Should be interesting to see where this leads.

Posted on Sun, Sep. 19, 2004





Alleged payment to Street is probed

The mayor is said to have been given a $10,000 check by an executive of a firm that got no-bid work.

By Mark Fazlollah, Emilie Lounsberry and Joseph Tanfani

Inquirer Staff Writers


Federal investigators are asking current and former associates of Mayor Street about a $10,000 check Street allegedly received from an insurance executive whose company has received no-bid city work.

Sources familiar with the inquiry say investigators have asked about money Street is said to have received in 1998 from Bernard T. West, founder of Philadelphia's West Insurance Co., before Street's first successful run for mayor.

A former Street ally says he witnessed the payment, which he said was a retainer for legal work.

West Insurance, one of the region's largest African-American-owned insurance firms, has received more than $1 million in public contracts since 2000.

The Inquirer previously reported that some deals came on instructions from a top Street aide, though there is no indication Street was personally involved in the decisions to give the West firm city work.

The FBI has been examining West Insurance's government contracts as part of its investigation into allegations of municipal corruption. In the last three weeks, prosecutors have subpoenaed at least five public agencies in the region for details about work they granted West.

The latest line of inquiry suggests a renewed interest by federal agents into Street and his finances. In October, they demanded his financial records at Commerce Bank as part of a wide-ranging subpoena.

The mayor on Friday would not comment on West Insurance or on the probe into the alleged $10,000 payment. His spokeswoman, Barbara Grant, would not confirm or deny any payment, but said Street did nothing wrong.

"We're fully cooperating with the federal investigation," she said.

Officials for West denied paying Street $10,000.

Bernard West, in a brief interview last week, twice repeated that he had not made any "personal" payments to Street.

"I have not made any payment personally to anyone, to John Street or anyone, ever, any official in the city of Philadelphia," West said.

When asked if one of his businesses had made a $10,000 payment to Street, West said he could not continue with the conversation and hung up.

Kobie T. West, Bernard's son and the president of West Insurance, said the only payments anyone from his firm made to Street were campaign contributions.

He said any report that his father gave Street $10,000 was a "flat-out lie."

In previous interviews, Kobie West has said his company has a reputation for integrity and has performed well in all its work for government agencies.

One source said investigators have been asking whether there was any pressure to grant contracts or subcontracts to West Insurance.

Among those questioned, the source said, was George Burrell, Street's contracts czar, who granted West city work and who has made several appearances before the federal grand jury.

In the past, Burrell has insisted that the decisions to give West Insurance city work were his, and that he wanted to help a qualified minority firm get established in Philadelphia.

When asked last week about a $10,000 payment, Burrell said: "I don't have any specific knowledge of any relationship between Bernard West and the mayor, but I am not going to talk about things that are before the grand jury."

Grant said that the Street administration, when giving contracts, tries to make sure that all companies are well-qualified, are performing the work, and are not wasting "a dime of taxpayers' money."

In an interview with The Inquirer last week, the former Street ally, Carl Singley, confirmed that he had traveled to New Hampshire with Street in late summer 1998 to meet with Bernard West. According to Singley, West handed Street a $10,000 check at that meeting.

At that time, Street was president of City Council, preparing to run for mayor. West was not doing work in this region then but was planning to open a Philadelphia insurance office.

Singley said the payment was a retainer fee for Street, a lawyer, to do legal work for Bernard West's companies.

When asked about the federal probe, Singley said he had spoken with the FBI. He said he would not comment on the interview.

Singley was a key adviser to Street in 1998 and for Street's first run for mayor. Singley later broke with the mayor and worked on the campaign of Sam Katz, Street's unsuccessful Republican challenger in 2003.

One source said agents also have been asking whether a payment from West to Street might have been a loan.

On his city ethics statement for 1998, Street reported income from his private law business but did not list any clients or say how much he was paid. City ethics rules do not require Council members to disclose either fees or clients.

In addition to questioning Singley and city officials, federal agents have delivered a flurry of subpoenas for information about West Insurance.

One subpoena, dated Aug. 31, asked for all records relating to West Insurance, and several of the firm's subsidiaries and top executives.

West Insurance's government contracts have come under scrutiny before. In December, The Inquirer quoted former city official Linda S. Berkowitz as saying she was ordered by Burrell in 2001 to add $100,000 to one city insurance deal so West could be included in the contract.

Berkowitz said that although she complained that the firm was doing little or no work, Burrell told her to pay West Insurance an additional $50,000 as a subcontractor in 2002.

"In 25 years, it's the only thing I ever did that I'm embarrassed about," Berkowitz told the newspaper.

Burrell, in an interview at the time, said he did not remember hearing that West Insurance did no work.

Berkowitz said the FBI questioned her early this year about that contract. The grand jury has also received records of the deal in response to a wide-ranging subpoena for city contracts.

One agency that got a subpoena, on Aug. 31, was the Delaware River Port Authority, where West Insurance is a subcontractor under the agency's contract with the Philadelphia-based Graham Insurance Co.

Graham's chief executive officer, William A. Graham IV, said he received a separate subpoena last week for records relating to West Insurance and to lawyer Ronald A. White, a former Street confidant who is awaiting trial on federal charges of extortion, lying to the FBI, wire fraud, and mail fraud. Graham said he had no business dealings with White.

In May, The Inquirer quoted Graham as saying that a DRPA official told his firm in 2000 to hire West Insurance on a deal, instead of the black-owned firm that Graham wanted to use as a minority subcontractor.

West Insurance has been paid more than $275,000 for its DRPA work. Graham said West Insurance had "a consultative role" as a subcontractor, but that his company had never asked it for any consultation.

In a letter to The Inquirer in May, Kobie West said: "We were not assigned as much work as we are capable of doing... . On numerous occasions, we wrote to Graham asking for more work. Each request was either ignored or overlooked."

Bernard West, a Philadelphia native who once ran a bank in Boston, relocated his firm to Philadelphia in 1999. Since then, he and his son have been successful at winning government contracts throughout the region. The firm's advisory board includes several politically influential players.

Bernard West regularly contributed to Street's campaigns until last year, when he switched sides and contributed $10,000 to Katz.

Street's campaign reports for 1998, the year he is reported to have received the $10,000 check, show no contribution from West of that amount.

Among the agencies served with subpoenas were the school district, SEPTA, the Convention Center, the DRPA, and the Hospitals and Higher Education Facilities Authority of Philadelphia.

At SEPTA, West Insurance is the minority representative on a three-member team that selects insurance companies. Since 2001, it has earned more than $500,000 in commissions.

Aon Corp., a member of the team and one of the nation's largest insurance brokerages, handles the major work. West Insurance, a smaller firm, gets 15 percent to 20 percent of the commissions.

The third company on the SEPTA team is Selzer Co., of Bucks County. Its president, Ronald J. Selzer, did not return calls left at his office. In the past, he has praised the work of West Insurance.

Selzer, which brokers insurance for several government entities in Bucks County, also works with West Insurance at the Convention Center.

The current investigation is not the first time that Bernard West has faced federal examination.

Until 1991, he ran Boston's Coolidge Bank & Trust Co. The bank collapsed on Oct. 25, 1991, leaving the federal Bank Insurance Fund with an estimated loss of $93 million.

The Justice Department conducted an investigation into the circumstances. No charges were filed.

http://www.philly.com/mld/inquirer/n...al/9699247.htm