Monday, August 5, 2019

What To Do When Your Boss Tells The FBI You're A Crook

By Ralph Cipriano
for BigTrial.net

What do you do when you find out your boss was talking smack about you to the FBI?

If you're Dominic Verdi, the former deputy commissioner of the city's Department of Licenses and Inspections, after you beat the rap at a political corruption trial, you go to court to sue your old boss for malicious prosecution and wrongful termination.

In Verdi's case, his lawsuit in Philadelphia Common Pleas Court targets the city and Frances Burns, the incompetent, scandal-plagued know-nothing of an L&I Commissioner appointed with tragic consequences by former Mayor Michael Nutter. And if you're Verdi, when the city's lawyers try to get your lawsuit tossed out of court, you strike back with a 286-page response to the city's motion filled with depositions and affidavits.


It's a bulging court file that for Verdi, reaps some measure of revenge by airing the entire messy dispute in the media, where it all began, a dispute that City Hall and the feds at this point would prefer to forget.

Dominic Verdi was a friendly, charismatic and flamboyant figure who spent nearly 40 years working for L&I, the corruption-plagued city department that regulates business and commerce here in the birthplace of democracy.

Verdi's most colorful duties involved wearing a flack jacket as a swashbuckling member of the city's Joint Nuisance Task Force. Standing side by side with cops, Verdi would bust down doors during midnight raids on speakeasies and outlaw bars, and close those joints with cease-and-desist orders.

But, according to Verdi's lawsuit, his boss, Burns, the buttoned-downed bureaucrat appointed by Nutter to make L&I a more business-friendly operation, was uneasy about Verdi's cowboy capers. According to a key deposition in the case, Verdi's act busting down doors as a member of the Joint Nuisance Task Force only served to create political problems for Burns, when the owners of those closed speakeasies and outlaw bars would complain to her.

So what did Burns do about her problems with Verdi?

On Feb. 17, 2011, The Philadelphia Inquirer ran a front-page story that said Verdi, L&I's deputy commissioner, was under investigation by the FBI for an undisclosed conflict of interest, namely a financial stake in a failed business venture, a former beer distributorship that Verdi was allegedly using his official title to steer business to.

Thanks to the publicity, Burns, according to Verdi's lawsuit, now had a good reason to get rid of Verdi, and she wasted no time in taking advantage of the opportunity.

The same day the Inquirer story was published, Burns sent Verdi a letter "stripping him of his exempt position and demoting him to a civil service position as a construction taxes inspector," at less than half his salary. That letter from the boss left Verdi with "no option but to retire," his lawsuit states, in order to preserve his pension benefits staked to his former salary as deputy commissioner.

Verdi's troubles can be traced back to 2006, when he invested $20,000 into Chappy's Beer, Butts & Bets, a beer distributorship that was out of business by 2010. But while the place was still in operation, Verdi made things worse for himself when he got a visit from the city's bumbling Inspector General, a future corrupt Philadelphia district attorney named R. Seth Williams.

Back in 2007, Williams asked Verdi about the beer distributorship, and Verdi denied having any ownership interest in Chappy's. A gullible Williams subsequently cleared Verdi of any wrongdoing.

But Verdi suspected a rat; the mousey Burns. It was his former boss, Verdi claimed in his lawsuit, who set him up with the inspector general by sending an anonymous letter to the IG targeting Verdi with false allegations that he was using his official position at L&I to benefit the beer distributorship. But in response to Verdi's lawsuit, Burns denied that she was the IG's confidential informant.

In his lawsuit, Verdi went a step further, alleging that it was Burns who years later also "anonymously contacted the FBI and falsely claimed that he was using his official position at L&I to further his purported financial interest in Chappy's." The lawsuit claims that Burns "knowingly provided false confidential information to the FBI, which was the basis of the initiation of the FBI's investigation."

According to the lawsuit, Verdi didn't know that Burns "had prompted the FBI investigation that was used as the pretense for his demotion."

In the federal case against Verdi, he was accused in a seven-count indictment of conspiracy under the Hobbs Act to commit extortion and honest services fraud. But the trial was a travesty, featuring an incompetent prosecutor that the judge frequently admonished for her lack of time management skills and propensity for asking irrelevant questions. On the witness stand, Verdi denied he had ever extorted anyone to benefit Chappy's, and the government failed to produce any corroborating evidence that proved Verdi's bank account had ever been enriched.

