Former Fattah Aide Pleads Guilty in Campaign Fraud (Updated)
Updated 5:27 p.m. | A longtime former aide and political consultant for Rep. Chaka Fattah, D-Pa., has pleaded guilty to a number of federal charges in campaign finance fraud schemes.
Gregory Naylor, 66, pleaded guilty Wednesday to multiple counts for his “participation in two campaign finance-related schemes initiated by a long-time friend and former employer” identified as “Elected Official A.”
But court documents posted online by Joel Mathis of PhillyMag.com describe in detail Naylor’s work on a failed 2007 Philadelphia mayoral campaign — when he was working on Fattah’s failed bid. Documents also describe a $500,000 contribution to a higher education conference named for an elected official that was then diverted to to pay off part of an illegal $1 million loan to the elected official’s failed mayoral campaign from an unnamed benefactor.
Fattah has annually held the “Fattah Conference on Higher Education” and a press release from the time touts a $500,000 contribution from Sallie Mae to the conference.
According to the Department of Justice release, Naylor helped conceal the theft of federal grants and private charitable funds to repay an illegal campaign debt from a 2007 campaign. “Naylor was aware that large amounts of money from an unexplained source were being spent on Elected Official A’s campaign, and Naylor helped to conceal the source of those funds by preparing a false invoice for services rendered by his consulting firm,” the release said. “Naylor subsequently learned that Elected Official A and others orchestrated the theft of federal grant funds to repay the outstanding balance of the campaign debt, and he agreed to the falsification of campaign finance reports to further conceal Elected Official A’s activities.”
Naylor also conspired with Elected Official A to pay down portions of the college debt of Elected Official A’s son using federal and local campaign funds, the release said.
“Some of the payments originated directly from the local campaign fund, and some were illegally sourced from Elected Official A’s federal campaign election committee and passed through the local campaign fund account to Naylor,” the release said. “Naylor made approximately $22,000 in improper payments between August 2007 and April 2011 at Elected Official A’s request. Naylor also falsely claimed on IRS forms that the payments made towards the college debt were earned income to Elected Official A’s son for services rendered as an independent contractor to Naylor’s consulting firm. When confronted by federal agents in investigative interviews about the payments, Naylor lied on two occasions and repeated his cover story that the son of Elected Official A was an independent contractor working for his political consulting firm.”
According to the court documents, NASA grant funds intended for a nonprofit founded by the elected official were also diverted to help pay down the loan.
Fattah is the ranking member on the House Appropriations subcommittee overseeing NASA funding.
In 2007, the Philadelphia Daily News reported on Fattah’s record of sending millions in earmarks to two nonprofits he founded and that were run by Fattah’s former aides and political allies, including examining a taxpayer-funded “Chaka Fattah Learning Lab” bus.
Fattah’s office did not immediately comment Wednesday. In March, he acknowledged getting a subpoena in a letter to Speaker John A. Boehner, R-Ohio, and said he planned to fight parts of it that he deemed were not “consistent with the privileges and rights of the House.”
Sentencing for Naylor is scheduled for Dec. 2.
Separately, Fattah’s son, Chaka Fattah Jr., was indicted earlier in August by federal prosecutors, who accused him of defrauding the IRS and banks and stealing from the Philadelphia School District.
An associate of Fattah Jr. pleaded guilty to making a false statement earlier this month in a related case.
The DOJ said that the case was investigated by the FBI and the IRS with assistance of the NASA Office of the Inspector General.