A wide-ranging federal investigation of alleged corruption in City Hall broke into the open yesterday, as FBI agents seized records from people with political ties to Mayor Street.
In several searches across the city, federal agents rushed to preserve possible evidence the day after Philadelphia police found a listening device that the FBI had planted in the ceiling of Street's City Hall office.
Yesterday morning, agents raided a small financial firm run by two Street supporters, including one of Philadelphia's most prominent Muslim leaders. Under Street's administration, the firm got a no-bid city contract to collect delinquent taxes.
Last night, Street told reporters he had done nothing wrong.
"My integrity is very important to me," he said. "I've been in this business 25 years."
Several sources, both inside and outside of government, confirmed yesterday that the bug was indeed planted by the FBI.
In the statement, Street said lawyer Arthur Makadon, whom he described as "my friend and adviser," had been told by the U.S. Attorney's Office that Street is not a "target of any federal investigation."
That does not necessarily mean that federal authorities are not interested in the mayor. Target is a specific term federal prosecutors use to describe someone who is likely to be indicted.
In a telephone interview, Makadon would not reveal anything further about what he had learned from the U.S. Attorney's Office about Street's status.
Street released his statement after Richard Manieri, spokesman for Philadelphia U.S. Attorney Patrick Meehan, said authorities had told the mayor where he stood.
"We have stated very clearly to Mayor Street and his attorney the mayor's status in this matter," Manieri said yesterday. He would not elaborate.
The bugging, according to those familiar with it, was part of a probe into corruption in city contracts and other matters - especially deals at Philadelphia International Airport.
The bug, with multiple microphones, was found Tuesday by Philadelphia police conducting a sweep of the office. Police Commissioner Sylvester M. Johnson has said that the sweep was part of a policy of periodically checking the office for bugs.
The mayor's office was last swept around June and no bugs were found.
The inquiry is being handled in part by the Philadelphia FBI office's anticorruption squad.
One of the FBI raids yesterday morning focused on Keystone Information & Financial Services, a Mount Airy business awarded a contract in 2002 that netted $60,600 from the city for collection of taxes.
The FBI also searched the Cheltenham home of an executive of the business, Imam Shamsud-din Ali, according to a law enforcement official. Ali is a leading Muslim cleric in Philadelphia.
"We served a few search warrants today," FBI spokeswoman Linda Vizi said yesterday. "They are sealed. I cannot give you any specific information about them."
Those knowledgeable about the inquiry said it focused in part on contracts at the airport.
The mayor's brother, T. Milton Street, who has ties to a firm doing airport business, said yesterday that he, too, thought the probe was related to the airport.
For Mayor Street, the discovery of the bug loomed as the biggest crisis of his mayoralty. It blotted out everything else in a campaign that has for months struggled to stay on message.
Yesterday, Street faced questions all day about the electronic device and its significance.
Street, as he had Tuesday when the bug was found, said yesterday afternoon that he doubted he personally was under investigation.
"I would like to know what's up...," Street said then. "Because I know what I've done and I haven't done."
Street and Gov. Rendell as well as a host of other prominent politicians called yesterday for the FBI to tell the public whether Street or other administration officials under investigation.
"It's incumbent on the FBI to make a statement now," Rendell said. "The only ones who know [are] the FBI, and it's time for them to speak up."
The FBI and federal prosecutors, both in Philadelphia and Washington, adamantly refused to do so, saying Justice Department rules prevented them from talking.
On Tuesday, however, the FBI did state flatly that the bug had not been placed as part of a political dirty trick by Street's opponent, Republican Sam Katz.
Yesterday, Katz took an indirect shot at Street as the mayor coped with the bad news.
"I would say that the evidence well prior to anything that's going on here today or yesterday reinforces my view that this is an administration engaged in cronyism, secrecy, nepotism, and sweetheart deals for their friends," Katz said.
While sources confirmed that the FBI had taken the extraordinary step of bugging the office of the mayor of the nation's fifth-largest city, much about the federal raids yesterday remained unclear.
Agents raided the Germantown Avenue offices of Keystone Information & Financial Services sometime before 10 a.m. They left with cartons of material, authorities said.
The chief executive of the firm, Marcelino Guerrero, has contributed $9,000 to Street's mayoral campaigns between 1997 and 1999, records show.
The vice president of the firm, Ali, is the founder and religious leader of the Philadelphia Masjid, a large and influential mosque in the area.
FBI agents searched Ali's home in Cheltenham Township yesterday, sources said. Ali, in a phone interview, declined comment.
"He's a supporter. He's a friend," Street said yesterday when asked about Ali. "I've seen him at fund-raisers. I mean, I don't know whether he's raised any money."
The imam is a founder of the Philadelphia Majlis Ash Shura, or regional consultative council, formed a decade ago as an umbrella body for mosques in the city.
"Shamsud-din is Street's adviser to the Muslim community," said Fareed Numan, a former researcher at the American Muslim Council and expert on the local Muslim community.
Ali has appeared at Street's side in events in the Muslim community, most recently Friday during the mayor's speech at the Al-Aqsa Islamic Society, a leading mosque for Arab and immigrant Muslims, many of whom are lukewarm in support for the mayor.
Ali has been an active Street supporter since at least 1999. That year, he was one of several African American leaders who signed a letter urging a black rival of Street's to drop out so the black community could unify around Street.
Earlier this year, it was learned that a federal law enforcement task force was investigating Ali in connection with alleged fraud at a private Muslim school he runs in West Philadelphia, the Clara Muhammad School.
The task force was reportedly looking into allegations that the school collected money from Community College of Philadelphia to operate adult-education classes that the school never held.
And, in June, the Philadelphia School District gave authorities documents related to a proposed charter school that Ali and his wife wanted to open.
It is also known that federal investigators have been exploring contracts at the airport.
In June, city officials disclosed that a federal grand jury was investigating a $13.6 million maintenance contract at the airport. Federal authorities had subpoenaed 25,000 page of contract documents, city officials said
In an interview yesterday, T. Milton Street said he believed that the hidden surveillance device may have been tied to the airport probe.
"You can't just bug an office because of politics," Milton Street said. "You need a reason, so I think they're using that whole airport thing as a reason to bug the office."
But Milton Street insisted that the low-bid contract was fairly awarded, and that neither he nor his brother had done anything wrong.
Milton Street said that whoever planted the device may have thought he had frequent discussions there with the mayor, but he said that is not the case. "I don't go to the mayor's office very often," he said.
