In a city where such a big population of Latinos exist?
And the thing is that you find that in department after department -- and you said you have now, what, three attorneys?
We have three, with two offers outstanding, so we -- maybe, if we're fortunate enough -- we've made a number of other offers, and I guess the difficulty has been, we've sent people to -- I think Donna, for instance, and our Latino lawyers have gone to job fairs. And we have done and continue to try very hard to do it and -- but we have gone from 0 to 3 in a year of me trying very hard to hire folks. 1857 2/23/01 - FY '02 OPERATING BUDGET
Paralegals? I will tell you, I have not concentrated on the nonlawyer side. I will honestly tell you that my personal involvement has been much more in trying to hire lawyers than in either the paraprofessional side or in the -- or anywhere else in the Law Department. I will tell you, I have not concentrated on --
But paralegals stay there for a longer time than usually attorneys do, so it might be very good to look at that.
And the other staffing that we have, because what we see from the testimony from the Personnel Director and so on is that there is really a total absence across the board in middle management and so on. And it's -- it's very frustrating to sit here year after year and listen to people and say, Well, we did -- we tried to do this and that. I think if you want to do it, you really are going to do it. And I know that next year, in your office at least, we will have a greater 1858 2/23/01 - FY '02 OPERATING BUDGET increase than we have this year. But I think I would like you to look at the overall aspect of the City, and not just the City Solicitor's Office, and see how we can begin to increase that number and not wait years to 7 advance percent. 8
I will commit to you 9 that I and my office will work with you and your 10 office to see what we can do. 11
And I will tell you -- 13 I'll say it again: It's unacceptable, I'm 14 disappointed in what I've been able to do in the 15 year that I've been there at a time -- and I've 16 spent a lot of time and effort on it. And I 17 really do consider it one of the failures that 18 I've had this last year. 19
Thank you. 22 The Chair recognizes Councilwoman 23 Miller. 24
Thank you, Madam 25 President. 1859 1 2/23/01 - FY '02 OPERATING BUDGET Good morning, City Solicitor.
When you talk about the Law Department being involved in creating new legislation, or additional legislation, along the Neighborhood Transformation Initiative, have you at all thought about any new legislation as it relates to troubled buildings, troubled apartment buildings, and whatnot that are out there?
Are you talking about from the renter's side or from the construction side or --
Well, just from code enforcement, lack of code enforcement. A lot of these buildings are falling down, and to me it just seems like they just continue to just fall down and nothing really happens. I know that the State was looking at some legislation that didn't get past the Senate as it related to putting these buildings into receivership.
What we have looked at 1860 2/23/01 - FY '02 OPERATING BUDGET is primarily legislation at repeat offenders; in essence, an bad landlords.
If a landlord, whether it's an apartment house or whether somebody has or 30 houses and has a series of code 8 violations, ways that we can package that as part 9 of our both affirmative litigation and code 10 enforcement side, and then also, I testified 11 earlier to increase the fine amounts that the 12 City's able to impose on a frequent violator, and 13 you step it up the more that they violate. 14 So that we are looking at, yes. 15
What is the 16 history of these types of landlords actually 17 paying their fines? 18
Again, I don't have an 19 analysis on that side, and I can't really respond 20 to that at this time.
I'd be interested in knowing, 'cause just from an appearance, it just seems as if people get fined, don't pay the fines, and just continue to go on and practice as usual. 1861 2/23/01 - FY '02 OPERATING BUDGET
I will be happy to get a report back to you on that issue. I'd have to probably narrow it down a little bit, but I think if you're asking what kind of success do we have in collecting the fines on the code enforcement, L&I fines, I'll be happy to get that to you.
Okay. And I, too, am also interested in whatever it is that you're going to put together as it relates to the Neighborhood Blight Initiative. And I think I heard you mention that there was going to be some type of new court, nuisance court, or some type of neighborhood court?
No, that is not done. What I testified was that we had begun to have those discussions with the Court of Common Pleas in order to decide whether it makes sense, particularly if there's going to be an increased code enforcement presence by the Law to have one or two or three, a specified number of judges designated to do, in essence, nuisance court. But no such policy has been made.
