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Another headache for L&I: Former official charged with extortion

4/7/2014 | Real Estate Blog

The Philadelphia Department of Licenses and Inspections has been trying to right itself since the fatal demolition accident in June. When that wall collapsed on the Salvation Army Thrift Store, city officials launched an investigation into L&I’s demolition permitting process and found more than a few flaws. A review of the department as a whole is underway; it should be in Mayor Michael Nutter’s hands in July (see our Nov. 1, 2013, post for more information).

L&I took another hit recently when federal prosecutors charged a former deputy commissioner with extortion. The 58-year-old retired from the department in 2011, during the early days of a federal investigation of corruption at L&I and the city’s police department. The defendant was not the target of the investigation, but he was a key player in what proved to be illegal dealings with a local beer distributor.

The prosecution claims that the man used his position at L&I and his temporary position on the police department’s Nuisance Bar Task Force to pressure bars and restaurants to purchase beer from the distributor. He also happened to have a financial stake in the distributor.

In exchange for their cooperation — and, apparently, cash — he made sure the bar and restaurant owners were not bothered by regulators or the task force, even when the establishments failed inspections. In return for their loyalty, he protected them from regulatory and enforcement actions.

For four years, prosecutors said, he passed information to the owners about surprise inspections associated with the task force’s work. He told L&I inspectors not to participate in raids and inspections and not to issue cease-and-desist orders against the owners. He made sure bars received their licenses even when the applications were incomplete or without the required inspection.

The details of the misconduct may not be the kind of press L&I is looking for, but the department may be able to put the episode behind it. Still, shaking off allegations of corruption at high levels can take some time.

Source: Philadelphia Business Journal, “Former top L&I official indicted in extortion, related offenses case,” Jeff Blumenthal, April 1, 2014