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Democratic Congressman Charged In Political Corruption Case

Democratic Congressman Charged In Political Corruption Case

By Will Dunham and Emily Stephenson

WASHINGTON (Reuters) – Democratic U.S. Congressman Chaka Fattah of Pennsylvania and four associates were charged on Wednesday in a political corruption case with bribery and misusing hundreds of thousands of dollars of federal, charitable and campaign funds.

Fattah, 58, who has represented Philadelphia in the U.S. House of Representatives for two decades and is one of the senior black lawmakers in Congress, and the others were indicted by a federal grand jury on 29 counts in an alleged racketeering conspiracy, the U.S. Department of Justice said.

Fattah said in a statement that “I have never participated in any illegal activity or misappropriation of taxpayer dollars as an elected official.” He said he would not resign from the House but he did step down as the top Democrat on the House subcommittee overseeing Justice Department spending.

“This will not be a distraction from my service to the people that elected me, and I am confident that I will be cleared of these charges,” Fattah added.

The charges included bribery, mail fraud, falsification of records, bank fraud, money laundering, making false statements to a financial institution and other crimes.

Fattah denounced a “misguided” eight-year Justice Department campaign “to link my public service career to some form of wrongdoing.”

The others indicted were: lobbyist Herbert Vederman, 69, of Palm Beach, Florida; Fattah’s congressional district director, Bonnie Bowser, 59, of Philadelphia; Robert Brand, 69, of Philadelphia; and Karen Nicholas, 57, of Williamstown, New Jersey.

The indictment said that in Fattah’s failed 2007 campaign for mayor of Philadelphia, the congressman and certain associates borrowed $1 million from a wealthy supporter and disguised the funds as a loan to a consulting company.

The Justice Department said after losing the election, Fattah returned $400,000 to the donor and arranged for a non-profit entity he founded to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies.

To conceal the contribution and repayment scheme, the defendants and others created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements, the department said.

The indictment said Fattah, after his mayoral defeat, sought to erase about $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the consultant to get federal grant funds.

SON’S COLLEGE LOANS

Fattah also was accused of misappropriating funds from mayoral and congressional campaigns to repay $23,000 toward his son’s college loan debt. Chaka Fattah Jr. was charged in 2014 with fraud related to loans associated with a business he ran, and is awaiting trial.

The indictment accused the congressman of contacting government officials to try to get Vederman an ambassadorship or a U.S. Trade Commission appointment. The indictment accused the defendants of trying to conceal an $18,000 bribe from Vederman to Fattah by disguising it as a payment for a car sale that never occurred.

“I can tell you that the conduct that Congressman Fattah engaged in undermines public faith in government, undermines confidence in government,” Zane David Memeger, U.S. attorney for the eastern district of Pennsylvania, told a Philadelphia news conference.

House Democratic Leader Nancy Pelosi called the charges “deeply saddening,” saying Fattah had a record of “distinguished service.”

Thomas Lindenfeld, a political consultant who advised Fattah, pleaded guilty last year to participating in a plan to provide illegal campaign contributions. Gregory Naylor, another aide, also pleaded guilty last year over campaign finance schemes.

A liberal first elected to the House in 1994, Fattah is a member of the Congressional Black Caucus and heads the Congressional Urban Caucus, a bipartisan group of members from U.S. metropolitan centers.

(Reporting by Will Dunham and Emily Stephenson; editing by Bill Trott and Grant McCool)

Photo: An undated photo of Representative Chaka Fattah (D-PA). (REUTERS/U.S. House of Representatives/Handout)

‘Roll Call’s’ Ten ‘Poorest’ Members Of Congress For 2014

‘Roll Call’s’ Ten ‘Poorest’ Members Of Congress For 2014

By Steven T. Dennis, CQ Roll Call

WASHINGTON — Roll Call’s annual list of the 10 “poorest” members of Congress contains one majority whip, one party chairman, one formerly impeached judge and one senator.

As usual, the quirks of the disclosure rules make it impossible to know exactly how poor any one lawmaker is, or how rich he or she might be.

