Wednesday, January 19, 2005

The Bug Trials Continue

Tuesday, Charles LeCroy, boss of Anthony Snell, who pled guilty to wire fraud on Friday, likewise pled guilty in the pay-to-play case in which they paid deceased attorney Ron White for, um, well... nothing. Nothing that is, but the potential of access to confiscated tax payer dollars free from such annoyances as "competitive bidding" or "cost-benefit analysis". So, two big shot bankers have now been hit with reasonable punishment for contributing to the steaming dungheap of corruption that is Philadelphia's city government. That's probably more progress that has been made in fighting city corruption than the previous thirty years combined, and reason to celebrate on it's own. But more intriguing is the possiblility that further trials will do more than scratch the surface, and really begin to cut to the heart of the culture of bribery and extortion that saps the city of so many resources, costs the taxpayers enormous amounts of money, and undoubtedly drives business away.

The first two prosecutions have already shined official light on what has long been assumed, but is now part of official record in a court of law.

Mayor Street's voice is not heard on any of the 44 tapes released yesterday. Nor do the tapes or documents contain any evidence that he personally orchestrated any of the deals in question. Street has not been charged with wrongdoing.

But the hundreds of pages of conversations paint an unflattering portrait of business-as-usual in Street's City Hall.

They reveal how executives from J.P. Morgan Chase, the national municipal finance firm, Commerce Bank and others talked nakedly about ways to put money in the pockets of White and other Street allies - not for their legal acumen, but for their ability to get deals done.

...

In the many conversations between White and (former city treasurer Corey) Kemp, at times it is almost impossible to discern who is the public treasurer and who the private businessman.

During one call, Kemp patiently details a host of pending bond deals with White - and listens as White instructs him who to cut into the action.

At point, White grows exasperated when he hears the name of a pair of Wall Street investment houses slated to take part in a deal involving Philadelphia International Airport.

"You know what? I'm gonna change that..., man," White said. "I don't like that. I don't like Goldman [Sachs] and Bear Stearns on both of those."


Tremendous. So here we have an unelected individual determining who will recieve city contracts, and that individual is the recipient of a number of payments for services never rendered by competitors for these contracts. And those entities which haven't bribed him (enough anyways...) - "I don't like them on those"

And what happens if you happen to think that it's wrong that an unaccountable civilian should be making these decisions for the city? Well, ask Janice Davis, former city finance director:

Janice Davis, now the finance director in Atlanta, said White had phoned her office looking for inside information on a city insurance deal. Davis ignored the request, and as a result was called on the carpet by Philadelphia Mayor John F. Street.

"He said that Ron was a friend, and if there was no problem giving him information, I should give it to him," Davis said. "He was a little disturbed that I had kind of blown Ron off."

She testified that over the next few years, White made several calls a week to her office lobbying on behalf of financial services companies, and came to play an important role in selecting which were hired to help sell municipal bonds.

On some occasions, she said, companies that White favored were added to contracts solely because of his requests.


I'm sure this method of doing business really has the best interests of Philadelphia taxpayers and residents at heart.

There's more to come out this week in the trial of Dennis Carlson, former VP at Janney Montgomery Scott.

Meanwhile, there's more corruption investigation fun as the Feds file papers against Commerce Bank officials for playing the same game.

$40,000 loan to Street's son and a $150,000 loan to Street's former law partner, both perhaps reasonable - I have no inside knowledge of their respective incomes or credit histories - but again, the influence of one Ron White enters the picture:

White called the loan to Ross "important," prosecutors said, because Ross was in a position to "make an official recommendation to award a potentially lucrative government contract to a firm affiliated with White."

The question I have is this:

Prosecutors painting a picture of a shadow government, essentially being run by one Ron White. And Ron White is now deceased. Who is it that is controlling the purse strings now?

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