Developer pleads guilty to corruption

When Philadelphians object to notices about their property taxes going up, they typically file appeals.

Federal authorities say construction contractor James F. Campenella did not want to bother with such bureaucracy, which can be expensive - but come January, he'll learn the price he'll have to pay.

Campenella, 56, pleaded guilty to a corruption charge yesterday, admitting to U.S. District Judge James T. Giles that he gave a $20,000 bribe to a city real estate assessor for help in reducing tax payments and resolving outstanding issues on four of his properties.

The assessor, James F. Lynch, who also was charged July 30 with one count of conspiracy to commit honest-services fraud, is expected to similarly plead guilty at a hearing next week. Both men face up to five years in prison and a $250,000 fine.

In a court filing, Assistant U.S. Attorney Michael Schwartz, chief of the public corruption unit, alleged that Lynch helped Campenella with four properties.

One is the former Western Union building at 11th and Locust Streets. After learning in early 2005 that the property's value was to be raised to $4.6 million, Campenella asked Lynch for help in lowering it.

That June, Lynch requested to the Board of Revision of Taxes that it be valued at $1.6 million.

Similarly, prosecutors alleged that Lynch made a request to lower the assessment on property at 323-27 N. 13th St. to $1.6 million from $3 million.

The board granted both requests. Both moves saved Campenella from having to pay $116,000 more in annual taxes, according to an Inquirer analysis, in addition to legal fees to appeal the higher values.

The other properties at issue are at 2500 Mifflin St. and 5201 Old York Rd.

The longtime owner of Campenella Construction, Campenella is a well-known general contractor who just last month was up for a nearly $1 million contract with the Philadelphia School District. School officials rebid the deal after learning he was facing a corruption charge.

Campenella's name stretches across the old Western Union building, a $45 million condo conversion project in its final phase.

Also, in 2003, Campenella, with a New York partner, built luxury condos in an old industrial building that will likely be razed to make way for an expanded Convention Center.

The pair paid $1.5 million for the century-old building in 2001 and is suing to keep the property from being condemned.

It is not clear what brought Campenella to the attention of federal prosecutors.

Court documents state that federal authorities had obtained enough information by May 3 to convince a judge that a crime had been committed.

The FBI executed a search warrant at Campenella's company offices, 1601 S. Columbus Blvd. Campenella by that time was cooperating with the government, the documents said.

A week later, on May 10, the FBI recovered all but $600 of the $20,000 payments, which were made in November 2005. Lynch, 55, voluntarily surrendered the money after being informed of Campenella's cooperation.

Asked why he gave Lynch the money, Campenella, according to documents, told a grand jury on July 10: "This process is a very difficult process to get through in the city. And in some instances, if I couldn't handle it with the evaluator, I would have to hire a law firm. And these law firms cost a lot of money. And it would be a lot of time, effort, and money to get results. I was grateful for [Lynch's] jumping in and helping out."

Campenella, who was represented by lawyer Arthur Makadon, chairman of Ballard, Spahr, Andrews & Ingersoll, was released yesterday on $25,000 bail.

He is to be sentenced Jan. 16.

Officials with the Board of Revision of Taxes "are in the process of reviewing all the properties involved in the Lynch matter," said Eugene Davey, the board's director of assessment.