Okay. 'Cause I think it's important that we're addressing the 1862 2/23/01 - FY '02 OPERATING BUDGET issue of neighborhood blight, but unless we really address his as a long-term issue, and ten years from now, homes, houses will continue to fall down and cause additional blight into the neighborhoods. So I think we have to do education and prevention out in the neighborhoods so that we're not constantly faced with the same cycle of blight. We address it in the year 2001, 2002, whatever, and then in the year 2008, we're still right back out there addressing the same type of issues, only in different locations. So I'd also be interested in the information that the Council President talked about earlier today.
I appreciate that. And I don't know if you were here when I testified, but one of the other things that our lawyers are going to be doing as part of the initiative is going to be going out literally to -- and one of the things we learned from San Francisco is that our lawyers will actually be going out into communities and -- to view the community, not just L&I, ultimately as the client on -- particularly on repeat offenders. 1863 2/23/01 - FY '02 OPERATING BUDGET And we've commenced -- we already have the draft of a manual that I spoke about earlier, which is typical problems, and so we want to hear from community folks as to, you know, what are the most significant issues in your particular neighborhood. Because, for instance, what's bothering me in my neighborhood may not be the same thing that's bothering somebody in another part of the City. Thank you.
You're welcome. Are there any further questions for the City Solicitor? (No further questions.)
You're welcome. Next we'll have the Office of Labor 1864 2/23/01 - FY '02 OPERATING BUDGET Relations (Break taken.) - - - (Proceedings resume.)
Good afternoon. Thank you for your patience. Please identify yourself for the record and proceed with your testimony.
Good afternoon, President Verna and members of City Council. My name is Bill Grab. I'm the Director of the Office of Labor Relations. I'm here with Joseph Tolan and Delia Gorman, Deputy Directors of Labor Relations, to present the Office of Labor Relations' request for our Fiscal Year 2002 Operating Budget. The Office of Labor Relations works with City managers, union representatives, and their members in collective bargaining, contract administration, dispute resolution, and labor management cooperation. To continue promoting effective labor relations, the Office of Labor Relations is requesting $591,048 in the Fiscal 2002 General Fund Budget. In the area of collective bargaining, as you know, the collective bargaining agreements 1865 2/23/01 - FY '02 OPERATING BUDGET for all four major bargaining units expire on June 30, 2002, and we successfully reached agreement with two unions and went to interest arbitration with the Police and Fire. As the timetable in Act 111 allows, the City will begin preparations for bargaining for successor agreements with the Police and Fire this coming summer, and we will begin negotiations prior to January 2002. In the area of dispute resolutions, we work with the District Council 33 and District Council 47 representatives in grievance arbitration -- in grievance and arbitration, and we worked with the FOP and the firefighters in the area of arbitration. Finally, in the area of the Redesigning Government Initiative, the Labor Management Cooperation, currently we have committees active in the Departments of Recreation, RGI, Revenue, L&I, Health, Police, and the Airport. We are working with the unions to expand the area of the Labor Management Cooperation, and we would like to thank Council for this opportunity to present our budget request for 2002, and I'm happy to answer any questions 1866 2/23/01 - FY '02 OPERATING BUDGET that you may have at this time.
Thank you. Are there any questions? The Chair recognizes Councilman Cohen.
We work with unions in collective bargaining, handle grievances, we work with the Law Department in arbitrations, and we work in the area of Labor Management Cooperation and the Redesigning Government Initiative.
Do you -- are you a policy office? are you a technical office that performs specific functions?
I was going to say we're more of a combination, where we suggest and implement policy. And then we are also technical to the collective bargaining process and the arbitration process.
Are you concerned, say, about the image of Philadelphia? If we have 1867 2/23/01 - FY '02 OPERATING BUDGET a labor policy that brings gets us involved in labor disputes where there's a question of fairness and justice, is that a matter of concern?
I guess we're the office inside, we're the inside. We work with 33, 47, the FOP, and the firefighters.
But, say, we're kind of embarrassed here because we have our different wash rooms serviced by people who tell us from time to time that we're paid less than other people doing similar work in private buildings in the City, we're working without a contract because our direct employer, a company called Colin -- I think they spell it one L. Maybe they can't afford the second L because they say, apparently, they can't pay the same level of wages that are paid by other companies when there's a labor dispute. Does the City get in and try to help that?
'Cause to the outside world, it looks like it's a problem 1868 2/23/01 - FY '02 OPERATING BUDGET affecting the City.