In addition, a couple of key prosecution witnesses who were supposedly co-conspirators didn't show up to testify, and the witness that did testify against Verdi had their own credibility problems, including a convicted murderer and a corrupt former L&I inspector who had pleaded guilty to using his official position to extort an elderly neighbor.

In the end, a jury acquitted Verdi on all the charges. That cleared the way for Verdi to go after his old boss in the civil courts, charging that she was a bad actor in the federal probe.

Burns, according to Verdi's lawsuit, "intended for the FBI to run with her false and discredited allegations," and then she used the FBI investigation as a "fraudulent pretense" to demote Verdi.

Burns "knew she was providing false information to the FBI, as such allegations had already been investigated and discredited by the office of inspector general," the lawsuit states. But according to the lawsuit, Burns "actively concealed her involvement with the FBI" and used it as a false pretense to demote him.

A confidential informant in 2009 had indeed reported to the FBI the same allegations that were made to the IG, that Verdi was using his official position at L&I to ship business to Chappy's. But Burns in response to Verdi's lawsuit denied that she was the FBI's anonymous source; she also made the dubious claim that she only learned about the FBI investigation when she read about it on the front page of the Inquirer.

According to Verdi's lawsuit, however, Burns's assertion of ignorance about the FBI investigation was undermined by a couple of Burns's key assistants.

Janice Hall, Burns' executive assistant, stated in a sworn affidavit that she and other staffers at L&I were "well aware" of the FBI investigation of Verdi and that it was "a regular topic of conversation and rumor with the office."

In her affidavit, Hall stated that she came to the conclusion that Burns was after Verdi.

"After Mr. Verdi was detailed to the Joint Nuiance Task Force and moved his physical office to the Police Department, but prior to the publication of the Philadelphia Inquirer article regarding the investigation into Mr. Verdi, Commissioner Burns called me into her office, closed the door, and told me I was not to have any contact going forward with Mr. Verdi, in either a professional or social context," Hall wrote in her July 12th affidavit.

But Hall, a friend of Verdi's, didn't want to play along.

"I informed Commissioner Burns that I would be reaching out to Mr. Verdi to tell what she had directed," Hall wrote. She wrote that she contemporaneously informed Verdi that "based on my conversation with Ms. Burns, I was of the impression that she was 'out to get him.'"

According to the affidavit, Burns also told Hall "that she did not want Mr. Verdi coming back [to L&I] from his detail with the Police Department."

Another key assistant to Burns, deputy L&I Commissioner Bridget Greenwald, testified in a deposition that she was also aware of the FBI investigation prior to the Inquirer story.

When he was deposed on May 2, 2019, Verdi talked about his problems with his boss.

"Personally, I didn't think she was qualified" to be L&I Commissioner, Verdi sad, "because she had no background or anything to do with the department, with codes." If you look at the city charter, Verdi testified, the L&I commissioner "should have at least" have "some kind of code or background [experience] in that position."

Regarding his participation with the Joint Nuisance Task Force, Verdi testified that Burns "basically told me over and over again that she wasn't happy with the fact that we worked with the police. She didn't need this involvement, she didn't need this headache, she didn't need to cease operations that were being done. These were headaches to her department."

Under Burns, Verdi testified, she wanted L&I be "more customer service friendly and she always made it sound like" the Joint Nuisance Task Force was "just not doing what we were supposed to do."

The cease operations orders he filed, Verdi testified, "became very political," as "anybody with political connections would call the commissioner." And that created problems for Verdi with his boss.

"If she [Burns] didn't like doing the cease, she would call me and scream at me," Verdi testified. This happened, he said, "at least six or seven times."

Just a month before Verdi went to trial on political corruption charges, on Nov. 23, 2016, Fran Burns gave an interview with the FBI where she trashed Verdi.

According to FBI records detailing that interview, Burns told the FBI that "she didn't believe in the use of cease operations orders except in specific situations," and she further stated that she "didn't think L&I employees should be participating" in the Nuisance Task Force.

According to the FBI, in her interview, Burns also cast doubt on a permit Verdi had granted to a catering operation that in her view "could not have been 'legitimately' performed."

She also stated that deputy commissioners should not be issuing permits, as Verdi had done in the past, and that Verdi's issuance of permits to one night club in particular was "unusual."

