The FBI is asking around: Are Philly’s Licenses and Inspections officials taking bribes?

The Bureau appears to be looking into how L&I inspectors handle building and demolition permit requests — and whether they’d be easier to obtain if money changed hands.

The FBI has made inquiries into whether inspectors in the Philadelphia Department of Licenses and Inspections have asked for bribes in return for preferential treatment, Billy Penn has learned.

Asked whether an investigation into bribery or improper payoffs at L&I was ongoing, the FBI declined to answer one way or another. “I have to give you the standard comment,” Special Agent Erich Ruona said in a brief interview. “I cannot confirm whether or not we’re conducting an investigation.”

Bribery of L&I inspectors has been rampant for as long as the department has existed. Last year, the U.S. Attorney’s Office indicted Deputy Commissioner Dominic Verdi on counts of conspiracy, extortion, and honest-services fraud related to exchanging favorable treatment to bars and clubs for promising to buy beer from a distributorship he owned. His trial is ongoing. In 2002, a previous L&I deputy commissioner named Frank Antico was convicted of 18 counts of bribery and racketeering, one of the more egregious offenses in what has been a pattern for the department stretching back to the ‘50s and ‘60s, during which time several dozen L&I workers were fired or arrested for accepting or soliciting improper payoffs.

The Philadelphia Office of Inspector General Amy Kurland, which aided the FBI during their investigation of Verdi, also declined to comment on any pending investigation into bribery charges.

The FBI inquiries Billy Penn learned about were made over the last few months, and did not appear to be connected to Verdi’s case. Instead, this summer’s inquiries appeared to be part of a widespread investigation into how L&I inspectors had handled building permit and demolition permit requests — and whether inspectors had intimated such permits would be easier to obtain if money changed hands.

Recently, L&I has come under fire for allowing illegal demolitions to continue to be performed, even after new, more stringent regulations were enacted in the wake of the deadly June 2013 collapse at 22nd and Market, which killed six people and injured 13. (Blame for that accident was officially placed on the demolition contractors, who are currently on trial in criminal court.)

In February of this year, a detailed article in the Philadelphia Inquirer documented the 2014 illegal demolition of the entire 2600-block of Poplar, in the Brewerytown neighborhood. It included this comment from an anonymous L&I inspector: “Taking down buildings without permits sends a chill through everybody. It shows someone in the department is doing favors.”

In July, the Inquirer reported on another 2014 demolition that appeared to have occurred without proper permits. In this case, regarding a structure at 24th and Federal in Point Breeze, it appeared that L&I Commissioner Carlton Williams had personally intervened and allowed the demo to move forward without a safety plan or periodic inspections. Both are required under current regulations.

Mayor Nutter’s administration has asked the Inspector General to look into the improper demolitions, but Kurland’s office has not yet issued a report on the topic.

A report looking at L&I operations was recently issued by another city office: That of Controller Alan Butkovitz. Butkovitz has been an outspoken critic of Williams and of L&I in general, and he was particularly disturbed by the idea that the inspectors were disregarding the new rules instituted after the Market Street collapse.

His office’s audit found that L&I allowed uncertified trainees to conduct inspections and that the computer system used by L&I (called HANSEN) allowed staff to easily manipulate or overwrite inspection data at any time, both issues that were also reported by the Inquirer.  It also corroborated a separate Inquirer report that a contractor who had performed illegal demolitions was subsequently given preferential treatment and placed on the city’s preferred contractor list. The question of whether that preferential treatment resulted from some kind of bribe was not directly addressed.

The Controller’s Office had no knowledge of any pending FBI investigation.

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