Testimony begins in Milton Street trial

February 8, 2008 7:24:44 PM PST
He's been a street vendor and a state senator, a duck-boat operator and a peripatetic public gadfly. But for the next few weeks, the colorful older brother of the city's last mayor must play the role of defendant in U.S. District Court.

T. Milton Street Sr., after a lifetime of business and political scrapes, finds himself in his late 60s trying to survive an indictment over an alleged kickback scheme at the city-owned airport.

Street, trading on his brother's name, made $30,000 a month as a consultant and minority subcontractor at the airport from 2001 to 2004, yet did little or no work, prosecutors say. He also failed to report $2 million in consulting fees on his taxes, they charge.

Matthias Schwabe, a manager for the prime contractor, admitted on the stand Friday that Street's company was unqualified for the airport maintenance work. His employer simply moved its own workers onto the payroll of an enterprise that Street dubbed "Notlim Inc." - his first name spelled backward, Schwabe said.

"I was told to facilitate Milton Street on a daily basis," Schwabe testified Friday. "Anything he needed I was to bring to my superiors or give it to him."

Milton Street's younger brother, John F. Street, left office last month after two terms as mayor, a tenure marred by the FBI's lengthy investigation of the city's pay-to-play culture. John Street was never charged, but the FBI bugged his office and his city treasurer, two bank executives and others went to prison.

Milton Street's case is unrelated to that investigation, although both center on the alleged abuse of city contracts.

The elder Street has pleaded not guilty to fraud and tax charges along with co-defendant John H. Velardi Sr. of Drexel Hill, who was Schwabe's boss.

Schwabe, of Malvern, is cooperating after pleading guilty to mail and tax fraud.

He testified Friday that Milton Street once gave him an $83,000 check - with the payee name blank - at the airport food court.

Schwabe used the check for renovation work on his house.

Street had also given him a $15,000 check for a down payment on the house, which Schwabe said he made out to his wife.

Milton Street last year ran for an at-large seat for City Council despite the indictment, questions about his residency and the fact his nephew was also in the race.

"I stand accused of doing some wrong things. ... But in America, the presumption of innocence always prevails," Street said during the campaign.

In another quixotic public moment, he started a tour company that used amphibious duck boats, challenging the parking rights and river access held by an established rival. The rival took him to court in 2004.

Street lives at least part-time in Moorestown, N.J., where he was arrested last year for allegedly letting unpaid traffic fines reach four figures.

Speaking outside that house after the November 2006 federal indictment, Street blamed the charges at least partly on his sloppy record-keeping.

The indictment also charges that he took $80,000 from a minority contractor under a promise he could secure a $3.2 million contract that didn't exist.

Defense lawyer Jeremy Ibrahim told jurors in opening statements Thursday that Street helped Velardi's company fulfill its minority-participation goals and keep its $13 million-a-year city contract.

The trial is expected to last about three weeks.