Thursday, February 17, 2005

The Two John Streets

I think there are two John Streets. Seriously. There is the first one, who used to be a big rabble rousing, gruff, innovative, loud reformer. He is the one who does things like promote city wide wi-fi access, to help Philly become the first City in the Country to close the digital divide, to make sure abandoned cars were towed, to pay attention to real, gritty neighborhood issues. I think of him as Reformer John.

Then, there is the other John Street. I don't like this other one, though he seems to be coming out more and more these days. This would be the Tammany Hall John Street. The John Street (I will just call him Tammany John from now on) who looks the other way while his brother scams the City, the Tammany John who takes advantage of a loophole to give himself a huge chunk of change when he leaves office, and, apparently, the Tammany John who showed a stunning lack of judgment.

The Daily News and Inquirer have a huge amount of details on the FBI probe, from a freedom of information request they recently had fulfilled.

Some choice parts of the Inquirer article:
When the Eagles' new stadium opened in 2003, Mayor Street made sure two seats in the city's box were guaranteed for two of his sons before the rest were doled out for campaign contributions.

The year before, after meeting with bankers about financing the city's new baseball park, Street approached one of them about refinancing his mortgage.

If nothing else, the release of new court documents in the continuing federal probe into alleged municipal corruption shows a mayor not shy about mixing the political and personal with the public's business.

.....

Along with the taped conversations, the government yesterday released a spreadsheet listing those invited to that first fund-raiser at Lincoln Field.

Most represented companies doing or seeking business with the city. One, Andre Allen of Phoenix Capital Markets, was listed as having been asked to donate $25,000. In their indictment of Kemp, prosecutors allege he and White tried to get Allen to make a $25,000 donation to Street in exchange for time with the mayor at that game. The total collected that night: $162,500.

Asked about the event the next day, Street denied holding the fund-raiser at the stadium. "There never was a fund-raiser," he told the Philadelphia Daily News.

Well, Rendell apparently used the Vet Stadium box to fundraise as well, so Street certainly is not unique. Of course, the fact that he lied blatantly about it is a little disconcerting.

And then, from the DN, there is this:
A HIGH-RANKING Commerce Bank official told his boss in 2002 that Mayor Street had approached him after a City Hall meeting and asked about refinancing the mayor's home mortgage.

The mayor's personal-loan discussions with the Commerce aide - while the bank was winning millions of dollars in city business - are disclosed in a company memo, one of more than 1,000 bugging transcripts and documents released yesterday in the sweeping federal city corruption probe.

The discussion with Street, who ultimately got two loans from Commerce in 2003, was just one of several examples of public deals and personal loans overlapping.

.....

The papers also shed new light on how Street's son, Sharif, described as "a VIP referral," was able to get a $40,000 loan during the 1999 mayoral campaign despite poor credit and other problems. And they show that top mayoral assistant George Burrell, a key aide in doling out contracts, called Umbrell in 2003 "to discuss his personal financial needs."

The idea that the Mayor is conducting business for the City, and interrupts it by making sure he gets a good deal on a mortgage refinance actually seems pretty pitiful to me. That it appears Tammany John got his son, a past and future candidate for office, a loan as well, despite poor credit? Ugh. The City is worth more than that.

Reformer John and Tammany John. Two people who would hate each other if they ever met. I just hope that maybe, just maybe, this whole scandal has made sure that Reformer John rubs his eyes, looks around, and realizes that his legacy as a Philadelphia public servant is being destroyed by his awful Doppelganger, and the reformer decides to make a comeback.

16 Comments:

At 5:01 AM, Anonymous Anonymous said...

Sorry, but there is simply "no there
there" here.

So what Commerce Bank gave Sharif Street a loan. Plenty of people with bad or marginal credit ratings get loans every day. Now if Sharif Street got a loan at a below market interest rate or defaulted on the loan and the bank just wrote it off that might be different, but that's not what happened AFAIK. Further, in 1999 Steet wasn't even mayor and was only even money to beat Sam Katz.