There is another office that gets involved in -- in those type of disputes, rather than our office. Our office works inside, with City employees, not with contractors or like the Convention Center. There's other offices that get -- there's another office that gets involved with that.
I don't think we're barred. I mean, it's just been -- our mission is to work with the City employees and City unions.
Well, you say your mission is the City employees, but not labor situations that affect the City? For example, it's only, I think, as a result of Mayor Rendell's privatization effort that custodial workers, you know, became non-City workers. Before that, they were all City workers. So it's a City function they're performing. Isn't that -- shouldn't that be a matter of your office? 1869 2/23/01 - FY '02 OPERATING BUDGET
I can talk that over -- I do not want to get into another office's jurisdiction. I can talk that over and find out about it and talk with the other office.
Well, I'm raising that because I think it important that there be an Office of Labor Relations that deals with how labor performs and what the City's relationship is with labor in matters that involve City functions, but not necessarily technically City employees. We look bad. Who was that young woman on a TV show who used to be Regis Philbin, who said that we'll -- UNIDENTIFIED SPEAKER: Kathy Lee.
Kathy Lee Gifford. She tried the line, Well, I'm not involved, I'm not the contracting party between the workers. You know, it's the other fellow, the contractor that pays these low wages. Now, to me, that tale didn't go very long, you know, and it hurt her very badly. And the City's in that same kind of position. We can't say, Well, that's Colin, some 1870 2/23/01 - FY '02 OPERATING BUDGET company that nobody knows about, that operates out of New Jersey. There -- a City function is being performed, and I think the City has to be concerned about it. Do you know whether the matter that used to bring many of us out on Friday afternoons during lunchtime in front of the Criminal Justice Center, the matter involving court employees; has that been resolved?
We do have a contract? (Unintelligible, parties talking over each other.)
Well, that's a good result. All right. Thank you, Madam President.
At sometime, I would like to suggest that you raise with whomever you have to raise the desirability of 1871 2/23/01 - FY '02 OPERATING BUDGET your office being authorized to get into any areas where there's a City function being performed. For example, at the Convention Center, there's currently a big problem that I think will hurt the City if it doesn't get resolved. Currently, in the food services, there are some kind of divisions that exist. There's sort of a front end, where people, as soon as they get hired, are entitled to medical benefits, but -- in what they -- I think they call it officially the "rear end" or the "back end," where the great bulk of employees are concerned that really do, the, you know, the preparing and cleaning of food and getting everything ready for service, that end has to work a certain number of days before they become eligible for medical benefits. And amazingly, generally, just before an employee -- this is what has been reported to us -- gets to the magic number of days which would enable that employee in the back end to get medical coverage, suddenly the Convention Center goes on a hiring spree and hires many more temporary workers and, therefore, doesn't need the older ones as much. So that most people never get 1872 2/23/01 - FY '02 OPERATING BUDGET to the point of even qualifying for medical help. Now, I don't know the technical question of who hires or who fires or who they're employees of, but it doesn't look good for the City of Philadelphia, you know, which is really charged by the Convention Authority with the responsibility for performing very important work. And certainly, in the City's judgment, it's very important, 'cause it's a part of our major effort in tourism. There ought to be a City agency that looks into that, that says, you know, we can't tolerate this -- somewhat like getting this agreement between the unions.
And I congratulate the City for its involvement in that. Now, did your office have anything to do with that?
No, we did not. The Convention Center issues, we were not involved in. We deal with District Council 33 and District Council 47, the Fraternal Order of Police, and the International Association of Firefighters.
Well, I just think 1873 2/23/01 - FY '02 OPERATING BUDGET the City is lacking, then, if it doesn't have anybody covering this area, because then all kinds of problems develop, we get to a crisis, as you saw at the Convention Center, where our rate of renewals is probably lower than any other Convention Center in the country. You know, it's a very unhealthy, low rate of renewals because a problem was permitted to fester, and now we've got the job of hoping we've arrived at a solution and can win back the confidence of people who exhibit their wares at the Convention Center.
Yes. The Administration has been aggressive. They're trying to work out that problem. It's not just our office, but --
Is there an office of the Administration that has worked on that problem?
I'd like to they're "Mr. Outside" and we're "Mr. Inside." We work with the unions that are -- with the City employees, and they work with the unions who are not City employees.
