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Philadelphia • U.S. Rep. Chaka Fattah paid off a campaign loan with charitable donations and federal grants, funneled campaign money to pay down his son's student loan and disguised a lobbyist's bribe as payment for a car he never sold, prosecutors said Wednesday in announcing a racketeering indictment against the congressman.
The 11th-term Democrat led a conspiracy that engaged in bribery, fraud, money laundering and other crimes, and netted him hundreds of thousands of dollars, federal investigators said.
The 29-count indictment describes four distinct schemes, two involving efforts to pay down debt from Fattah's failed 2007 mayoral bid in Philadelphia. The Justice Department charges that 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 toward the campaign debt.
Fattah vowed to remain in office and fight the charges but stepped down from his leadership post as the top Democrat on the House Appropriations subcommittee that oversees spending for Commerce, Justice, Science and related agencies.
"This isn't Deflategate," Fattah said of the yearslong investigation. "I've never been involved in wrongdoing, any unlawful activity [or] any misappropriation of federal funds."
House Minority Leader Nancy Pelosi, D-Calif., said in statement the charges "are deeply saddening" but said she would not ask him to step down.
Fattah, 58, was not arrested and no court date was set for his initial appearance.
The case had ensnared two former aides, who have pleaded guilty to charges linked to Fattah's campaign debt, and his son, who awaits trial on a case that includes charges he misspent $930,000 in federal education funding.
In the indictment, prosecutors said Fattah 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.
Fattah's wife, Philadelphia news anchor Renee Chenault-Fattah, is accused of helping hide an alleged $18,000 bribe from a lobbyist through a sham sale of her 1989 Porsche. The couple used money from the purported car sale to help get a mortgage for a Poconos vacation home, the indictment said.
The car was supposedly sold to lobbyist Herbert Vederman, Fattah's longtime campaign finance director, U.S. Attorney Zane Memeger said. Vederman, in exchange for the $18,000, wanted an ambassadorship or a seat on the U.S. Trade Commission, the prosecutor said. FBI agents found the car in Fattah's garage 26 months after the supposed sale.