John Grady Profile: The Dealer

PIDC president John Grady at the Navy Yard, whose revival he's helped mastermind. Photograph by Colin Lenton

PIDC president John Grady at the Navy Yard, whose revival he’s helped mastermind. Photograph by Colin Lenton

John Grady is trying to show me the waterfront. The Schuylkill is close, just a few hundred meters away, but there’s no street grid here on the river’s wild western shore, no bike trails, no sidewalks — nothing at all, really.

This is just about a mile southwest of the Penn and CHOP mega-medical complex, but those towers seem a world away. In this forgotten fragment of the city, up-jumped weeds form a forest canopy in long-abandoned lots. Roads end abruptly, melting into the overgrowth. Ivy has reached the top floor of the old city incinerator, climbing through the broken windows.

Grady — 47 years old, white, with the look and bearing of a stereotypical mid-career executive — seems just a bit out of place here. We pass discarded mattresses, a 1960s-era refrigerator, a pink toilet and a dead cat. Grady turns his silver Buick LaCrosse down a cobblestone road — it’s 49th Street — that’s usually closed to through traffic by a locked cyclone fence. Today, though, the gate is open, so Grady punches the gas, bumping the Buick across a CSX rail line and past the first two people we’ve seen in blocks — a couple of rail workers. One of them flips us off. Grady seems not to notice.

He’s too busy imagining an altogether different future for this squalid patch of overlooked urbanity. Grady looks and sees Philadelphia’s next “innovation district,” with some two to three million square feet of new offices and laboratories, a gleaming riverfront road, and recreational trails that would make this bastard stretch of the Schuylkill every bit the equal of the jogger-choked path to the north.

It all sounds fantastical, given the present-day landscape. But Grady is the president of the Philadelphia Industrial Development Corporation, a little-known but extraordinarily powerful joint venture between business and City Hall.

More than half a billion dollars in public and private grants and financing — for everything from small-business equipment loans to city and state subsidies for Comcast’s new skyscraper — is budgeted to pass through PIDC this year. And the organization has been at the center of most every mega project of the past 50 years: the Navy Yard, the Pennsylvania Convention Center, the Center City hotel boom and much more.

So when Grady dreams, it makes sense to listen. He notes that we’re just five minutes from the heart of University City by car, or by trolley. He tells me about the voracious expansion needs of nearby Penn, CHOP and Drexel, institutions that think about development in chunks of 10 and 20 years.

Grady has been selling cities for a long time. These days, there are more buyers out there. “When I graduated college in the late ’80s, the popular thing was to move to the suburbs. You went as far out as you needed to buy a house, and you put a fence around your house and you drove to work every day,” says Grady, who, as it happens, did none of those things. (He lives in East Falls.) “That paradigm has shifted dramatically for people, and relatively quickly.”

In another city — one with a more robust business culture, with bolder builders, with more capital and fewer built-in obstacles to development — it might be a maverick developer or some far-sighted technology company looking to reclaim the riverside wilds. But this is Philadelphia, where it took 83 years for someone to find the stones to erect a building taller than City Hall. As much as any organization, it’s been PIDC and its roster of powerful leaders, past and present, that has filled this visionary vacuum.

Grady has served as PIDC’s president for just three years. But he has already emerged as one of the city’s leading problem-solvers. I think of him as the unflappable traffic cop in the hectic three-way intersection of government, business and the nonprofit sector.

And in this town, for better or worse, that’s where a lot of the action is.

BY FEBRUARY 1994, there was little hope left for the Navy Yard, which had been building ships and employing vast numbers of Philadelphians for more than a century. The politicians were dragging the imminent closure out as long as they could, and another 19 months would pass before the base was formally shuttered and, ultimately, 7,000 civilians would lose their well-paying jobs.

In preparation, leading regional economists, architects and urban planners met at the University of Pennsylvania to ponder what else might be done with the 1,425-acre site. Some suggested it would serve best as a prison. Others proposed turning it into marshland. The most likely scenario, many of the academics agreed, was that the yard would simply rot, lying fallow until some distant future when a market might exist for so much riverfront land.

John Grady had a different view. He was no Pollyanna, having grown up in Olney and worked in Camden prior to joining PIDC. But Grady, like most economic-development professionals, is allergic to the notion that cities must surrender to adverse market forces, particularly when the stakes are as high as they were for the Navy Yard.

The son of two educators, Grady became fixated on the central necessity of jobs while taking an undergraduate seminar at La Salle University. The course — taught by John Raines, the celebrated Temple professor who early this year revealed himself as one of the eight anti-war activists who burgled an FBI office in Media in 1971 — focused on the ethical value of work. “It showed what it means to people, to communities,” Grady says now. “It was about how work sustains us on many different levels.”

