Like son, like father: Fattah indicted

DID YOU HEAR that noise yesterday morning? That was the sound of the other shoe dropping. Of course, it dropped on Twitter.

The first tweets to emerge from an 11 a.m. news conference - Fattah indicted - reverberated from Independence Mall to Washington, D.C.

Nearly a year after U.S. Rep. Chaka Fattah, D-Phila., was ominously described as "Elected Official A" in a former aide's plea deal, federal prosecutors gathered on the eighth floor of the U.S. Attorney's Office and announced a sweeping indictment against the 11-term congressman and four associates.

The feds gave Fattah's attorney five minutes' notice - a figurative middle finger to the smooth-talking pol they've been tailing for the better part of a decade.

The bombshell 85-page indictment doesn't charge the East Falls resident with committing a mere crime or two, but rather with leading an entire criminal "enterprise" aimed at furthering his political and financial objectives and those of his co-conspirators.

This isn't cash in a brown bag; this is the type of language you see in cases targeting mob families and corrupt labor unions:

Racketeering. Wire fraud. Conspiracy. Mail fraud. Money laundering. Falsification of records. Honest-services fraud. Bank fraud. Bribery.

And a whole lot of chutzpah.

"The public expects their elected officials to act with honesty and integrity," said U.S. Attorney Zane David Memeger. "The public does not expect their elected officials to misuse campaign funds, misappropriate government funds, accept bribes or commit bank fraud. These types of criminal acts betray the public trust and undermine faith in government."

The 29-count indictment alleges that Fattah and four others participated in a racketeering conspiracy, largely stemming from his failed 2007 Philadelphia mayoral bid.

The alleged co-conspirators are: Herbert Vederman, 69, of Palm Beach, Fla., a lobbyist who served as finance director of Fattah's mayoral campaign and had been a deputy mayor under Ed Rendell; Robert Brand, 69, of Philadelphia, a Fattah campaign contributor and founder of the consulting firm Solutions for Progress; Karen Nicholas, 57, of Williamstown, N.J., a former Fattah staffer and CEO of Educational Advancement Alliance, a Fattah-founded nonprofit; and Bonnie Bowser, 59, of Philadelphia, district chief of staff for Fattah and treasurer of his mayoral and congressional campaigns.

The mind-boggling indictment consists essentially of five alleged schemes:

*  In his failed mayoral bid, Fattah accepted an illegal $1 million loan from a wealthy supporter, but disguised it as a loan to a consulting company. After he lost the election, he returned $400,000 in unused funds to the supporter - but illegally arranged for Nicholas' Educational Advancement Alliance to repay the rest of the loan using funds from NASA and the charitable arm of student-loan institution Sallie Mae, laundered through two other companies, including one run by Brand. To hide the scheme, the co-conspirators allegedly created phony contracts and made false entries in accounting records, tax returns and campaign-finance disclosure statements.

*  Fattah tried to erase $130,000 in campaign debt owed to political consultant Tom Lindenfeld by arranging for the consultant to receive federal grant funds for a phony "environmental education and coastal heritage preservation" group called the "Blue Guardians." Fattah told Lindenfeld to apply for a $15 million grant for the Blue Guardians in 2009.

Lindenfeld pleaded guilty last year and is cooperating in the Fattah case. As recently as September, a Fattah spokeswoman had defended the Blue Guardians as a legitimate educational program, telling the Daily News that Lindenfeld "has been engaged in environmental-justice work for 30 years."

*  Fattah used campaign funds to repay student debt accumulated by his son, Chaka Fattah Jr. Fattah and Bowser directed Fattah's longtime friend Greg Naylor to use campaign money to make 34 payments totaling about $23,000 between 2007 and 2011 to pay off Fattah Jr.'s debt at Drexel University.

Naylor has pleaded guilty and is cooperating in the new Fattah case. Fattah Jr., who has said he earned the money by working for Naylor's consulting firm, Sydney Lei & Associates, is awaiting trial in October in a separate bank-fraud and tax-evasion case.

*  Fattah used his connections to try to get Vederman an ambassadorship or appointment to a federal trade commission. In return, Vederman gave Fattah money, including an $18,000 bribe for a vacation home in the Poconos.

Fattah's wife, NBC 10 anchor Renee Chenault-Fattah, labeled as "Person E" in the indictment, allegedly participated in faking the sale of her 1989 Porsche Carrera to Vederman to conceal the $18,000 payment.

"I had talked to a co-worker this past summer, but would much rather it be in your possession . . . Asking for $18,000 which is a steal," she emailed Vederman in January 2012. He responded, "love to purchase," and transferred the $18,000, but Chenault-Fattah allegedly kept the Porsche.

*  Nicholas used $50,000 in federal grant funds - which she claimed would support a higher-education conference - to pay a political consultant, her attorney and herself. The conference never took place.

