Ten years ago, a bugging at the mayor’s office shook Philadelphia [The Philadelphia Inquirer]

By Craig R. McCoy and Mark Fazlollah, The Philadelphia Inquirer

McClatchy-Tribune Information Services

Oct. 06--Before it all blew up, the FBI's bugging of Mayor John F. Street'sCity Hall office went off without a hitch.

In a choreographed intrusion, dozens of agents protected the perimeter while the small technical team made its way to Street's second-floor suite and broke in.

It helped that the mayor's City Hall office was unguarded and there was no alarm system. And luckily, the hallway key fashioned on the spot by the FBI team also opened the door to Street's inner office.

Not that it wasn't nerve-wracking, especially when the FBI's surveillance crew reported that Street was on the move, possibly heading back to the office late that weekend afternoon from a campaign event in North Philadelphia.

"It was pretty close," one knowledgeable source recalled, helping to provide the first authoritative account of the bugging. "There were some tense moments."

As the teams quietly withdrew after their hour's work, the FBI case agent, John Roberts, turned to his fellow agents and said: "We just made history."

In perhaps the most audacious act by law enforcement in recent Philadelphia history, the FBI and federal prosecutors chose to rig Street's office with listening devices as the climax of a "pay-to-play" investigation weeks before before Street was to stand for reelection.

It was all for naught. The FBI would not pick up a single conversation, incriminating or otherwise, before someone leaked word of the bug to the Street administration. A top aide to the mayor then instructed the police commissioner to sweep the office for listening devices.

Ten years ago Monday, Philadelphia police pulled down the small bug from the ceiling of Street's office, revealing the massive federal investigation.

The news was a bombshell. It rocked the electorate and triggered a tumultuous week rivaled for governmental chaos in recent memory only by the aftermath of the MOVE bombing. The furor grew as FBI agents fanned out across the region, raiding city offices, businesses and homes and handing out a blizzard of federal subpoenas.

In the mad scramble that followed the bug's discovery at 7:15 a.m. on Oct. 7, 2003, top agents immediately confirmed to a shaken and angry Street that the bug was indeed a FBI device. But the FBI deliberately misled him about the scope of their probe in a desperate ploy to salvage the investigation and protect other bugs still functioning, according to interviews.

Minutes after the FBI briefed him on its investigation, Street put his own spin on things, telling the public he had no idea who had installed the bug. "It could be a private party," he said.

His police commissioner, Sylvester Johnson, misled the public, too, saying he had ordered the bug sweep as "routine" security check.

It was not until years later, after Johnson's boss had been safely reelected, that the public learned Johnson had uncovered the bug at the urging of George R. Burrell, Street's top political aide. Nor did Johnson reveal to the public that he had also alerted the FBI to the pending sweep.

The probe was star-crossed in other ways.

Along with the Democratic mayor, the investigation's main quarry was Ronald A. White, a lawyer with no government position who nonetheless secretly held sway over concessions at Philadelphia International Airport -- along with municipal bond action, city contracts and more.

While Street never faced criminal charges, White headed the long list of corrupt officials, crooked lawyers, bent bankers, and bogus contractors charged in the case. But White died at age 55 of pancreatic cancer two months before his trial, cheating prosecutors of their marquee defendant. Street attended his crowded funeral.

With White gone, the feds turned another indicted official, Corey Kemp, just 32 years old when named city treasurer, into "Mr. Big," his former defense lawyer, L. George Parry, said last week. Kemp ended up with a 10-year prison sentence, the stiffest handed to anyone in the scandal.

Despite the setbacks, prosecutors went on to win 24 convictions.

Beyond that, the work by the FBI and U.S. Attorney's Office slowly paid sweeping dividends, spurring political reforms that included campaign-contribution limits, creation of a tough and well-funded city ethics board, new regulation of lobbyists, a City Charter change to limit contract abuses, and more.

Assistant U.S. Attorney Robert A. Zauzmer, a key prosecutor in the probe, said last week the investigation prompted widespread reforms and a 2007 mayoral campaign to choose Street's successor that focused on abolishing pay to play.