And Street refinanced his mortgage by taking advantage of talking to bankers when he had the chance. The last time I checked, that's what banks do, make loans. Further, given that Fannie Mae and Freddie Mac buy most of the mortgages on the market, the banks don't even take a risk making them. There's no indication any bank gave Street a low or no interest loan or didn't expect repayment. Do you really think if the City Mayor (not just Street)had called ANY bank about a re-fi loan, that account would have been handled by Joe Schmoe? Of course not, it would've been handled by a high level bank officer and would've been approved regardless.

The fact is the political, financial, business and powerbroker players are inseperable, not just in Philadelphia, but everywhere. One can actually separate the personal from the professional. There isn't
necessarily a "corrupt" connection when a group of people are together and personal business is discussed.
Only when special or free things are provided to curry favor and there's a clear-cut quid pro quo is it problematic. There's simply no real evidence of that here.

I do believe, as the Carlson jury did, that Ron White exaggerated his connection with Street and used his supposed influence to get himself more business than he otherwise would have. White seemed to have found an accomplis in Corey Kemp, who also trumped up his influence for personal gain.

I know from personal experience that big companies try to buy influence, they don't need any encouragement.
Why do you think David (not councilman) Cohen was hired by Comcast? To try and influence Rendell, of course. Does that mean Cohen and Rendell are "corrupt"? Hardly.

It is truly sad that so many people seem to uncritically accept this flimsy federal case as evidence of corruption.

 
At 8:26 AM, Blogger DanielUA said...

I strongly disagree with the anonymous posting.

Yes, people with tons of debt and crappy credit get loans, but they not generally get them from a prime lender, like Commerce Bank. From the article:"This is a VIP referral," read a handwritten note at the bottom of Street's loan-submission papers. "The applicant is John Street's son, a candidate for the mayor of Philadelphia."

Prosecutors have not alleged there was anything improper about the loans to the Streets, and lawyers for the Commerce executives are expected to seek to keep them from being mentioned at the trial.

Another document related to the loan noted Sharif Street's history of credit problems.

"Refer with caution," it read.

"Please take a look at this one!" read another handwritten bank memo. "Our friend S. Street Jr... . Doesn't show me the money to close and take a look at that search! Oh baby! To quote a colleague, 'Like father, like son,' " an apparent reference to the mayor's own checkered financial past, which includes two bankruptcy filings.

Bank documents show that the loan was approved May 27 by Umbrell.

Umbrell, who waived the $195 application fee for the loan, wrote that Sharif Street had "minimal debt" and ample income to "comfortably support" the loan.

According to other bank documents, Sharif Street was more than $59,000 in debt and had not submitted pay stubs or other documentation of his income.

Sharif Street, who could not be reached for comment yesterday, has said his credit was sound and denied that favoritism was involved in the loan. He said the loan, which he used to buy a house from his mother, had been repaid."

I call his bullshit, is what I am saying. Their memos said that he was a huge credit risk, and they gave him a loan anyway. In other words, they cut him a deal, saving him some dough, and I sincerely doubt at the supprime rate he otherwise would have qualified for by having poor credit, debt and not submitting the proper documentation. Hell, why would Sharif go to Commerce in the first place? Because he knew he would get the VIP treatement.

As for the Mayor himself, if you have a meeting about City business, and in that same meeting, in your office, you immediately start talking about your personal needs , you implicitly implying that your own needs and that of the City are all part of the sam package. That is the fiefdom BS that is killing us here.

Did John Street openly take bribes? I doubt it, I do not think he would go that far. Did he have any problem implying that part of a city deal was to make him a personal mortgage? Sure doesn't seem like it.

As for Ron White himself, he was Stret's pay to play man. You may say that what they did, and what they Mayor did was not against the law. And you know what? i may even agree with you- they may not be explicitly violating any laws. But the pay to play culture that they lived up (and continue to do do) is just a modern day Tammany Hall. And, as I said in the main post, the old version of John Street would be ashamed.

 
At 9:33 AM, Anonymous Anonymous said...

The first anonymous post might be a Street staffer or something. The two John Streets theory is interesting and entertaining, but you're too kind. There's one John Street and he's never really been a "reformer" - he's had a couple of decent ideas (who doesn't) that have gotten implemented. He's in the Mayor's Office because of a political deal that he made with Ed Rendell (who is awesome) and then he had to buy and scheme his way to get elected twice. He's got no real constituency or genuine charisma as a leader. His administration will go down as one of the worst in the last few decades, up there (or down there) with Goode and Rizzo. Better days for Philadelphia are ahead, with either Saidel or Nutter (I prefer Nutter) as the likely front-runners in the next mayoral election.

