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The Philadelphia Story
May 17, 2005: May 9th brought the unexpected conviction of a gaggle of prominent Philadelphia pay-to-players with ties to the administration of Mayor John Street. The end result of indictments delivered in 2004, when more than a dozen people were charged. Since then, several of the indicted dropped out via guilty pleas. Those just convicted (though not of all charges) include former Philadelphia city treasurer Corey Kemp, Glenn Holck, president of Commerce Bank/Pennsylvania and Stephen Umbrell, Commerce's regional vice president. Along with a few supporting actors. A key player was struck from the roster last November when death by natural causes claimed bond lawyer Ronald A. White. A former member of the Commerce Bank/Pennsylvania advisory board and top fund-raiser for Mayor John Street.

With White out of the picture many thought conviction of the other defendants unlikely. Some believed the prosecution's case was weak or that Mayor Street, as personified by those connected to him, was invulnerable. An attitude typical to corrupt cultures. Which is how government in Philadelphia has often been characterized. Now-- and in the past.

The Philadelphia Story rises above the usual tale of municipal pols on a greed binge for a number of reasons. First, Philadelphia is the fifth largest city in the nation. Second, there's the matter of Commerce Bank. At present, the U.S. Securities and Exchange Commission (SEC) is investigating whether Commerce's mother ship, Commerce Bancorp, has made a practice of donating to public officials in both Pennsylvania and New Jersey in hopes of obtaining government contracts. Third, the impact of the recent convictions is being felt outside of Pennsylvania and familiar faces in far flung places have surfaced in connection to the overall case. Finally, Mayor John Street is black and charges of racism re investigations into his administration have been raised repeatedly.

The Philly essentials are this: bond lawyer, bank board advisor, and fund raiser Ron White bought himself a city treasurer: i.e. Corey Kemp. In exchange for cash and assorted percs, which he sometimes arranged through third parties, White got to direct Kemp in selecting providers for city financial transactions. One of the providers who reaped the benefits of the White/Kemp alliance was Commerce Bank. Commerce Bank president Glenn Holck and regional vice president Stephen Umbrell, knowing White pulled Kemp's strings, showered gratuities on both men. Again, sometimes through third parties. Treasurer Kemp told Ron White what city deals were coming up and how to score: White in turn, instructed Holck and Umbrell. Via this arrangement, Commerce became credit line provider for the Redevelopment Authority of Philadelphia.

Among the gifts Kemp received from Holck and Umbrell was 100 percent financing on his $250,000 home. City treasurer Kemp was a "poor credit risk". He wouldn't have qualified for the mortgage without the boost. Kemp's relatives also received extra consideration with Commerce loans. As did the St. James Chapel Church, Church of God in Christ. Where Kemp once worshipped and the Reverend Francis McCracken tended the flock.

In late 2004 Reverend McCracken pled guilty to assorted charges. Admitting that between 2001 and 2003 he and Corey Kemp defrauded a state and federally funded welfare-to-work program operated by the St. James Community Development Corporation by siphoning off money through dummy business entities. The Church of God in Christ also received a $116,000 advance on a $480,000 construction loan from Commerce. Not only was the amount needed for construction inflated by false statements, but Kemp and McCracken immediately skimmed half off the advance via dummy companies. Then laundered the money through a series of bank accounts. Kemp and McCracken were in the process of figuring out how to use more of the loan for a personal investment in a racetrack/casino at the Philadelphia Naval Yard (a project recommended by Ronald White) when indictments descended.

Not all who realized the Kemp/White connection were locals. Take La-Van Hawkins of Detroit, Michigan. Hawkins, a former Pizza Hut and Burger King franchisee, now co-owns an upscale establishment in the Greektown section of Detroit. According to a business article in the 05/10/05 Detroit News, in 2000 Hawkins sued the King for fraud and breach of contract. And in 2001 received a settlement of $30 million. In 2004 Hawkins was indicted in Philadelphia along with White, Kemp et al. Court statements by the feds re Hawkins raised the issue of whether an agreement with Burger King had actually been reached, or if litigation was ongoing. The feds also described Hawkins as being heavily in debt. And that he joined those who at the behest of Ron White, were laying gifts on Philadelphia city treasurer Corey Kemp. In return, Kemp and Ron White helped Hawkins deceive a company called Falcon Holdings, a franchiser running one hundred Church's Fried Chicken outlets in Detroit and Chicago. Hawkins allegedly claimed he had access to Philadelphia's pension fund-- which would be available for co-investment in Church's Fried Chicken franchises as part of a redevelopment effort in North Philly. Kemp and White allegedly backed up Hawkins' story at a May 2003 meeting with the owner of Falcon Holdings at the Waldorf Astoria in New York City.

