April 05, 2017
On the witness stand under cross-examination, Rufus Seth Williams explained how he paid for his plane fare, rental car and hotel accommodations when he attended the 2008 Democratic National Convention in Denver.
Williams said he charged some $1,600 in travel expenses to an American Express credit card that belonged to his adoptive mother, Imelda. But he was in trouble in Election Court because he neglected to report those American Express charges as income.
Judge Allan L. Tereshko was incredulous. “You used your mother’s credit card?” he asked.
“That’s correct, Your Honor,” Williams replied.
It happened eight years ago, long before the Philadelphia Board of Ethics fined Williams a record $62,000 in January for failing to report gifts and income valued at $175,000 between 2010 and 2015.
On March 20, 2009 in Philadelphia Election Court, the sums they talked about with Seth Williams were smaller but many of the issues were the same. Williams took the witness stand and tried to explain why he had not reported more than $10,000 of income he had received from his political action committee. He also tried to explain why he didn’t report as income the expenses he charged to his mother’s credit cards to pay his own bills.
It was eight years before the feds would indict Williams for allegedly diverting $20,000 intended for his 84-year-old mother's nursing home care to his personal use. That’s in addition, the feds charge, to allegedly accepting another $34,000 in gifts and cash from a couple of businessmen.
In Election Court eight years ago, Rufus Seth Williams was a bad witness who had trouble answering simple questions, and was frequently admonished by the judge.
When he testified in Election Court in 2009, Williams was running for district attorney of Philadelphia. Dan McCaffery, an opponent in the Democratic primary for the office, went to court seeking to get Williams thrown off the ballot because he had not fully disclosed his income in campaign finance forms.
Lawyer George Bochetto represented McCaffery in Election Court.
In his closing argument to the judge, Bochetto said Williams “shows up with having received ... more than $10,000 worth of checks from his campaign.” And to explain what he did with the undisclosed income from his PAC, Bochetto said, Williams “shows up with $700 worth of receipts.”
They included a receipt for an Apple martini at the Devon Horse Show and a parking stub for $1.25.
Such accounting was an “insult to the voters and the [election] process,” Bochetto argued to the judge. Those receipts, which “could have been for anything for anybody, somehow justifies over $10,000 worth of cash payments to him out of his campaign.”
The judge subsequently ruled against Williams, kicking him off the ballot two months before the May 2009 Democratic primary election.
But the victory was short-lived. Williams appealed the decision. A month later, a panel of three Commonwealth Court judges voted to reinstate Williams on the ballot. McCaffery declined to appeal the case. And Williams was elected to the first of two four-year terms as the city’s first African-American district attorney.
But a look back at Williams’s disastrous testimony in Elections Court, detailed in 218 pages of legal transcripts, shows that Williams had a history of messy financial dealings, and an unhealthy dependence on his mother’s assets. And even after he pulled off a narrow escape for his transgressions in Election Court, Williams failed to clean up his act. Instead, if the ethics board and the feds are to be believed, he got worse.
Seth’s new lawyers in his criminal case, where he is facing a 23-count federal indictment charging him with bribery, extortion, mail fraud and honest services fraud, may want to prepping their client now. Because in Election Court eight years ago, Williams was a bad witness who had trouble answering simple questions, and was frequently admonished by the judge.
“We have been very, very specific that the problem here with Mr. Williams’ disclosure form is that he had sources of income from his campaign PAC which he failed to disclose,” Bochetto told the judge at the beginning of the 2009 hearing in Election Court. “And that the law is explicit in requiring expenditures, expenses, to be disclosed as a source of income.”
“That’s what voters want to know; who he is affiliated with; how is he making his money; who is paying him; who is he indebted to,” Bochetto told the judge about the city's future top prosecutor. “That’s what these disclosure forms are all about.”
The law “clearly and unmistakably required [Williams] to disclose them as a source of income on his financial statement,” Bochetto said of the income Williams received from his PAC. “He didn’t do so.”
Bochetto then outlined a list of undisclosed income to Williams from his PAC that included $9,762 in unspecified reimbursements and $1,900 in petty cash payments; and $561 to American Express for an unspecified reimbursement.
In response, Abbe Fletman, Williams' lawyer, argued the sums Bochetto referenced weren’t income, but merely reimbursements for expenses.
That’s when the judge quoted the legal definition of income: “Any value received or to be received as a claim on future services or in recognition of services in the past, whether it be in the form of payment, fee, salary expense, allowance, forbearance, forgiveness, interest, dividend ....”
On the witness stand, Williams described how he was appointed in 2005 by Mayor John Street as inspector general for the city of Philadelphia. In that position, Williams was responsible for investigating municipal corruption. He resigned that position in January 2008 to work for a law firm.
William testified that he received income in 2008 from five different sources, for positions that included serving as a major in U.S. Army Reserve, JAG Corps. As well as working as a lawyer at Stradley Ronon Stevens & Young in Philadelphia.
Some of the funds from the Committee to Elect Seth Williams were “paid to you and your wife, isn’t that correct?” Bochetto asked.
“As reimbursements for expenditures,” Williams said.
“And those payments to you and your wife were deposited in your personal bank account, correct,” Bochetto asked.
“That’s correct,” Williams said.
“I wrote my wife’s name on reimbursement checks for expenditures that were made by my campaign,” Williams said. “And I signed them on behalf of the campaign committee, and then used her name when I gave them to her for her to deposit.”
“In your bank account?” Bochetto asked.
“In a joint bank account,” Williams replied.
“And didn’t you earlier state on the public record that the only reason you used your wife’s name on those checks, rather than your own, was that you thought it would look funny if they were made out to your name?” Bochetto asked.
“It’s a joint account,” Williams said. “I thought it was a better practice to put her name on it.”
