Landlords' ties to Kelly, aide studied

Federal investigators are scrutinizing contributions from Northeast Philadelphia's largest property owners to City Councilman Jack Kelly and their relationship with his chief of staff, two sources close to the investigation said yesterday.

In 2005, the chief of staff, Christopher G. Wright, received a $1,000 check as a Christmas present from Hardeep Chawla, who with his brother Ravinder Chawla is among the city's most prolific landlords. Wright disclosed it on a statement of financial interest required by the city. It is not clear whether the holiday gift is part of the investigation.

Kelly's office confirmed that he and staff had been interviewed by FBI agents.

"Councilman Kelly's staff has cooperated and will continue to cooperate with authorities," said John Cerrone, Kelly's legislative director. "The councilman is not the target and has not been accused of any wrongdoing at all."

Cerrone confirmed that investigators asked about the relationship between Kelly's office and the Chawla brothers.

FBI spokeswoman Jerri Williams declined to comment. Assistant U.S. Attorney Michael Schwartz, chief of the corruption unit in Philadelphia, said: "It would be inappropriate for me to confirm or deny the existence of any investigation about that subject matter."

The city Ethics Board is already investigating whether the Chawlas improperly skirted new campaign-finance limits by contributing $30,000 to Kelly last year through three partnerships they controlled. Kelly got $30,000 on April 26 - $10,000 each from three small partnerships that include Chawla family interests such as Sant Properties.

If giving as individuals, the Chawlas would be limited to $2,500 each, or $10,000 from a single partnership, under the new campaign limits. The contributions were handled by the Chawlas' corporate counsel, Andrew Teitelman - who doubled as Kelly's campaign treasurer.

The Chawlas - who also gave $6,000 to Michael Nutter's mayoral campaign - said they believed their gifts were legal, though others said the contributions exposed a loophole in the city's campaign-finance law.

The contributions and Kelly's relationship with the Chawlas were first detailed in The Inquirer in October; the Philadelphia Daily News first reported the investigation yesterday.

Investigators are exploring an allegation that Wright lived in a Chawla-owned apartment rent-free, the sources said. Wright could not be reached for comment yesterday.

Teitelman said it would be improper to comment on anything involved in the investigation.

Attorney Richard Scheff, who represented Hardeep Chawla in a 2005 conviction for making false statements to a federal agency, said yesterday: "The entities that the Chawlas control have been fully and completely cooperative with the government and government requests in any way you could imagine possible."

Hardeep Chawla spent five months in prison for deceiving the IRS, a tenant in one of his properties, about property-tax breaks he received and was supposed to pass on in the lease. Kelly and City Councilman Brian J. O'Neill wrote to U.S. District Judge Michael Baylson in February 2006, asking for leniency.

Hardeep Chawla had been charged in November 2005, which would have been shortly before he gave $1,000 to Wright. Asked why a developer would give money to a Council staffer, Teitelman said, "My understanding is it was done on a personal level and had nothing to do with Chris' position within the city."

Wright is also a licensed real estate agent, who as part of a Coldwell Banker team in 2006 represented prospective buyers for the Chawlas' property off JFK Boulevard and Schuylkill River Park, Teitelman said. No deal was ever consummated on the property, owned by the Chawlas' World Acquisition Partners, which would have been known as River City, Teitelman said.

Wright never earned any commission from any deal involving Hardeep or Ravinder Chawla or any entities controlled by them, Teitelman said.