What do Al Sharpton, fast food and campaign contributions have in common?
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Investment Scheme Unfolds in Philly Trial
Sat Mar 19, 4:28 AM ET
By DAVID B. CARUSO, Associated Press Writer
PHILADELPHIA - For anyone who looked closely enough, the presidential campaign finance reports posed a mystery: Why, in the winter of 2003, were a handful of wealthy investment bankers making donations to the Rev. Al Sharpton (news - web sites)?
Federal prosecutors offered this surprising answer: It was all part of a scheme involving government pension funds, city contracts, and a plan to take over scores of fast-food franchises.
The unusual allegation was tucked away in a 150-page indictment handed up last June as part of a sweeping FBI (news - web sites) probe of city government in Philadelphia. A federal jury began hearing more about it Wednesday in the trial of the city's former treasurer, Corey Kemp.
The case centers on charges that Kemp accepted thousands of dollars in illegal gifts from the late Democratic fund-raiser Ronald White in exchange for influence over which companies received city contracts.
FBI agents tapped White's phones for nine months as part of the probe, and it was during that investigation that they allegedly overheard him talking with Detroit fast food king La-Van Hawkins about enlisting Sharpton's help with an ambitious business plan.
In 2003, Hawkins had recently sold off an empire of Pizza Huts and Burger Kings and was hoping to replace them with Church's Chicken, Popeye's Chicken and Cinnabon franchises.
To do it, he needed millions of dollars in new capital. Investigators said he turned to White, an old friend.
The plan, prosecutors said, was complex: Hawkins hoped to get financing from New York City's huge pension fund. To do so, he needed to persuade the city's controller, William Thompson, that the investment was worthwhile. And to do that, he needed to get his foot in the door.
That's where Sharpton came in, according to the indictment.
Both Hawkins and Thompson were friendly with the long-shot presidential candidate. Hawkins hoped Sharpton might be willing to make an introduction.
White's job was to warm Sharpton to the idea by raising money for his cash-strapped campaign. To do it, he turned to financial services executives who he had helped get work in Philadelphia.
Several of the fund-raising calls were recorded by the FBI.
"I know this is gonna sound strange to you, but, it's not strange, OK," White told Stewart Wolmark, an executive at CDR Financial Products of Beverly Hills, Calif. "Let me tell you, you know, this guy has a lot of contacts and in particular, ah, he has a very strong relationship with the controller up in New York."
Wolmark agreed to help raise $5,000 for Sharpton.
"I mean, don't ... don't let them think that we crazy ... you know what I mean," White said, laughing. "I mean, this has nothing to do with winning or losing the presidential."
White made a similar pitch to Jim Reynolds, an executive at Chicago-based Loop Capital Markets.
"Don't think I'm crazy when I tell you this, all right?" White said. "It's, it's, it's Al Sharpton. OK. For, for, for President."
"You are crazy man," Reynolds said, laughing, although he quickly agreed to help raise another $5,000.
"Well, let me tell you something, man. I'll tell you what he brings," White said of Sharpton. "He brings access to, into these corporate rooms. Where we, where we're not getting these deals from."
The plan worked, at least in part.
Thompson ultimately agreed to speak with White. The meeting took place on May 8, 2003, at Sharpton's request, according to Thompson's office.
The discussion never resulted in a deal. Thompson's spokesman said that when the meeting took place, White wanted to talk about hedge fund investments, not restaurants. Sharpton's lawyer said there was nothing improper about arranging the meeting.
Neither Thompson nor Sharpton nor the executives are accused of any wrongdoing, but prosecutors brought a charge against White and Hawkins for allegedly asking Kemp to do a little acting to help salvage the restaurant deal.
In a meeting secretly videotaped by the FBI, Kemp sat down at a New York hotel with Aslam Khan, an Illinois businessman considering a sale of his Church's Chicken franchises.
Investigators said Kemp tried to make Hawkins' bid appear more secure by suggesting that it could get financial backing from Philadelphia's pension fund. At the time, Kemp had no authority over the fund.
White was charged with giving the treasurer $10,000, a new deck for his house and tickets to the 2003 Super Bowl in exchange for his help with various business deals.
Defense attorneys said the gifts were not illegal. They have also disputed that Kemp, White or Hawkins did anything wrong during their meeting with Khan.
The trial is expected to last many weeks. White died while awaiting trial. |