On the witness stand, Williams described how he was appointed in 2005 by Mayor John Street as inspector general for the city. In that position, Williams was responsible for investigating municipal corruption.
“And that was your personal American Express card, correct?”
“Incorrect,” Williams said.
“Whose credit card was it?” Bochetto asked.
“My mother’s,” Williams replied.
“Your mother’s credit card,” Bochetto replied.
“As a result of going to the Democratic National Convention [in Denver], I couldn’t – I only have a debit card,” Williams said. “I don’t have credit cards.”
“The air fare was made in advance on Southwest Airlines with the use of the card, and the same with Dollar Rent-A-Car,” Williams testified.
The judge broke in. “You used your mother’s card to reserve...,” the judge began.
“Correct,” Williams replied.
The judge asked Williams if he acknowledged that the “failure” to include these records in his financial disclosure statement “creates the scenario whereby you have received certain payments from your campaign committee without an explanation ... of what those expenses were.”
“I think that’s a legal conclusion,” Williams told the judge. Williams, however, insisted the money he took “was not income” but “reimbursements as a result of expenses.”
“Speaking of legal conclusions,” the judge cracked.
Fletman tried to argue that Williams didn’t break any campaign laws if he acted in good faith.
“I will tell you categorically, that is not the law,” the judge responded. “That is not the law.”
The judge repeatedly asked Williams if he had disclosed these transactions on his financial disclosure forms.
“Those were not included,” Williams replied.
“If I’m out with young kids where they have my T-shirts on, we’re handing out fliers, and they want pizza or they want a hot dog. They do not give receipts at the hot dog stand for the hot dogs and soda.” – Seth Williams, Election Court testimony, 2009
Bochetto reviewed a series of seven petty cash payments made to Williams by his PAC that ranged between $150 and $500.
“Your Honor, there are times where I had the cash in a separate envelope in my briefcase to use when I’m out doing things to pay for,” Williams said. Such as “lunches for the staff members, or cab fare, parking meters, things of that nature, Your Honor, in a separate and distinct segregated envelope.”
“There are many things that I do not have receipts for,” Williams admitted.
“If I’m out with young kids where they have my T-shirts on, we’re handing out fliers, and they want pizza or they want a hot dog,” Williams said. “They do not give receipts at the hot dog stand for the hot dogs and soda.”
Bochetto asked the witness about “other expenses for thousands of dollars more than the campaign said it expended that Williams personally received.” Such as “American Express bills that were submitted by the candidate, though they are substantially and heavily redacted,” Bochetto said.
One of those payments was $1,053 that Williams had received from his mother, among other similar transactions.
To Bochetto, it was a pattern of deliberate deception.
Williams “has essentially – with all due respect – funneled money through his mother in a rather convoluted way, with reimbursements on some and non-reimbursements on the other,” Bochetto charged. “But he’s received thousands of dollars of benefit by the use of his mother’s credit card without disclosing it on his financial disclosure form.”
The hearing in Election Court was adjourned until three days later, to allow Williams time to file amended financial disclosure forms.
At the second day of the hearing, Bochetto asked Williams about a $210 charge on the amended forms for a hotel in Denver that was billed to “Mom’s credit card.”
“The understanding is, Your Honor, my campaign reimbursed my mother for expenditures made in support of the campaign, and that she was reimbursed for that,” Williams told the judge.
“Time out,” Bochetto said “But that’s not the way it worked. It didn’t go from your campaign to Mom. It went from the campaign to your private personal account, then from that account to Mom, correct?”
“The voters have a right to know that he’s relying on Mom’s pocketbook to run for office.” – George Bochetto, lawyer for Dan McCaffery, who ran against Williams in the 2009 primary
The judge asked the witness for a yes-or-no answer.
“I don’t recall exactly,” Williams said.
Williams was asked about bills to his mother's credit card that exceeded $1,300.
“I’m not exactly sure what the total was,” Williams said.
“And would you further agree that you did not identify your Mom as a source of financial interest, which you just filed Friday afternoon,” Bochetto asked.
Both Bochetto and the judge asked Williams for another yes or no.
“Your Honor, as I was stating, the amended documents reflect...,” Williams began.
“Objection, Your Honor,” Bochetto said. “He’s not being responsive.”
“Sustained,” the judge said. “You’re not responsive,” the judge told Williams.
“Apparently you didn’t hear me,” the judge said. “It’s a simple yes or no at this level. And then I said you may be able to explain.
“Does your mother’s name appear as a source of income” on the newly filed amended financial disclosure forms?, the judge asked.
“I don’t believe so, Your Honor,” Williams replied.
After Williams left the witness stand, Bochetto made a prescient speech questioning how voters could trust a candidate who couldn’t keep his campaign finances straight.
“He is going to be, essentially, the No. 1 integrity officer for the City of Philadelphia,” Bochetto warned the judge. “He’s going to enforce the Criminal Code in all its respects, financial and otherwise.”
“How is this gentleman handling his own financial integrity?” Bochetto asked. “It’s of fundamental importance.
“The voters have a right to know that he’s relying on Mom’s pocketbook to run for office,” Bochetto said.
“I believe that there’s a very substantial basis to demonstrate and conclude that this candidate did not proceed in this disclosure process with good faith,” Bochetto said. “I think it’s been like pulling teeth. I think there are still many, many unanswered questions.
"And frankly,” Bochetto added, “We have an oppositional attitude that I should have to disclose."
“That’s not good faith, Judge," Bochetto said. “He’s fighting us.”
“Something is wrong in Denmark here, judge,” Bochetto concluded.
“And this gentleman,” he added, referring to the future district attorney of Philadelphia, “doesn’t want to own up to it. And that’s the problem that we have here.”