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The Federal Probe: An Explainer
by INDEPENDENT STAFF
August 2004
Why do I care about the probe?
Because you, as a resident or devotee of Philadelphia, are pathologically drawn to corruption and its seedy accomplices, and the federal investigation into the awarding of city contracts offers a rich stew of them: mob bosses, union bosses, mistresses, collection agencies, religiously-inspired name changes, the lovely Sky Asian Bistro at the Philadelphia International Airport, those “umbrella-like organizations where artistry and criminality often mutually coexist” (Philadelphia Inquirer, 12/21/03) known as rap groups, the slum-healing power of fried chicken and … oh yes, City Hall. Because a very naive and sick part of you is charmed by tales of Italian Catholics, black Muslims and WASP bankers all harmoniously gorging Philadelphia's fleshy underbelly with fatty municipal contracts. Because everyone is talking about it, and you, reader, are everyone's resident know-it-all.
How did the probe start?
Where there are drugs, there are bugs. If the Taliban hadn't been trafficking heroin, the C.I.A. might never know they were also playing host to Al Qaeda boot camps. If a rap group called the Richard Allen Mob (RAM) Squad (which hailed from the dreary projects that preceded those charming townhouse Richard Allen Homes around 10th and Parrish streets) had complied with the promise touted in the liner notes of their 2001 album, “To The Philly police: Stop hating, we sell music now!” we might not be having this conversation. But the album Random.Access. Money, despite the involvement of Nelly, Cam'ron and South Philadelphia mobster Joseph “Skinny Joey” Merlino, was too mediocre even for commercial hip-hop radio. The RAM Squad sold 13,000 CDs, then returned to selling cocaine, where they made much better money involving themselves in a giant drug network that grew to involve hundreds of people, one of whom the police suspect might be a local Muslim religious leader, the imam of the Philadelphia Masjid, or mosque, at 47th and Wyalusing streets, Shamsud-din Ali. Ali was once known as Clarence Fowler, a black mafia leader who was convicted and sent to prison during the 1970s for the murder of a Baptist preacher that was later overturned. He is married to a woman, Faridah Ali a.k.a. Rita Spicer, whose taste in men has tended toward those of a narcotics-dealing inclination; her ex-husband was a convicted coke dealer, her son was an alleged coke dealer and she, naturally, had been an FBI informant, according to the Philadelphia Daily News. Fowler was also a big supporter of Mayor John Street's and an influential community leader. Eventually the feds obtained a warrant to tap the imam's phone.
So was the imam a drug trafficker?
He hasn't been charged with anything yet, but the feds' attentions quickly turned to other types of possible criminal activity. The imam's mosque received money from drug dealers that some of said dealers described as a “street tax,” but Fowler/Ali—who was known to said dealers as ‘Cutty' (Cutthroat)—seems, by most accounts, to have been more active as white-collar scam artist. Aside from the mosque, he had three main businesses: a collection agency, an adult education school and a we'll-be-your-minority-partner-so-you-can-get-city-contracts firm that collected taxpayer dollars but didn't really do anything. The school took in money for a community college that gave diplomas but didn't always hold classes. The collection agency got some $60,000 in city money to collect delinquent taxes that weren't actually delinquent. The minority partnering firm partnered with a wireless firm to run cellular phone service at the Philadelphia Airport, when the airport could have paid thousands of dollar less for the same service.
Isn't all that stuff pretty low-level? Why is the probe so big?
Wait, but you haven't heard the part about the free deck! The weekend usage of the condo in the Poconos! In all seriousness, this case is no Enron. Unfortunately, it takes a great deal more work and money to prosecute a hundred low-level scams than it does to prosecute one high-level one, and it is unquestionably the former this city seems to attract. But there are common threads that bind our hustlers together: besides drugs, for instance, there are minority business contracts. The imam won one for the cellular phone towers, and also partnered with a union boss—at a meeting also attended by an alleged mob boss from Scranton—to create a demolition company strictly for the purpose of getting minority contracts. (It never won any.) Then there were Renee Enterprises and Hoppergrass, companies owned by the girlfriend and wife, respectively, of the imam's close friend Ron White (who we will get to later), which became partners in over a dozen newsstands and bars at the Philadelphia International Airport, despite the fact they didn't do anything. White's girlfriend—ahem, “paramour,” to use the feds' term—won numerous minority business contract for a phony “printing company” called RPC that took city bond certificate printing jobs to Kinko's-type outfits and invoiced the city for a 300 percent markup.
Who in City Hall is on the hook for all this stuff?
The main city agencies that served as graft epicenters are the airport, the Minority Business Enterprise Council and the Department of Finance, where the one city employeewho has actually been charged, former treasurer Corey Kemp, worked. Kemp was raised in North Philadelphia and worked as the treasurer of Reading, Pa., where he was accused of sexually harassing a co-worker in a case the city settled for $57,500, before returning to the big city to become the youngest person ever appointed to the job of city treasurer. As treasurer, Kemp was responsible for naming the lawyers and investment bankers who would work on city bond deals and deciding who would hold the city's money in the meantime. In exchange for some perks—Super Bowl tickets, NBA All-Star Game tickets, a deck for his house, among others—he stands accused of handing these decisions over to Ron White, a lawyer, philanthropist and close friend of John Street. White in turn collected as many counsel and co-counsel gigs as he could himself ($633,594 worth during Kemp's tenure) and steered other work to his friends and business associates in exchange for big mayoral campaign donations. White's reputation for brokering campaign contributions and city contracts precedes the Street administration. At the airport, for instance, former aviation director Fred Testa says that when he took the job under Mayor Ed Rendell in 1999, colleagues told him, “Ron White gets your concessions.” And indeed he did: dozens of sweet contracts to do business at the airport were awarded to friends of Ron White with deep campaign-giving pockets but no actual expertise in what they were doing. In most cases, the Minority Business Enterprise Council (MBEC) enabled this charade; a city audit of MBEC's activity showed that White's wife's business Hoppergrass got certification, with “little evidence of meaningful review” of her qualifications, as a “disadvantaged business” within twenty-six business days. Other certifications took 200 or more days to process. Of ninety-one certification files randomly selected as part of the audit, twenty-four were missing and forty-four had insufficient documentation to support the disadvantage certification.
