May 24, 2004

At probe's core: Just who is talking?
Wiretaps put a spotlight on City Hall players.
But what's behind the chatter on the tapes is a mystery.
By Joseph Tanfani
INQUIRER STAFF WRITER
   
 
Seven months since the Day of the Bug, the pace of the probe is picking up.

Agents are working long hours. Twice a week, city officials and others are trudging into a grand-jury room. And on Thursday, federal agents indicted 27 members of a North Philadelphia drug gang, whose chatter on wiretaps spawned the sweeping City Hall investigation.

With indictments expected by summer's end, the tracks left by federal agents make it clear that they are investigating whether some political players tried to turn city government into a racketeering enterprise for profit.

The discovery of bugs in Mayor Street's ceiling Oct. 7 set Philadelphia City Hall on its ear. Since then, with a wave of raids, subpoenas and wiretaps, the FBI has upended city government and given it a bone-rattling shake. A lot of information has tumbled out about an array of deals, from airport bars to municipal bonds to cell-phone towers. Those public details aside, experts say the real heart of this looming corruption case is still a deep secret - to everyone but the feds, that is.

What's on the tapes? And, who's willing to talk?

In the answers to those two questions may lie the difference between a probe that cuts deeply into Philadelphia's political culture and one that just makes a few nicks.

One expert in public corruption law said Philadelphia could now be the "national center" of a broadening federal assault on municipal malfeasance.

"Ultimately, the cure has to come from within - you have to have an electorate who's not willing to tolerate it," said George D. Brown, a law professor at Boston College. "The counterargument is, the culture becomes so ingrained that you need these episodic wholesale attacks," he said.

Boggling in its scope, the Philadelphia corruption investigation is best understood as two interlocking networks of political players and deals, with lawyer Ronald A. White at the center of one, and Muslim cleric and businessman Imam Shamsud-din Ali at the other.

Nearly everything that has surfaced about the federal probe relates in some way to one of these men - friends themselves, both active in politics, both engaged in getting city contracts, and both close supporters of Mayor Street's.

Both men have said they did nothing wrong. White said he merely raised campaign money and sought city work like generations of others before him.

Prosecutors have issued "target letters" to White, Ali's wife and several others, in a move that usually signals that prosecutors are close to seeking charges.

A big unknown is just how high up in City Hall the case will go.

From documents and subpoenas, however, it's apparent that federal prosecutors are considering a number of potential crimes, including violations of the Hobbs Act, the powerful federal anti-extortion law that makes it a crime for public officials to use their offices for private gain.

But that's not all. Possible tax fraud, mail fraud, bank fraud, and lying to investigators also figure in the probe. The IRS is on the case. Two grand juries are hearing testimony at the federal building at Ninth and Market Streets; Ali-related witnesses show up one day, White witnesses another.

A string of top Street administration officials and others have been called before the grand jury, many of them merely to provide testimony about how city government works. Among them are George R. Burrell, the mayor's chief political aide, who approves many of the city's no-bid contracts; Street spokeswoman Barbara Grant; John Christmas, a mayoral aide; and City Councilwoman Jannie L. Blackwell.

Street himself was identified as a subject of the probe. He has said he has done nothing wrong. Soon after the bug was discovered, federal agents seized his BlackBerrys and subpoenaed his bank records.
The FBI also has been digging into other issues that spun off from the main probe. One is whether anyone leaked the existence of the bug.

Agents have recently been looking at possible wrongdoing involving mortgages and other loans given to Philadelphia insiders by Commerce Bank.

Even the Mafia has a bit role in the drama: The FBI has asked about a dinner meeting in South Philadelphia between Ali and a reputed Scranton mob figure.

By themselves, though, all these deals don't necessarily add up to anything illegal. In federal corruption cases, it's often what the players say about those deals - on tape, or in testimony of someone who decides to become a cooperating witness - that spells the difference between politics-as-usual and a federal crime of extortion or bribery.

If there's a clear tie between the deal and some benefit to a city official, that's a potential crime. Making promises on tape means trouble: "For $1 million, I'll make sure you get the contract," for example. So do threats: "Unless you pay me, I'll make sure you never work in this town again."

