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Nazareth, Pa., United States

Thursday, July 30, 2015

Is Fed Ed a Racketeer?

We all know that a federal Grand Jury, the United States Attorney's Office and the FBI have subpoenaed documents and served search warrants on Allentown City Hall, Reading City Hall, political consultant Mike Fleck's office and Reading Mayor Vaughn Spencer's home. We know agents were poised outside Mayor Ed Pawlowsi's home. We know he and his wife, who is his campaign treasurer, were questioned. We know that political consultant Mike Fleck, who worked for the mayors in both Allentown and Reading, left town in a hurry. We know Feds are seeking information concerning the very cozy relationship that exists between developers and city government. This is compounded in Allentown's Neighborhood Improvement Zone, where $54 million in state tax dollars have been used with no oversight to build an empire for J.B. Reilly. It's inevitable that mischief is afoot. There was simply too much money and too little accountability. But what kind of charges can we expect to see down the road? There was a good indication yesterday that this may be a racketeering investigation. Those are the charges that were filed against U.S. Congressman Chaka Fattah Sr, along with four of his assoiciates. It followed a very lengthy investigation that spanned several years, not months. That may be the case here, too.

Fattah has been charged with bribery, fraud and money laundering in connection with several schemes involving contributions to his campaign warchest. But he's also been charged with racketeering, which is the nuclear option for federal prosecutors.

What is racketeering? When you hear that word, you might start think of finding horse's heads in beds and offers that can't be refused. The law was definitely written to take on the Mafia. But it applies to any criminal enterprise, even a legitimate group like ... say a City Council or the bluebloods that infest the NIZ Board. As explained by the law's author, G. Robert Blakey, "We don't want one set of rules for people whose collars are blue or whose names end in vowels, and another set for those whose collars are white and have Ivy League diplomas." Boiling it down to its simplest terms, a prosecution requires proof of  pattern if racketeering activity in the form of two predicate acts.

Its official name is the Racketeer Influenced and Corrupt Organizations Act of 1970.

Prosecutors can go back ten years to find predicate acts, which can come from a list of 35 state and federal crimes. Those who are convicted face 20 years in prison, along with a $25,000 fine and the forfeiture of all assets. There's also a civil component. Those who have been damaged by racketeering can sue and seek treble damages.

In this case, the enterprise could include Fed Ed, Miked Fleck, other politicians along with a cornucopia of crony capitalists who were seeking to enrich themselves. Is the connection between campaign contributions and contracts a coincidence? Or is there a scheme to deprive the public of its right to honest services with bribery, extortion, mail and wire fraud, obstruction?

It's important to note that no one has been charged with anything,

Even without whatever was learned by wire, I know there is evidence of vendors seeking to do business in the City who were told that they should discuss it with Pawlowski at his next fundraiser. There is also evidence that Pawlowski distributed lists to potential vendors, identifying PACs and nonprofits where they should make contributions. I know of one vendor who actually walked out of a meeting after being handed such a list.

Is this criminal? By itself, no.

With Miked Fleck in the picture, things get a lot more interesting. Why did Pawlowski solicit candidates to use Fleck's services? How is it that Abe Atiyeh, who couldn't get his foot in the door in Allentown, suddenly owned all of its billboards after hiring Fleck as a "consultant"? Why is it that the Rosen family, rumored to the financial backer for Fleck's brewer client Ruckus, made all those contributions to Pawlowski's Senate race?

These questions could be asked of numerous other contributors who seemed to be on the inside track to city or NIZ business.  With a wire, the answers could prove interesting.

In a news release accompanying yesterday's indictment of Chaka Fattah, federal authorities make very clear why these prosecutions are necessary.

Assistant Attorney General Leslie R. Caldwell: "Public corruption takes a particularly heavy toll on our democracy because it undermines people’s basic belief that our elected leaders are committed to serving the public interest, not to lining their own pockets.”

FBI Special Agent-in-Charge Edward J. Hanko: “A founding principle of our democracy is that citizens place their faith and trust in the public servants they elect to represent them. It is the duty of the FBI, IRS, and Department of Justice to investigate and prosecute those who violate this trust and put personal gain above public service.”

IRS-Criminal Investigation Special Agent-in-Charge Akeia Conner: “Public corruption by our elected officials and their associates undermines the American public’s confidence in our government.”