Couldn't we avoid all of this by putting city contracts up for bid on eBay?
Yes. But the city has long tried to steer more contracts to “disadvantaged” businesses, and a combination of the indictments and the MBEC's new chief Michael P. Williams will probably clean up the process by which a company gets certified as “disadvantaged.” And even in cases where a city contract is supposed to be won by the lowest bidder, there are ways to rig it: For instance, when the city was trying to get a $30 million line of credit, Corey Kemp allegedly told his friends at Commerce Bank (who had earlier granted him a mortgage despite the fact that his car had been repossessed and his credit score of 433 was the worst his loan officer had seen in forty years on the job) what interest rate they would have to bid to undercut the competition—and Commerce got the job. Also, companies already wrongly certified as “disadvantaged” won't immediately lose that status. Likewise, the city can't re-award all its contracts. The process of actually transferring city contracts to qualified bidders will take time. Or never happen.
How much prison time do these guys face? Who's paying their legal bills?
Well, White and Kemp together face up to 1,352 years in prison and $19 million in fines, and yes, they've pled not guilty. There has been no sign the two will turn on one another. Emerging from court, White said the feds had “taken a friendship ... and tried to portray it as something else,” and suggested they didn't understand “the culture of the African American community.”
What's the mayor's involvement anyway? And what does he have to say for himself?
“People who support me in the general election have a greater chance of getting business from my administration.” (Philadelphia Inquirer, 9/21/99) The indictment says Street “instructed his staff that, if White or firms he touted appeared to be qualified, the staff members should award the city business White sought, and provide White with inside information he sought regarding the operations of city agencies otherwise unavailable to the public.” Street has denied this. But on the wiretaps, Kemp and White talk in the year before the election about how it's time for businesses looking for city contracts to “get down or lay down,” and how Street's reelection would “give us four more years to do our thing.”
“I feel badly that there is a probe,” Street said, after White, Kemp and co. were indicted. “I wish it never happened, but it did and we're all going to live with it.” The feds have all but admitted that Street will get to live with it without being charged.
So, what good parts are you leaving out for space?
The fried chicken pages (forty to forty-four) are arguably, ahem, some of the indictment's juiciest. City Treasurer Kemp shows up at a New York meeting between Ron White, their friend La-Van Hawkins and an owner of one hundred Church's Fried Chicken franchises that White and Hawkins are trying to buy, and tells the Church's owner that the city is interested in loaning White and Hawkins $40 million to buy the fried chicken franchises “as part of the revitalization of Philadelphia neighborhoods.” So the indictment reads. See, none of the fried chicken outlets were actually in Philadelphia, but Hawkins explained to the fellow that he had plans to expand into Philadelphia, thereby showering the city's inner-city neighborhoods with badly-needed third-tier fast food options. It pains us to say that this deal never actually went down, but Kemp did allegedly remark on the phone with Ron White afterward, “That was fun ... that was a good day.”
Also, our indictees are connected to that bustling big-money urban center, Reading. Kemp's friend and old pastor Rev. Frank McCracken, who in 1997 as a Reading city councilman had charged that the sexual harassment suit against Kemp was racially motivated, stands to spend life in jail for borrowing money from Commerce Bank and receiving state welfare-to-work money for his church in Reading, and allegedly giving the funds to himself and Kemp. After he was indicted, he told the press: “If the government wants to persecute me, it's the government that persecuted Jesus. It's the government that persecuted Martin Luther King. It's the government that persecuted Marcus Garvey. It's the government that persecuted Nelson Mandela. This is the government that allowed my ancestors to be raped. This is not new.”
To view the full text of the indictment, visit the "Related Link" below.
What do people at the Richard Allen Homes have to say about all this?
In addition to the RAM Squad, Ron White himself grew up at Richard Allen, and Kemp and Hawkins also hail from North Philadelphia and often referred to themselves as the “North Philly Three.” One warm June afternoon we stopped by to ask current residents of the North Philadelphia public housing development what they think of their native son's alleged misdeeds.
“He hasn't been found guilty of anything,” said William Sweat, a laborer who's lived in the Richard Allen Homes for twenty-five years. “They're just saying what they think he did.” As for Mayor Street, “he hasn't done anything different than any administration before.”
White's charity, the Youth Leadership Foundation, sponsors a neighborhood basketball team. He dispenses scholarships and mentorships. He shows up to community events. He throws an annual benefit gala. Some residents said he was being “railroaded,” others “scapegoated.” Everyone seemed to know him, and no one had an unkind thing to say about the man.
Related Links:
 The Press Release with the full text of the indictment
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