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Intrigue in Philadelphia involves mayor, FBI, listening device and scandal

Saturday, October 11, 2003

By Bill Toland, Post-Gazette Harrisburg Bureau

PHILADELPHIA -- The remarkable mayoral corruption drama continues to unfold in Philadelphia, where a high-tech listening device was found in the office of first-term Mayor John Street and FBI agents acknowledge an ongoing investigation, but refuse to divulge what they're looking for or who, exactly, they're investigating.

Philadelphia Mayor John Street

Rumors about the FBI bug and ensuing probe have gripped the city, muscling Arnold Schwarzenegger off the front pages and giving radio show hosts, some already pretending to have audiotapes gleaned from the bugging device, weeks worth of talk fodder. Waitresses and customers in restaurants and bars are discussing little else.

"It's all we've been talking about in my family," Dave Kaleda said, finishing off a beer while sitting in a pub just off Broad Street, downtown's main thoroughfare. "I was on the [subway] this morning, and people were talking about it there, too."

As suspicion swirls around him, Street continues to deny that he's the target of an investigation, reiterating that this week in television interviews and during a debate with his opponent in the city's November mayoral election, Republican businessman Sam Katz.

"It's been confirmed by the U.S. attorney that I'm not the target of any federal investigation," Street said Thursday evening to CNN cameras. The word "target," however, is often used by prosecutors in reference to a person about to be indicted. Just because he's not the official "target" doesn't mean he's been cleared of wrongdoing.

In any event, the circumstantial evidence accumulated since Tuesday, when the bug was discovered during a routine police sweep of the mayor's second-floor office, suggests that Street, his administration or all of City Hall are indeed being targeted, at least in the traditional sense of the word. One newspaper even claims that Street is the subject of a grand jury investigation, organized sometime this year.

Shortly after their cover was blown, FBI agents began confiscating Street's personal effects and raiding offices of those with close political ties to the Democratic mayor. Federal agents so far have raided the accounting office of Jeanice Salter, who keeps the books for some of the city's top pols, and a financial firm run by two Street allies, one of whom is Shamsud-din Ali, a prominent Philadelphia-area Muslim leader who last year won a no-bid contract to collect the city's delinquent taxes.

Ali is emerging as one of the possible focuses of the two-pronged investigation, according to reports in the Philadelphia Inquirer and the Philadelphia Daily News. The other focus may be a series of contracts that the mayor has authorized during his tenure.

But the FBI isn't confirming, or denying, anything.

Agents have seized stacks of papers from Ali's offices, Salter's records and -- just hours after the bug was discovered -- one of the mayor's hand-held, wireless BlackBerry organizers.

The placement of the bug, in the ceiling directly above Street's desk, also points to the mayor, indicating that the FBI wanted to record his conversations. To place a bug in Street's office, the FBI first had to secure a warrant and the permission of a federal judge.

Permission generally isn't granted unless investigators have some kind of evidence linking the bugging subject to a crime.

Though no one's been indicted and the FBI is being, at least for the record, tight-lipped about its investigation, the growing Street saga is quickly rising among the ranks of Philadelphia's all-time corruption scandals.

It's probably the most notable city investigation since 1995, when a scandal involving Philadelphia's police department emerged. A half-dozen officers from the 39th District were later convicted of making false arrests, filing false reports, robbing drug suspects and generally "squash[ing] the Bill of Rights into the mud," according to one judge.

This controversy, said one expert, may eventually exceed the police scandal in terms of local impact.

"It's about a nine on the Richter scale," said G. Terry Madonna, a political science professor at Millersville University. "If you've got underlings involved, that's one thing, [but] this directly involves the mayor" of one the country's largest cities.

"This has the potential to influence the course of this election," he said. "It diverts attention away from the campaign in a very serious way. ... This is patently unfair to both candidates."

The timing of the corruption revelation is as fascinating as the revelation itself. Is it mere happenstance that the bug was discovered just weeks before Street and Katz square off, or is the timing too coincidental to be a coincidence?

"Well," the mayor said during his debate this week, "the timing is awful suspicious."

Street and his spokesmen are hinting that the bug had something to do with Republican "dirty tricks," designed to damage the mayor's re-election campaign beyond repair. Pundits here are wondering aloud whether the Justice Department and the Republican presidential administration have it in for Street, who is black.

"The voters ... have serious questions about the timing, about the placement," said Mark Nevins, communications director for Street's campaign. "Who signed off on this? People are asking whether or not Republicans at the highest levels of government knew anything about this. They deserve some more clear answers."

But law enforcement officials have assured reporters that the discovery of the bug had not been anticipated and has created quite "a mess" for investigators, possibly hampering the federal effort.

Additionally, U.S. Attorney Patrick Meehan, Philadelphia's chief federal prosecutor, has denied repeatedly that politics played any role in the timing of the investigation.

"The U.S. attorney's office ... has a long and proud history of doing its work without regard to partisan politics," he said in a statement.

Meanwhile, the city has come down with a full-blown case of bug fever, with anti-bugging devices selling like cheese steaks. Sales of counter-surveillance products have tripled at some stores, as the more paranoid Philadelphia residents and businessmen are wondering whether they, too, have been bugged.

"A lot of people, suddenly they want to know how to protect their confidential conversations," Scott Black, owner of the Philadelphia-area Spyware Spy Shops chain, said yesterday. The bug-detecting devices are similar to the metal-detector wands waved over your pockets and shoes by airport personnel, but instead of detecting metal, the spy wands are sensitive to radio frequencies, Black said.

Every passing day brings new theories about the bug, how it was placed, and what Street's inner circle has to do with the probe. On Friday, the Daily News said that a drug squad had conducted a search of Ali's home, but also quoted a source as saying that Street's troubles have nothing to do with drugs.

Earlier in the week, media outlets highlighted the administration's previous problems -- a city employee was charged with fixing millions of parking tickets for political pals, and an airport maintenance contract was awarded to a joint venture including Street's brother, Milton Street. That $1.2 million contract was later canceled.

Any one of the escapades, or perhaps others not yet surfaced, could be the subject of the federal probe, the papers speculated.

Street himself has suggested that a night janitor, working for the feds, might have been the one who placed the bug above his office.

Even in the bright spotlight of this week's unexpected tribulations, the mayor, to his credit, continues to face the music, even though his answers to most questions have been vague. Throughout Thursday, the day the Liberty Bell was moved from its old home to a new museum near Independence Hall, the mayor fielded questions from throngs of reporters and TV anchors, including Katie Couric of NBC's Today show.

She asked him if he thought the parking tickets uproar or the canceled contract with his brother might have prompted the bugging. Couric also asked if race played a role.

Street said: "I think there will continue to be a huge amount of speculation and concern that some of this is racially motivated. We live in the greatest country in all the world, but it's not a perfect country."

Prior to the bug's discovery, Street no doubt expected Thursday's Liberty Bell dedication ceremony to bring little more than softball questions about Philadelphia's cracked, centuries-old icon of freedom.

The bell was still big news, with some TV networks carrying a live feed of the hours-long move, but questions on Thursday invariably focused on the bug, not the bell.

Four years ago, Street beat Katz by fewer than 10,000 votes, and polls suggest this year's rematch will be just as tight. The bug drama, however it plays out over the next three weeks, could well be the item that tilts this election.

"I don't see how it couldn't," said Melissa Mazur, a city resident. She said Street's evasiveness on certain questions could cost him the undecided electorate. "I don't think that's going to play well with the average voter."

Bill Toland can be reached at or 1-717-787-2141.

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