Fattah Jr. begins defense, calls Rendell to testify

Chaka "Chip" Fattah Jr. opened his defense in his federal fraud trial Thursday just like he shops for his clothes: With an emphasis on splashy brand names.

Former Gov. Ed Rendell was the first witness called to testify on Fattah's behalf. And in his gravelly rasp, he told jurors he hired the son of U.S. Rep. Chaka Fattah (D., Pa.) to shoot photos for his 2002 gubernatorial campaign. He was, he testified, entirely satisfied with the work.

"You were a hard worker," Rendell said to Fattah, who is representing himself. "You were always on time. You took excellent photographs."

As for government allegations that Fattah, 32, blew tens of thousands of dollars from business loans on sports cars and a collection of Armani and Trussini suits and Hermes ties, the governor offered little during his seven minutes on the stand.

It was a pattern that continued throughout the day as Fattah called a number of satisfied former clients of his companies in an effort to prove not only his record as a legitimate businessman but also that he had earned enough money on his own to afford his luxury tastes.

The congressman's son is fighting to dispel prosecutors' depiction of him as a scam artist who cheated banks, the IRS, and the Philadelphia School District out of thousands of dollars paid to a collection of his thinly defined business ventures between 2005 and 2012.

And yet, nearly every former customer Fattah called to the stand worked with him prior to the time at the heart of his indictment. Prominent on Thursday was Fattah's photo business, FattaGraphy.

"So the only thing you know about is a 2002 payment of $5,000 to FattaGraphy?" Assistant U.S. Attorney Eric Gibson asked Steve Kaplan, a campaign lawyer for U.S. Rep. Robert Brady (D., Pa.), who testified that Fattah shot photos that year for the congressman.

"That's correct," Kaplan replied. Gibson shot back: "Then what are you doing here?"

Most of the revenue streams Fattah referenced Thursday were in some way connected to his congressman father or his allies in Washington - from his work for the Brady campaign and for Rendell, who said that the elder Fattah had asked him to hire his son, to a $25,000 contract Fattah Jr. received in 2004 from the House of Umoja, a West Philadelphia nonprofit run by his grandmother.

Fattah questioned Michael Scheffer, the lead IRS investigator in the case, about an $85,000 payment he received in 2005 from Mikel Jones, a Florida lawyer and childhood friend of Fattah's father.

Fattah has contended he earned that money through work his personal concierge service, American Royalty, did for Jones.

Scheffer, however, testified that the transaction attracted federal scrutiny for a different reason. The IRS was investigating whether the congressman had helped Jones obtain money from a City of Philadelphia economic development program just before Jones sent Fattah the $85,000, he said.

(Jones was later acquitted on charges he misused those funds. A spokesman for the congressman said Thursday no evidence was presented to support the assertion that Fattah had helped Jones obtain program funds.)

One source of income had no clear family connection - the $4,000 a month Fattah was paid in 2008 and 2009 while working as a marketing consultant for Joel Harden, a Rolls-Royce-driving Germantown real estate developer whose photo, of him posing alongside a lion skin rug, was shown to jurors last week.

Harden paid Fattah under the table to help market "Mogul," a board game the developer created to explain real estate finance management to children.

Harden ordered thousands of copies in anticipation of striking a deal with a major toy company. Fattah managed to sell 10. He did not report any of the money he earned to the IRS, prosecutors said.

"Do IRS guidelines require a business to be successful?" Fattah asked Scheffer.

The agent responded: "The expectation of the IRS is that you will report your income - it doesn't matter how successful."

Arguably, though, Fattah found his greatest success of the day before his defense case had even begun, during his cross-examination of Richard J. Haag, the lead FBI investigator in his case.

On Wednesday, Haag admitted that he had tipped off an Inquirer reporter to the 2012 raids of Fattah's Ritz-Carlton condo and Logan Square office, and had shared other broad strokes of the case.

As he grilled the agent for nearly two hours Thursday, Fattah wrung several concessions from Haag, including that those conversations violated a judicial order sealing the search warrants.

Despite his admission, Haag came across as direct and forthright. And when inquiries strayed into other parts of the case, Haag proved unwilling to give an inch.

At one point, Fattah confronted the agent with what he described as the exemplary educational record of Delaware Valley High School, a for-profit education firm through which Fattah is accused of stealing $50,000 from the Philadelphia School District. Haag bristled and said he had interviewed most of its teachers.

"They described the school as a diploma mill," Haag said. "Teachers said they felt pressured to let students cheat and that attendance was abysmal."

In a hearing outside the jury's presence Thursday, U.S. District Judge Harvey Bartle III quashed subpoenas Fattah issued Wednesday to three Inquirer reporters, and denied his request for a hearing to further explore whether Haag's contact with the newspaper affected the case.

Fattah and his standby counsel, Nina Spizer, have seized upon the relationship as evidence of an unfair investigation. Had Fattah known of Haag's contact with the paper earlier than Wednesday, Spizer said, he could have launched a more coherent defense.

Gibson, the prosecutor, replied: "If an incoherent defense has been presented in this case, Mr. Fattah need only look in the mirror for that."

Testimony is expected to resume Friday.

jroebuck@phillynews.com

215-854-2608@jeremyrroebuck