Crossing Fumo

Part three of three.

When Alan and Sheila Hunter decided to move into an old convent in South Philadelphia, they saw beauty behind the asbestos that hung from the ceiling and the plywood that covered the walls.

"We came into the chapel and my wife started to cry," Alan Hunter said in an interview. "You could feel the presence of the nuns who had lived here."

There was nothing holy about what happened after that.

Then-State Sen. Vincent J. Fumo wanted the property for a charter school. He leaned hard on Hunter to sell.

When the high-pressure tactics didn't work, an enraged Fumo decided to "really f- him over."

His weapon: the city Board of Revision of Taxes.

In an e-mail to an aide, Fumo issued orders demanding that Joseph A. Russo, then a BRT assessor, jack up Hunter's tax bill.

Russo, in turn, spoke with a colleague, suggesting that she look at whether the property's taxes should be raised, according to people familiar with the matter. The next year, Hunter's property assessment more than doubled.

In a brief interview, Russo, who now sits on the board of the BRT, said he could not remember the incident. He declined further comment.

Another BRT board member said the allegations of interference in assessments, if true, would be not just a conflict but a gross violation of BRT policies.

"How could you condone it?" asked Russell Nigro, a former state Supreme Court justice who said he did not know the facts of the case. "How could you condone what, in my opinion, is probably a crime?"

The city's inspector general is now investigating.

The story of the old Catholic school and adjacent convent, pieced together through interviews, board records, and evidence in Fumo's federal corruption trial, shows how the senator's influence infiltrated the Board of Revision of Taxes. This obscure, heavily politicized agency has enormous power. By setting real estate values, it effectively determines what everyone in Philadelphia pays in property taxes.

The seven board members who run the agency are appointed by Philadelphia's judges - many of whom, in turn, would have a tough time getting elected without backing from Fumo and other party leaders. Along with U.S. Rep. Robert Brady, the Democratic Party chief, Fumo has used his muscle to push allies into seats on the BRT board.

When it came to Fumo's 27-room house - like Hunter's, a converted convent - the BRT gave Fumo a huge tax break for more than a decade. And the board resisted raising the $250,000 value on the mansion even after Fumo listed it for sale at $7 million.

Neither Fumo, convicted in March of 137 corruption charges, nor his attorney, Dennis Cogan, would comment.

The brick buildings on Christian Street near Second, dating from the 19th century, once housed the St. Philip Neri parish school and an adjoining convent for the nuns who taught there, the Sisters of St. Joseph.

After the school closed in 1991, the buildings began to fall apart. Hunter, a community activist and former president of the Queen Village Neighborhood Association, snapped up the complex for $200,000 in 1997 at an auction.

His plan was to sell the school and use the money to renovate the convent. But developers were just beginning to sniff around Queen Village then, and Hunter says he had trouble putting together a deal.

Enter Fumo. In 2000, his nonprofit, Citizens' Alliance for Better Neighborhoods, was flush with millions in grants that he'd squeezed out of Peco and other sources. And he was eager to start spending the money, in part to buy and renovate properties in South Philadelphia's fading business district.

Fumo decided the property near Second and Christian would make an ideal home for a new charter school. He dispatched his aide and son-in-law, Christian Marrone, to persuade Hunter to sell.

Hunter, 69, knew his way around: He grew up in South Philadelphia. He'd worked with Fumo's office before. He knew he couldn't brush off the senator.

But he also knew something about real estate. So when Marrone came calling, Hunter asked for upward of $1 million, far more than Fumo wanted to pay.

Marrone tried to get Hunter to see reason. His proposal: He would send Harvey M. Levin, an independent appraiser, who would set a fair price. Levin, he told Hunter, was an expert, head of the Pennsylvania chapter of an international appraisal association.

That was true. But Hunter said there was something Marrone didn't mention: Levin, owner of an appraisal company and a longtime political pal of the senator's, was acting as the agent of Citizens' Alliance in the negotiations.

"I know that now," Hunter said.

Also unmentioned during the Fumo negotiations was Levin's other job: He was one of seven board members on the BRT, supervising tax assessments and hearing appeals.

In an interview, Levin said he didn't remember the convent or Hunter.

He said he always acted ethically in his work for Citizens' and in the rest of his appraisal career.

Levin said he never let his relationship with the former senator affect his judgment as an appraiser for Citizens' or as a member of the BRT.

"Sen. Fumo's been a friend of mine for 40 years," he said. "To me, Citizens' was the same as any other client."

Levin was appointed to the BRT board in October 1999. Around that time, he also became an important player in Fumo's burgeoning nonprofit empire. As Fumo embarked on his urban renewal shopping spree, Levin worked as his real estate expert, offering advice on what to buy in the Passyunk business corridor, and how much to pay.

He even had his own Fumo staff e-mail account: hlevin@fumo.com.

"We can buy this property NOW (retail & 2 apts.) for $67,000!" Levin e-mailed Fumo about one property, saying that East Passyunk was being touted as "the next Manayunk."

