Wednesday, July 14, 2010

My Crime Beat Column: The Bug in the Mayor's Office, the Pay-To-Play Scandal, and other Philadelphia Corruption Cases

The below column originally appeared in The Orchard Press Online Mystery Magazine in 2003.

Lincoln Steffens wrote that Philadelphia was corrupt and contented in 1903.

Philadelphians are nothing if not proud of our history, so it was no surprise to me when Philadelphia Mayor John Street was reelected despite the discovery of a FBI bug in his city hall office shortly before the election.

The news of the bug and the subsequent story that his administration was being investigated for illegally issuing city contracts to campaign contributors actually helped invigorate his campaign.

We appear to be corrupt and contented still.

The time-honored tradition of rewarding political contributors with lucrative city contracts, called "Pay-to-Play," is not unique to Philadelphia. Other cities have similar set-ups.

As I understand it, giving contracts to contributors is only illegal if its done on a "quid pro quo" (something for something) basis. That is, if you give the mayor a campaign contribution and then just happen to be awarded a contract, that’s not a crime. But if there is a stated agreement of cash traded for future contracts, that’s a crime.

With only weeks to go in a hotly contested mayoral election, the Philadelphia police "swept" the mayor’s office for electronic listening devices and discovered a fairly sophisticated bug concealed in the ceiling.

FBI spokesperson Linda Vizi came out and stated that the bug was not "election-related," leaving everyone to assume that the bug was the FBI's’ and that they were investigating crimes.

Street’s supporters protested the bugging of the mayor and claimed the federal investigation was political and racially motivated (the mayor’s opponent, Sam Katz, is white and Street is black). U.S. Attorney General John Ashcroft and President George Bush were mentioned as part of a broad Republication conspiracy to steal the election. Ironically, the fallout from the scandal actually helped the mayor, especially among black voters.

Street said that he did nothing wrong. He said the FBI described him as a "subject," rather than a "target" of the investigation.

A subject, according to the U.S. Justice Department, is a person whose conduct is within the scope of the grand jury’s investigation. A target, according to the Justice Department, is a person that the prosecutor or the grand jury has substantial evidence linking him or her to the commission of a crime.

After the news of the bug in the mayor’s office broke, the FBI raided the city’s Finance Department, the City Treasurer Office and the city Board of Pensions & Retirement. The FBI also raided the law offices of Ronald White, a close political associate of the mayor, as well as a major fund-raiser. White, who has received city contracts for legal work (big surprise), appears to be a key figure in the FBI probe.

White reportedly has his business associates contribute to his political action committees, which in turn donates large amounts of cash to the mayor. White has, according to press reports, collected $967, 094 in fees on bond deals. The city also paid White $1.6 million since 1996 for his work as a lawyer representing the city.

Since the discovery of the bug, we’ve learned that White’s wife was judged by the Street administration to be qualified to run two businesses at the Philadelphia International Airport even though she also serves as a medical director of a mental institution situated more than 30 miles from the city. (I would think that her expertise as a psychiatrist and director of a mental institution is a clear plus. One might say that the city is, after all, one large mental institution).

The city’s Minority Business Enterprise Council (MMBCE), set up to help "disadvantaged" companies, ruled she could become a partner in five airport bars and several gift shops despite her other business interests. Her company grossed $4.7 million according to records released to The Philadelphia Inquirer. The newspaper reported that White’s son once had a popcorn concession at the airport, his daughter, a punk rock singer, had a job there and recent reports show that White’s brother-in-law also had a piece of the action.

The treasurer of one of White’s political action committees sold soft pretzels at the airport. Don’t laugh. We’re talking big bucks here.

City Treasurer Corey Kemp, who recently resigned his office, had his office raided by the FBI. The Philadelphia Daily News reported that FBI agents were making inquiries into allegations that Kemp was taken to the Super Bowl by White.

A mayor’s aide helped the mayor’s brother, Milton Street, by giving him information about the bidding process for a contract at the airport. The FBI was looking at a $13.6 million dollar contract with a company that had ties to the mayor’s brother.

