A longtime Philadelphia congressman was indicted Wednesday in a racketeering case stemming from the alleged misappropriation of hundreds of thousands of dollars in federal, charitable and campaign funds after his failed 2007 run for mayor. Democratic U.S. Rep. Chaka Fattah, 58, and four associates were charged with bribery; conspiracy to commit wire, honest services, bank and mail fraud; money laundering and other charges.
The indictment alleges that in connection with his failed mayoral bid, Fattah and his associates borrowed $1 million from a wealthy supporter and disguised the funds as a loan to a consulting company, then created sham contracts and made false accounting records, tax returns and campaign finance disclosure statements. In addition, the indictment alleges that after his defeat in the mayoral election, Fattah sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. According to the allegations in the indictment, Fattah directed the consultant to apply for a $15 million grant, which he did not ultimately receive, on behalf of a then non-existent nonprofit entity. In exchange for Fattah's efforts to arrange the award of the funds to the nonprofit, the consultant allegedly agreed to forgive the debt owed by the campaign. The indictment further alleges that Fattah misappropriated funds from his mayoral and congressional campaigns to repay approximately $23,000 of his son's student loan debt.