"Need quick answer or we will lose it to a land speculator," Levin e-mailed.

"OK Go with it!" Fumo replied.

Levin set up a real estate operation in Fumo's office, assisting his staffers with listings, and allowing them to register their licenses at his business.

In one January 2000 e-mail to Fumo, he said he needed to use the BRT's computers to track "midyear changes" on properties. In a recent interview, he said he didn't remember what he meant by that.

"It is what it is," he said. "I don't know what I was trying to say."

At one point, Fumo aide Christian DiCicco told Fumo that too many people in the Citizens' Alliance network were giving Levin advice.

"Harvey is getting three and four phones as to what to do and what to buy. . . . It's driving him nuts!"

The nonprofit paid Levin at least $35,000 in 2002, according to documents introduced at Fumo's trial. Levin said he did not know how much he received in total.

During the haggling over the old Catholic school, Levin toured the buildings with Hunter. He sent Fumo a biting report, saying Hunter talked like a saint but was looking for a big payday.

"Disregarding his altruistic [expletive] about neighborhood improvements, civic concerns and 'my good friends the Senator and Councilman' (Frankie) he is keeping the convent for his home and deeded parking spaces on site," Levin wrote in a January 2000 e-mail to Fumo.

"Frankie" is Frank DiCicco, the councilman and Fumo ally. Hunter says he considers him a friend and ally in neighborhood affairs.

Levin told Fumo the school "needed total rehab" and that the first offer shouldn't exceed $600,000.

He signed off with: "Always comforting to know your confidence in me."

Hunter, unmoved by Levin's analysis, stood his ground: He thought the property was worth more than $1 million. That's when things turned ugly.

"Look pal, we are connected," Hunter quoted Marrone as saying. "We can do anything we want."

In an e-mail to Fumo, Marrone himself said as much:

"Well Senator, Harvey and I agree. We are taking the approach that he's going to get what we want to give now or else he sits on the property forever.

"We agree that we should play hard ball with him."

A livid Fumo was eager to do just that. In e-mails studded with epithets and exclamation points, Fumo told his aides to ramp up the pressure on Hunter.

He told Marrone to hand Hunter a letter offer for $600,000, with a $100,000 check. If Hunter still said no, Fumo had another strategy: make him pay, using his allies on the BRT.

Fumo said the details of his offer and Hunter's rejection should be noted on a letter.

"Then give the letter to Joe Russo and tell him I want the property IMMEDIATELY reassessed at $600,000 fair-market value."

For good measure, Fumo said Levin, as a BRT board member, should be ready if Hunter filed an appeal:

"And tell Harvey that when he appeals we want to be witnesses that he turned down a $600,000 CASH offer and wanted $1,300,000 instead," he wrote. "We have to follow this through."

Marrone e-mailed Fumo again.

"The bomb will drop" on Hunter, he assured Fumo.

Levin said he didn't remember sending the e-mail about Hunter to Fumo and never was copied on the senator's exchanges with Marrone.

"I did not change and I would not change an assessment on this or any property," he said. "I wouldn't know how to do it.

"That's not who I am. That's not what I do."

Like Levin, Russo had one foot in the BRT and the other in what Fumo insiders called "Fumoworld."

After his workday at the BRT, Russo would frequently stop by Fumo's offices to see his close friend Rosanne Pauciello, who'd been tight with Fumo since their teenage years in South Philly. She later worked on his Senate staff and became Democratic leader of his old ward.

Like other bit players surrounding Fumo - Pauciello's cousin and her nephew - Russo was given a seat on the Citizens' Alliance board.

In 2000, when Fumo was trying to buy Hunter's property, Russo was the nonprofit's president, at least on paper.

During Fumo's corruption trial, Russo testified that he knew next to nothing about what the nonprofit did. He said he wasn't consulted on decisions and had no idea how the organization was spending its millions.

"I never read what I signed," he said.

At the time, Russo's job at the tax agency was to set property values in South Philadelphia. But he didn't have the authority to jack up Hunter's assessment, despite Fumo's wishes.

Russo was assigned to a different neighborhood, and BRT rules don't allow evaluators to make changes outside their zones.

He spoke to a fellow assessor, Elizabeth Aros, who made the change, according to people familiar with the matter.

When federal prosecutors asked him about the episode, Russo testified that he did not remember anything about Hunter's Christian Street property, or about being asked to change the assessment.

"I would think I would remember that, yeah," Russo testified. He repeated the same thing in a brief interview: "Honest to God, I have no recollection of it."

After the Fumo-Marrone e-mails surfaced during Fumo's trial, the city's inspector general began looking into the case. Kevin Feeley, a BRT spokesman, would not release records or provide other information, citing that investigation.

Vincent M. Battestelli was Aros' supervisor in 2000. He said he heard that Aros had been asked to look at a school property in South Philadelphia. He didn't know the details, he said, but he heard that she was upset and had talked to Eugene Davey, then the BRT's chief assessor.