Why can't we have one office that works, that does it all?
That's the way that it's been designed. I didn't design it. I just try to administer it.
I -- our -- our areas are the same types of issues, but we're dealing with completely different groups.
Yes. I mean, with different 1875 2/23/01 - FY '02 OPERATING BUDGET goals. I mean, we deal with different laws. They deal with the National Labor Relations Act; we deal with the Pennsylvania Labor Relations laws. It's similar, but we're not exactly the same.
But you get involved, don't you, with the labor boards?
The Pennsylvania Labor Board we get involved with, not the National Labor Relations Board.
But the other office handles the National Labor Relations Board?
If there is a role. The City employees are not involved in the National Labor Relations Board; it would be private-sector employees.
Well, I hope somebody from the Administration at the level that can make decisions is listening, because I think there's kind of anarchist form of dealing with labor problems, unless there are immediately the problems, you know, until a crisis develops. You 1876 2/23/01 - FY '02 OPERATING BUDGET know, unless they're the ones that we have with the four basic unions, but the City is involved in all kinds of other activities which deal with labor relations, and sometimes the line between State and the National Labor Relations Boards is dimmed. Sometimes there's concurrent jurisdiction. But we think something has to be done because what happened at the Convention Center -- just imagine if somebody advocated a policy that lost a single convention. We've had witnesses here that tell us that we missed a convention because we weren't big enough to handle it, and they presented it as a calamity. Yet the City kept very, very quiet about the loss of huge numbers of conventions that apparently were lost because there were certain labor matters that had not been resolved. So I think that the City has got to pay attention to this, or we're going to have some very, very severe problems in the future. Thank you, Madam President.
You're welcome. 1877 2/23/01 - FY '02 OPERATING BUDGET The Chair recognizes Councilwoman Brown.
Thank you very much, Madam President. Good afternoon.
I too am struggling along with my colleague Angel Ortiz to get a grasp of the organizational makeup of the office. And help me along. There's labor standards and then you have labor relations. You're the Office of Labor Relations.
And to whom does -- is a representative here from the Office of Labor Standards?
I believe they report to the 1878 2/23/01 - FY '02 OPERATING BUDGET Chief of Staff also.
I mean, I believe they report to the Managing Director, I'm not sure. They might report to the Managing Director.
You should know that a number of us share Councilman Cohen's concerns with regards to the employees here in City Hall who are not City employees but are subcontracted to a particular union.
And that's why all of this questioning. And we were indeed told by the Commissioner of Public Property that the entity to register this concern with was the Office of Labor Relations. And we're now hearing you say, Go to the Office of Labor Standards.
I will talk with the Labor Standards Office about it, and I will look into it and get back. I just -- this is the first I've heard about it at all. 1879 2/23/01 - FY '02 OPERATING BUDGET
Okay. And you will get back to us how? You will register what you find out through the Chair, please.
Okay, then. Thank you very much. Thank you, Madam President.
Thank you. Are there any further questions of these witnesses? (No further questions.)
The DA's Office is next. (Witnesses come forward.)
Good afternoon and thank you so much for your patience.
You're quite welcome. We brought you a little sustenance so we can sweeten up the afternoon and fill up a few tummies with goodies.
So if your chief of protocol could take those and spread those around, that would be very nice. (Sergeant-at-arms passes around tray of cookies from Ms. Abraham.)
Kindly identify yourself for the record and proceed with your testimony.