 
At 12:19 PM, Anonymous Anonymous said...

LOL! I'm definately not a Street staffer. In fact, I'm a caucasin resident of far NE Philadelphia.

So what Commerce Bank decided to take a risk on Sharif Street. It turns out he paid the bank back with interest, but maybe in your world people with bad credit should be happy seeking out the local Mafia for a loan. I guess Commerce Bank never gives loans to students who come out of college thousands of dollars in debt either.

Here's what a corrupt person would have done - gotten Commerce Bank to loan money then forgive or write off the debt. Did that happen? No.

Contractors are always trying to get themselves an edge. So what Commerce Bank thought maybe they could get themselves an edge by approving a loan to Sharif Street.

The bottom line is, no one has shown any proof or even allegation that the city awarded contracts to anyone but the low bidder.

As for Rendell. He did a good job as mayor and he's doing well as governor. I'm a supporter, but have you seen the commercials he's cut praising Comcast? You think that's ok? The GOVERNOR making an ad for a company that's trying to get itself a big tax break.

I'd highly recommend you read Bissinger's book "A Prayer for the City" to see who really made Rendell's miracle happen.

It's too bad there are so many people in Philadelphia who simply can't let go of Street's past.

BTW, Sam Katz, the golden candidate, actually WAS convicted of swindling his partners. You never read much about that, though, did you?

 
At 12:37 PM, Blogger DanielUA said...

Um, lets see.

From you: "So what Commerce Bank decided to take a risk on Sharif Street. It turns out he paid the bank back with interest, but maybe in your world people with bad credit should be happy seeking out the local Mafia for a loan. I guess Commerce Bank never gives loans to students who come out of college thousands of dollars in debt either."

So what that they took that risk? You call it what you want, but every month he was paying that loan, he was paying less than you or I would be in a similar situation. Interest rates translate to tangible, real dollars. And if he was in fact given a prime loan despite bad credit, he was essentially given money each and every single month. I would never judge whether somoene can take a loan. But, if Commerce has a certain set of underwriting standards, and they decide to give the Mayor's son a low-interest loan despite those, that is plainly awful. Again, that is real dollars.

You then say: "Here's what a corrupt person would have done - gotten Commerce Bank to loan money then forgive or write off the debt. Did that happen? No.

Contractors are always trying to get themselves an edge. So what Commerce Bank thought maybe they could get themselves an edge by approving a loan to Sharif Street."

Well, similarly, I disagree with you. Corruption does not always have to be so black and white as an outright bribe that you want it to be. If Sharif Street did in fact get a home loan at a lower rate than he otherwise would have, he was receiving a monetary benefit every month. Just because he did not demand that the loan be forgiven does not let him off the hook. Just as you do not throw away a good politician because he is not perfect, you should not let corruption go because it is not a pure and outright bribe.

And lets not obscure the point by bringing up Katz. I am not a Katz fan, nor have I ever been. And, the details of his own trial certainly make him seem less than honest. This is not about Katz v. Street all over again. I am not a Street hater, nor I have ever been. When he does something good (such as the Wi-Fi, etc), I try and make sure to mention it. When he does something like this, that reeks of Tammany Hall politics, he should be called out.

 
At 12:37 PM, Anonymous Anonymous said...

I've read Prayer for the City a number of times and worked for the Rendell Administration in a lower level capacity. If you're inferring that Street contributed to the "Rendell Miracle", I'd say LOL myself. If you knew anything about how Philadelphia city government operated and what a City Councilmembers' contribution to that is, then you'd know that Street didn't do much for the Rendell Administration. The Rendell Administration worked well because of Rendell and the great, intelligent, and dedicated people that he attracted to work for him.

The Sam Katz stuff has been in the paper, a lot was written about it, and his political career is basically over.

Remember how Street was touted as a "budget expert" when he ran the first time? Didn't work out that way. Nutter '07.

