South Philly City Councilman Kenyatta Johnson indicted by feds

Johnson, who along with his wife was charged with two counts of honest services wire fraud, has maintained his innocence and called federal prosecutors “overzealous.”

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First Assistant United States Attorney Jennifer Arbittier Williams speaks at Wednesday morning’s news conference announcing the indictment of Philadelphia City Councilman Kenyatta Johnson and his wide, Dawn Chavous.

The Assistant United States Attorney for the Eastern District of Pennsylvania announced on Wednesday that Philadelphia City Councilman Kenyatta Johnson was one of four people charged in a 22-count indictment alleging a wide ranging racketeering conspiracy.

In the indictment, Johnson and his wife, Dawn Chavous, allegedly received payments in excess of $66,000 in exchange for Johnson using his public office to take official actions to benefit the CEO of Universal Community Homes, Abdur Rahim Islam, and its CFO, Shahied Dawan. Universal Community Homes is a subsidiary of Universal Companies, which is a nonprofit that owns several charter schools in South, West and North Philadelphia. It’s owned by longtime Philadelphia songwriter and music producer Ken Gamble.

Johnson, who along with his wife was charged with two counts of honest services wire fraud, has maintained his innocence and called federal prosecutors “overzealous.”

“First, let me be clear: I am innocent,” Johnson said in a statement. “I did nothing wrong. I am the victim of overzealous federal prosecutors who have spent the last five years looking for something to charge me with. If charged with any crime, I will be pleading not guilty.”

If convicted as charged, Johnson and Chavous face 40 years’ imprisonment and a $500,000 fine, according to a press release from the U.S. Department of Justice.

The whole investigation has “been nothing but intimidation and bullying from the U.S. Attorney’s Office,” Johnson said at a post- indictment news conference. “It makes no sense for me to work as hard as I have…to throw it all away for some alleged backroom deal.”

According to the indictment, the charges stem from criminal schemes orchestrated by Islam and Dawan through Universal Companies that included thousands of dollars in bribe payments to public officials and the misappropriation of hundreds of thousands of dollars from Universal.

“It all boils down to this: The indictment charges that two businessmen wanted a corrupt advantage,” said Assistant U.S. Attorney Jennifer Arbittier Williams. “They wanted to pay to play, and the indictment charges that they found willing partners here in Philadelphia. City Councilman Kenyatta Johnson and his wife, Dawn Chavous.”

Williams said that Chavous, who operates Chavous Consulting, used her consulting business to enter “into a sham consulting agreement” to receive payments from Islam and Dawan for her husband.

The indictment alleges that Universal owned the property on which the closed Royal Theater sits, on the 1500 block of South Street, and they’d been trying to sell “for years,” according to Williams.

“The property became dilapidated,” she added. “A blight on the neighborhood.”

In May 2013, Williams said, a member of the community filed an action to take control away from Universal in order to rehabilitate the property and end the blight. That same month, according to Williams, Islam arranged for a political fundraiser for Johnson’s re-election campaign, and Universal Companies entered into a contractual agreement with Chavous, hiring her business, Chavous Consulting.

“The indictment alleges that this consulting agreement was a sham – that Chavous did very little work for Universal and that the arrangement was simply a way for Universal to funnel bribe payments to Johnson,” said Williams. “In fact, within a matter of months…Johnson is alleged to have pursued zoning changes for the Royal Theater that would save Universal’s bottom line.”

The indictment also alleges that Universal purchased properties at 1309-1313 Bainbridge St. years earlier for $3 under a redevelopment authority contract, which required Universal to build on the land.

“Under the contract, Universal was required to complete construction within 18 months or face the prospect of reversion back to the city,” said Williams. “The indictment alleges that these parcels, under Universal’s ownership, nonetheless remained undeveloped for nine years, strewn with trash, again a blight on the neighborhood.” As a result, Williams said, the city began the process of reversion in 2014.

“This is when things are alleged to have changed,” said Williams. “In January 2014, Dawn Chavous is alleged to have contacted defendant Islam and warned him that Philadelphia intended to revert the property. In that same month, it is alleged that Chavous received an $18,000 payment from Universal.”

Williams said that soon after the payment, Johnson indicated to a city official that he would not support the reversal. She said he then utilized councilmanic prerogative – “a custom in Philadelphia that allows individual city councilpersons to influence nearly all land use decisions in their district” – to stall the reversion process.

“The indictment alleges that this resulted in Universal being able to continue owning its properties, valued between $2.6 million and $3.5 million,” said Williams. “In both instances – the Royal Theater and the 13th and Bainbridge properties – Universal is alleged not only to have silenced attempts to take away and rehabilitate their blighted properties, but also to have profited greatly from those properties thanks to Kenyatta Johnson’s efforts at the same time Universal was paying Johnson’s wife, Dawn Chavous.”

Williams said that Universal “was hijacked by Abdul Rahim Islam and Shahied Dawan, and turned into a criminal enterprise in order to commit these crimes of corruption and greed with the support and necessary participation of Kenyatta Johnson” and his wife. She noted that Universal itself had not been charged with any crimes.

Wednesday’s allegations mean that Johnson is now one of two city councilmembers – the other being 6th District Councilman Bobby Henon – to be under federal indictment.

FBI Special Assistant Christian Zajac, who spoke at Wednesday’s news conference, said that Philadelphia’s FBI field office has “a higher percentage of agents and task force officers working corruption than any other office in the FBI.”

He added: “That speaks to our commitment to ridding this city of this scourge, and unfortunately it highlights the magnitude of the problem in our city.”

Williams said that Johnson and his wife, along with Islam, were expected to self-surrender on Friday at 1:30 p.m. in front of Magistrate Judge Richard Lloret on the fifth floor of the Eastern District of Pennsylvania’s courthouse at 601 Market St. Dawan is expected to self-surrender on Thursday.