My name is Lynne, L-Y-N-N-E, Abraham, A-B-R-A-H-A-M. I am the District Attorney of Philadelphia, and I am pleased to be before the City Council. I have already submitted to all members of Council and to the Chair copies of our budget statement. Essentially, Madam President, we are here to do several things. Number one, to thank you and the City Council and the Mayor, John Street, for the help that you have given to us in the past year. As a result of those things that you agreed to do last year and even the year before, we have established a number of new programs: We have begun to deal with a very 1881 2/23/01 - FY '02 OPERATING BUDGET serious issue on an interesting new basis, a Repeat Offender Unit; We have a new Cyber Crime Unit; We've really revolutionized the Private Criminal Complaint Unit, which handles many, many thousands of private complaints every year; A new filing system; A new training facility; And with the productivity loan, we've done a tremendous amount of computerization of the office, something that we are very grateful for. In addition to that, we are here also to say that we are pleased that we in the District Attorney's Office and the Mayor are on the same page vis-a-vis our budget. And I'm not asking for anything more than the money recommended by the Budget Bureau and the Mayor. The two things that we are interested in today are $478,538 for the ability to deal with some of the issues that need to be addressed if we are to keep pace with salary structures elsewhere, and I believe that City Solicitor Trujillo mentioned that in passing. First, to start salaries of starting attorneys in our office to 1882 2/23/01 - FY '02 OPERATING BUDGET the same level approved this past August for young solicitors who are coming to the City Solicitor's Office; and, second, to increase for the first time in four years the money provided through us as a pass-through to victim witness organizations which work throughout the City of Philadelphia. These organizations are really tremendously helpful. These organizations -- and I have them listed in my outline by name. They are: The Action Alliance for Senior Citizens, Families of Murder Victims, Support Center for Child Advocacy, Women Against Abuse, Women Organized Against Rape, plus the Center City Crime Victim Services, East Division Victim Services, North Central Victim Services, Northeast Philadelphia Victim Services, Northwest Victim Services, Victim Witness Service of South Philadelphia, and the West-Southwest Victim Services. These victim advocates play a vital role in making sure that our victims and witnesses come to court. They visit crime victims in their home, they give them assistance at preliminary hearings, they come to the police districts, they 1883 2/23/01 - FY '02 OPERATING BUDGET accompany our victims and witnesses to court. And in addition to their many duties, the Pennsylvania government, which monitors and has oversight of these groups, is requiring more detail and more training and more service-related issues be addressed by these groups. And as a result, their administrative and training requirements are growing. And, therefore, we believe that they have funded -- have been funded at such a modest level, that this increase would be just very well received. So the Class 200 increase requested by us totals $171,755, which would mean about $14,313 per group. And that is an amount of money that's very, very well-invested for our victims and witnesses. We, as the -- as I indicated before, are seeking some differences in our pay scale. We want to increase our pay starting salary from around 37,200-and-something to $42,250. And in that way, we can attempt to make some small inroad in the tremendous disparity between private lawyers and private business and the City. And this would, by the way, not go into effect until 1884 2/23/01 - FY '02 OPERATING BUDGET November of 2001, to coincide with the new Bar results.
So that would be a total Class 100 increase of a very modest $306,783. And I'll be pleased to answer any questions that the committee has. ), our Deputy for Narcotics. And to my right Al Toczydlowski, who is our Director of Administration.
Thank you. Based on your testimony, can I believe that your concerns regarding parity and additional funding for the various groups that you mentioned have been addressed in the budget?
When you say "the various groups," do you mean the victim witness groups.
I'm talking about the Action Alliance and the victim witness groups.
They all have been included in the $171,000? 1885 2/23/01 - FY '02 OPERATING BUDGET
So that figure has been included in the budget, has it not?
Yes, that's been included in the 400-and-some thousand dollars that I had previously referred to. The 200 increase is 171,755 for those groups. And the issue of parity is in the budget. All of this is in the budget.
So you are very happy with your budget as you present it?
I'm a very happy little person. The Mayor and the Budget Bureau have addressed it.
That's wonderful. We don't see too many happy people these days. I'm glad you're here. The Chair recognizes Councilman Nutter.
What a place. Thank you, Madam Chair. Just first to the Chair, I appreciate you going through that 'cause I could not figure 1886 2/23/01 - FY '02 OPERATING BUDGET out from the testimony whether or not an increase was being requested, 'cause I heard the opening statement and I'd also read the testimony, so there seemed to be a request for an additional 478,538.
That's correct. However, it's -- it's actually a decrease because of the nonrecurring expenses, the 631,979, but all of the money that we're asking has already been agreed to and is in the Budget Bureau and in the Mayor's Budget.
It's already in there, yes. We're not asking for anything above --
You were just highlighting. You were just highlighting, you were just pointing out that there had be an increase from last year, and this is what it was it's for?
Well, I guess it depends on how you mean by "increase" or "decrease." We are -- there are some -- nonrecurring costs. It's an overall decrease of 2.2 percent from last 1887 2/23/01 - FY '02 OPERATING BUDGET year's General Fund Budget, but that's above the base budget that the Finance Department directed that we use, but the Mayor and the Budget Bureau have agreed to that.
