fuck arnold and gray ... some REAL shit is goin' down in Philly

Largest Federal Indictment In City History

Probe Became Public Last October

Jun 29, 2004 11:05 pm US/Eastern
PHILADELPHIA (AP) A federal grand jury indicted Philadelphia's former treasurer Tuesday on charges that he accepted tens of thousands of dollars worth of gifts from a politically connected lawyer, who in return got hefty city legal fees and fat government contracts for his clients.

Treasurer Corey Kemp, who resigned in November, was indicted along with Philadelphia attorney Ronald A. White, two Commerce Bank executives and eight others as part of a wide-ranging probe into corruption in Philadelphia city government that became public when police discovered a listening device in the mayor's office last fall.

Prosecutors say White, a top campaign fund-raiser for the mayor, used the power ceded to him by Kemp to ensure that Commerce Bank and other financial institutions that hired him were selected to handle bond transactions for the city.

Mayor John F. Street was not among those charged with a crime, but U.S. Attorney Patrick Meehan criticized him for allowing "a culture that breeds corruption."

Meehan accused the mayor of telling staff members that they should award city business to White or companies he was backing, as long as they were qualified, and provide White with "inside information" about city operations.

"The mayor allowed White to wield the power, the corrupt power, that he did. That's not to say that the mayor committed a crime," Meehan said.

Street disavowed any knowledge of criminal activity by White or Kemp, and said he took a hands-off approach to city management that left much of the dealmaking to his cabinet members and their subordinates.

"I said at the time that the bug was found in my office that I was very, very comfortable that I had done nothing wrong, and that they would find no corruption, no sex and no profanity, and I stand by those statements," Street said.

He said he never instructed anyone to give sensitive information to White, or anyone else.

"I've been careful not to do anything wrong and I've tried very hard to guard against even the appearance of any impropriety," Street said.

The indictment said White showered Kemp with gifts from January 2002 through October 2003, including a payment of $10,000, a new deck for his house, parties in his honor, tickets to an NBA All-Star game and a trip to the 2003 Super Bowl in San Diego that included transportation by private jet and limousine.

White also offered Kemp a secret stake in an investment group trying to win state approval to build a horse racing track and slot machine parlor in Philadelphia, investigators said.

In exchange, Kemp hired White as counsel for city bond deals and followed daily instructions from White as to which companies to hire for city work, prosecutors said.

White earned $633,594 in fees on city bond transactions during Kemp's tenure, prosecutors said. Simultaneously, he earned $15,000 a month from Commerce Bank, the indictment said.

The 150-page indictment said Glenn K. Holck, president of Commerce Bank-Pennsylvania, and Stephen M. Umbrell, regional vice president of the bank, "made favorable and otherwise unavailable loans" to Kemp, who had poor credit, prosecutors said.

In return, Commerce Bank was awarded a deal to provide the city with a $30 million line of credit, the indictment said.

Holck's attorney called the charges "false and outrageous."

Attorney Kevin Marino, of Newark, N.J., said Holck hadn't profited personally from deals between Commerce and the city. Marino said Commerce received no favorable treatment from city officials, and didn't bend the rules to get Kemp a loan.

Commerce Bank, based in Cherry Hill, N.J., said in a statement that it had suspended the workers and was cooperating with the investigation.

Kemp was charged with 46 counts, while White faces 34 counts, on charges including conspiracy to commit honest services fraud, wire fraud and mail fraud. They were charged with extortion for allegedly demanding that financial services firms and brokers seeking city work make hefty donations to Street's re-election campaign.

Each faces substantial prison time and hefty fines if convicted.

Attorneys who have represented White, Kemp and Commerce Bank did not return phone calls Tuesday. A spokesman for Commerce Bank also did not return a phone call.

The indictment also charged two former J.P. Morgan executives with arranging for White to be paid $50,000 for legal work he never performed. Prosecutors said Charles LeCroy and Anthony C. Snell arranged the payment to secure White's assistance in obtaining business for J.P. Morgan in Philadelphia.

Snell's attorney said his client would plead innocent. A spokesman for J.P. Morgan declined to comment, but said the company was cooperating with investigators.

In the days after the FBI bug was discovered in Street's office, agents seized the mayor's handheld computer and raided the offices of two of his supporters, the power-broker White and the leader of a Philadelphia mosque, Shamsud-din Ali. The FBI also seized hundreds of boxes of records from city agencies.

Later, federal prosecutors revealed that the wiretapping efforts ranged far beyond the mayor's office.

Among those tapped or bugged were White and Kemp, whose conversations about the city's financial dealings were allegedly recorded for nine months.

Also charged in the case are a Detroit restaurant owner accused of funneling payments from White to Kemp, an executive at the financial services firm Janney Montgomery Scott who is accused of lying to the FBI about Kemp's use of his vacation home, a Reading pastor who allegedly conspired with Kemp to divert money from a church construction loan, an attorney accused of conspiring with Kemp in a fraud scheme, and Janice Renee Knight, a woman prosecutors identified as White's mistress.

On June 2, a federal grand jury indicted Ali's wife and two stepchildren on charges that they defrauded the Community College of Philadelphia. A college administrator and her son were also indicted on fraud charges. Prosecutors said the five participated in a conspiracy to pay no-show teachers for adult literacy classes that never took place.