PHILADELPHIA (AP) — A longtime Philadelphia congressman who was indicted Wednesday paid off a campaign loan with charitable donations and federal grants, funneled campaign money to pay down his son's student loan debt and disguised a lobbyist's bribe as payment for a car he never sold, federal prosecutors said.
Democratic U.S. Rep. Chaka Fattah and four associates were charged with racketeering conspiracy. They also were charged with bribery, conspiracy to commit wire, honest services, bank and mail fraud, and money laundering, among other things.
Prosecutors say the charges covered several schemes. They allege Fattah used federal grants and donations to his educational foundation to pay back part of a wealthy campaign supporter's $1 million loan and that he helped arrange a $15 million federal grant for a nonexistent nonprofit in lieu of a $130,000 payment to a political consultant after his failed 2007 mayoral run.
"The public does not expect their elected officials to misuse campaign funds, misappropriate government funds, accept bribes or commit bank fraud," U.S. Attorney Zane Memeger said. "These types of criminal acts betray the public trust and undermine faith in government."
Fattah's office had no immediate comment on the charges. It said it would issue a statement later Wednesday. The 58-year-old remains free pending a yet-unscheduled court date.
Under indictment, Fattah was stepping down from his post as the top Democrat on the House Appropriations subcommittee that oversees spending for Commerce, Justice, Science and related agencies.
House Minority Leader Nancy Pelosi, D-Calif., said in statement the charges "are deeply saddening."
"Congressman Fattah has been a tireless and effective advocate for America's hard-working families across more than 20 years of distinguished service in the House," Pelosi said.
Despite a long-running federal investigation, Fattah maintained a busy public schedule and side-by-side with top Democrats, catching a ride to a Philadelphia event earlier this month with President Barack Obama on Air Force One.
Prosecutors said the 11th-term Democrat and his district director, Bonnie Bowser, passed mayoral and congressional campaign funds through a political consulting company to make 34 student loan payments on behalf of his son totaling $23,000.
To cover up the transactions, there was a scheme to portray an $18,000 bribe from Florida lobbyist Herbert Vederman, who sought an ambassadorship or a seat on the U.S. Trade Commission, as a car payment, Memeger said. FBI agents found the car in the garage at Fattah's Philadelphia home 26 months after the sale, the indictment said.
Memeger said Karen Nicholas, a former member of Fattah's congressional staff and the CEO of his Educational Advancement Alliance, obtained $50,000 in federal grants for a higher education conference that never took place. Fattah was supposed to be the keynote speaker.
Instead, Memeger said, Nicholas used the money to pay a political consultant, an attorney and several checks to herself from the charity's operating account.
Bowser, Vederman, Nicholas and Philadelphia businessman Robert Brand have also been charged.