"We, the prosecutors, and the agents who worked on this and the juries who served sent a very powerful message that apparently was received," Zauzmer said.

Moving fast

In a bit of political jujitsu, Street moved swiftly to recast the bug discovery to suggest he had been targeted by Republicans in the White House and the U.S. Justice Department. His Republican opponent, Sam Katz, uncertain how to exploit the scandal, watched, frozen, as Street opened up his lead.

The Democratic message infuriated the FBI, which was left largely helpless to rebut it.

"It's ridiculous. It's madness," Jeffrey A. Lampinski, the special agent in charge of the Philadelphia office of the FBI when the bug was planted, said recently. "It was disgraceful.

"We followed the evidence and the timing of the evidence. . . . That's what drove us to put this in."

As it happened, the roots of the probe were both more prosaic and more fantastical than the conspiracy theory advanced by the mayor. The investigation into the leader of the nation's fifth-largest city grew out of a street-level FBI pursuit of North Philadelphia crack dealers.

As part of that investigation, veteran FBI agent Jesse Coleman received court approval in 2001 to tap the office, home and cell phones of a Muslim cleric, Shamsud-din Ali, whom investigators suspected of using his mosque in West Philadelphia to launder drug money.

"What we started to intercept was not really that," Coleman recalled last week in an interview in his suburban home far from the rough streets where he once pursued narcotics cases.

He and his fellow agents discovered that Ali and his wife had become white-collar grifters. Among other scams, the couple stole federal education money by billing for "ghost teachers" at a school at their mosque. Ali was also using political ties to get a no-work city contract, the bug showed.

Coleman, now retired, added, "We started intercepting calls between him and Ron White."

Coleman linked up with agents in the corruption squad. No longer was the probe a drug case. Now it focused on political corruption.

The Ali taps, Coleman said, gave prosecutors and the FBI justification to bug White as well -- "probable cause," or as Coleman put it, "to go up on Ronald White."

On his office and cellphone taps, White was revealed to be a tireless deal-maker, effortlessly switching from scheme to scheme, swapping city business for campaign contributions for the upcoming mayoral election. Kemp, the city treasurer, was the eager acolyte.

"You got your boy sitting in, in the treasurer's seat," Kemp was recorded telling him. "That's what we do, man: Take care of each other."

White told Kemp: "The key for us right now, man, is to concentrate on getting John elected 'cause it gives us four more years to do our thing. . . . If we get four more years, Corey, we should be able to set up."

In the thousands of intercepted conversations, the FBI repeatedly captured how White bluntly ordered officials to do his bidding. He was quick to invoke his connections to the mayor.

On a tape recorded June 16, 2003, White told a top pension-fund official that the fund should hire a campaign contributor as a hedge-fund manager.

"Listen, I had another talk the other day over at City Hall, you know," White said. "We really are hard-pressed to do something for this guy if we can."

It worked. Ten days later, the pension fund agreed to invest $200 million in hedge funds. The hedge fund manager wrote checks for $50,000, half going directly to Street's campaign and the rest to two of White's political action committees, which, in turn, channeled more money to the Street campaign.

On June 24, 2003, according to another tape, White told an official of the Redevelopment Authority that an insurance broker who had contributed $50,000 to Street's campaign should get a piece of a major contract.

Said White: "I talked to the mayor yesterday. . . Make sure it gets done."

The official replied: "That'll get done at our first board meeting in July."

In his calls, White liked to reference the mayor's office as a signifier of his clout.

"When I'm calling you, I'm calling you because I'm calling directly from the second floor," he said during one recording, a reference to City Hall Room 215, the mayor's suite of offices.

The problem for the investigation was to put Street and White together in that office.

On July 30, 2003, FBI agent Roberts, the top investigator in the case, shadowed White into the corridors of City Hall and up to Room 215.

Roberts eavesdropped from a hallway as White spoke with a Street staffer until the voices grew faint. As the recalled in a recent interview, the surveillance was more proof of White's close ties to the mayor.

"Intense really is the best word for it," he said recently. "It was a validation of months of investigation."

But despite the surveillance, informants, and a slew of audio and video wiretaps, the FBI was falling short in building a case against Street.

