Despite the campaign finance scandal that’s broken over her head, Councilwoman Blondell Reynolds Brown seems secure in her leadership position on city council — for the moment.
Earlier this week the city’s Board of Ethics released a settlement agreement with Brown, in which she agreed to pay a record $48,834 fine for financial improprieties — including using campaign funds to repay a personal loan.
The embattled councilwoman — once considered a strong possible candidate for mayor — could be stripped of her leadership post by a vote of council. Published reports have suggested that her council colleagues are discussing the possibility.
But none would say so on the record.
“Not that I know of,” said council President Darrell Clarke, when asked Thursday if there was a movement afoot to remove her as majority whip, a post Clarke once held.
Majority Leader Curtis Jones was among those who declined, on Thursday, to speak on the matter publicly.
Earlier in the week, he told reporters that the Ethics Board report was not grounds to remove Brown.
“I don’t see where her leadership within council, as whip, which is defined as the ability to garner votes, being able to move legislation, is impacted by the findings of the board,” he said Tuesday.
Speaking off the record, another council member said that council might be spurred to action if the report resulted in any more allegations, criminal or civil charges.
Brown admitted that she used campaign funds to pay back a personal loan from Chaka Fattah Jr. — the son of U.S. Rep. Chaka Fattah — using the money to stave off foreclosure after she fell behind in mortgage payments.
The news prompted almost immediate calls for her to resign from her council seat, and even spawned a website urging Philadelphians to recall her in a special election.
Speaking to reporters after Thursday’s council meeting, Brown said she did not have any indication that her colleagues intended to strip her of her post.
“No,” she replied tersely when pressed by reporters.
Council leaders were aware that she was the subject of an Ethics Board investigation, she said, adding that now everyone on council was aware.
Asked if she was concerned, Brown added, “I feel good that I will be measured on the totality of my work product. I feel good in knowing that consistently, in my 13 years here, I’ve made not good choices but very good choices. I feel good in knowing that I was very honest, I was very forthcoming [with the Ethics Board.]
She referred reporters with more questions back to a statement her office released Tuesday.
“I will do everything in my power to make amends,” she said in a statement released by her chief of staff David Forde.
In a statement, the councilwoman admitted to a number of “errors.”
“It is clear that there were a number of errors that occurred during the last campaign,” she said in the statement.” I take full responsibility for the conduct of my campaign and have taken corrective steps to ensure that future reporting is clear and accurate.”
The headline grabber was the loan from Fattah Jr. — known as Chip — which came in December 2010, just after Brown made a phone call to his congressman father seeking assistance in the effort to save her home. Shortly after the phone call, Fattah Jr. loaned Brown $3,300 — the final chunk of money she needed to stall bank action against her home. The loan was later repaid by the Friends of Blondell Reynolds Brown committee.
In campaign filings, the settlement found, Brown lied about the repayment, listing it as a payment for printing services. Additionally, the report noted that Fattah Jr. was employed by a for-profit school that relied on city council approval for its funding, which came through the school district. At the time, the school had a $4.5 million contract with the district.
“I … must take full responsibility for an error in judgment regarding the repayment of a loan, through campaign funds, for a personal matter,” Brown said in the statement. “I have subsequently made the Friends of Blondell Reynolds Brown whole through reimbursing that amount with my personal funds.”
Fattah Jr.’s phone number was no longer active. The congressman did not respond to requests for comment.
The loan from Fattah Jr. was not the only mistake Brown made.
Documents released by the Ethics Board — 25 pages in all — showed Brown’s campaign finance reports contained more than 170 “errors,” which the board broke down into 165 “material omissions” and six “material misstatements.”
A cursory accounting of the omissions and misstatements showed that Brown collected but failed to properly account for at least $46,600. She also inflated account balances for campaign accounts.
Among the omissions outlined by the settlement was a $4,000 donation from the Friends of Marian Tasco, and in the next reporting cycle a $4,000 debt to the Friends of Marian Tasco. A $2,500 gift from the International Brotherhood of Electrical Workers was also on the list of donations that were not reported. Brown also failed to report a $150 donation from former SRC chairman Robert Archie and $250 from Evelyn Smalls, the president and CEO of United Bank.
The settlement, announced late Monday, also included a number of other incidents where Brown admitted to playing fast and loose with campaign funds. In several instances, she pocketed campaign contributions; in others, her campaign took amounts over the legal limit from a campaign related political action committee.
In one example, Brown took a signed, blank check from entrepreneur Sid Booker, then made it out for a $1,000 and deposited it in her personal bank account. Similar incidents, where Brown took campaign money and put it in her personal account, happened on four different occasions netting her $1,400.
Ethics officials noted that Brown voluntarily disclosed some of the transactions.
