Attack Against Philadelphia Sheriff: Part 2
Broken system, powerful people
In 2004, long before foreclosure became front-page news, Green sounded an alarm in the city of Philadelphia. "More of our neighbors, our families and our friends are falling behind on their mortgages and losing their homes" to foreclosure, he wrote to constituents on his Web site, www.phillysheriff.com.
"When I ran for sheriff, I promised to open this office up to people in all neighborhoods. I've opened up sheriffs sales to neighborhood residents and local investors from all economic backgrounds and ethnic communities. I have increased the number of contracts with minority- and women-owned companies. I increased awareness of Sheriff Sales by publishing the notices in community newspapers that are delivered directly to neighborhood door steps. This office represents all the people of this city. Our homeowners knew seven years ago something had gone wrong and they asked government to step in and protect them. All I did was listen and find ways to respond."
A lot has changed since then. The foreclosure wave that washed through Philadelphia's modest, low-income neighborhoods has now begun consuming high-end upscale projects and moving into commercial real estate - where the financial stakes are higher.
Newly built luxury condos are virtual ghost towns. More developers have found they are unable to secure funds to complete projects. The Sheriff of Philadelphia has emerged as a powerful figure in the real estate market where billion-dollar deals often are done out of the public view.
The delinquency rate on commercial loans in this area reached 7.3 percent at the end of May, according to Trepp LLC, a New York-based research firm. Last year, the rate was 2 percent. Moreover, Trepp reported that 10 area office buildings - including the Lafayette Building overlooking Independence Mall - were in foreclosure and eight other loans on office buildings were either 60 to 90 days delinquent or nonperforming beyond maturity.
Sheriff Green, meanwhile, has created a host of auction policies aimed at keeping the sheriff's sale process open to small and minority investors. Recently, his office decided multi-unit developments could not be sold as one sheriff's sale unit. This means mortgage holders will have to package condos in groups of five or less. The policy allows more local people to continue to participate at these sales, where millions of dollars stand to be made by investors, Green said.
No good deed goes unpunished
As the financial stakes rose, the chorus of complaints against the sheriff's office have grown louder. Sheriff Green publicly admitted accounting controls in his office needed to be stronger; he hired a forensic accounting firm to review procedures and recommend changes. Audits have greatly improved in recent years.
Local journalists rely heavily on these outdated audit reports about the office, but few have taken time to visit or view accounting improvements. In 2003, the Philadelphia Inquirer wrote a front-page story about $12,300 missing - possibly embezzled - from the sheriff's office; it was not until the jump page that readers discovered the money was not missing at all. Sheriff Green was quoted at the end of this story saying the money had been place in the wrong account, though the Inquirer told readers the City Controller had not verified his fact. (The Controller did verify it but it was never reported.)
To this day, allegations of missing and embezzled money continue to circulate. Sheriff Green said the rapid growth in revenues being collected at sheriff's sales simply outpaced his office's structures and controls, but improvements have been made.
By 2007, Green found himself facing a well-financed opponent as he sought re-election. Michael Untermeyer, a lawyer turned Philadelphia developer, donated $100,000 of his fortune to his campaign for sheriff.
Phoney "reform" proposals
As the debate got into full swing, Sheriff Green told media of a disturbing visit. Untermeyer, he said, approached him - and offered not to run - if Green would give him a decision-making position in the office, which had emerged as a key player in real estate.
"I thought he was either crazy or was setting me up for something," Green said of Untermeyer, a Democratic primary opponent. "I just ignored him."
When confronted with Green's allegations, Untermeyer later told the Daily News, the only major newspaper to report this troubling story, that it was the sheriff who had offered him - a multimillionaire - a job paying $36,000 a year.
Untermeyer, who made it clear to local media he would not divest his holdings in real estate ventures as sheriff, won the endorsement of the Philadelphia Inquirer, the city's major newspaper. Working-class neighborhoods were backing Green who snatched victory in the Democratic primary 67.5 percent of the vote and captured 97 percent of the vote in November.
Fifteen months after the people had returned their sheriff to office, the Committee of Seventy, a non-partisan group that bills itself as a government watchdog and clean government advocate, issued a call for Philadelphia to shut down the sheriff's office and three "other obscure elected offices filled with patronage jobs."
"Seventy called for abolishing four obscure elected offices filled with patronage employees (Sheriff, Clerk of Quarter Sessions, City Commissioners and Register of Wills) and transferring their necessary functions to other city offices," the organization states on its Web site. "The state agency that oversees the city's finances just released a report verifying cost savings of at least $13-$15 million. The Philadelphia Inquirer and Philadelphia Daily News have both endorsed Seventy's 'row office' reform proposals."
In November 2009, the Committee of Seventy held its biggest fundraiser of the year. The nonprofit, nonpartisan group accepted hefty contributions from real estate companies, banks and law firms with lucrative real estate practices.
In fact, a check of its Web site found approximately 68 percent of the contributors to its fundraiser that year either had ties to the real estate market or offered consulting services to the public sector. This year, Daniel K. Fitzpatrick, president and CEO of Citizens Bank in the region, serves as chair of the Committee of Seventy Board of Directors. John McKeever, Esq., a lawyer with DLA Piper, is one of two vice-chairs. DLA Piper's real estate group, with over 550 lawyers globally, is the "world's largest real estate practice and it's consistently top-ranked around the world," DLA Piper states on its Web site.
Zach Stalberg, President and Chief Executive Officer of the Committee of Seventy, did not return emails or phone calls. IRS records show he is paid over $248,000 per year.
No regrets
Meanwhile Green, a husband, father, and grandfather is now 63 and ready to begin a new chapter in life. He said he may write a book, or play golf. And he'll read. He is retiring next year and he intends to set the record straight before he goes.
If he could return to 2003 and revisit his decision to take on the financial sector, would he still take on the role of activist sheriff? "Yes," Green responds without any hesitation. "Because what we did prompted the various stakeholders of the mortgage foreclosure process to consider, perhaps for the first time, its impact on humans," he said.
He thinks that is a pretty good legacy for a sheriff from Philadelphia.
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