Burns told the FBI that she had heard rumors about Verdi's wife owning a beer distributorship. Burns was also aware that Verdi was "taking official action within L&I that were outside of L&I policies and procedures," such as the issuing permits, the FBI noted.

When Burns became commissioner of L&I she "removed Verdi from his role and deputy commissioner and placed him under the supervision of Philadelphia Police Department Commissioner Pat Fox," the FBI wrote. "Burns made this change because of Verdi's reputation of circumventing L&I policies and procedures," the FBI wrote.

Burns, according to the FBI, also believed that owning a bar was a conflict of interest and said that she would not approve of "an L&I employee having this type of outside employment."

In her deposition, former deputy L&I Commissioner Greenwald stated that Burns and Verdi had different ways of operating.

According to Greenwald, Burns was "very process oriented." But Verdi was "very less process oriented and more let's just get the job done oriented. So process, to him, in my observation, was not as important, where to Fran it really was."

But Greenwald denied that Burns was out to get Verdi. At her deposition, Greenwald testified that she told Verdi at a party, "Fran did not have a vendetta against him, ever."

In her deposition on April 26th, Burns was asked when she first learned about the FBI investigation of Verdi.

"When I saw the front page of the Inquirer," she said.

Burns testified that she was told by former L&I Commissioner Robert Solvibile that "either Dominick or his wife had something to do with a beer distributor. And he was certain of it. And that's a recollection from 12 years ago."

Regarding her interview with the FBI, Burns testified it was an "intense experience." And that when she complained about Verdi as a deputy commissioner supposedly not being able to issue permits, she was unaware that previous deputy commissioners had issued permits.

Benjamin J. Simmons, Verdi's lawyer asked Burns if Verdi was "taking official action outside of L&I polices and procedures," as Burns had told the FBI.

"I don't know," Burns replied. "As I said to the FBI, I never had anything against him."

Burns was also asked about an April 13, 2011 budget hearing in front of City Council, if she had ever testified that "if we hear rumors can make anonymous complaints to IG's office."

"Never," she said.

Do you recall that testimony, she was asked.

"No," she replied.

But a transcript of that 2011 budget hearing quoted Burns as telling City Council members, "I now address integrity and ethics at every single opportunity and communication that I have with not only our supervisors and managers but our workforce. I strongly encourage that we're the eyes and ears of each other and that we take responsibility for our own action."

"But if we hear rumors or something, you know, that we can make anonymous complaints to the Inspector general's office."

Burns has a history of being a poor, some would say pathetic, witness. Back in 2013, the City Council held a public hearing on the collapse of a building on Market Street that killed six people, injured 14, and prompted an overworked L&I inspector to commit suicide, just six months after Burns left office.

Burns, former L&I commissioner under Nutter, from 2008 to 2012, had to be dragged into council chambers after she was hit with a subpoena. The council was trying to find out how, on Burns's watch, had the emphasis at L&I switched from public safety and code enforcement, to being business-friendly. But Burns provided no answers, just empty rhetoric. For 90 minutes, she was audibly and visibly nervous as she spoke in what I described at the time as "sleep-inducing banalities."

At that hearing Councilwoman Cindy Bass asked Burns what her thoughts were on the morning of the building collapse, after all the safeguards she had supposedly put in place had failed to prevent the tragedy on Market Street.

"I don't know," Burns stammered. "I had a lot of thoughts on what happened."

"What is your reaction to what happened on Market Street?" Bass asked again.

"I don't know if that question matters," Burns replied. 

"I think it does matter," Bass persisted. The City Council hearing was exploring, "How did we get here? How can we move forward?" Bass said. "That's why you're here."

But Burns wasn't going to be any more forthcoming.

"You're asking something I don't feel comfortable speculating on," she replied.

2 comments:

  1. Interesting case that has not been in the news much. Did or can the plaintiff subpoena the FBI to reveal if Burns was their source?

    The case reminds me of the Richard Jewell case. He sued an employer (Piedmont College) who badmouthed him to the FBI and newspapers. Jewell got an undisclosed settlement.

    ReplyDelete
    Replies
    1. Very interesting question, I would like to know the answer to that as well. Maybe this could open the door for the Traffic Court Judges, who should be able to sue Bernice D'Angelis and Crooked Ron Castile for bringing a case against them.

      Delete

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