Deal to end ex-Philly deputy mayor’s bribery case with one-year sentence crumbles in court

Herbert Vederman, a former Philadelphia deputy mayor charged in 2016 with bribing ex-U.S. Rep. Chaka Fattah, arrived at federal court Thursday thinking his future was assured.

Although a jury had found him guilty three years ago, that conviction was overturned on appeal. Rather than risking a second trial, the 73-year-old cut a deal with the U.S. Justice Department that would send him to prison for only a year — half of what he originally had received.

But U.S. District Judge Harvey Bartle III had other ideas.

Calling the agreement “far too lenient” and “not just,” the judge rejected the proposal and ordered the independently wealthy public servant — whom prosecutors once described as Fattah’s “human ATM machine” — to spend two years behind bars.

The decision drew shocked cries from a courtroom filled with Vederman’s family and well-heeled supporters, and prompted some to storm out while Bartle was still speaking. One woman shouted “Bastard!” over her shoulder at the judge.

And Steven R. Paisner, a member of Vederman’s legal team, described it as “a totally unreasonable sentence from a vindictive judge.”

The extraordinary turn of events capped what already had been an unusual proceeding that brought into the open rarely seen discord between Justice Department officials in Washington and their local counterparts.

Notably, none of the federal prosecutors who secured Vederman’s original 2016 conviction, and who until recently had been preparing to retry him on charges including conspiracy, bribery, and money laundering, attended Thursday’s hearing.

Instead, they were replaced by James I. Pearce, an attorney from the Justice Department’s Public Integrity Unit, who entered the case three weeks ago.

Pearce declined comment after the hearing. A spokesperson for Philadelphia-based U.S. Attorney William M. McSwain referred all questions regarding the absence of the original prosecution team and whether he endorsed the one-year deal to prosecutors in Washington.

Vederman, too, had a new team of lawyers from the Center City law firm Ballard Spahr and the Washington office of white-shoe firm Jones Day, which claims among its alumni several prominent Justice Department and White House officials. The Jones Day lawyer who handled Vederman’s original sentencing in 2016, Noel Francisco, is now solicitor general.

David L. Axelrod, the Ballard Spahr lawyer who stood by Vederman in court Thursday, said the deal Bartle rejected had resulted from months of discussions between the new defense team and Justice Department officials in Washington, not local prosecutors.

“I can’t speak to what happened internally in the Justice Department,” Axelrod said. “I can tell you that … we worked out with the Department of Justice what we thought was a very fair deal for [them] and for Mr. Vederman.”

In tossing the one-year proposal, Bartle noted that it ran counter to what the local U.S. Attorney’s Office had sought just a few months ago, when it urged him to exceed federal sentencing guidelines and send Vederman to prison for at least two years.

“It’s only recently that the government has changed its opinion, with no change in circumstances,” the judge said Thursday.

He referenced a February court filing in which Philadelphia-based Assistant U.S. Attorney Eric L. Gibson wrote that “well-heeled individuals with access to financial resources are unlikely to be deterred from conduct like Vederman’s if the only consequence imposed is a minimal sentence.”

For his part, Vederman, who earned his fortune as an executive with the Charming Shoppes women’s clothing chain before taking prominent roles in the mayoral and gubernatorial administrations of Edward G. Rendell, told the judge that he already had suffered financially, physically, and mentally as a result of the case. He splits his time between Philadelphia and West Palm Beach, Fla.

“I have now destroyed [my] reputation, and no matter what happens here today I will never, ever be able to get that back,” he said.

Thursday’s hearing came roughly a year after the U.S. Court of Appeals for the Third Circuit overturned Fattah’s and Vederman’s bribery convictions, finding that the jury had not been properly instructed on the legal definition of “political graft” — one narrowed by a U.S. Supreme Court ruling days after the verdict in their case.

Still, in remanding the case for a new trial, the appellate court found sufficient evidence for a jury to find both men guilty even within the new parameters.

Bartle resentenced Fattah earlier this year to the same term of incarceration he had received previously — 10 years — citing his conviction for a host of other crimes including misusing federal grant funds, charitable donations, and campaign contributions to cover personal and political debts.

Because Vederman was sentenced Thursday before he was retried, the judge based his new prison term on two counts of bank fraud and making false statements, which the appeals court had let stand.

Those charges were tied to $18,000 Vederman paid Fattah in 2012 that prosecutors described as a bribe. They alleged that both men tried to cover up its origins by arranging a sham sale of a Porsche owned by the Democratic congressman’s wife, former NBC10 news anchor Renee Chenault-Fattah.

Fattah used the money to pay closing costs on a Poconos vacation home, and within days of receiving it offered Vederman’s girlfriend a job in his office, which she needed to keep her federal health and retirement benefits.

Federal sentencing guidelines called for probation or a term of imprisonment of up to six months for those crimes. But, as is allowed in federal sentencing, the judge cited evidence of Vederman’s other alleged misdeeds in fashioning his new punishment.

At trial, prosecutors presented evidence portraying Vederman as Fattah’s ever-generous benefactor, who showered him with other gifts that also included cash payments to the congressman’s children and college tuition for his South African au pair.

Fattah, in exchange, lobbied government officials — including then-President Barack Obama and U.S. Sen. Bob Casey (D., Pa.) — in hope of landing Vederman a post as an ambassador.

Vederman’s lawyers balked Thursday at the judge’s decision to include those bribery allegations in determining the new sentence.

“The fact that the court sentenced Herb to 24 months is still very raw,” Axelrod said. “But objectively, a sentence four times the guideline range is unreasonable, and there’s a good grounds for appeal.”

Had his one-year prison deal gone through, Vederman was prepared to admit that he provided his gifts to Fattah over the years in exchange for official acts.

Court filings in support of the plea detailed a previously unreported action Fattah took on Vederman’s behalf — ceremonially naming a bill after him that would have created a federal commission. The “Herb Vederman Commission on American Discoveries and American Jobs Act of 2011” died in committee soon after Fattah proposed it.

Bartle said Thursday he wanted to send a message that even wealthy men with powerful friends should face the same justice in court.

“The public wonders whether there is a different set of rules for them and the well-connected,” he told Vederman. “The court must signal to the public that the behavior of someone of your standing is unacceptable.”