US Rep. Fattah: Consultants to blame for any financial crime

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Posted: May 16, 2016 4:50 PM
US Rep. Fattah: Consultants to blame for any financial crime

PHILADELPHIA (AP) — Lawyers for U.S. Rep. Chaka Fattah blamed his former political consultants for any financial crimes that flowed from a costly, failed bid for Philadelphia mayor in opening statements at his corruption trial Monday.

Prosecutors told jurors that Fattah took an illegal $1 million loan to prop up the 2007 mayoral campaign and obtained federal funds and charity grants to pay $600,000 of it back.

Fattah, a Philadelphia Democrat, is on trial just weeks after losing a primary race to retain the congressional seat he had held for two decades. The loss comes in a year that has seen his namesake son go to prison for five years in a related fraud case and his wife lose her TV anchor job after being linked to a bribery count in the indictment.

Renee Chenault-Fattah has not been charged, and both husband and wife insist they did nothing illegal. Chaka Fattah, 59, blames his family's travails on a lengthy FBI investigation that he considers a witch hunt. Federal prosecutors painted a starkly different picture.

"The congressman stole from federal agencies, from taxpayers, from nonprofit groups he created to pay his political debts," Assistant U.S. Attorney Paul Gray said in opening statements. "He even stole from his own campaign."

Four associates are also on trial while two others pleaded guilty and are expected to cooperate. Fattah's lawyers told jurors that campaign consultants Greg Naylor and Thomas Lindenfeld acted alone.

"The government's case rests on the word of those two convicted felons," defense lawyer Mark Lee said. "Chaka Fattah's lifestyle is not on trial. Philadelphia politics are not on trial. (Congressional) earmarks, donations, grants to nonprofits are not on trial."

The seven-figure campaign loan, which exceeded new donor limits for the 2007 Philadelphia mayor's race, is one of five schemes outlined in the racketeering indictment. The others include the use of nonprofits Fattah set up as "pass throughs" for federal grants to reach Fattah's family and friends, prosecutors said.

The loan came from a close Fattah friend, Albert Lord, the former CEO for Sallie Mae. When the economy turned sour, Lord sought to be repaid, prompting the series of illegal financial moves, prosecutors said.

Defense lawyers questioned whether friends doing something for Fattah should really be accused of bribery or whether they were simply performing favors. Lawyer Robert Welsh, representing co-defendant Herbert Vederman, who had earned a fortune from the Charming Shoppes, said his client helped out Fattah's son, Chaka "Chip" Fattah Jr., simply because the young man was "in the throes of a gambling addiction."

Welsh said the case falls apart when considering the timing of events surrounding Fattah Sr.'s pitch to President Barack Obama for Vederman to be named an ambassador or Vederman's allegedly sham $18,000 purchase of Chenault-Fattah's Porsche. Prosecutors say the car never left her garage.

"They do not add up to bribes. They add up to examples of people helping out each other," Welsh said.

The other co-defendants include Bonnie Bowser, who managed Fattah's district office and served as his unpaid campaign treasurer during the 2007 mayor's race. Her lawyer said she simply took direction from the congressman.

The trial is expected to last six to eight weeks.

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This story has been corrected to show that Herbert Vederman, not Albert Lord, earned his fortune from the Charming Shoppes.