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Political allies turn business adversaries

Sometimes in Philadelphia politics, it's not your party label that's important - it's who your friends are.

Take the case of Republican banker Michael G. Crofton.

For years, he formed an unlikely political triangle with two of the city's top Democratic power brokers, Robert M. Feldman and Ronald White, who was later charged in the City Hall corruption probe and died awaiting trial.

In fact, Feldman says, Crofton introduced him to White.

Now Crofton and Feldman find themselves at odds in a business dispute-turned-court case - and in Pennsylvania's U.S. Senate race. Feldman is a longtime supporter of Democrat Bob Casey Jr., Crofton a bow-tie-wearing ally of Republican Rick Santorum.

The fight over the proceeds of Crofton's Philadelphia Trust Co. makes plain Crofton's political interconnections, highlighting how business relationships can trump partisan divides.

Crofton, a Montgomery County businessman, met Santorum at a Catholic retreat a decade ago. He accompanied Republican Gov. Tom Ridge on a trade mission to South Africa in 1998.

He sits on the board of conservative think tanks such as the Faith and Reason Institute in Washington, and is a board member of Santorum's nonprofit, the Operation Good Neighbor Foundation.

"We had the Catholic thing in common," Santorum said, "so we developed a relationship. "

But as a banker in Democrat-dominated Philadelphia, Crofton also worked the other side of the aisle. He contributed money for Mayor Street's 2003 reelection, records show. A longtime friend of White's, Crofton also served on the board of the White family charity.

Crofton and his wife have given more than $12,000 to Santorum's reelection and leadership committees, and Philadelphia Trust donated $10,000 to Santorum's nonprofit. Crofton's money also apparently ended up in Casey's campaign - though indirectly.

Crofton gave $5,000 to White's tapped-out political action committee in December 2001; the same day, the same amount moved to Casey's campaign account for governor, finance records show.

In Feldman's view, Philadelphia Trust was built, in part, on political relationships. It's an eight-year-old boutique bank with a portfolio of wealthy investors and money-management contracts with public entities such as the state Treasury, the Turnpike Commission, and the Delaware County employee pension fund.

The dispute is over Feldman's position with the bank, which severed ties with him in December 2003.

Feldman contends he was a cofounder who tapped his own network to bring clients and investors to the bank.

His list, according to court documents: the pension fund of International Brotherhood of Electrical Workers Local 98, run by potential Democratic mayoral candidate John Dougherty; Citizens Alliance for Better Neighborhoods, a nonprofit tied to state Sen. Vincent J. Fumo (D., Phila.); and former Philadelphia controller Thomas Leonard, now treasurer of Casey's Senate campaign.

Crofton says Feldman was nothing more than an employee.

"To suggest he is a cofounder is just fantasy," said Kevin Feeley, a spokesman for Philadelphia Trust. The lawsuit "is an attempt to get more compensation than he was owed. "

One of Philadelphia Trust's better-known customers is Santorum himself. The senator received a $500,000 mortgage in 2002, raising questions of special treatment when it became known this year. Santorum did not fit the bank's customer profile, described on its Web site as "affluent. "

Crofton and White, in a July 2003 conversation wiretapped by the FBI, shared a laugh when Crofton recounted Santorum's surprise at hearing that White thought well of him.

"He said, 'You're kidding me,' "Crofton told White. "I said, 'He's a big fan of yours, Senator.' He's got a big ego. "

 


Contact staff writer Carrie Budoff at 610-313-8211 or cbudoff@phillynews.com.

 

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