Status of Germantown Settlement probe questioned at corruption-hotline launch event

Near the end of a Monday morning press conference at which city, state and federal law-enforcement officials announced a hotline number for citizens to report public-corruption tips, James Foster — the publisher of Germantown Newspapers and independent candidate running against U.S. Rep. Chaka Fattah  — raised his hand.

While George Venizelos, special agent in charge of the FBI’s Philadelphia division, helmed the event to trumpet the anti-corruption 1-855-FBI-TIPS line, Foster’s question was directed toward U.S. Attorney Zane David Memeger and city Inspector General Amy L. Kurland.

Specifically, Foster wanted to know the status of the investigation into the Germantown Settlement debacle, which meshed with the event’s anti-corruption theme.

He held, with notebook in hand, that multi-year investigations have seemingly “dropped off” and that people in Northwest Philadelphia would appreciate an update.

An expected reply

“It is a matter of policy that we don’t answer questions on the status of ongoing investigations,” Memeger said. “This sort of investigation “generally takes time. [They can] last several years. That is the reality of what we do.”

Foster said afterwards that he figured that would be the answer, but that he asked because it’s a corruption investigation that reaches some “pretty high levels of government.” Broaching the topic on Monday provided “an opportunity to put this upfront in the minds of those [officials] who are new to this task force.”

If properly investigated, he said, this could potentially be the largest public-corruption probe since the days when Republicans ruled city government.

“We’re talking about, from 1975 to 2007, potenially hundreds of millions of misused private funds and public funds,” Foster said. “Memeger should be reminded that it’s there. Kurland, too. Hopefully, this will spur them and other people to ask ‘What happened to the Germantown Settlement investigation?'”

The back story

When bankruptcy Judge Stephen Raslavich ordered Germantown Settlement, the disgraced 125-year-old social service and housing agency, to liquidate in 2010, he said leaving executive director Emanuel Freeman in charge was the equivalent of “leaving a fox in a henhouse.”

The politically connected Freeman helmed Germantown Settlement as it received massive levels of public and private funding in the 1990s. Over the course of two decades, public funding under Settlement’s umbrella totaled as much as $100 million.

Tax liens were surfacing by 2004, but Settlement delved into housing and commercial real-estate developments and opened one of the city’s first charter schools.

Five years later, legal claims against Settlement stretched into the tens of millions of dollars and the charter was shuttered amid financial concerns that spurred a federal probe. Settlement was forced to sell off its remaining assets after the HUD-ordered foreclosure of two low-income senior-housing facilities in Germantown and all city funds to the agency were halted.

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