Anonymous said...

Thanks for explaining this, Bernie. Looks like you are getting your readers educated for if and when the shoe drops.

Anonymous said...

This is just an unfortunate distraction in the media.
Back to work.

Anonymous said...

Jun 18, 2014 MC article first reported Atiyeh getting the billboard deal. It reports the first billboard went live on June 11, 2014. With Pawlowski scheduled to take the stand in Atiyeh's legal challenge of the City's 2010 zoning update that gave supreme authority for the Mayor to waive zoning rules that permitted such billboards, the City agreed in February 2014 to start settlement talks with Atiyeh. In an about-face, Atiyeh acquired Clinton Street Allentown Media LLC and Atiyeh concerns over zoning is reconciled. It's a blessing. The paper reported the first add was of Fed Ed smiling face. "There was no deal that was made here, per se, and in any way, shape or form," Pawlowski said.

How many times has the Mayor waived zoning requirements?
Has the City realized 20% of the promised add revenue and what was that amount?

Anonymous said...

The drama builds by the day. I don't think an Allentown resolution is too far off, however. Philadelphia has a full history of racketeering behind it, and as a Federal level politician, Fattah had many more layers of protection and delaying mechanisms. Pawlowski is very small potatoes in comparison.

Nefarious operators in Allentown might think they are slick, but their talent remains Junior Varsity. Mistakes would be more frequent and easier to spot.

Thinking back to reading an earlier local opinion, these office raids typically come late in the process. I look for something definitive by the end of summer. Actually, that would be best for Allentown.

Anyone know if construction downtown is continuing at the pace it was? Could become difficult to pay for some of that soon.

Anonymous said...

How did Atiyeh get the building where building 21 will operate? That seems suspicious, especially given the secret agreement between him and the school board.

Anonymous said...

From inside City Hall:
All but the most routine tasks are being ignored, fear reigns. Long time hard-working staff is terrified they will take the fall for things they did when they were ordered.
It is a dead zone

Anonymous said...

One of the great things going on right now is legal pursuit of our version of the Elite, elected officials. NY has been thoroughly entertaining watching slimeball after slimeball, from both parties, get strung up. In PA we've started the cleansing process. Other states too.

Both necessary and the right thing to do. Here's hoping it sticks this time.

The Banker

Anonymous said...

The after hour, party scene and happy hour has dropped off by about 80%. You can smell the fear in the air.

Anonymous said...

Does anyone remember when Atiyeh was fighting the NIZ Map? Then it just seem to get settled and disappear. Remember he wanted the NIZ on the campus where Building 21 is located and his Hamilton Street location. My theory is that the powers on top cut him a deal for Building 21 to have him settle his suit.

Anonymous said...

I hope all Allentown politicians (and direct staffers) involved in this pay to play scheme get their day in court, are found guilty and share a jail cell with multiple diseased sex partners.

Anonymous said...

Pawlowski is not a crook.

Pawlowski has transformed Allentown.

Pawlowski's campaign contributors do not receive special consideration for anything.

Anonymous said...


all great points. make sure to bring those statements to ed's legal council.

Jamie Kelton said...

@8:15 AM

The government that governs the least, governs the best.

Jamie Kelton said...

@10:24 AM "...Pawlowski has transformed Allentown..."

Come on
Oh baby don't you wanna go

Come on
Oh baby don't you wanna go

Back to that same old place
Sweet home Chicago

Anonymous said...

It will be a refreshing day when we can celebrate Billy Joel's 1977 single "Movin Out".

Anonymous said...

8:15 said:

"From inside City Hall:
All but the most routine tasks are being ignored, fear reigns. Long time hard-working staff is terrified they will take the fall for things they did when they were ordered."

I have a hard time feeling sorry for them.

The problem with Pawlowski and City Hall didn't just start on July 2nd, 2015 when the FBI raided City Hall. The silence of "hard-working staff" is why this has gone on for over a decade.

They had a responsibility to the residents of the city to speak out about what was going on. It shouldn't take a visit by the FBI for them to do the right thing. We should be reading articles from anonymous City Hall sources talking to the press, and they should also be spilling whatever they know to the FBI.

If they're not taking advantage of the opportunity to talk now, in the limited time they still have available, they are part of the problem and deserve whatever they get.