The report has already resulted in the firing of one city employee named in the settlement documents. John D. McDaniel was fired Tuesday from his job at the airport, where he was employed as an assistant director with a salary of more than $87,000. In 2010, he was Brown’s campaign manager.
McDaniel had also worked for Mayor Michael Nutter, who, after firing him, issued this statement.
“I have known John McDaniel for a long time, and certainly I’m disappointed by his actions and admissions as outlined in the Ethics Board report,” said the mayor. “The dismissal was “imperative to ensure the integrity of our government and our personnel,” he said.
Promising that it won’t happen again, City Councilwoman Blondell Reynolds Brown this week gave a detailed explanation of the circumstances surrounding the missteps that led to her agreeing to pay a record fine for violating city campaign finance laws.
“You have to face the music,” Brown said. “I have a daughter looking at me, my mother and other young women. Part of leadership is saying, ‘I messed up.’”
Brown sat down with The Philadelphia Tribune for an exclusive interview to discuss the circumstances surrounding her agreement to pay more than $40,000 in fines for ethics violations.
In addition to discussing her role in the violations, Brown assured her constituents – voters all across the city – that she has put safeguards in place to insure that something like this never happens again.
“We are expected to conduct ourselves to a higher standard,” she said. “I fell down, and I’m more disappointed with myself than anyone else could ever be. I asked to do this work, and you take the hits that come with it and you don’t complain.”
As an example of her resolve, the councilwoman noted that she will file her next round of campaign reports Friday -- a week late thanks to an extension -- because she and her staff are going over them with a fine tooth comb. They will be correct and include every detail, she said.
“I am in the weeds in a very meticulous way,” Brown said. “This time, I’m going through every single page.”
Brown herself is financially responsible for personal violations. Her campaign will pay fines related to her committee. In total, she will pay in eight $5,000 installments until the end of 2014.
“I have to go out and raise the money, ask people to invest in me again,” she said.
In sitting down with the Tribune, Brown said she wanted to present the facts in a broader context.
It is not the first time the suddenly embattled councilwoman has been the subject of an ethics investigation. She faced a similar problem, though on much smaller scale in 2011. Then, as now, she agreed to pay a fine for violating city campaign finance rules.
In both cases, political operative John McDaniel was involved. And Brown, while taking full responsibility for actions detailed in the 25-page settlement agreement, said McDaniel was at the core of her troubles.
To outsiders the two incidents may seem separate but they are related, said Brown - all part of a hazy year or so of personal tumult that started with her divorce.
“My life was stupid for a year and a half,” she said.
Her current difficulties started in August 2010, when Brown learned that her ex-husband had stopped making mortgage payments on the home she shares with her daughter and mother. The bank was threatening to foreclose – its second effort apparently – and Brown owed more than $40,000 in back payments, penalties and interest for payments not made since January.
The news sent her scrambling for cash.
“In a move of desperation, I had to figure out how I could come up with $40,000 to save my home,” she said. She tapped her pension, her daughter’s college fund and took loans from friends.
By mid-November she’d raised most of the cash, she but remained $3,300 short. She turned to a longtime friend for help. That friend happened to be U.S Rep. Chaka Fattah.
“That was a misjudgment, because in the eyes of others he’s not a longtime friend – he’s the congressman,” said Brown.
Fattah in turn asked his son, Chaka “Chip” Fattah Jr., to give Brown a check, which he did.
Brown got caught up on her mortgage payments. And then, aside from asking McDaniel, who was her campaign manager, to pay back the loan from a campaign account, which he did in December, she forgot about it.
Looking back now, Brown realizes that she should not have told McDaniel to pay back the debt out of campaign funds.
“When you’re going through that sense of desperation and crisis you do a lot of things that don’t make sense,” she said. “I did not think through, adequately and clearly, that this was inappropriate. I was not thinking through a lot of things clearly.”
Brown said she didn’t realize that McDaniel had cut the check and recorded it as a payment to a printing company.
It was almost two years later, when Brown heard about an FBI investigation into Fattah Jr. that the loan re-entered her mind.
She knew that McDaniel, who faced questions about ethics violations in 2003 in an unrelated matter and, in yet another incident, agreed to pay back $13,000 to a nonprofit from which he had allegedly stolen the money, had a questionable history when she hired him.
“I believe in second chances,” she said. “Our relationship goes back to 1984. I always had faith and trust in John.”
McDaniel, however, continues to attract the attention of authorities, who are less forgiving. He was named Wednesday in a federal investigation in which U.S. officials allege he stole $100,000 from a political action committee linked to Brown.
“I don’t take responsibility for John McDaniel,” she said, declining to comment on that investigation. She stuck to recounting her own story.
After learning that Fattah Jr. was under investigation in the spring of 2012, Brown called McDaniel to make sure he had done as instructed.
