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Rep. Chaka Fattah Charged in 29-Count Indictment (Updated) (Video)

Chaka Fattah was indicted Wednesday. (Bill Clark/CQ Roll Call File Photo)

Updated 2:19 p.m. | Prosecutors charged Rep. Chaka Fattah , D-Pa., Wednesday in a 29-count indictment with racketeering conspiracy, bribery and wire fraud as part of a probe into the 11-term congressman launched by the FBI and IRS in March 2013.  

Fattah's office confirmed he has agreed to give up his leadership post on the Appropriations Committee, where he is the top Democrat overseeing criminal justice and science spending. He will be replaced by Mike Honda, D-Calif., who is currently the subject of an ethics probe .  

Fattah has declared his innocence and his plans to run for reelection.

(Read: Despite Fattah indictment, don't expect a scramble for his seat)

Fattah’s congressional district director, 59-year-old Bonnie Bowser of Philadelphia, and former congressional staffer Karen Nicholas, 57, plus two other individuals were also charged for their alleged involvement in several schemes federal investigators say were intended to further their political and financial interests by misappropriating hundreds of thousands of dollars of federal, charitable and campaign funds. The indictment alleges illegal activity dating back to Fattah's failed 2007 campaign to serve as mayor of Philadelphia, as well as false congressional campaign filings.

During an 11 a.m. news conference in Pennsylvania, officials declined to go into specifics about the penalties Fattah, 58, could face. His D.C. office did not immediately respond to requests for comment, with the House in session and headed toward final votes before the August recess. Fattah has not been arrested, and the office did not say whether Bowser would stay in her position.  

"Public corruption takes a particularly heavy toll on our democracy because it undermines people’s basic belief that our elected leaders are committed to serving the public interest, not to lining their own pockets,” said U.S. Assistant Attorney General Leslie R. Caldwell.  

The indictment alleges that in connection with his failed mayoral bid, Fattah and his associates borrowed $1 million from a wealthy supporter and disguised the funds as a loan to a consulting company, then created sham contracts and made false accounting records, tax returns and campaign finance disclosure statements.  

In addition, the indictment alleges that after his defeat in the mayoral election, Fattah sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. According to the allegations in the indictment, Fattah directed the consultant to apply for a $15 million grant, which he did not ultimately receive, on behalf of a then non-existent nonprofit entity. In exchange for Fattah’s efforts to arrange the award of the funds to the nonprofit, the consultant allegedly agreed to forgive the debt owed by the campaign.  

The indictment further alleges that Fattah misappropriated funds from his mayoral and congressional campaigns to repay approximately $23,000 of his son’s student loan debt.  

In another alleged scheme, beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for 69-year-old lobbyist Herbert Vederman an ambassadorship or an appointment to the U.S. Trade Commission in exchange for an $18,000 bribe.  

Vederman, of Palm Beach, Fla., was also charged in the indictment.  

Finally, the indictment alleges that Nicholas obtained $50,000 in federal grant funds that she claimed would be used by EAA to support a conference on higher education. The conference never took place. Instead, Nicholas used the grant funds to pay $20,000 to a political consultant and $10,000 to her attorney, and wrote several checks to herself from EAA's operating account.  

Tamar Hallerman contributed to this report.