Emanuel Freeman: The Man Who Duped City Hall

Freeman, a.k.a. The Buddha, was supposedly rebuilding Germantown. And even though project after project failed, political heavyweights—from Ed Rendell to Bob Brady to Michael Nutter—kept giving him our money. Lots and lots of our money.

As of late 2005, the situation was grim. Settlement was piling debt on top of debt, mortgaging one property to pay off the debt on another. It had current assets of $3.3 million and current liabilities of $6.8 million. Yet Freeman apparently had no plans to scale back: In an unintentionally chilling letter to the city, he listed $155 million worth of future projects in his development pipeline, including a nursing home and a hospital. Eventually, the monster would consume Germantown. What Philadelphia desperately needed was a whistleblower. An accountant with a conscience. And Ray Devlin is as surprised as anyone that it turned out to be he.

IT WAS DEVLIN, a former officer at a Freeman-run company, who told me this:

“Emanuel Freeman is the Robert Mugabe of Germantown.”

Devlin is a finance guy. He understands how to structure tax deals, how to marry public money with private development. He worked for years at PIDC, the city’s nonprofit economic development company, then went to the Philadelphia Housing Authority. Taking a job at GGHDC seemed like a natural next step. He didn’t live in Germantown, and as far as he knew from the outside, GGHDC was “the premier development agency in the city.”

Freeman hired Devlin in January 2006 to get GGHDC’s books in order so it could produce the audits the city required. Two weeks into Devlin’s first month on the job, his paycheck bounced. Freeman’s people apologized, blamed a bank error. “I thought, no big deal,” Devlin says. “I’ve been through worse.” In his 20s, serving a stint in the Peace Corps, Devlin lived for two years as the only American man in a remote village in what’s now called Congo.

But then Devlin discovered something. He looked at the accounting ledgers, which were in disarray; he looked at the deeds, the agreements of sale, the mortgage pro formas. “I did not have the courage to look at the records that were being kept in the abandoned muffler store,” he says. And he discovered something profound: Both GGHDC and Settlement were “essentially bankrupt.” Freeman couldn’t afford to take care of his properties, or pay his employees’ health insurance (although he kept his own family’s health insurance current), or make his mortgage payments. For the first time, the disconnect between Settlement’s income and its deficits made sense. The reason the company was broke was that one part of it was always raiding another part.

“We were just blown away by how little understanding they had of life in the financial world,” says one person familiar with Settlement’s records who corroborated Devlin’s story. “If I worked at Settlement and I wanted to steal a million dollars, it would have been very easy.” In 2003, an auditor found that two large federal grants — one for $530,000, another for $770,000 — weren’t recorded properly in the ledgers. Work proceeded slowly, because auditors were always having to re-create records that had been destroyed in what Settlement explained were freak accidents: fires, computer crashes. Said the person familiar with Settlement’s records, “They just seemed to have an inordinate talent — I’m choosing my words exceedingly carefully — to lose important documents that would either exonerate or prove malfeasance.”

So where had all the money gone?

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  • Alexander

    This article was superbly written, informative and revealing in the simple fact that Philly remains a very corrupt and close-knit city. And we thought that we had progressed from here!

    • Shirley Harrison

      It’s unfortunate, that the old regime will remain in power, hidden by a maze of corruption. and maleficent cronies. Emanuel took advantage of the trust, friendship, and respect, a neighborhood had for the Freeman family. He was raised by gospel singers and Pastors. In the same neighborhood he raped and pillaged.

  • Maxine

    I absolutely cannot believe the audacity of the public officials in this city. Here it is the City owes small business owners Hundreds of Thousands of Dollars for legitimate work that was done, and t

  • Stephanie

    I knew Emanuel “way back when” when community voter registration and self-determination were waves of the times. Having spent much of my adult life away from Philly, I didn’t know Emanuel had morphed from respected 1970s activist to greedy profiteer. I am so disappointed.

  • Lauren

    I read with great disgust the article “Emanuel Freeman: The Man Who Duped City Hall” earlier this week in Philadelphia Magazine. I’m infuriated at the waste, mismanagement, seeming corruption, and overall disregard for the residents—by not only Freeman, but also by the Northwest’s elected leaders – who are supposed to have their constituents’ best interest at heart.
    Freeman received $100 million over the last 20 years via grants, tax breaks and low-interest loans and what do we have to show for it? A walk through Germantown is appalling: downtrodden buildings, trash on the streets, failing businesses, underperforming schools, crime, empty lots. Is THIS what $100 million buys?
    Where would our community be today if that money was put to proper use? We could have better schools; thriving businesses; help for mothers and children; community organizations that actually HELP the community. In short, Germantown could be—and should be– a shining example for other neighborhoods in the city. What a wasted opportunity—especially for our youth.
    While Councilwoman Donna Reid Miller seems to have gotten the majority of the scrutiny, I demand to know where our other Northwest elected officials stand on this. My State Representative, John Myers, should be as infuriated as I…

  • Lauren

    yet so far we’ve not heard a single word from Myers on Freeman, Miller or their financial rape of Germantown. In fact, Jason Fagone’s article indicates that Myers is in bed with Miller, Freeman and others who’ve literally robbed the community. He writes, that Myers was part of “Settlement’s freshman class” and “had graduated to positions of real power in the city, thanks in part to Freeman’s connections.”
    And what’s more, despite everything, Freeman still believes he has a pipeline and working relationship with our elected officials. He wants Miller’s assistance to “embark on a significant venture” located behind the failing school he wasted taxpayer money on. What’s wrong with this picture and where does it end?
    It’s time that we demand better. Better for our children, better for working parents struggling to get by, better for our local businesses, better for our community as a whole. It’s time we demand more from our leaders. I am a professional working woman, a mother, a wife, a taxpaying resident and I now accept the challenge of being a community activist. I urge others to stand with me in a fight to demand that the funds invested in our district are put to…

  • Lauren

    good use and to begin to reinvest in Northwest Philadelphia — this time for real.

    Lauren Anderson Youngblood
    Community Activist
    Lauren.Anderson.Youngblood@gmail.com

  • Steve

    The LAST thing we need is another Youngblood in office. She is just as corrupt as the others in this article, and sold her district away just to stay in office! Sorry, we will fight tooth and nail to make sure that NO Youngblood ever makes in in office again!

  • Pat

    If this article is of interest to you and you oppose the pillaging that has taken place in this great Philadelphia neighborhood, please check out a new Face Book page called Battle for Germantown and become a friend.

  • Enough’s Enough

    I observed Freeman and Settlement in action while working on site but for another employer. A dazed and confused finance wing, late paychecks, the hopeless charter school, and both Mr. and Mrs. Freeman’s aloof manner and fancy cars- all as bad as the article describes. I hope Freeman’s ride is over and other leaders can step up in Germantown.

  • Rozalind

    You won’t hear from John Myers because he was a part of it as well. He sits on the Board of Germantown Settlement and his wife was on their payroll for quite some time. So you should be appalled with him as well. Every last one of them needs to payback all the money they stole from the city and state. LISC had better take a look at their executive director as well, he’s the former COO of Germantown Settlement.