On May 9th, La-Van Hawkins was acquitted re the chicken franchise conspiracy, but was found guilty of lying to a grand jury as to why he sent several checks to city treasurer Corey Kemp.

Out-of-town players also included Wall Street types such as Charles LeCroy, former managing director of the southeast regional office of J. P. Morgan and Anthony Snell, a former J. P. Morgan vice president. LeCroy and Snell hailed from Florida and Georgia respectively. Both pled guilty to billing J. P. Morgan for $50,000 worth of non existent legal work by Ronald White. In exchange for his influence in obtaining city business for J. P. Morgan. Business that was also beneficial to LeCroy and Snell.

Meanwhile, Back At The Ranch

By 2003 Ron White's law firm, with the assistance of Corey Kemp, had earned $1.6 million from various city of Philadelphia agencies, with White receiving more than half a million dollars in consulting fees from the city in regard to bond issues. Some of the money paid White's firm was for genuine legal work. Still, there was so much crooked back scratching between Corey and White that Philadelphia was in danger of becoming the city that itched itself to death. As Corey Kemp told Ronald White on an FBI tape: "You got your boy sitting in the treasurer's seat..." and "that's what we do, man, we take care of each other."

Mayor John Street's role in Philadelphia municipal corruption is open to debate. No charges against him have been filed. At best he seems blind to corruption as practiced in the highest circles of his administration and among his closest political allies. The tangles described above are only a few of the scandals that have erupted in Philadelphia involving major city agencies and allegations of graft, extortion and fraud. And among the many FBI recorded conversations that factored into the White/Kemp/Holck/Umbrell case were several where Street's top campaign fundraiser Ronald White, told Corey Kemp their deals depended on "John" remaining in office. When companies wanted to do business with the city of Philadelphia Ron White made it clear the cost of admission was contributions to Mayor Street.

Did fundraiser Ron White's arm twisting spring from ideological commitment or loyalty to a political leader? Not half. Consider the following comments White made in a September, 2003 conversation with another fundraiser: "...the whole thing, man, you know I don't care about none of this s---, man, none of this politics s--- means nothing to me. What we want to do is, we business people, we want to protect our f---ing investment."

Go Team

Commerce Bank is based in the southern part of New Jersey. In Cherry Hill, a suburban town near the city of Camden, across the Delaware River from Philadelphia. Commerce is one of the fastest growing banks in New Jersey and Pennsylvania and has aggressively pursued public finance work in myriad locales. In 1999 Commerce and its officers began contributing heavily in Pennsylvania political circles. John Street's first mayoral run was the largest recipient. After Street became mayor Commerce was added to the city of Philadelphia's banking roster, receiving $233 million in city deposits. Its municipal bond subsidiary, Commerce Capital Markets, which till then was a minor Philly player became the city's second largest underwriter.

In New Jersey, between 1998 and 2003, Commerce Bank made more than $1.8 million in political donations. Former Governor Jim McGreevey received a big piece of that pie in his election run of 2001. McGreevey's top campaign fund raiser, Robert Feldman, was a business partner of Ronald White, advisory board member at Commerce Bank/Philadelphia. After McGreevey was elected, Ronald White popped up as consultant to the University of Medicine and Dentistry of New Jersey (UMDNJ). A state university. The appointment wasn't approved by the school board of directors, only by the administration. White's firm (International Brokerage Concepts, Inc.) was apparently hired to represent the university "during the transition of Governor-elect Jim McGreevey." White received $75,000. As of early Spring of this year UMDNJ was unable to find any records of work done by White.

According to an 05/10/05 Newark Star Ledger story (Philly corruption verdict rattles Jersey landscape) Charles LeCroy of Florida was also on hand post the 2001 McGreevey election. LeCroy was the J. P. Morgan guy who back in Philly, presented dummy invoices to the company for legal work not done by Ron White. In Jersey, LeCroy was trying to round up government jobs for J. P. Morgan from the new governor. But found pickings slim because White's "team" had gotten there first. According to a business memo by LeCroy, the team included White's partner Robert Feldman and former New Jersey state Senator John Lynch. One of McGreevey's main mentors and a top political boss in Jersey. Speaking of such, LeCroy also mentioned he hadn't been able to win a tobacco financing deal for J. P. Morgan-- Commerce Bank had beat them to it. Thanks to the efforts of George Norcross III.