Okay. First, let me say that given some discussions from years gone by, it is now apparent that the DA's Office is up to speed from a technology standpoint, and you also have color printers now?
I don't think we have one color printer -- we have one color printer. Everything's back and white.
Okay. No, it's a very nice -- on the testimony, a great emblem. We had discussions a couple years ago, and it sounded like you were, you know, still dealing with file 18 cards and paper and that kind of stuff.
Actually, that is true. And we are -- because we only received this marvelous productivity loan last year, we are gradually transitioning from file cards. But, for example, our Homicide Division still uses file 24 cards, but we're gradually putting them on a computer, so we're generally pleased with our 1888 2/23/01 - FY '02 OPERATING BUDGET progress.
Very good. And I'm doing my best never to have any contact with the Homicide Unit, so I wish them the best in their computerization. Let me ask you a couple of questions about some general activities going on in the community. One thing that's been in the news a fair amount -- it's not a new issue, but there's been heightened attention to it -- is the issue of predatory lending.
And one of the newspapers is on a pretty good tear about this one. It's a very serious issue. What part of the DA's Office deals with that kind of issue? Is that the Economics Unit or someone else?
And what's been going on in that area that -- I mean, there was no 23 mention in the testimony, I know you can't cover everything that happens in life.
In a really perfect, 100 1889 2/23/01 - FY '02 OPERATING BUDGET percent perfect world, there is much more that one can ask for, but we recognize that the City has financial constraints too. And because Council and the Mayor have been gracious to us in the past two years and have gotten us what we need to do to become modernized, we recognize that good policy and financial restraint is required. However, crime changes, and we recognize crime changes, and cyber crime is one of those things, and economic crimes change as well. In the past -- I'll give you some figures, which you might find interesting. There were, in the year 2000, 14,037 complaints received in the Economic Crimes; and in 1999, 1,091. With respect to predatory --
I'm sorry, 14,037 in 2000, 1,091 in 1999, in our Economic Crimes Unit. Now, many of them relate to but don't only always revolve around what now may be called "predatory lending," schemes committed by contractors an so forth. We've also seen, at least briefly last 1890 2/23/01 - FY '02 OPERATING BUDGET year and perhaps a little bit more this year, home frauds, use of computers or interlopers to steal houses that are vacant from people who are in nursing homes. It's house-stealing. It's been featured in the press as well. We are obviously very concerned about practices that revolve around what's now frequently called "predatory lending," the subprime lenders. And last week, I went to a meeting at Congreso de Latinos Unidos in East Philadelphia to talk about the aspects of predatory lending, and I met with several dozen citizens who had been complaining that they had been ripped off by these so-called subprime or predatory lenders.
Well, tell me a little bit about the 14,037 complaints in 2000, the 1,091 in '99. What's your assessment of the scope of this problem. Of that number of complaints, how many do you think were for predatory lending-type activities, and what was -- how many were prosecuted?
I don't have that figure, but I can certainly get it for you, but here is 1891 2/23/01 - FY '02 OPERATING BUDGET our major concern about predatory lending as it pertains to today's reality. As the current State of Pennsylvania law exists, most practices that are engaged in by what are now called so-called "predatory lenders" are under are, under our present statutory structure, lawful. They are sharp practices, to be sure, they are reprehensible, and they are disgraceful. But the State laws that we have do not address themselves sufficiently, I believe, to the issues of the subprime lender. What we do in our office, when we find matters that are covered by State criminal statutes, theft statutes and the like, we prosecute, and have prosecuted, and have a number of cases open where we are investigating. We are also cooperating with the Community Legal Services, which is reviewing all of the complaints that are funneled through their office to see which complaints are civil in nature, which might be classified as "class action lawsuits," which might be classified as "criminal conduct." Because the theft statutes and the other statutes require us to prove -- have a 1892 2/23/01 - FY '02 OPERATING BUDGET greater burden of proof, and it's very, very difficult. And every day, we get more and more letters from various agencies, Councilpeople, legislators, and the like to investigate new aspects of alleged predatory lending.
Do you have any information regarding the results of what happened to the 1,091 complaints in '99 or the 1,437 in 2000? Have those complaints been followed up on, have there been prosecutions?