Mortgages must be reported as liabilities, but lawmakers don’t have to list home values — many Americans’ most significant investment — as an offsetting asset. As a result, someone could appear quite poor, even if they have a ton of home equity.

Listed in order of the lowest minimum net worth, the 10 “poorest” members are:

1. Rep. David Valadao (R-CA)

-$3.7 million minimum net worth

Valadao once again tops the list of “poorest” members, although his inclusion on the list could also be seen as a prime example of how imprecise congressional financial disclosure requirements are. Under CQ Roll Call’s minimum net worth calculation, we subtract minimum reported liabilities from minimum reported assets. But because they are reported in broad ranges, Valadao’s actual net worth is a mystery. His interest in a dairy farm is listed in two assets — one worth $1 million to $5 million (counted as $1,000,001 under our methodology), and another worth $500,001 to $1 million, which we count as $500,001. Five separate million-dollar-plus liabilities related to the farm drag him down.

2. Alcee Hastings (D-FL)

-$2.23 million

The longtime lawmaker still has legal debts dating from his impeachment as a federal judge in the 1980s, and still lists a single bank account with more than $1,000 as his only reportable asset. He also has a mortgage.

3. Debbie Wasserman Schultz (D-FL)

-$972,000

The chairwoman of the Democratic National Committee has a lot of debt. In addition to mortgages on two homes and a home equity line of credit exceeding $250,000, she and her husband listed credit card debt exceeding $15,000 and a personal bank loan exceeding $100,000. Also of note, Wasserman Schultz listed $25,978 in income from her DNC gig.

4. Retiring Rep. Howard McKeon (R-CA)

-$943,000

The Armed Services chairman has two mortgages, each exceeding $500,000, and a single personal loan exceeding $10,000 that he’s had for more than a decade.

5. Rep. Dana Rohrabacher (R-CA)

-$924,000

Rohrabacher is new to the list, but his spot carries an asterisk. One of his biggest liabilities in the calculation — a mortgage exceeding $500,000 — was paid off during 2013. But reporting rules still require him to list that mortgage under his liabilities. Rohrabacher’s biggest reportable asset is an investment of more than $100,000 in a small biotech firm called ISI Life Sciences Inc.

6. Rep. Emanuel Cleaver II (D-MO)

-$848,000

A business loan from Bank of America exceeding $1 million drags down the net worth of the Methodist minister, who also has another bank loan and a mortgage alongside various pension and investment accounts. He wasn’t on last year’s list.

7. Rep. Mike Quigley (D-IL)

-$780,000

Quigley lists two mortgages and at least $80,000 in liabilities on three credit cards.

8. Sen. Martin Heinrich (D-NM)

-$722,000

The only senator on the list, Heinrich reports a minimum $128,000 in assets against more than $850,000 in liabilities — all mortgages. Included in the assets was more than $100,000 for a rental property that ceased being used as a rental partway through the year, and assorted mutual funds. He didn’t make last year’s list.

9. Rep. Chaka Fattah (D-PA)

-$700,000

Fattah’s been in the news a lot lately. His son was indicted last month and a former top aide and political adviser pleaded guilty to multiple campaign finance schemes. He reported $100,000 in assets from his wife’s investment in General Electric, against more than $800,000 in liabilities from various mortgages.

10. Rep. Steve Scalise (R-LA)

-$671,000

The newly minted House majority whip has swank new digs in the Capitol, but is a relative pauper. He reported a minimum $4,000 in assets alongside $675,000 in liabilities. His new presence on the “poorest” list comes with a bold asterisk, too. Under the disclosure rules, Scalise has to list every liability he had over the course of the year — and because he refinanced $300,000 in mortgages, that has the effect of double-counting $300,000 in debt. Scalise ended the year with a mortgage exceeding $250,000 and a second mortgage exceeding $100,000. Still, it’s not like he’s sporting a net worth anything close to ex-Majority Leader Eric Cantor’s multimillion-dollar Wall Street payday.

Photo: Gage Skidmore via Flickr