Like Commerce Bank, Norcross the third hails from Cherry Hill and though he's never held elected office is also a top political boss. Possibly a tip top boss. Chief executive officer of Commerce National Insurance Services to boot. Plus a hefty holder of Commerce stock. Charles LeCroy, speaking via his memo, said Norcross had "apparently steamrolled the administration on this one..." and "Ron [White] indicated that this deal was cooked..."

The above emerged during the Philadelphia trial of city treasurer Corey Kemp, Commerce execs Glenn Holck and Stephen Umbrell etc. New Jersey state officials deny the allegations. And no doubt resent the alligator. Also brought up during the trial was that the McGreevey administration had granted over 4 million dollars worth of no-bid work to the Investment Management Advisory Group of Pottsdown, Pennsylvania. A firm which at the behest of Ron White had contributed to the Corey Kemp Gift Club.

After the brouhaha in Philly erupted, Commerce Bank suspended its Political Action Committee and said Commerce would no longer seek no-bid public finance work. Commerce Bancorp announced the capital markets division wouldn't be pursuing municipal bond underwriting business. But the SEC probe of Commerce Bank political donation activities in Pennsylvania and Jersey is still open. Many stock analysts believe the guilty verdicts of Commerce execs Holck and Umbrell will mean an investigatory uptick. However, in January of this year the Federal Home Loan Bank of New York announced it will help subsidize an affordable housing development project in the city of Camden-- one also financed by Commerce Bank/North in Cherry Hill. So confidence in Commerce by government-mandated institutions seems to be holding up.

The Plots Thicken

News first broke of a federal investigation involving the administration of Mayor John Street in early October 2003. City cops, when making a routine security sweep of Street's City Hall office found listening devices. The bugs belonged to the FBI. All hell broke loose. Philadelphia was in the middle of a bitterly contested mayoral race and charges flew that Street's opponent, white Republican Sam Katz, was being aided by the Bush Justice Department in an effort to smear and embarrass Street. Some claimed this was just another example of an overall effort to knock black elected officials out of office. While others said that even if the investigation sprang from actual municipal corruption, black pols were due their turn at the trough white ones had hogged for years.

Philadelphia has its history of racism and of black people being excluded from political power. And the administration of Mayor John Street certainly didn't usher public corruption into Philly. Think Mayor Frank Rizzo. Think Abscam. But while suspicions by some Street supporters that the bugs were part of a racist conspiracy to cheat Street of re-election may be understandable, they weren't the truth of the matter. Yet they were trumpeted by local pols who knew better-- and by prominent politicians from other parts of the country who visited Philadelphia to boost Mayor Street's re-election.

The bugs in Mayor Street's office arrived there via a federal probe of a major drug ring. The Philadelphia/Camden region is at the center of one of the busiest illegal drug transit routes in the USA. Partly because the Port of Philadelphia/Camden is the second largest seaport in the nation. The Philly investigation began before 2003. Twenty six alleged members of a ring believed to involve hundreds of people were ultimately busted in February 2005. During the drug investigation references to Imam Shamsud- din Ali, a city contractor and long time supporter of Mayor Street showed up on wiretaps. As did the voice of Ali himself and conversations between Ali and Street.

Imam Shamsud-din Ali (born Clarence Fowler) heads 3 business in Philadelphia. A debt collection service, a mosque connected adult education school and a minority partnering firm. At one time or another all received contracts from the city of Philadelphia. In wiretaps the FBI allegedly picked up drug dealers talking about payments called a "street tax" which was made to the Philadelphia Masjid, the mosque headed by Shamsud-din Ali. Who dealers called "Cutty". Though not indicted on any drug related charges Ali is currently standing trial for 48 RICO counts. Ones alleging that in concert with a Special Assistant to the Chief of Staff for Mayor Street, and a Chief of Staff for a City Councilperson, Ali extorted kickbacks from city vendors by claiming political influence. And that he defrauded the city, banks and taxpayers through a variety of frauds related to his businesses. Ali has already pled guilty to four counts of tax evasion connected to charges of siphoning money from the Masjid's religious school.