They are all followed up on. Not all of them involve predatory lending. There may be various schemes and frauds involving real estate or other financial dealings with mostly elderly, infirm, or indigent people of Philadelphia who complain that they have been ripped off by home remodeling, refinancing, and other people, among a variety of other issues.
I think there are about seven lawyers in the unit, seven lawyers. Mr. Deutchman (ph.), behind me, the 1893 2/23/01 - FY '02 OPERATING BUDGET gentleman in the dark beard and the shaved head, is the Chief of the Unit.
We've been searching throughout the government for a man with dark hair and glasses for the past few weeks. (Laughter.)
He can, Councilman, if you would care to, discuss all of the aspects of the legal issues. There were bills in Harrisburg changing the statutory scheme for predatory lenders, but it died in committee, without ever having -- or died, without ever having been passed. So that never worked.
That was actually one of my questions 'cause I know that from time to time, you're fairly active on the legislative front.
We were and are. We testify. 1894 2/23/01 - FY '02 OPERATING BUDGET
We testified in favor of that legislation. Mr. Deutchman testified as my representative because I was unavailable, but he testified for our office that we were in favor of the changes, but whoever was successful in derailing that legislation did so; and, therefore, we left with the two statutes that we have: theft by deception, which is 3922, and theft by failure to make require disposition of funds received, which is 3927.
Okay. My last question in this area, and I think I'm getting ready to get the hook, is from a law enforcement standpoint and as the District Attorney, have you given any thought to either notwithstanding or given what -- notwithstanding the statutes that are in place, and if there are changes that need to be made but not have been made, you know, life kind of goes on. Have you given thought to what we can do, what we should do, what kind of message needs to be sent out from a law enforcement standpoint 1895 2/23/01 - FY '02 OPERATING BUDGET in the DA's Office in terms of dealing with this particular problem, the types of people who are being targeted for this kind of activity? What's the message that should be going out?
Well, I think there are a couple of things that we can think of, and we really should as a city and as a government think of this together, not just from the District Attorney's point of view, but as a city. The people who are targeted by these predatory lenders -- I'll call them that for want of a better term. These are the people who are bombarded by, let's say, radio commercials. One of the issues at the meeting was how many commercials that are on popular radio programs that talk about home improvement loans. There are millions of eyeballs looking at television, talking to these wonderful smiling faces who are going to rid your house of debt, you're going to cash in on the equity in your home and you're going to consolidate all of your loans and you're going to get those new kitchen cabinets. So actually, this is a much broader, much more pernicious issue than just the District 1896 2/23/01 - FY '02 OPERATING BUDGET Attorney taking the stand. We do attempt also, in our own right, to educate as many people as we can. You know, I speak hundreds of times a year to seniors and other people who are the likely targets of these practices and advise them about what to look out for, what to do, and what not to do. The biggest problem that we face as a law enforcement agency is proving that the lender had criminal intent at the time of transaction occurred. And that sometimes is extraordinarily difficult, but we are successful in some of those instances, and we are working to alleviate all of those issues.
Well, if you could -- and I'm sure that a number of Councilmembers would be interested. If you could forward anything to the Chair that even in a small way would lay out, I think, some kind of game plan or strategy or your thoughts and ideas about what the City can and should do given the constraints of either the State or federal law in this particular area. It is something I think that's crying 1897 2/23/01 - FY '02 OPERATING BUDGET out for some level of attention, and to the extent that any of us have our various hands tied, I think if people understood that if you engage in this practice, we will find out about you and we plan to do something about it, we might actually save a few people from going through some of this horrible situation. So if you could do that, I would appreciate it.
I already have a memo in draft, and I will give you a game plan and strategy. The biggest problem is going to be educating the public that if it sounds too good, it obviously is, and the problems about signing your name on a piece of paper, which is then sold to somebody else, and before you know it, you're out of your home.
Right, okay. Madam Chair, I have other questions but --
Thank you. The Chair recognizes Councilman Cohen.
Thank you, Madam 1898 2/23/01 - FY '02 OPERATING BUDGET President. I'm not clear like Councilman Nutter apparently wasn't. I just want to be made clear. As a result of what exists in the budget proposal for the District Attorney's Office, does it mean you will be able to raise the level of salary for the new attorneys? Do you have that funding provided for in the budget, which has already been approved by the Mayor?
