Posted on 01/19/2005 5:32:26 AM PST by randita
Posted on Wed, Jan. 19, 2005
U.S.: Bank intended to sway Street
Prosecutors say Commerce Bank granted a loan to the then-mayoral candidate's son to gain influence.
By Emilie Lounsberry, Marcia Gelbart and Craig R. McCoy Inquirer Staff Writers
Commerce Bank officials arranged a loan for then-mayoral candidate John F. Street's son in an attempt to "influence" his father's actions, federal prosecutors said yesterday in a court filing.
The New Jersey-based bank gave a $40,000 loan to the mayor's oldest son, Sharif Street, a Center City lawyer, in October 1999 - one month before Street was elected to his first mayoral term.
The court filing did not name the Streets; it only said the loan had gone to "the son of a public official." But prosecutors have identified Sharif Street as the loan recipient in other legal documents.
In court papers, prosecutors said that Commerce vice president Stephen M. Umbrell approved the loan to the son "with the intent to influence the public official's actions."
Last night, Sharif Street and a Commerce Bank lawyer said the loan, made on a house in North Philadelphia, was not intended to influence the mayor. Neither of the Streets nor the bank have been charged with any crime - although Umbrell and bank president Glenn K. Holck are awaiting trial on conspiracy charges.
Prosecutors also contended that Sharif Street, now 30 and a lawyer with Wolf, Block, Schorr & Solis-Cohen, received the loan despite his "credit problems." The younger Street said his credit was sound.
The latest filing in the City Hall corruption probe also added information to prosecutors' contention that Commerce loaned $150,000 to Street's former law partner, Leonard Ross, when Ross was heading a selection panel to redevelop Penn's Landing. The selection process has since been halted.
Prosecutors say the Ross loan was granted at the urging of the late lawyer Ronald A. White, who was seeking Ross' support for a Penn's Landing development proposal in which White had a financial interest.
According to the filing, Umbrell, in 2003, agreed to make the loan to Ross - a lawyer identified in the filing as "L.R." - after Umbrell got a call from White, who was a member of Commerce Bank's regional board and a top Street fund-raiser known for his influence at City Hall.
White called the loan to Ross "important," prosecutors said, because Ross was in a position to "make an official recommendation to award a potentially lucrative government contract to a firm affiliated with White."
Ross has been subpoenaed in the probe but not been charged with anything, and the filing contained no suggestion that he took steps to steer the Penn's Landing work to the White-connected firm. Ross declined comment last night.
Prosecutors want to introduce evidence about both loans during the trial of Umbrell, Holck, former City Treasurer Corey Kemp and two others, set to begin Feb. 14. All five have pleaded not guilty.
The five are accused of conspiring to corrupt Kemp, and the indictment alleged that White essentially took over Kemp's decision-making duties.
Ross, who had been Street's law partner for eight years and remains a close friend of the mayor's, declined to comment last night.
Lawyers for the Commerce bankers reacted angrily last night to the prosecution's filing. "As the trial nears, the prosecution's desperation increases not arithmetically but geometrically," said Kevin H. Marino, who represents Holck. Lawrence Lustberg, an attorney for Umbrell, said there "was nothing remotely improper" about the loan to Sharif Street and that it was given to him at market rate and "according to good banking procedures."
In May 2003, Commerce also gave two mortgages to the mayor and his wife, Naomi Post, totaling $130,500, though neither of these loans was mentioned in the filing.
Street, through his spokesman, last night rejected the notion that he or his administration would make decisions based on personal favors. "It's just very odd because the mayor would never allow himself to be influenced by anything like that," Dan Fee said, referring to the loans to Sharif Street and Ross. "There's a process in place for determining how government decisions are made, and loans to friends and family don't factor into them."
Sharif Street said last night that he needed the Commerce loan for a mortgage so he could buy a house in North Philadelphia from his mother.
"You're talking about a $40,000 loan on a $55,000 property for a guy making $100,000 a year," said the younger Street, who also said the loan had been repaid - 28 years ahead of time.
The prosecutors cited the loans as evidence that the bank and its executives conspired with White, who was the central defendant in the case until he died of cancer in November.
"Commerce Bank rewarded White with legal fees, political and charitable contributions, and sweetheart loans in exchange for White's influence in securing city business for Commerce," prosecutors wrote. "Holck and Umbrell not only took advantage of White's access but also provided benefits directly to Kemp."
The prosecution team - Michael A. Schwartz, Robert A. Zauzmer, Joan L. Markman and Richard J. Zack - further contended that Umbrell agreed to make the $150,000 loan to Ross after White called Umbrell on Ross' behalf.
Ross had told White that he was getting "desperate" for the money, prosecutors wrote, quoting wiretapped conversations. Umbrell described the deal as "a little weird" but agreed to do it, the prosecutors said.
The disclosures came as the prosecutors painted a harsh portrait of the actions of the Commerce Bank executives, saying they knew what they were getting into when they started dealing with White.
Prosecutors said the bank gave loans to White, Kemp and others as part of a broad effort to curry favor and win city business.
"You know you're my boy," Kemp told Umbrell in one taped conversation, the filing said. In another conversation, prosecutors said, Kemp told the banker, "You are my... guy... so you get special treatment."
Contact staff writer Emilie Lounsberry at 215-854-4828 or elounsberry@phillynews.com. For FBI tape transcripts, court filings and recent stories about the City Hall corruption probe, go to: http://go.philly.com/fbiprobe
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