"Whatever was involved in that scared her," said Battestelli, now retired from BRT. He described Aros as one of the most "dedicated, honest" people in city government.

Battestelli said Aros never talked to him about it, and he didn't ask.

"How can I get in trouble if I don't know it?" he said. "Why open a can of worms if you don't have to?"

Davey, now retired, said he could not recall the incident.

Aros declined requests for an interview. Her union representative said the evaluator just did her job.

"They are told when somebody comes to them and makes a suggestion to look at a property, they should go to the director," said Rita Urwitz, vice president and business agent for AFSCME Local 2186.

Aros was told by Davey to make sure the building had the proper value, and that's what she did, Urwitz said. At the BRT, she said, such "suggestions" are not unusual.

"People have friends and sometimes that affects the process," Urwitz said. "I think it's a political atmosphere. That's true in a lot of departments."

Later that year, Hunter got a notice saying the value of his property for the 2001 tax year would rise from $200,000 to $520,300, an increase of 160 percent. After an appeal, it was reduced to $400,000.

The BRT couldn't say whether Levin voted on that appeal because it does not keep those records. Levin said he couldn't remember.

In September 2004, Russo got a promotion at the BRT: He became one of seven board members who run the agency, a part-time position that pays him $72,000 a year.

A real estate broker, he remains president of Citizens' Alliance and, in recent years, has handled private work for Fumo. In 2007, Fumo gave Russo power of attorney so he could handle the sale of a building on East Passyunk Avenue for him.

That same year, a controversy over Fumo's influence at the BRT spilled into public view, exposing the normally secretive agency to rare public scrutiny.

During the standoff over the old school, Fumo's e-mails seethed with righteous indignation that Hunter was asking for more than $1 million when the BRT, for tax purposes, valued his property at only $200,000.

"He is probably paying minimal taxes on it and therefore can afford to 'warehouse it' like every other land speculator," Fumo wrote.

"Well let's have him pay the city for that privilege at the fair market rate!"

But the story was different when it came to Fumo's house in the Art Museum section of the city.

Thanks in part to his friends on the BRT board, the agency was far more reluctant to raise Fumo's tax bill.

Like Hunter, Fumo bought a former convent and completely rehabbed it - helped by taxpayers and the nonprofit, according to the corruption indictment.

By the time Fumo was done, the house on Green Street had a six-story elevator, heated sidewalks, a shooting range, a hot tub, a billiard room, and a brick oven in the back garden.

Still, even as Fumo set out to convert it to a luxury residence, the BRT began dropping the value. Over the next two years, it went from $200,000 to $150,000. In 1997, the year the BRT said the house was worth $179,100, the Fumos took out a $750,000 mortgage on it.

In 2003, the BRT raised the value to $436,000 but rolled it back to $250,000 after Fumo appealed. The BRT said it couldn't explain the rationale for the reduction because it lost the Fumo file.

In 2007, to help raise money for his legal defense, Fumo put his mansion on the market for $7 million. (Since then, the asking price has dropped to $5.5 million.)

The gulf between the mansion's tax bill and asking price quickly became an embarrassment for the BRT, a particularly striking example of the irrationality of many of its assessments.

Even then, the board at first voted, 4-3, not to raise the mansion's value, with Russo and Levin siding with the senator.

"I would vote exactly the same way," Levin said, explaining that it was wrong to single Fumo out for a tax hike. "It was spot-assessing. When we reassessed it as part of a larger group of properties, I voted for it."

In March 2008, Levin and other board members hiked the value of Fumo's mansion to $953,500, raising his tax bill 281 percent. Fifty other high-end properties got similar treatment. Fumo appealed, but in January, the BRT shot him down in a unanimous vote. Levin and Russo were absent.

Thwarted by Hunter, Fumo eventually gave up and moved on. The Independence Charter School, with a loan from Citizens' Alliance, found a building in Center City.

Less than a year after he refused Fumo's $600,000, Hunter sold the school for $1 million to a condo developer; the building is now 11 luxury condos, a project that helped turn around that section of Queen Village.

With the profits, Hunter and his wife painstakingly converted the convent into their dream home. The former nuns' chapel is now a study for Sheila Hunter.

Whatever happened at the BRT after Fumo's intervention, the message was lost on Hunter. When first asked about the matter, after the e-mails surfaced at Fumo's trial, he told The Inquirer his assessment had not been raised.

He didn't remember that his taxes had indeed gone up until reporters showed him the records. If he was punished for crossing Fumo, no one ever told him.

Today, he's left with a mixture of irritation and admiration for Fumo's relentlessness. As an activist - Hunter is trying to build urban greenhouses to provide jobs for ex-offenders - he saw the same Fumo tactics pay off in money and projects for the neighborhood.

"Wouldn't you like a Gen. Patton on your side?" he asked. "In that world, who wouldn't want someone like that?"

To read the series online and check out special interactive features, go to http://go.philly.com/brtEndText