The FBI is also looking at contracts awarded to a Street supporter and Muslim Iman named Shamsud-din Ali.

"Before becoming a soft-spoken, politically connected leader of Philadelphia’s African-American community," The Philadelphia Daily News reported, "Iman Shamsud-din Ali was a reputed Black Mafia kingpin named Clarence Fowler."

The FBI placed a video cam in Ali’s dept collection agency. His company – you guessed it – was awarded a host of city contracts. More to come, I’m sure.

As a crime reporter and columnist for South Philadelphia newspapers for a good number of years, I covered local politics, city government, the police and the FBI. I’ve interviewed most of the principal characters in this urban comedy and I, like everyone else in the city, have heard stories about pay-to-play deals. 

Although all of the known subjects of the investigation, and perhaps the targets as well, are black, I think Katz is correct in his assertion that the federal probe was not about black or white.

"It’s about green," he told reporters. "And green is the color of greed."

The subjects are black simply because, as Street himself proudly proclaimed, "the brothers and sisters are in charge." When white politicians were in office there were also corruption scandals. We have an equal opportunity crooked system.

I recall some of Philadelphia’s more recent seedy history, starting with the rock & roll "payola" scandal in the early 1960s. The scandal involved DJs who accepted money and gifts from records companies for playing their songs. You might say that this was another form of "pay-to-play."

Dick Clark, who hosted "American Bandstand" from Philadelphia at that time, was discovered to have substantial holdings in music publishing and record companies. ABC stepped in and ordered Clark to divest himself or lose the show. In a sense, this was Dick Clark’s first "blooper."

Then there was Democratic City Chairman Peter J. Camiel, who claimed that Mayor Frank Rizzo, the law and order former police commissioner, tried to make a deal with him in a hotel men’s room. Rizzo denied it and both men were coaxed into taking a lie-detector test administered by The Philadelphia Daily News. Rizzo failed the test.

Another major black eye for the city came with "Abscam," a FBI sting operation in the 1970s and 1980s. The FBI set up "Abdul Enterprises" and an undercover FBI agent dressed up as an Arab sheik that offered cash to several elected officials. The FBI caught the greedy politicians on tape.

My own South Philly congressman at the time, "Ozzie" Myers, went to jail as a result of Abscam. Myers was the guy caught on tape saying the infamous line, "Money talks and bullshit walks." This could be Philadelphia’s slogan.

Abscam also netted the U.S. Senator from New Jersey, Harrison Williams, Camden Mayor Angelo Erichetti, Philadelphia City Council President George X. Schwartz, Philadelphia City councilman Harry Jannotti, Congressman Raymond Lederer and a string of other elected officials.

Those caught in the sting claimed entrapment, but the images of politicians eagerly stuffing cash into their pockets in a hotel room was truly damaging. John Street, the future mayor and current subject of his very own corruption probe, criticized City Council at the time, calling them "nothing but thieves and crooks." Former Philadelphia Mayor William Green called City Council "the worst legislative body in the free world."

In other scandals, not one, but two of my South Philly city councilmen were jailed for corruption. In the 1980s City Councilman Leland Beloff, along with a local mob guy, tried to solicit a bribe from Willard Rouse. Pay us, they said to the nationally known developer, and your bill will fly through city council.

That Rouse was a constant dinner companion of not only the mayor and the governor, but also the Special-Agent-In-Charge of the FBI, did not deter these two from shaking down the developer. Of course, Rouse went right to the FBI and the two were arrested and later jailed.

Beloff’s successor to city council, Jimmy Tayoun was also jailed in a later scandal.

Tayoun, a former Philadelphia Daily News reporter, would go on to write a book to help initiate the newcomer to federal prison. Tayoun’s Going to Prison? is sort of a dummy’s guide to Club Fed.

It’s a very popular book locally, as you can imagine. I would venture to say that quite a few more copies will be sold in the future. 

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