Finally, Roberts submitted a 123-page affidavit to a federal judge seeking permission to install the bug.

In the sealed document, reviewed by The Inquirer, Roberts said: "I have probable cause to believe Mayor Street, White, and other use [Street's office] to execute the pay-to-play schemes".

On Sept. 18, 2003, U.S. District Judge Eduardo C. Robreno, a Republican, secretly gave them the green light.

'A workaholic'

"I couldn't believe it. Wow! This is going to the mayor's office," Coleman recalls thinking.

The afternoon of the bug's installation, as many as 80 men and women, most of them FBI agents, played roles, large and small.

Coleman had a supporting role. He was one of several agents stationed in City Hall's many stairways to head off any visitors on their way to the second floor.

Another team kept an eye on Street as he attended the political event a few miles from the office.

Tailing the mayor was not easy. He traveled with his own watchful security detail.

Still, a source said, "we knew exactly where he would be."

A big worry was that Street might simply pop back to City Hall.

"Street was known for his erratic habits. He was pretty much a workaholic," the source said. "He was known to show up day or night."

The team arrived with a clear understanding of the layout of the mayor's office. Five weeks before the break-in, sources say, FBI Special Agent J.J. Klaver had scoped out the office to quickly sketch out a floor plan.

Sources declined to say how the agent managed to step inside the office beyond noting that City Hall was a very public space at the time. Klaver declined to comment.

The drawing, obtained by The Inquirer, carefully noted such details as chair placements, the TV, and a credenza behind the mayor's desk.

Sources declined to say precisely how the FBI entered City Hall itself, a building guarded by police around the clock. Their reticence suggests someone covertly helped the FBI that weekend in late September.

With Street safely off the premises, the technical team, wearing plainclothes, headed up to the second floor and got to work. According to the sources, agents then opened the hallway door to the office, using a technique known as key "impressioning."

Working with files and key blanks -- ones known to work given the lock's manufacturer -- an expert agent carefully created a working key from scratch, pushing the blank in, withdrawing it, noting marks, filing it, reinserting it.

The FBI team, though adept in classic lock-picking, saw impressioning as having an advantage. Break-in artists who pick locks the traditional way have to pick them once again upon departure to restore them to their original locked status.

In about 10 or 15 minutes of uninterrupted work, the agent was finished. The key turned the lock, and the door to Room 215 opened.

Once inside, the team moved swiftly past the desks of two aides, and, using the same key, opened the door to the mayor's inner office.

There, the agents quickly put the two devices into place, hefting one up to the ceiling, placing it squarely in the middle of the room, above the dropped ceiling.

As they were well into their work, they got a message from the "eyes" out in the field: Street had left the political event early and might be headed back to the office.

It turned out to be a false alarm of sorts. Though Street had moved on from the campaign event, he wasn't bound for City Hall. Still, the team and the scouts quickly wrapped up the job, leaving behind a seemingly untouched office.

Under the strict ground rules imposed by Judge Robreno, the FBI could not merely turn on the listening device and roll tape.

The rules stipulated the agency could record conversations only among White, Street, and other selected people. The FBI chose to wait until White and Street met in the room. That never happened.

In the brief two weeks or so the bug was in place, the two men never met in City Hall.

The device was never switched on. It never recorded a sound.

It was almost as though people knew to avoid the room.

'A feeling'

Despite intensive investigation, the FBI was never able to determine who gave up the bug. No one has ever been charged in connection with the leak.

But at least some of the story is known.

After the bug was found, sources told The Inquirer a civilian lawyer for the Police Department, Karen Simmons, had relayed information about a possible bug to Barbara Grant, then, as now, Street's spokeswoman.

Grant, in turn, alerted Burrell, a top member of Street's cabinet. He then met with Police Commissioner Johnson to urge him to sweep for a bug. Two people familiar with Johnson's account of the conversation have said Burrell told him he "had a feeling" the office might be under electronic surveillance.

According to sources, Burrell told federal investigators after the bug was revealed he had no idea it might be an FBI device, but rather thought it a "dirty trick" by a political rival.