"Public corruption takes a particularly heavy toll, because it really undermines people's basic belief that their elected leaders are committed to serving the public interest, not to lining their own pockets," said Assistant Attorney General Leslie Caldwell at yesterday's news conference. "Corruption like what is charged today really shakes public confidence, not only in those who are accused but in all those who serve an elected office."

Although they staged a late-morning news conference to announce the indictment, the feds clearly were in no rush to let Fattah himself know the details.

His attorney, Luther Weaver, said he still had not seen a copy as of early yesterday afternoon.

"So far, neither me nor my client have seen it," Weaver said. "I talked to them yesterday and didn't know it was going to come down today."

Fattah, who served as a state representative and state senator before heading to Congress in 1995, released a statement yesterday refusing to relinquish his seat in Pennsylvania's 2nd Congressional District, which covers parts of West, Northwest and North Philadelphia and part of Montgomery County.

"This has been an eight-year effort by some in the Department of Justice to link my public-service career to some form of wrongdoing. With today's charges, this misguided campaign has now moved from speculation to specific allegations," he said.

"As I have previously stated, I have never participated in any illegal activity or misappropriation of taxpayer dollars as an elected official. For the last 21 years, I have represented the people of Philadelphia in Congress with honor and dignity, helping millions of families through my efforts focused on education, employment, mortgage relief, and health care," Fattah said. "I will proudly continue to serve my constituents and look forward to helping millions more."

Fattah did, however, step down from his position as ranking member on the Appropriations Subcommittee on Commerce, Justice, and Science. He said he is "confident that I will be cleared of these charges."

U.S. Rep. Bob Brady, chairman of the Philadelphia Democratic City Committee, said he was "completely saddened" by the news of the Fattah indictment.

"He brought a lot of resources to the city of Philadelphia," a glum-sounding Brady said.

"A lot of children are going to college because of him. It's sad," he said. "I understand he's resigned off the Appropriations Committee. Now we have nobody from the city of Philadelphia to watch our financial back."

Brady said he'd lobby for U.S. Rep. Brendan Boyle to take Fattah's place on the Appropriations Subcommittee, but noted that Boyle, a freshman, would lack Fattah's clout.

"I think the city of Philadelphia is going to be hurting," he said. "[Fattah] was a major player on the committee."

Shortly after 1 p.m., a solemn Mayor Nutter, who has known Fattah for more than 35 years, exited his second-floor City Hall office and addressed reporters assembled in the hallway.

"This is a very, very sad moment, certainly for Congressman Fattah and his family, and the others who were part of the indictment presentation today," Nutter said.

Nutter, who defeated Fattah in the 2007 mayoral primary, said he was "completely unaware" of Fattah's alleged crimes, and sounded crestfallen that his friend had been busted.

"It's sad to see anyone go through this kind of process, but especially someone that I've known and worked with for a long, long period of time," Nutter said. "He's been a champion for children in this city and across the United States of America in terms of education."

U.S. Rep. Nancy Pelosi, the House minority leader, also praised Fattah and said in a statement that she, too, was sad.

"The charges in the indictment against Congressman Chaka Fattah are deeply saddening," Pelosi said. "Congressman Fattah has been a tireless and effective advocate for America's hardworking families across more than 20 years of distinguished service in the House."

While the timing was anyone's guess, yesterday's indictment was not unexpected. Court documents in the Naylor and Lindenfeld cases made it clear that prosecutors were building a case against Fattah.

The Daily News reported in October that between 2001 and 2012, nonprofits founded or supported by Fattah had paid out at least $5.8 million to Fattah's associates, including political operatives, ex-staffers and their relatives - some of the same people and nonprofits named in the indictment.

With the feds closing in, Fattah had been calling campaign donors and soliciting funds for Fattah for Congress - then using much of that cash to pay hundreds of thousands of dollars in legal fees and related costs.

It was no secret that the money has been defraying his legal bills. When President Obama was in Philly in January, Fattah got fundraising help from U.S. Reps. Bobby Scott and John Lewis and city labor unions - two fundraisers in one day.

"When we have friends that are in trouble, we embrace them because they're still our friends," Patrick B. Gillespie, business manager of the Philadelphia Building and Construction Trades Council, told the Daily News after a Fattah fundraiser. "None of us are without sin."

And just two weeks ago, Fattah joined Obama aboard Air Force One as the president flew here to address the 106th annual NAACP Convention.

Brady said Fattah hadn't seemed worried about the long-running probe into his finances. Despite the investigation, Fattah was re-elected in November with 88 percent of the vote.

"I just saw him [Tuesday] and he was upbeat," Brady said. "Then I heard on the radio driving in this morning that they were indicting him."

- Staff writers David Gambacorta and Mensah M. Dean

contributed to this report.