So that you are confident that beginning in the fall, whatever date you refer to, it will be possible for you to begin.
We're not asking for anything more than the Mayor and the Budget Bureau have already agreed to.
Well, that is sweet news, Madam President. So there is no additional requests you're making of City Council? 1899 2/23/01 - FY '02 OPERATING BUDGET
Councilman, as I mentioned to Councilman Nutter, in a perfect world, I could ask for lots of things that I would really want to have in our office. You know, I've talked about witness protection. We have a truancy program in two clusters; we'd like to have them in all of clusters. There's a wealth of things that one could ask for. But once we have been treated well by Council and our mayor and we understand that we're not the only agency, that there needs to be financial constraints, we are satisfied that the Mayor has taken the major issues that we want to address this time, our victim witness program, which is essential to getting victims and witnesses to come to court and feel satisfied that the system is working for them, and the small increase for us for our starting salaries, we will be satisfied this year with that figure. In a perfect world, I could probably give you multiples of millions of things I'd like to have, but I'm not going to do it.
Well, the reason for our questioning is all morning long, we have had 1900 2/23/01 - FY '02 OPERATING BUDGET hearings involving different agencies, and I think in just about every case, the request was for money in addition to that approved by the Mayor. So we wanted to make sure we were actually hearing correctly. (Laughter.)
Well, Councilman, as you know, I have been here many times in this body and almost always ask for money more than was approved in the Mayor's budget, but I'm doing something novel this year and last year.
Well, we're very pleased -- one less problem for us to deal with.
Thank you. The Chair recognizes Councilman Goode. 1901 2/23/01 - FY '02 OPERATING BUDGET
Thank you, Madam President. I have a quick question regarding predatory lending. I think your opinion on it is probably very key since so many people have made this a game of cops and robbers. I was interested -- I was not sure whether or not you were actually making a distinction between predatory lending and subprime lending; predatory lending being a practice that should be illegal, and subprime lending actually being a market, which is -- it's nothing we can do about it. The market exists because of the lack of access to capital.
Sure, obviously. It just so happens that some are also in some of the others, that it's some of one or some of the others. Obviously, there is a need for subprime lending. Not all subprime lenders are predators, as that word has come to be known. We are concerned that when the predatory lender gets into a situation, we want to be able to address it. We are constrained, however, by the current state of the criminal law of 1902 2/23/01 - FY '02 OPERATING BUDGET Pennsylvania. And that's where our problem primarily resides.
I'm more concerned with, as I said, this whole game of cops and robbers that people are playing in not making a distinction between subprime lending and predatory lending. What is your view in terms of what you need in terms of being able to prosecute people, and what the laws should be, and what should be illegal practices regarding subprime lending?
If you wouldn't object, Councilman Goode, I'll have Mr. Deutchman come up, and he can give you sort of the bird's-eye overview of what he sees day in and day out in our Economic Crimes Unit, and he can address the minutia of it.
I'm not interested in any more predatory lending stories. I'm asking, what should be the law in terms of what should be legal in terms of subprime lending, and what should be illegal in terms of subprime lending?
I'm still going to ask him to come up because I think he's better able to 1903 2/23/01 - FY '02 OPERATING BUDGET answer that even than I am.
Good afternoon. My name is Leonard Deutchman, and I am the Chief of the Economic and Cyber Crime Unit of the District Attorney's Office. I'd like to thank you for having me here. Let me begin by clarifying that we tend not to see -- when we get cases that are -- that have been referred to as "predatory lending cases," they come in by way OF home improvement fraud. I can't think of a case that we have seen that has not been linked with home improvement fraud. No one has complained to us that they simply have gotten stuck in a loan that they didn't understand the terms or where they were told one thing about a loan and it turned out to be another thing, but that there was otherwise no 21 other problem. The predatory lending practices tend to be integrally woven with home improvement people who come in and simply don't provide the services. They typically sell a product or a 1904 2/23/01 - FY '02 OPERATING BUDGET package to somebody who has other debt problems, and they say, We can make them all go away, your credit card problems will go away, and other payments go away, water bill payments. And also, we can give you the brand-new kitchen you've always wanted. And then they get the check. Very often, the broker is the same person as the contractor. As the broker gets the check, cuts a check to himself. And on Monday morning, when the people are supposed to show up, nobody shows up. And then we get the call.