 
At 1:32 PM, Anonymous Anonymous said...

Daniel,

You are naive to believe that Sharif Street wouldn't have gotten a loan no matter what bank he applied to. Do you think he should have put on his loan request, "please charge me the highest interest you can based on my credit history"? Would you have done that? (If so, you should get a free pass into heaven.) Is it his fault he's the mayor's son and a bank officer decided he'd be an acceptable loan risk? The bank chose to lend him money based on their assumption it would be a good political move for them. If Sharif Street had needed a loan, what should he have done?

Anonymous #2,

I'll see your low level city job and raise you 25 years of federal gov't service. I know how gov't works, too. I was here during Rendell's 2 terms and without Street's control of city council, nothing would've
gotten done.

As for the current budget deficit, it's remarkable that we survived in the black for so long given how GW Bush has wrecked the economy. In my book, that's good fiscal management.

And Nutter, what a joke. This is a man who got in bed with John Perzel and the GOP to get himself appointed to head of the Convention Center.
Don't know who I'll vote for in the next mayoral primary, but it sure won't be councilman Nutty.

I'm still waiting for your response to my comment about Rendell and the Comcast commercial.

 
At 1:51 PM, Blogger DanielUA said...

I am naive? Nah.

"You are naive to believe that Sharif Street wouldn't have gotten a loan no matter what bank he applied to. Do you think he should have put on his loan request, "please charge me the highest interest you can based on my credit history"?"

What a shocking coincidence that he just happened to end up at Commerce Bank! Shocking! Man, he sure was fortunate to just happen on the bank that his father hit up for a loan as an implicit price of doing business in the City! I wonder though, was it just pure chance? Or was he told to go there, with an understanding that he was going to get a "special" deal? Are you so naive that he did not know exactly what bank he was going to and why?

And, no, I don't expect him to ask for the highest rate possible. I do expect that Commerce will not loan him money at a rate only available to him (which again, translates to dollars in his pocket every month), based on a history that his father started by implying that part of doing business in Philly is making sure the Street family was taken care of in the mortgage industry.

Again, just like his brother being paid hundreds of thousands of dollars to help get no-bid contracts, it is the same: illegal? Maybe not. Pay-to-play, fiefdom politics, that we need major reforms to address? Yes. And again, the old Street would be ashamed.

 
At 1:54 PM, Anonymous Anonymous said...

Rendell and Cohen played Street like a Stradivarius; they used him to get want they wanted, which happened to be better, more efficient government and economic growth.

You might have Federal Govt. experience, but you don't have an intimate knowledge of how this City government works.

By the way, Street busted this budget himself, by prioritizing things like Safe Streets (millions for the cops' support and the program was curtailed right after he got re-elected) and a grandiose and ill-concieved NTI program.

I haven't seen the Rendell for Comcast commericals, but I don't really care if he did them - that doesn't offend my sensibilities at all.

Nutter in bed with Perzel? I don't know where you get that information from.

 
At 5:01 PM, Anonymous Anonymous said...

Daniel,

You seem to be a bright, thoughtful
blogger. I've read your posts on either dKos or MyDD, can't recall which, though.

Here's what I think the real deal is and it's tied to the city's minority business contracting clause.

Ron White, and to a lesser extent Milton Street, took advantage of the fact that in order to get a city contract you must include minority subvendors. Ron White had a great entree as he was in the bond business, a highly specialized area
with few, if any other minority competitors. So White was a natural partner for banks and investment firms looking for city bond business. I'd bet dollars to donuts
that the big banks and investment houses looked no further than the fact that White was a minority and was on friendly terms with the mayor and brought him in on their bids.

I believe White parlayed this to his own benefit, exaggerating (as the Carlson jury concluded) his influence, but the businesses with which he was dealing didn't know if he really had influence or not, so they played it safe and hired him or paid him as a consultant.

Then White found an ally in Corey Kemp and the two of them decided to
take advantage of companies by selling their alledged influence on awarding city contracts.

(In my career, I've developed requirements and worked with buyers and contracting officers. It's very hard to rig a competitive bidding process, the bottom line for contract award is low bid.)

You also have to understand business are always looking for an edge. My experience was that companies were continually trying to buy influence one way or another. They are predisposed to this behavior.