Johnson did not respond to requests for comment.

Burrell, now a government-relations lawyer at a Center City firm, also did not respond to messages seeking comment.

Nor did Simmons, a Democrat who is now a Municipal Court judge. Lawyer Patrick J. Egan, who represented Simmons when federal authorities were probing the leak, declined to comment last week when asked how Simmons had learned of the bug.

Grant declined to discuss details of her communications about the bug. "It was a very difficult decision and a difficult moment in my life," she said.

Grant praised Street's team, saying: "The people that I was working closely with were honest, skilled, committed people who were doing a tough job for the city. And if you walk through the city, in almost any neighborhood, you'll see decent living spaces and living conditions that wouldn't have existed if we hadn't been fulfilling the mayor's vision."

Agonizing choice

After fielding Burrell's request for a search, Johnson played a double game.

On the one hand, he ordered officers from the Internal Affairs unit to carry out the search. On the other, he immediately alerted the FBI to the demand.

Tipped off by Johnson, the FBI faced an agonizing choice.

Should it pull the bug out and then try to reinstall the device? Or should agents sit tight and hope the police sweep would miss the bug? After all, it gave off no electronic signals in its "resting state."

"We thought long and hard about it and came to a collective judgment," James K. Welch, head of the FBI's corruption unit in Philadelphia, told The Inquirer in 2005.

In the end, the agency gambled the bug would not be found -- and lost.

It was only a small consolation that the police sweepers overlooked a second unit installed in the office.

When FBI experts arrived back at the office on Oct. 7, 2003, they left with that one, as well as with the unit Philadelphia police found.

'Gut-wrenching'

When news broke that police had found the bug, the blow was devastating to the FBI, even though it had been braced for the possibility.

"We had worked hard only to have it discovered was gut-wrenching," case agent Roberts, now senior manager in the forensic practice at Deloitte Financial Advisory Services, said recently.

But there was no time to lose focus. "We had to make the best of the situation," Roberts said.

Coleman agreed.

"We were all disappointed. The question was, now what can we do to save the investigation? What can we do to distract attention from Ron White, from why we put the bug in there?"

To that end, Coleman and others say, he and other FBI agents confronted Street shortly after the bug was discovered. The plan was to sell him on the idea the probe was all about his relationship with the imam, Shamsud-din Ali.

In facing off with the mayor, Welch, chief of the office's Squad Six, its elite anticorruption unit, ordered a surprised and somewhat unnerved Coleman to brief and interrogate Street.

"Agent Coleman: Explain the investigation," Welch instructed.

Carefully neglecting to mention White -- whose office, office phone, and cellphone were still bugged -- Coleman aggressively questioned the mayor about his relationship with the imam.

"I did my best to put my gorilla suit on and went after the mayor," Coleman said.

For his troubles, Coleman said, all he elicited was "a few denials and then, 'I don't want to talk to you anymore.' "

The ploy appeared to work.

Days later, a still-functioning wiretap caught White's mistress, Janice Knight, telling him she had lied to the FBI -- as he had instructed. She was later convicted of making false statements to the government.

In the end, Knight was sentenced to 51/2 months behind bars, one of the lightest sentences in the case.

The toughest by far was the 10-year sentence given Kemp, the city treasurer, two years more than prosecutors had sought.

Kemp, 44, is still incarcerated, locked up in the same federal prison in Kentucky that, until recently, held former State Sen. Vincent J. Fumo, another Philadelphia Democrat convicted of corruption charges. Kemp is scheduled for release in May.

As for Street, he proclaimed within hours of the bug's discovery: "I have done nothing wrong."

Prosecutors were never able to prove anything to the contrary.

Late last week, Grant, who still serves as Street's spokeswoman, issued a one-page statement from the former mayor saying the bug's 10-year anniversary had "understandably yielded a variety of stories and requests for comment."

His statement said nothing more about the bug, the FBI, or his former treasurer. Before presenting a list of his mayoral successes, Street said:

"History has proven that my administration was honest and hardworking."

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@CraigRMcCoy on Twitter.

Inquirer staff writer John P. Martin contributed to this article.

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