Incorporating the The Germantown Chronicle & The Northwest Independent

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Second Installment

As the federal trial on fraudulent conversion of federal funds by a U. S. Congressman and Chair of Appropriations continues, I offer the second installment in how the very financial manipulations he is being tried for was a long-existent practice of his office in funding nonprofits and front entities. I contend these efforts consumed hundreds of millions in public dollars during his 11 term, 22 year career, with significant portions of it being authorized to entities that did not qualify, comply with standing federal regulations, or were designed at the outset to move money under false flags.

In the first installment, we outlined how one particular combination real estate/political monopoly, Germantown Settlement, was the continuous recipient of federal dollars for rehab and rebuilding in historic Germantown. In addition, there was funding that supported city services, and those funds were channeled through city agencies, but again were often distributed outside of standing regulatory requirements.

That particular federal Fattah-authorized funding to Germantown Settlement entities was rarely publicized in the manner the funds that Fattah sent regularly to U of P, Drexel and Temple University were. But it amounted to hundreds of millions over many years with the majority of it done in a manner that would not meet standing federal law.

The massive federal funding of Germantown Settlement and its 27 corporations began after Settlement was recognized by its private funders as having been operating using duplicitous practices in order to get those private charitable contributions. It seems that when the private charities cut them off, (but did not take legal action for the frauds perpetrated out of embarrassment for not even checking on the use of the funds), the stream of public money began from state and federal sources, with federal being the majority source. All of this was done in Chaka Fattah’s district and actually in the neighborhood where he resided. Fattah often used the offices of Germantown Settlement to announce events and other projects he was funding. The street story at the time was that “Settlement got two federal dollars for every $1 dollar it lost from the private funders."

Complaints about the shortfalls of Germantown Settlement projects were known early on and the same became true for service entities that Settlement money was supporting through the city agencies. Projects fell short of budgets and needed more money year after year, and they got it, despite lack of filed progress reports and essential qualifying paperwork.

A federal investigation into Settlement was begun in the early 2000s and it was no secret in the community. Newspaper investigations into some of their negligence went public in the Inquirer with the Germantown Settlement Charter School debacle; which cost them their operating license. But more should have been done. City politicians up through mayor and at the state level were scrambling to cover the tracks.

A parallel city IG investigation was begun and the gathering of information on the multiple nonprofit and for-profit corporations energized any number of cover-up efforts and insider political deals to save the “Settlement Empire”; as its failures to meet vendor obligations, salaries and tax obligations were becoming commonplace. Judgements on city dockets against Settlement entities reached $10 million, with many cases pending; but funding deals continued.

Political efforts to bring substitute funds to them from state and city sources were the “tactics to jour” after the City IG investigation efforts caused some disbursing agents to shut down funding to any Settlement entity as they were well aware of non-compliance for years on end, and that the money came from federal sources. No one wanted to be held responsible for helping them circumvent federal law.

Settlement tried to hire 11th hour experts to create financial reports that would pass city and federal muster so that the money would again flow, but no one would touch the empire of Emanuel Freeman and his political connections. One financial specialist who reviewed the years of neglect described what he found in his characterization of Freeman this way: “Emanuel Freeman is the Robert Mugabe of Germantown,” but the city and state politicians from mayor on down tried to find ways to keep him funded.

The parallel federal and city investigations were connecting the dots and it was clear that the majority of what was being funded on an annual basis did not qualify, but the checks were being cut under a “pay regardless” guideline. The excuse from those who cut them was that they were told by superiors to keep the money moving and the federal source wanted it that way.

In the mid-2000s, things were coming to a head and both agencies had more than enough information and evidence to move beyond investigation. A high level meeting was held that included members of both investigative agencies and hierarchy from the federal funding agencies themselves. What took place at that meeting and after will be part of our next installment.

Jim Foster

The Independent Voice