“I said, “Please tell me you recorded that $3,300 transaction on my expense report,’” she said. “He told me no.”
It was then that Brown, as noted in her recent settlement with the Ethics Board, decided on her own to confess to ethics officials.
Though the incident involving the Fattahs has been the center of the brouhaha, the ethics report also noted numerous other violations. In a few, Brown took checks and deposited them in her personal account.
Sloppy bookkeeping is how the councilwoman explained that, telling the Tribune that the checks were made out to her personally, and she endorsed each of them over to her campaign committee – Friends of Blondell Reynolds Brown.
“It was sloppy paperwork. Period,” she said.
A non-disclosure clause in the settlement agreement forbids Brown from criticizing its findings but her mood turned sour when she discussed those checks. In addition, the councilwoman pointed out that the subjects of ethics investigations are free to refute allegations in a report until it is released.
After that they must remain silent.
Ultimately, Brown is determined to avoid getting mired in the scandal. Her position as council’s majority whip appears safe - as does her seat on council. She’s looking forward.
“I’m not fretting about it,” she said. “You have to work hard again to rebuild your reputation. I want to get back to the work that gives me a lot of personal and professional joy.”
She hopes that her constituents can do the same.
“I would hope that they would look at my record, and ultimately I hope that’s what people measure me by. This politics stuff comes and goes.”
Megan Smith, founder and president of Brownstone PR, started her own public relations firm and now has a number of clients in South Philadelphia.
Smith came to Temple University in 2001 — motivated in her journalism curriculum.
She worked several internships at various publications including Essence, Glamour and Marie Claire. It wasn’t until she reached her senior year that she realized she wanted to do something different.
Smith, who is a Washington, D.C., native, decided she would stay in Philadelphia after graduating in 2005, to chase what ever it was that would make her happy. She knew she had a love for independent films and started an internship with the Philadelphia Film Society.
“I thought it would be a cool opportunity to promote a film festival,” she said. “I got to connect with a lot of amazing people.”
It wasn’t long before Smith realized she enjoyed creating stories, giving pitches and conversing with people in the media. She then began working for a boutique public relations firm, which led her to more opportunities to network.
Through her public relations work she reconnected with editors she interned for in the past and began to put the pieces of her life’s goals together.
Smith knew she wanted to continue public relations work and wanted to do it for everyday people. Chaka Fattah Jr., Smith’s long-time friend, needed public relations assistance for a luxury concierge firm he started. Smith began working with Fattah and managed to get him on the cover of the Philadelphia Business Journal.
As her work with Fattah grew, it became increasingly difficult to maintain her work at the boutique firm.
“I had a decision to make and it was really scary,” Smith said. “I didn’t want to go out on my own — I considered it would happen but I didn’t think it would come so soon.”
Smith decided to leave the boutique firm and continue her work with Fattah. She was able to get him a full feature in Black Enterprise and Forbes. After much thought and a motivating conversation with Fattah one night, Smith decided she would pursue starting her own firm.
“When I started it was me — a laptop — and Chaka Jr., my one client,” Smith said.
Smith launched her firm, Brownstone PR in June 2007 and now has a team of seven and client list of 31. The team works with nonprofit organizations, like the Art Sanctuary located at 628 South 16th St.
“I work with a lot of clients in South Philadelphia, as well as major corporations and law firms,” she said.
Smith’s South Philadelphia clientele also includes Ms. Tootsie’s, a soul food café located on 1314 South St. and KPD Lifestyle Luxury Suites.
As an African-American female entrepreneur, Smith would encourage anyone to pursue what their true passion is.
“My dad used to always say there are enough miserable people in the world that get up and go to a job they hate and come home to a significant other they don’t love — don’t add to that number,” Smith said.
She has found her true passion, but she described her work as anything but easy.
Brownstone PR opened an office in June 2010 at 1616 Walnut St. Smith mostly enjoys when her clients share an idea with her and she is able to help make it bigger.
Along with public relations, Smith has other passions she would like to tap into. She hopes to one day open up an art gallery and bookstore. On her spare time, she enjoys going to Old City to browse through used books and old record stores.
“You have a lot of bad days and there are a lot of uncertainties,” Smith said “I do it everyday because I love what I do.”
FBI search related to fees totaling $450K
This week, federal agents raided the home of Chaka Fattah Jr., son of United States Representative Chaka Fattah, and a local law firm where the younger Fattah has office space, seizing records and a computer.
Fattah has not been indicted on any criminal charges, but federal authorities are investigating why Fattah was paid $450,000 in fees from the Delaware Valley High School, an education firm that has received millions in contracts from the Philadelphia School District.
