Sandusky case.
Fina wrote the sting report one month after he completed work on the trial that led to the conviction of Sandusky on charges of molesting 10 boys.