The companies were an easy mark for White and then Kemp and Milton Street. They believed they were going to get "something" for their "investment", so they hired these guys. As Dennis Carlson found out, he "gave" more than he ever "got" in return.

I have yet to see any evidence that contracts were awarded improperly or that someone other than the low bidder was selected. I have yet to learn what other minority bond firms or lawyers were available for hire.

The Inquirer, as it reported itself, has been reviewing the MBEC's records for over a year trying to find some improprieties. Nada afaik.

Even the feds with their wiretaps and investigation cannot produce any evidence except the very circumstantial and potentially spurious correlation about a couple personal loans and luxury boxes at Lincoln Field.

If this were truly a "pay-to-play" investigation, where are Ballard, Spahr; Wolf, Block; Len Klehr, David Cohen et al?

 
At 5:19 PM, Anonymous Anonymous said...

Anonymous, you seem like a smart articulate guy, but are being very naïve about this whole thing. Please, read the papers - people where getting money and not doing any work! It was pay to play!!

 
At 6:35 PM, Anonymous Anonymous said...

Have read some of the transcripts and have to say they are very lame. Based on those I've read so far, I'll bet not one person who goes to trial is convicted. This is a weak, weak case that the feds have greatly exaggerated.

(If you are referring to reading the Inky, they lost their investigative
credibility when Nancy Phillips got personally involved with Neulander.
Plus, fwiw, had an Inky employee tell me how poor that paper is these days - that all the really good reporters have left.)

 
At 11:24 PM, Anonymous Anonymous said...

Dude - you've got some low standards for public officials if you think that the transcripts are lame. Haven't you noticed that a bunch of folks have already plead guilty? That's because they did something wrong under Federal law. I'm done talking to you about this. You're either silly, don't care, or really are a Street stooge. But have a great weekend nonetheless.

 
At 1:25 AM, Anonymous Anonymous said...

The only evidence we have to examine about the strength of the federal case is the recently completed Carlson trial.

The Carlson jury thought the transcripts were unpersuasive. Not only that, even a live appearance by Janice Davis, Meehan's star witness, didn't move them.

When the feds work these cases, they start at the bottom with the strongest cases to get convictions of the small frys to turn them on bigger fish up the food chain. The case against Carlson should have been one of their best - a relative slam dunk. The feds had what might reasonably pass for quid-pro-quo, Carlson letting Kemp stay at this vacation home. The feds had the former city finance director and an true city hall insider on the stand, under oath, testifying there was favoritism. The feds even had a shot at cross-examing Carlson under oath when he testified in his own behalf.
Does it get much better than that from the prosecution perspective? Yet they did not get a conviction on either count. That's extremely telling. (The Carlson verdict was so damaging, in fact, the Inky felt compelled to opine that the feds still have a good case and chose to emphasize the two juror quotes that seemed to support their editorial stance.)

The feds' case hasn't improved and their main target is dead. That's why they won't win any trial convictions. It's also why they are scrambling right now to try and make something out of Penn's Landing developement - or lack thereof.

But you're right, I am impressed that Pat Meehan nailed a city employee fixing traffic tickets and got a few minnows in the fish pond to plead guilty. What a feather in his cap.

 
At 4:07 PM, Anonymous Anonymous said...

Yea - I see your point. Weeding out public corruption is not a good thing to do. Keep defending the Street Administration, the most ethically challenged and fiscally inept group in a long time. BTW, you don't know much about the law - the case against Carlson wasn't that strong. You didn't mention the guilty pleas that have already come to fruition - don't you think that shows the strength of the Fed's work? Of course it does. And another thing - you mentioned a few law firms that have done a bunch of business with the City - here's a critical difference between Ballard and Ron White's girlfriend - Ballard gets paid to do work by the City and they do it. Ron White's girlfriend was paid to do nothing - do you see the difference?

 
At 2:38 PM, Anonymous Anonymous said...

Speaking of Pat Meehan, are we supposed to believe he never saw pay-for-play in Delaware County, where he was miraculously anointed D.A. with no prosecutorial experience - and named as U.S. Attorney two years later?

Oh no, nothing going on THERE.

 

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