Law firm where John Street's son worked got millions in PHA contracts

After he appointed himself to the Philadelphia Housing Authority board in 2004, John F. Street repeatedly voted to award millions of dollars of PHA contracts to the law firm where his son worked - actions that legal experts say appear to violate the Pennsylvania ethics law.

PHA board minutes reviewed by The Inquirer show that six times between 2004 and 2008, Street voted in favor of PHA resolutions "to execute contracts" with Wolf, Block, Schorr & Solis-Cohen, the now-defunct firm where his son Sharif Street worked as an associate.

During that period, Wolf Block billed PHA $774,779 for 3,295 hours of work by Sharif Street, according to a review of the authority's legal bills by The Inquirer. For most of that time, Street was Philadelphia's mayor, leaving office in early 2008.

Street said he "had nothing to do with any work that may have been done by Sharif." He also said he had received a waiver in 2004 from the U.S. Department of Housing and Urban Development "in view of my son's employment with Wolf Block."

HUD told Street this month that it had never received a request for a waiver "for the PHA to hire your son, Sharif Street, or any law firm with which he was associated." In a letter sent to Street on Feb. 14, HUD Assistant Secretary Sandra B. Henriquez said the 2004 waiver had related to his serving on the PHA board. Former HUD officials involved with the waiver backed her up.

The federal agency, which allocated $371 million to PHA this year, said Friday that Street and four other members of the PHA board should resign to clear the way for reform of the scandal-plagued agency, which has gained national attention for its profligate spending.

On Saturday, after initially saying the board would resign, Street issued a clarification indicating that members would stay on the job. "We feel resigning is unwarranted," Street said in the statement.

HUD is scrutinizing all of PHA's spending, including inordinately high sums for outside legal fees. Since 2007, the agency has spent $38.5 million in legal fees, far more than any other large housing authority, an Inquirer analysis shows.

Under state law, a public official must abstain from voting on a contract if the official has a conflict of interest - such as a direct relative working for the bidding business, according to John Contino, executive director of the Pennsylvania State Ethics Commission.

Ethics experts say that because of Sharif Street's employment at Wolf Block, the former mayor should have recused himself from approving legal work for the firm.

"The rules are pretty clear," said Barry Kauffman, executive director of Common Cause Pennsylvania, a nonpartisan citizens group that advocates open, accountable government. "The ethics law says you cannot use the power of your office to get financial gains for yourself or members of your immediate family."

Street wrote in an e-mail reply that while he and the other board members approved legal contracts, it had been PHA's executive director at the time, Carl R. Greene, who assigned work to law firms.

Greene was fired in September after revelations that PHA had secretly settled three sexual-harassment complaints against him and tried to reach a financial agreement in a fourth.

In her letter to Street, Henriquez wrote that HUD "did not issue a waiver to the PHA in connection with its engagement of legal services by Wolf Block."

Street, in his defense, said, "When I contemplated going back on the board . . . I was told by PHA lawyers that we needed a waiver from HUD because my son worked for Wolf. A written waiver was requested and received."

"I was led to believe that nothing further was needed," he said.

He called Henriquez's letter "tantamount to having a play reviewed after the game is over."

Sharif Street, 36, did not respond to messages left at his new firm, Zarwin, Baum, DeVito, Kaplan, Schaer, Toddy P.C.

The Inquirer reviewed extensive correspondence dating from the time shortly before John Street joined the board. After he appointed himself - which, as mayor, he had the power to do - he was immediately named chairman.

On April 19, 2004, after Street expressed his interest in rejoining the board - he had served in the 1990s - Greene wrote to HUD seeking approval.

Greene noted that there was precedent for a sitting mayor to serve on the PHA board: Ed Rendell, then governor, had served as PHA chairman during his terms as mayor.

In addition, Greene submitted a legal opinion from PHA's general counsel at the time, Leigh Poltrock, who concluded that Street's appointment would not violate the state's Public Official and Employee Ethics Act.

Poltrock noted that Wolf Block, which employed Sharif Street as an associate, had several contracts with the agency that had been solicited through a public procurement process. Street, she added, would have no supervision or responsibility for the contract.

She wrote that one provision of the ethics law that "might be applicable" to Street addressed "voting conflict."

Under the law, a public official, facing a vote on a matter that involves a conflict of interest, must abstain from voting and publicly disclose the nature of the conflict in writing.

Poltrock wrote: "This section would prohibit the mayor from voting on any issue relating to Wolf Block's contracts with PHA."

In 2004, HUD Assistant Secretary Michael Liu said the department had no objection to Street's appointment as PHA chairman, according to correspondence obtained by The Inquirer through the Freedom of Information Act.

But Liu warned in a letter to Street that the department "takes conflicts requirements seriously." HUD, he added, "is mindful that care needs to be taken against board actions favoring the city government over other possible contractors or providers."

Liu, a lawyer who left HUD and now works for Dutko Worldwide in Washington, said the 2004 waiver from his office had not applied to state law.

"Certainly, the waiver didn't give him allowance to take action that would be contrary to state law," Liu said in an interview last week. "We said nothing that this waiver allows you to run roughshod over any other requirements."

Ann E. Harrison, the former HUD regional counsel for the Mid-Atlantic area, who also was involved in the matter, added that "HUD cannot waive state law."

"The members and employees of the Housing Authority are obligated to follow the most stringent of either state or federal law unless there is a waiver from both," she said in an interview.

The State Ethics Commission's Contino declined to comment on Street's actions. But speaking in general of the ethics code, he said, "In a situation where there is a conflict of interest, a public official is required to abstain."

Failure to do so, Contino said, could require paying restitution. State prosecutors could also bring criminal action.

As board chairman, Street voted on six resolutions approving Wolf Block for legal services.

Street's first vote was in December 2004. Wolf Block was approved for up to $5 million in services.

Sharif Street's PHA work increased dramatically after that contract was signed.

In the 12 previous months, he had spent 429 hours on PHA matters, and the housing agency paid Wolf Block $94,350 for his work.

In the 12 months after the contract was signed, Sharif Street worked 1,069 hours for PHA, and the agency paid Wolf Block $247,502 for his work.

PHA work represented a major part of the younger Street's work, according to former lawyers from Wolf Block.

And the agency was a major client for Wolf Block.

In 2007 and 2008, the last full years of Wolf Block's operations, the firm billed PHA $6.7 million - $2.5 million more than any other firm working for the agency.

Sharif Street joined Wolf Block as an associate after law school at the University of Pennsylvania and left in 2008 to work as managing director of the Housing Association of Delaware Valley, a nonprofit housing counseling agency. He resigned after eight months.

In October 2008, Wolf Block again began billing PHA for Sharif Street's work, PHA records show.

Ted Schaer, a partner at his current firm, Zarwin Baum, said Sharif Street worked on commercial real estate cases and government affairs.

He said he had known the younger Street for more than 10 years.

"He's a very well-known guy in the city and is known in all political circles - both Democratic and Republican - and has a large breadth of political experience and government-relations experience," he said.

Schaer said Zarwin Baum currently handled no work for PHA and had not for "two or three years."