Posted on 11/16/2003 4:58:20 AM PST by randita
Posted on Sun, Nov. 16, 2003
FBI probe expands to new fronts
A city agency plans to comply with a subpoena for records. Penn's Landing plans were questioned.
By Emilie Lounsberry, Joseph Tanfani and Nathan Gorenstein Inquirer Staff Writers
The already-sprawling federal investigation into corruption in city government has surfaced on two new fronts: the offices of the city Redevelopment Authority and the Penn's Landing waterfront.
The agency became the latest in a string of city offices to be served with a federal subpoena seeking records, its executive director confirmed.
And one of Mayor Street's closest advisers said in an interview that FBI agents questioned him about two weeks ago on the city's plans to redevelop Penn's Landing.
"They were very general questions," said lawyer Leonard Ross, chairman of a committee that will choose a developer for a 13-acre parcel of land along the Delaware waterfront. "What the procedure was, who was on the selection committee, how was the selection committee chosen, what was the timetable, who were the participants."
Ross said there had been no secrets and no wrongdoing in the Penn's Landing selection process.
The subpoena to the Redevelopment Authority, delivered last week, was described by one source as "very broad, a kitchen-sink thing." No details could be learned.
The Redevelopment Authority channels tens of millions in federal, state and city funds each year into projects in blighted areas. Its chairman is John J. Dougherty, a key supporter of Mayor Street, treasurer of the local Democratic party, and head of Local 98 of the International Brotherhood of Electrical Workers.
"We will fully comply with the request," Herbert Wetzel, executive director of the agency, said Friday. He declined further comment.
The federal investigation became public on Oct. 7 when a hidden FBI bug was discovered in the mayor's City Hall office during what Philadelphia police said was a routine sweep for surveillance devices.
Since then, federal agents have taken boxes of records from three city agencies, Philadelphia International Airport, the office of lawyer Ronald A. White, and the home and offices of Imam Shamsud-din Ali, a prominent Muslim cleric who is a longtime supporter of the mayor's. They also sought financial records related to Street and his family.
"Neither the mayor nor anyone in the administration has done anything wrong," Barbara Grant, a city spokeswoman, said Friday.
In other subpoenas, the government has sought records relating to bond deals and city contracts that involve some close allies of Street's - including White, who has emerged as a central figure in the probe. A major fund-raiser for Street, White has received $815,000 in city legal work since 1998 and earned nearly $1 million since 2000 for his work on city bond deals. His wife is a part-owner of four lucrative bars at the airport.
White had a role at both the Redevelopment Authority and in the competition for the Penn's Landing project.
He was on one of the final four teams competing to win the Penn's Landing deal, Ross said - the group put together by developer Bart Blatstein.
The other teams also included people with political connections, Ross said, adding that the FBI asked about who made up each group.
"You would see people that are close to the mayor, the governor, the former mayor, the next mayor," Ross said.
"It doesn't hurt to have people's friends as part of your team."
Blatstein could not be reached for comment.
Ross said he had never had his arm twisted by any of the people competing to win the Penn's Landing deal, White included.
"Ron is an aggressive business person, and there's nothing wrong with being an aggressive business person," said Ross, adding that he has known White for 30 years.
"I think he certainly stretched certain things, but I've never known him to do anything illegal," Ross said.
Ross, a former law partner of Mayor Street's, said the agents asked him no questions about the mayor or their relationship. Ross also lent an unspecified amount of money to the mayor at an interest rate of 8.5 percent, according to the mayor's financial statements.
White picked up bond work at the Redevelopment Authority in late 2000, after Street was elected, and helped represent the authority on all but one of its bond issues from November 2000 through June 2003. In two of those deals, his fees totaled $50,000.
In four bond deals last year, White represented the authority as co-counsel with the Philadelphia law firm of Ballard Spahr Andrews & Ingersoll. In a fifth deal, White partnered with Ross' firm, Greenberg Traurig LLP, to represent the authority.
That pairing was made by Street administration officials, Ross said, just as they had done in other bond sales. Philadelphia generally does not require competition for bond work.
"I receive a phone call... . And I am told my firm has been selected," Ross said. "And I say: 'Who is co-counsel?' and they tell me."
Political connections help land the deals, but Ross also said his firm - and White's - keep getting the work because they are good at it. White is one of the few qualified African American bond lawyers in the city, Ross said, and the Street administration has pushed for minority participation in all contracts.
"Ed Rendell did it," Ross said of handing out contracts to allies. "Wilson Goode did it before him, and Bill Green did it before him, and Frank Rizzo did it before him."
Contact staff writer Emilie Lounsberry at 215-854-4828 or elounsberry@phillynews.com. Inquirer staff writer Rose Ciotta contributed to this article.
© 2003 Philadelphia Inquirer and wire service sources. All Rights Reserved. http://www.philly.com
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