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FBI Investigates Philly City Contracts

October 26, 2003

PHILADELPHIA (AP) _ At the height of the campaign that carried him into office in 1999, Mayor John Street offered encouraging words to the lawyers and entrepreneurs thinking about giving money to his campaign.

``The people who support me in the general election have a greater chance of getting business from my administration than the people who support Sam Katz,″ Street said of his Republican opponent.

Four years later, the FBI appears to be investigating whether the mayor kept his word without breaking the law.

The federal investigation dates back many months but only became public on Oct. 7, when police discovered listening devices that the FBI had placed in Street’s City Hall office.

In the past few months, federal agents have asked several former members of the Street administration whether they were pressured into handing municipal contracts to the mayor’s supporters.

FBI agents on Wednesday asked the city’s former treasurer whether an attorney who specializes in government contracts, Ronald A. White, ever offered her or the mayor money in exchange for city work.

``I told them `no,‴ Folasade Olanipekun told the Philadelphia Daily News.

In July, two agents visited the home of Louis Applebaum, the city’s former procurement commissioner. They wanted to know how a $13.6 million contract at the city-owned Philadelphia International Airport had been awarded to a company that employed the mayor’s brother.

Applebaum said the firm, Philadelphia Airport Services, got the job because it offered to do the work for $2 million less than a competitor.

Federal authorities have refused to discuss the investigation, but in recent weeks agents have sought interviews and records from several people and companies who contributed money to Street’s campaigns and later received lucrative city contracts.

Much of the inquiry has focused on White, who founded two political action committees that have donated heavily to Street’s campaigns, including more than $100,000 this year.

Since Street took office, White has been involved in some of Philadelphia’s biggest projects, sometimes representing companies seeking city work, and sometimes working for the city _ most often as a bond lawyer.

In a recent lawsuit, Philadelphia auto dealer Biagio DeSimone said that when he needed city approval for a zoning change, White told him he should donate $5,000 to Street’s campaign, plus $5,000 to a political action committee.

DeSimone sued when the only thing he got was an invitation to the mayor’s box at an Eagles game. The city settled.

As he did in 1999, the mayor acknowledged that he gives city work to campaign contributors, but he said no one gets a job they are unqualified to perform. He said he is only following unwritten rules that have been ``accepted in this country for as long as there has been government and as long as there has been patronage.″

Such arrangements are not, on their face, illegal.

Pennsylvania has few limits on the contributions that business executives may make to political candidates. State procurement laws also give the mayor wide leeway in awarding no-bid contracts for ``professional services″ such as legal work or financial consulting.

Politicians are free to solicit campaign donations from people looking for city work, as long as they don’t promise anything in return for the money.

Some of the records requested by the government date back to when current Gov. Ed Rendell was Philadelphia’s mayor. Rendell said he is not concerned that the investigation might delve into his campaign activities as well.

``I have the same clear conscience that Mayor Street has,″ Rendell said. ``We raised money, but there was never any quid pro quo.″

A new poll published in Sunday editions of the Philadelphia Inquirer shows Street has a slight lead in the current mayor’s race, 46 percent to 41 percent, over Katz, who he is running against again. It also found most voters said the ongoing FBI investigation would not affect their choice.

The survey of 800 likely voters was conducted Tuesday through Thursday by Mason-Dixon Polling & Researcher and had a margin of sampling error of plus or minus 3.5 percentage points.

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