Based on the pre 2003 drug ring wiretaps containing references to Shamsud din-Ali, plus his and Mayor Street's voice, the bugs travelled to the City Hall office phone. Where they hung out for months and picked up some of the chat which eventually led to the corruption indictments of Ron White, Corey Kemp and the Commerce Bank boys. In turn, the material from the City Hall phone taps contributed to the FBI receiving limited approval from a federal judge to listen to conversations in Street's actual City Hall office. But only conversations between certain parties. In October 2003, those bugs had been in place for just a few days when city cops, in a sweep of Street's office, discovered them.

Federal investigations move slowly. Even if the bugs hadn't been found, there was no way anything heard in Street's office could have been used in time to affect the November 2003 election. The indictments of White, Kemp and crew weren't handed down until Summer of 2004. Shamsud-din Ali was indicted later that year. Furthermore, until the bugs in city hall were discovered Mayor Street had been running neck and neck with Sam Katz. But a month later Street mopped the floor with Katz. If anything, suspicions of a federal "conspiracy" united black and white voters and helped keep Street in office. Philadelphia is obviously not as racist as some would paint it.

As to the suggestion that black politicians deserve their chance at the corruption trough not only is this a morally bankrupt and profoundly anti democratic position, but it ignores the fact that black taxpayers are among those who help fill that trough. And that black urban dwellers in particular deserve good government. Precisely because they so often didn't-- and don't-- receive it from the municipal administrations of white John Streets.

Whenever corruption investigations arise the impacted parties, no matter their race or party affiliation, almost invariably blame a conspiracy by opponents. Usually in league with the evil newsmedia. In turn, pols love it when rivals are charged with being dirty-- and beat the outrage drum loudly in whatever newsmedia will carry the message. Even if their own closet is filled with the same practices. But the corruption unearthed is usually for real, even if the passion for reform on the other side isn't. Furthermore, for every investigation that gets launched due to politics there are far more that don't for the very same reason. The rot left to fester does far more damage.

Think New York

A bit of scrapple from The Apple. With a little Philly dog. One more odd twist in The Philadelphia Story took place this April when the name of New York's own Reverend Al Sharpton came up in a Philadelphia Inquirer article about Detroit restauranteur La- Van Hawkins and the late Ronald White. Seems that in early 2003, Hawkins and White agreed to help raise money for Reverend Sharpton's 2004 NYC mayoral campaign. In return, Hawkins and White wanted Sharpton to help get them a meeting with the New York City Comptroller's office. Which oversees the city's pension fund. Apparently Hawkins and White hoped the pension fund would invest in one of their projects. Though the meeting took place no investment resulted. Possibly because New York already has plenty of chicken. The Philly Inquirer article also said that the FBI in NYC was looking into questions re Al Sharpton's 2004 campaign funding.

A day or so after this story appeared Reverend Al appeared on the O'Reilly Factor on Fox Television. Those who expected a battle of the mega-demagogues were in for a surprise. Sharpton and Bill O'Reilly hit it off well. O'Reilly seemed truly simpatico when Al Sharpton complained about unnamed sources with hidden agendas who spread leaks. And lauded Sharpton for his wisdom in coming on the O'Reilly show and meeting "these things head on". To avoid being "demonized by the press". Nor did O'Reilly roll out the no-spin zone when Sharpton said in his best, heavily significant manner: "The other thing that is interesting is the investigation in Philadelphia, they put a bug in Mayor Street's office."

Carola Von Hoffmannstahl-Solomonoff

"For my own part, I was struck by the extent of the corruption."

Juror in the Philadelphia Kemp/Holck/Umbrell trial. Judge Suggests New Corruption, Ethics Law. David B. Caruso, Associated Press, 05/11/05

"Don't worry, the grand jury is still handing out indictments."

Jonah, poster at Attytood, 05/06/05

Sources used in this article include The Philadelphia Inquirer, Philadelphia Daily News, Philadelphia Independent, Philadelphia City Paper, Philly Burbs.com, News Gleaner, Pittsburgh Post- Gazette, Crime Beat/Paul Davis/Orchard Press Mysteries, Newark Star Ledger, Courier-Post, Detroit Free Press, The Detroit News, The New York Times, TheStreet.com, AllMortgageDetail.com, MSN.com, Reuters, Associated Press, 2005 Press Release/Federal Home Loan Bank of New York, Press Releases U.S. Department of Justice, Online records of proceedings in the United States District Court for the Eastern District of Pennsylvania, Camden/Philadelphia 2005 HIDTA statement/Office of National Drug Control Policy, plus several of the lively informative blogs thriving in Philly. Including but not limited to Attytood, Young Philly Politics and Roxborough's Publius.

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Copyright (c) 2005 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.


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