On Wednesday, federal agents confiscated records from Fattah’s home at the Ritz-Carlton and a computer from the law offices of attorney David T. Shulick, who is also president of Delaware Valley High School. The school specializes in educating students with behavioral problems. Shulick’s area of expertise is civil litigation, and Fattah allegedly maintained office space at Shulick’s firm.
“Because this matter is under investigation, I’m limited in what I can say regarding my client,” said Fattah’s defense attorney Ronald A. Sarachan when asked what federal investigators were looking for. “I am representing Mr. Fattah, and we have been cooperating fully with the government. I only recently became involved in this. We are hopeful that this matter will be resolved quickly.”
Fattah is the owner of a consulting company called 259 Strategies L.L.C. that works as a subcontractor for Shulick’s companies. At this point, neither Shulick nor his education company are the subject of the investigation, however, this is not the first time the federal government has had Fattah under scrutiny.
Fattah was connected to Mikel D. Jones, a politically connected attorney who was recently the subject of a federal investigation for fraud and money laundering. They are old friends who grew up together in West Philadelphia.
Jones, 55, and his wife, Dona Nichols Jones, 54, of Boynton Beach, Fla., were convicted in connection with a scheme to defraud a New York venture capital fund that financed the operation of Jones’ Philadelphia law firm. Mikel Jones was found guilty of conspiracy, money-laundering, 14 counts of wire fraud and 14 counts of mail fraud. His wife was convicted of conspiracy, money-laundering and 14 counts of wire fraud. The jury acquitted Jones of several counts of mail and wire fraud involving thefts from the City of Philadelphia. His wife was not charged in those counts.
Although Shulick was unable to respond to a request for information from the Tribune by press time; he did release the following statement by email which appeared in a published report;
“Chaka Fattah Jr. is being victimized merely because his last name is ‘Fattah,’” the release said. “Mr. Shulick has both a personal and professional relationship with Chaka Fattah Jr., and cares about him. From Mr. Shulick’s perspective, he is dealing with issues that nobody without the last name ‘Fattah’ would have to deal with.”
Delaware Valley High School has sent furlough letters to its entire staff.
The DVHS operates four schools, and runs two for the School District of Philadelphia: the accelerated program and the alternative (known as disciplinary) schools located at 4300 Westminster Avenue and at 4224 N. Front Street.
The DVHS has retained Zarwin Baum law firm Attorney Paul W. Baskowsky, who, when reached by phone, contradicted media reports that suggested DVHS has closed its doors and isn’t accepting other students.
“The schools are not closed, and [the media] reports are wrong,” Baskowsky said, mentioning that at this point, he is limited on what information he can release to the press. “The staff is simply on furlough until we get a contract, and they are currently in contract negotiations with the school district.
“Of course, if the school district doesn’t supply the students, the school cannot operate.”
This isn’t Delaware Valley High School’s first hint of trouble. There are reports that link the school to Chaka Fattah Jr. — the son of powerful U.S. Congressman Chaka Fattah — a matter which came to light recently as the FBI raided the Logan Square offices of attorney David Shulick. It has been reported that Shulick’s offices run DVHS, and the federal officials were looking for paperwork highlighting the involvement of Fattah Jr.
Fattah Jr. couldn’t be reached for comment, and Congressman Fattah hadn’t returned Tribune calls for comment before deadline.
The school district, at one point, was paying $4.1 million to DVHS to operate both the disciplinary school on Kelly Drive and the accelerated program in Southwest Philadelphia.
School District of Philadelphia spokesman Fernando Gallard said the district was advised of the ongoing investigation and of the mass furlough, but said, as of now, the district hasn’t been notified of any plans by DVHS to shut down.
“We have not been notified that the school is closing, but what we do know is that the school has sent letters to teachers announcing they have been furloughed — but no notification was sent to us,” Gallard said. “These are not charter schools, but are contracted schools that provide special services to the district; we did hire them to run an alternative school and an accelerated school, and those are the two schools we have contracted them to run.
“Usually, the School Reform Commission approves a contract extension for one year,” Gallard continued, “and we are still in the midst of negotiating those extensions for all of our providers. We will take into consideration the changes the DVHS is considering when we approve those extensions.”
Consideration, too, must be paid to the 500 or so students that attend DHS. Gallard said it wouldn’t be too difficult to shift the seats and resources, should DVHS collapse.
“We are working very quickly and trying to get [negotiations] done as soon as possible; contracts expired on June 30, and the district is now working on extending the contracts,” Gallard said, noting that the severely at-risk students in both schools will receive the same level of instruction and guidance as they have become accustomed to receiving at DVHS. “But we could easily shift seats if we needed to. DVHS doesn’t represent a large portion of the seats we contract, so it’s not a tremendous shift for us.
“Basically, what you are looking at, if we are looking to maintain the same number of seats, it just means we have to look for other providers.”