Anonymous said...

Have the encroachment requirements been met for the billboard at Jordon Park? Seems like the reach of this billboard is very close the air space above the right of way of this federally funded road. Seems like PennDot rules superced Pawlowski's zoning waiver.

Anonymous said...

While that may be the right thing, it isn't so simple. You have to believe that some one in Justice will pursue it and not just file it under a pile of other paperwork. In the back of your mind will always be the nagging question of who is a part of the scheme? Someone in the DA's office? (Not saying anyone is, but with the BS having gone on for so long, it would make me wonder why the DA never took notice and conducted an investigation.) It required the FBI showing up before the local "Friends of Ed" media to question anything and there is still no real investigative journalism being conducted by the mainstream press or television news.
Should your name make its way to your employer as having filed a complaint, your job is gone. Everyone has realized the Whistle Blower Law doesn't have any teeth in protecting the employee.

Anonymous said...

12:48 -

So nobody has retired over the last decade who could talk? Nobody has left City Hall for another job (on their own) and could speak up? Nobody (retired, former or active employees) could pass the information on to someone (law enforcement, the media, other) anonymously? That could all have been done before the FBI stepped in.

Now that the FBI is involved, there is even less of an excuse to sit by and do nothing.

Sorry, but as I said in my 12:26 pm post, the limited window they have to start talking (to the FBI, to the press, etc.) is going to quickly shut. After that, there should be a house-cleaning in City Government for anybody who kept quiet and turned their backs on city residents.

Chris Casey said...

What is that old saying? All it takes for evil to prevail is for those who are aware of it to stay silent? It was one thing to suspect it and not have proof. But to be aware and say nothing is to imply consent. There are always consequences.

Anonymous said...

I think if indictments do come, not only will there be a cleaning of City Hall, but council as well. City Council has been downright complicit with the mayor's agenda. I think that meeting last Friday was a defense strategy, not some mayor replacement discussion.

One of the benefits of all the attention on Allentown is the growing interest in highlighting crony capitalism where it festers in the Lehigh Valley. You have people interested in seeing who's involved and where the money is coming from. Before all this went down, did anybody know how pervasive Pennrose influence was? How Reilly owns nearly all of downtown, donating tens of thousands to the mayor? Or the incestuous business relationships hidden by attorneys?

Allentown is the tip of the iceberg but we have so many organizations that spend taxpayer money and make decisions about spending that money in near secrecy that is guided by crony thinking and lawyers working every angle.

They say they have nothing to hide. That's until you start asking for audits, ethics statements, how lawyers are connected to other development or financial interests or how board members always seem to get contracts for work. Then everybody clams up.

Airport Authority
Lehigh Valley Planning Commission
The Chamber
Wildlands Conservancy
Trexler Trust

That's just the start, sadly. Every one of those organizations is infected by the same influence peddling you see in Allentown.

Anonymous said...

Say what you will, but it's pretty obvious, morality in America is on a rapid decline. Leading the charge are politicians. We need to sweep them out and begin anew.

Anonymous said...

Bernie, all ways shots and giggles at the site of allentown circus stick¿

Does racketeering Fall Under THE Same Rule As THE RICO law of homeroom rule Laws AND Bylaws IN THE County seat¿

patent pending

Anonymous said...

I certainly hope that they consider how Code Enforcement was used as administration thugs to intimidate honest citizens who wouldn't tow the party line.
That department needs a probe by the DA if the FBI doesn't get there first.

michael molovinsky said...

@3:24, people talk in times like this of cleaning house, but rarely, if ever, do. i only know of one person who over the years has taken all the entities you mention to task, and has also ran for office. you're welcome

Anonymous said...

@5:49 - probably why one of the good guys got forced out a few years back, Eric Weiss?

Anonymous said...

AND BETSEY from Recycling!!!
y.YES---and there you have it!

Anonymous said...

Weiss for Mayor!!!!!!

Anonymous said...

This guy was a code official that took payoffs that has allowed one family units too be cut up into multiple units¿ This shit is Allentowns administration
engineered destruction at the very core¿

The notorious Hamilton street gang of thugs hostel takeover tactics employees as public servants and our mayors double dip pension package+payoffs to play in the demise of the true urban core relocation process¿

patent pending