Greetings Sports Fans! How about them Eagles?
The Sunday Inquirer carried a story that no fan of Delco politics should miss. We are excerpting parts of it here. You can read the whole story at www.phillynews.com.
Commerce weaves web in Pa. suburbs
The bank got government money, officials got loans.
By Tina Moore
Inquirer Staff Writer
When Commerce Bank set out to conquer the city's Pennsylvania suburbs, executives had a simple strategy: Make friends with the elected officials and power brokers who could help deliver deposits of public money.
It worked. By 2003, Commerce Bank Pennsylvania had increased its stash of government cash fivefold. [And then a whole bunch of people went to jail.]
In Delaware County, which is dominated by Republicans, one Commerce executive correctly predicted, a year ahead of time, that the bank would snare all county cash once a new chairman of the County Council took over. [Did he have a really shiny crystal ball, or do you think it was his connections?] Two months before the county moved the money, the chairman received a $220,000 Commerce loan. His lawyer says there was no connection. [Oh. It was the crystal ball.]
As part of a wide-ranging investigation into Commerce, the FBI is scrutinizing the bank's relationships with officials in Philadelphia's Pennsylvania suburbs.
Commerce's political action committee, Compac NJ, gave less than $20,000 in Delaware County between 1995 and 1999. Over the next three years, the PAC gave more than $69,000 to the county's reigning Republicans.
Commerce bankers also forged relationships with such suburban power brokers as Delaware County's Charles Sexton, Springfield Township Republican Party leader and former county chairman.
Sexton was named a member of the bank's Pennsylvania advisory board in June 2002 - a position that paid $500 a meeting, stock options, and $100,000 of permanent life insurance.
By then, Commerce was already lining up Delaware County business. [Including the personal accounts of several judges!]
In an October 2001 memo, Holck wrote: "$6 MM payroll account being moved to us from F/U [First Union]. Will look to move entire relationship once McFadden assures chairmanship in January."
That was John McFadden, then vice chairman of the County Council and a Sexton ally in Springfield Township. He became head of the County Council in January 2002, three months after that memo was sent. Over the next three months, Commerce poured $25,000 into the county's main Republican finance committee.
In November 2002, McFadden received a $220,000 Commerce loan for the purchase of a $400,000 tract of commercial land just outside Media. Two months after that, the County Council voted unanimously, without a word of public debate, to shift $54 million to Commerce.
Let's look at this:
- In October 2001 Commerce gets the $6 million payroll account, and figures it has the rest of the County's money locked up.
- In January 2002 McFadden becomes head of County Council.
- By April 2002 Commerce has given the Delco Republicans $25,000.
- In June 2002 Charlie Sexton gets a paid position on Commerce's board.
- In November 2002 McFadden gets a loan.
- In January 2003, Commerce gets $54 million in County business.
McFadden would not comment, but referred questions to his lawyer, Joseph M. Fioravanti.
- Isn't that the same Joe Fioravanti who is also one of the three partners in Solutions North America, along with Karen Weldon and Charlie Sexton?
County Controller Cynthia Leitzell
said that a committee supervised by McFadden evaluated proposals from six banks and picked Commerce because it charged no fees and offered better service.
"I feel that we made the right decision on a purely objective basis," said Leitzell, who was a committee member and who also received a Commerce loan. "Nobody said a word to influence my decision."
The team that made that pitch included Albert J. Melfi Jr., Commerce's regional vice president. Melfi also played a role in McFadden's and Leitzell's personal Commerce loans.
Fioravanti said that McFadden and Melfi are friends and that McFadden's loan had nothing to do with the bank's receiving county business. Melfi prepared McFadden's loan for him, Fioravanti said, adding that McFadden received no special treatment. McFadden's interest was 7 percent, the market rate, documents show.
"There isn't any this-for-that," Fioravanti said. "It just doesn't exist."
Shepard said there was nothing strange about a vice president preparing a loan himself.
"There's nothing wrong with Al Melfi preparing loans," Shepard said. "He's a banker."
The bank has since changed its policies, however. Bankers seeking public business are no longer permitted to write loans for the town's officials, Shepard said. And loans for government officials must be approved by a senior vice president.
"As the bank grows, we need to ensure that we have the gold standard of procedure," Shepard said.
In February 2004, Leitzell received a Commerce business loan for her accounting firm, Leitzell & Economidis
. She said it was for about $30,000.
Leitzell said she also talked to Melfi about a loan after his presentation; he referred her to a branch manager. She said she didn't get any favors.
Bankers sometimes courted government business at lunch meetings and other social events. Leitzell said that has changed for her.
"I saw what happened to Corey Kemp," she said. "I don't even go out with these guys anymore." [Very wise, Cindy! Buy your own dinner and Phillies tickets, and you won't need that Get Out of Jail Free card!]