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.”