Verbal nods and winks might be enough, too, but that's a tougher sell to a jury.

Absent such a link - or some related crime, such as lying on a document or failing to report payments on tax returns - all the deals under investigation could add up to nothing more than gobs of political grease in a long Philadelphia tradition.

"For the politician and the lobbyist alike, it may be disquieting to know that all that stands between the legal campaign contribution, gift, meal or ticket to a sporting event, and an illegal gratuity or bribe, is the government's ability to prove a link between such donations and an official act," said Elkan Abramowitz, a former federal prosecutor, in an article in the New York Law Journal. Without that connection, he wrote, "the exchange is simply the bread and butter of American politics."

Proving that connection, the quid pro quo, in legalese, is not always easy. Prosecutors usually try to do it by recording conversations as deals go down, or even better, by persuading one party in the transaction to snitch on the others.

"If they have someone saying, 'The mayor's going to listen to me. Unless you give me what I want, you'll never get what it is you're looking for' - right there he's committed a crime, regardless of whether the public official knew about it or not," said lawyer Richard T. Meehan Jr., who defended the former mayor of Bridgeport, Conn., in a corruption trial involving payoffs for city contracts. In that case, the mayor went to jail after his former cronies testified for the government.

As for the Philadelphia investigation, what is known is that the FBI has a lot of talk on tape. In two years of wiretapping, starting with a tap on Ali's home phone and spreading to phones of White and city officials, the FBI recorded more than 5,000 "incriminating intercepts," according to one court report. In all, agents eavesdropped on 36,668 conversations, the report said.

What isn't known: Just how damaging are they? The transcripts are still under wraps, but some witnesses and lawyers who have been played snippets say they didn't hear anything that was clearly damning.

In the Bridgeport case, "the conversations were vague," Meehan said. "Without the cooperation [of the two associates] there never would have been a conviction here. "People just don't discuss this stuff openly on the telephone."

The question of whether the FBI has a cooperating witness who could provide a window into wrongdoing has been Topic A in political and legal circles for months. There apparently are some cooperators, but it's unclear how much any of them know about dealings in City Hall. Part of the case may turn on this question: Just how powerful were White and Ali? Were they just like other potential deal-makers, scrapping for business, or were they figures with special authority to make deals happen for themselves and their friends?

White, who runs his own Center City boutique law firm, developed a reputation as an aggressive advocate for clients seeking government work, particularly at the airport, where some say he became almost a gatekeeper over concessions. But two men who took those phone calls from White - Burrell and former Rendell chief of staff David L. Cohen - say he was no more heavy-handed than others in the same game.

"Ron White was a facilitator like lots of other people," Cohen said in a February interview. "You're completely focused and fixated on a guy that seems larger than life. I'll tell you, from '92 to '97, he wasn't larger than life. He was just another guy." There's nothing illegal, or even unusual, about lawyers and lobbyists taking fees to get clients government work.

Likewise, it's typical for those lobbyists to raise money or buy dinners for politicians. It goes on in every big city hall or statehouse in America. But there's a line that shouldn't be crossed, at least in the view of federal prosecutors. In one recent federal corruption case, in Illinois, prosecutors alleged that one businessman became so influential that he could force people to pay him in order to get contracts from then-Secretary of State George H. Ryan Sr.

In their indictment, the prosecutors said the lobbyist, Lawrence E. Warner, essentially crossed the line from private figure to public player, acting under "color of official right" - a key phrase in extortion statutes covering government officials and corruption. That case also provides an illustration of the powerful kit of tools available to prosecutors in corruption cases.

Ryan was hit with a trunk load of charges, both state and federal, under the umbrella of an alleged racketeering conspiracy - everything from extortion to lying about gifts to family members to handing out coveted low-number license plates to pals.

That case hasn't gone to trial.

And last week, in a case involving a supposed bribe scheme in Minneapolis, the U.S. Supreme Court upheld a powerful, little-known law that makes just about any bribe over $5,000 paid to a public official into a federal crime.

"It was a huge victory for the government," said Brown, the law professor. "They've now got a hunting license."

Inquirer staff writers Emilie Lounsberry, Marcia Gelbart and Mark Fazlollah contributed to this article.