Miller aide indicted in probe
by MICHAEL J. MISHAK
The federal probe into city government corruption spilled into the 9th Ward last week when federal authorities indicted Steven Vaughn, chief of staff to Councilwoman Donna Reed Miller, and John Christmas, assistant chief of staff to Mayor Street, for their alleged participation in a racketeering enterprise that defrauded the city out of $60,595 in a delinquent tax settlement with Chestnut Hill-based Bowman Properties Ltd. and its general partner Richard Snowden.
According to the indictment, Vaughn withheld Bowman's tax settlement checks from the city law department while Christmas worked to get a collection contract for Keystone Information and Financial Services, a debt collection agency based at 7108 Germantown Ave. in Mt. Airy, on a debt that had already been paid.
The scheme was only one of at least eight violations involving Shamsud-Din Ali, a prominent and politically influential Muslim cleric, and his wife, Faridah Ali, contained in the 48-count, 122-page indictment released last week. The Alis are co-owners of Keystone.
Vaughn, well known to both the Chestnut Hill Community Association and Business Association, was considered by many to be Miller's Chestnut Hill liaison. Charged with constituent service in the eighth Council district, Vaughn played a role in major civic matters from the Germantown Avenue Bridge talks to the formation of the Chestnut Hill Business Improvement District. He has worked for Miller since 1997.
According to the indictment, Vaughn profited from the "no work" contract. Feds charge that Keystone played no part in the negotiation and settlement of the Bowman tax settlement.
After Keystone had received its $60,595 commission from the city in mid-April, 2001, the indictment alleges, Vaughn asked Ali for "at least 54," meaning $5,400, for personal expenses during a meeting at Keystone's Mt. Airy headquarters. Vaughn allegedly later accepted $2,000, leaving Ali's Elkins Park home with cash in his hand.
"This enterprise used political influence as leverage and access to people in high places as a hammer," said U.S. Attorney Patrick L. Meehan in his announcement of the indictments last Wednesday. "This organization wrapped its tentacles around individuals, institutions, government entities or whomever it targeted as a source of profit, and simply applied pressure when necessary. Taxpayers wound up stuck with the bill for work that was never done," Meehan said.
Vaughn was charged with four counts of mail fraud and mail fraud conspiracy. He faces a maximum sentence of 20 years in prison. Christmas was charged with the same offenses, in addition to two counts of perjury and one count of making false statements to the FBI. He faces a maximum sentence of 35 years in prison.
Both entered pleas of not guilty in court last week.
Vaughn resigned from his post last week. In a statement, Councilwoman Miller said she was "deeply saddened by the recent development," but accepted Vaughn's resignation because the indictment "may compromise [his] ability to effectively serve my office ..."
Miller declined further comment in her statement, "No other statement or comments will be provided by my office on the matter pertaining to Steven Vaughn."
In a rare sit-down interview with the Local last March, Miller said she had yet to be notified by authorities regarding the allegations against Vaughn then being reported in the city's daily newspapers. "If I didn't read this stuff in the newspaper I would never know it existed," Miller said. "There's been no formal anything. And I know how they write about me."
"I've known Steve for about 30 years, if not longer. I have never known him to be anything other than an upright honest citizen. And that's what I'll continue to say until they prove otherwise," she said.
When asked about the link between her office and the Bowman tax settlement deal then under scrutiny in the press, Miller said, "Richard Snowden is a good buddy of ours. And that's who we help, Chestnut Hill. Keystone [Information and Financial Services] is a business in our district. We help businesses all the time."
Neither Snowden nor Bowman Properties are accused of any wrongdoing in the indictment released last week.
Miller received a grand-jury subpoena in connection with the federal probe this summer. At the time, her lawyer said she was being called as an "informational witness" and that she was not suspected of wrongdoing.
Knowledge of the yearlong scheme, which unfolded from April 2001 to April 2002, may have reached all the way to the mayor's office, conversations caught on federal wiretaps reveal.
A 'win-win' situation
In 1999, Vaughn helped Bowman settle its delinquent taxes for 1995 through 1998 with the law department. The developer agreed to pay $240,989, which was collected by the law department.
Two years later, Bowman sought Vaughn's help again. Bowman Properties issued 22 checks, which were given to Vaughn, totaling $661,388, between April 2001 and September 2001. According to the indictment, Bowman directed Vaughn to deliver the tax delinquency payments to the city, but Vaughn withheld the checks.
According to the indictment, after Vaughn spoke with John Christmas, special assistant to Mayor Street's chief of staff and former assistant city solicitor, about the Bowman debt in spring 2001, Christmas told Shamsud-Din Ali, then vice president of Keystone Information and Financial Services, to contact the city law department about getting a collection contract.
In late May 2001, Ali sent the law department a letter that said Keystone had been contacted by a delinquent taxpayer who wanted to resolve a debt. The letter also stated that the taxpayer didn't know the amount owed and that the city hadn't yet taken collection actions. All were false statements. The city knew about Bowman's delinquency and had already commenced enforcement.
Later, Ali met with law department officials to pursue the matter further, claiming he could collect the debt in one week.
In late June, the law department awarded Keystone a collection contract, but the deal fizzled when officials reviewed an Ali spreadsheet that identified Bowman as the tax delinquent. Since the debt was already known and collection action had already begun, the law department informed Keystone it was ineligible to earn a fee.
In August 2001, Christmas allegedly told Ali he would intervene on Keystone's behalf. According to conversations caught on federal wiretaps, Christmas told Ali he would call the law department because "this has to get done or else they will lose the taxpayer." Ali said the law department should "give me the whole thing," according to the indictment.
By September 2001, Christmas' intervention with the law department seemed to have paid off. Ali's Keystone was awarded another contract with the opportunity to earn a fee for the Bowman tax collection.
In early October 2001, Ali delivered to the law department the 22 checks Bowman had given to Vaughn.
On Oct. 5, Vaughn allegedly told Ali, "I was going to call John Christmas and let him know ... we got all the stuff, and you know, you gonna be turning it in."
According to the indictment, the following day Vaughn asked Ali about the delivery.
"I turned it in," Ali said.
"All right, well they got it now," Vaughn said.
Later, the feds allege that the law department approved the payment of a fee after intervention by both Christmas and George Burrell, Mayor Street's secretary for external affairs.
On Oct. 15, 2001, Ali told Vaughn he had spoken with Burrell, who had spoken with the city solicitor. "I think we probably on the right wire," Ali is quoted as saying. "[Christmas] did all the stuff he was supposed to do," Vaughn said.
In late February 2002, Ali delivered three new checks, issued by Bowman and given to Vaughn, for $657,914, an amount negotiated by both the law department and Bowman counsel.
Christmas allegedly told Ali, "You know, I'll be so glad when you actually get paid." In that same conversation, he said, "You know, nobody's happy with how long it took, and you know, the Mayor was asking about it and he kept on asking how come this is taking so long." He also said, "Finally, we were able to, you know, get it closed out and everything is fine. I mean we've got no negatives. Everything, everything is good. I mean it helped Keystone. It helped Bowman. It helped [Councilwoman Donna Reed Miller]. I mean it was really win-win."
On March 26, 2002, the city issued a check for $60,595 to Keystone.
