Street faces probe in PHA case

Former Mayor John F. Street is under investigation for possibly violating federal regulations when he voted to award millions of dollars in Philadelphia Housing Authority contracts to a law firm that employed his son, a federal official confirmed Friday.

Street was chairman of PHA's board when he cast the votes, and his son, Sharif, was then a lawyer for Wolf, Block, Schorr & Solis-Cohen. The firm billed $778,000 for the younger Street's PHA work.

The U.S. Department of Housing and Urban Development's Office of Inspector General - which oversees civil and criminal inquiries - gave a hint of the investigation in releasing an audit Thursday. It focused on Street's votes between 2004 and 2007 for five resolutions involving contracts worth up to $29.5 million.

"Chairman Street's approval of contracts to the law firm that employed his son is an exceptionally distasteful conflict of interest. Our investigation on this issue continues," acting HUD Inspector General Michael P. Stephens said in a statement accompanying the audit.

One federal official familiar with the matter confirmed that a criminal investigation had begun. He cautioned that an investigation does not mean there will be any charges.

Street, Philadelphia's mayor from January 2000 until January 2008, and the four other members of the PHA board resigned under HUD pressure last week.

He and his son did not respond to requests for comment Friday.

When questioned last month about his voting on the Wolf Block contracts, Street said he believed a written HUD waiver gave him permission to vote on the contracts, though his son was a lawyer at the firm and working on PHA issues. HUD said that it never gave Street permission to vote on issues involving Wolf Block and that the waiver merely allowed him to serve on the board.

In a March 3 e-mail in response to follow-up questions from The Inquirer, Street wrote that the PHA board "only votes to allow the executive director to negotiate a contract with the firms in the resolutions." He said the board was not responsible for granting the contracts.

Wolf Block was dissolved in early 2009. Sharif Street now practices law with another firm.

The inspector general has a team of criminal investigators based in Philadelphia who operate separately from the auditors who wrote Thursday's report. Any case they develop must be forwarded to the Justice Department for review before charges can be brought, the official said.

Last fall, Justice Department prosecutors approved several subpoenas for PHA records. The FBI is also known to be looking at activities at the agency.

The inspector general's audit said Street broke HUD rules and Pennsylvania law when he voted for the Wolf Block contracts.

It cited HUD conflict-of-interest provisions covering "any present or former members or officers of the governing body for the authority, or any other members of the officer's immediate family."

Street appointed himself to the PHA board in 2004 and immediately was elected chairman. As mayor, Street had authority to appoint himself.

Before he could join the board, Street needed HUD's permission.

His request for permission was backed by PHA, which provided a memo from the authority's general counsel, Leigh A. Poltrock, saying that Street could serve on the board. Her memo also said Street could not vote on issues involving contracts involving family members.

The inspector general's audit quoted from her memo, which cited state regulations that "prohibit Mr. Street from voting on any issue relating to Wolf Block's contracts with the authority, as well as voting on any other matter where a conflict of interest might exist. Mr. Street would be compelled to abstain on any such vote."

"Based on board minutes, on five occasions during our audit period, Mr. Street voted to approve Wolf Block's contracts with the authority. These votes occurred between Dec. 16, 2004, and Jan. 31, 2007," the audit said.

"At each and every board meeting wherein a contract for Wolf Block was part of the agenda, authority Board Chairman Street voted 'aye,' or yes, on all five of these contracts.

"Mr. Street's role as chairman of the board of commissioners for the authority makes his actions more egregious."