Philadelphia's Ex-Treasurer Is Indicted in Graft Case
By JAMES DAO, NY TIMES, June 30, 2004

WASHINGTON, June 29 - A federal grand jury in Philadelphia on Tuesday indicted the city's former treasurer and a powerful lawyer with close connections to Mayor John Street as part of a wide-ranging investigation into municipal corruption.

The indictment, which names 12 defendants, charges the former treasurer, Corey Kemp, with accepting payments, gifts and other benefits from the lawyer, Ronald A. White, in exchange for directing city business worth hundreds of thousands of dollars to Mr. White's law firm and other companies linked to him.

"The nameplate on the desk of the city treasurer may have read Corey Kemp, but Ron White was calling the shots," Patrick L. Meehan, the United States attorney, said in a statement. "This is an indictment not only of the defendants but of a pay-to-play culture that can only breed corruption."

Lawyers for Mr. Kemp and Mr. White did not return calls for comment.

Mr. Street, who was elected to a second term in November, was not charged. But the indictment asserts that he instructed his staff to award city business to Mr. White or any firms he recommended whenever they appeared qualified for the work.

It also accused Mr. Street of telling aides to provide Mr. White, who has been a fund-raiser for Mr. Street since he was on the City Council, "inside information" on city agencies.

Though federal officials suggested that Mr. Street would not be indicted, they said he was responsible for encouraging favoritism that might have led to wrongdoing. They said that the investigation was continuing and that future indictments were possible.

"The mayor allowed White to wield the power, the corrupt power, that he did," Mr. Meehan said at a news conference.

In his own news conference, Mr. Street said he was unaware of any wrongdoing inside his administration and denied that he had instructed his staff to assist Mr. White.

"I've been careful not to do anything wrong and I've tried very hard to guard against even the appearance of any impropriety," he said.

The investigation exploded into public view in the middle of last year's mayoral campaign when city police found a listening device in Mr. Street's City Hall office in early October. Soon after, the Federal Bureau of Investigation confiscated Mr. Street's hand-held computer and began seizing city records. Federal officials told Mr. Street that he was not a target of their investigation.

At the time, Mr. Street, a Democrat, was locked in what seemed a tight battle against a Republican, Sam Katz, who had come within a point of defeating Mr. Street in 1999.

But news of the federal investigation seemed to energize Mr. Street's supporters. And his campaign deftly turned the emerging scandal into a political weapon, accusing Republican appointees in the Justice Department of a political vendetta against Democratic mayors. Mr. Street won re-election by 16 points.

On Tuesday, after months of official silence, the F.B.I. responded sternly to Mr. Street's attacks during last year's campaign.

"This is a story not of an election hijacked by rogue F.B.I. agents, but rather of an electoral process hijacked by Mayor John Street's private attorney, through official corruption at the highest levels of city government," said Jeffrey Lampinski, the special agent in charge of the F.B.I.'s Philadelphia office.

The 150-page indictment offers a detailed accounting of how, according to federal investigators, Mr. Kemp handed virtual control over the treasurer's office to Mr. White. Mr. Kemp was appointed by Mr. Street in April 2002 and resigned in the middle of the criminal investigation last November.

The indictment asserts that Mr. Kemp directed $633,594 in bond counsel fees to Mr. White. He also helped Commerce Bank/Philadelphia, which had hired Mr. White, win city business, including a $30 million line of credit, the indictment charges. And it says he urged that a "paramour" of Mr. White receive printing work worth more than $308,000.

In exchange, Mr. White gave Mr. Kemp $10,000, tickets and transportation to the Super Bowl game and N.B.A. All-Star events, a $10,350 deck for his house, numerous free meals and the promise of a secret partnership in a proposed racetrack-casino.

Mr. White often emphasized the importance to their criminal enterprise of getting Mr. Street re-elected, the indictment says. "It gives us four more years to do our thing," he told Mr. Kemp, according to a recorded conversation cited in the indictment.