Straight out of school, Grady took a position with Camden’s waterfront economic development agency before moving over to PIDC in 1998. Ever since, Grady has been the point man on the massive conversion of the Navy Yard, which really should be considered one of the most successful urban reclamation projects in recent U.S. history. When the Navy (mostly) moved out, it fell to PIDC to coordinate the integration of the yard into the city. There was no zoning, no street grid, no sanitary connection to the city’s sewer supply, no post-office addresses.

Now the Navy Yard has all that, plus office and manufacturing facilities for 143 companies employing more than 11,000 workers. It’s home to behemoths like Urban Outfitters and the U.S. headquarters of GlaxoSmithKline. It’s become a favored destination for fast-expanding homegrown businesses like motorcycle-gear retailers, which in the past could well have ended up out on Route 202, or in some other suburban destination.

Critics of the Navy Yard generally charge that it cannibalizes Center City, stealing away tenants that otherwise would be renting office space in skyscrapers. But Grady has little patience for this complaint, and he makes a good case. Consider Urban Outfitters. Floors in an anonymous office tower would have been all wrong for such a company. Richard Hayne wanted a campus environment, with distinct buildings for the company’s different brands and the ability to expand over time. Similarly, Glaxo wanted a radically new kind of office, one with as few walls as possible and more worker mobility — a poor match for the stock in Center City.

As remarkable as the Navy Yard’s reinvention already is, it’s nowhere near complete. On a summer afternoon, with airplanes roaring overhead and the sun reflecting off the immensely wide stretch of the Delaware River that frames the Navy Yard, Grady showed me a bit of what’s yet to come.

There’s the seven-acre park under construction in the yard’s office district, designed by the same landscape architecture firm that designed New York’s High Line park. There’s the Penn State engineering campus, also under construction, and two vast loft-style warehouse buildings on Kitty Hawk Avenue that could become the Navy Yard’s first residential developments. “Ultimately, what we’re doing is we’re building out a whole new neighborhood,” says Grady.

Projects as enormous as the Navy Yard, projects that require massive new infrastructure investment and comprehensive planning, are, I would argue, well served by an organization like PIDC.

Founded in 1958, during the first term of reform mayor Richardson Dilworth, PIDC was created to try and staunch the city’s bleeding of industrial jobs, and to serve as something of a hedge against the government-driven urban renewal policies that held sway in Philadelphia and many other big cities in the post-World War II-era.

From the start, business was the ever so slightly more senior partner at PIDC, with one more representative than City Hall on the organization’s board of directors. But PIDC power struggles between the Chamber of Commerce and City Hall are exceedingly rare, and as a practical matter, a lot of the organization’s clout has rested with its succession of long-serving presidents (including Grady) and with Walt D’Alessio, who has acted as PIDC’s chairman since 1982.

At its best, PIDC combines government’s focus on the public good with private-sector flexibility and competence at executing complex tasks. With a staff of 62 and an annual operating budget of about $10 million (virtually none of which is taxpayer money), PIDC has resources that dwarf those of the city’s Commerce Department. Grady’s salary, for instance, is $230,000 a year, more than Mayor Nutter earns. Grady also has a free hand to run the organization as he likes, unbound by civil service rules or union contractual restrictions.

Ostensibly, City Hall sets policy and PIDC executes. The reality is that the two entities “operate as a seamless organization,” says deputy mayor and Commerce director Alan Greenberger. “They’re not shy about making recommendations about policy, and we’re not shy to weigh in on transactions.”

Bill Hankowsky, one of Grady’s predecessors at PIDC and now the president and CEO of Liberty Property Trust, likened his old job to “translating to government how business works, and translating for business how government works.”

That training worked out well for Hankowsky, obviously, and for D’Alessio, the former senior managing director of NorthMarq Capital. Indeed, PIDC alumni are all over any roster of Philadelphia power players, past and present. There’s Joseph M. Egan, the onetime Republican mayoral candidate, who preceded Hankowsky as PIDC president in the late 1980s; John Gattuso, a onetime PIDC staffer who’s now a big wheel at Liberty Property Trust; Charles Pizzi, former PIDC board member and Tasty Baking CEO; and so on.

Grady chalks this up to PIDC’s appeal to those “who want to roll up their sleeves and make a positive contribution,” and tells me the organization “attracts a lot of people early in their careers who have an interest in development, in building businesses.”

That’s self-evidently true. It’s also mildly disturbing that in Philadelphia, mastering the intersection of business and government is seen as such a building block to success. The men — and they are almost all men — who rise to the top of the economic and power heap in Philadelphia typically aren’t audacious entrepreneurs or market-creating pioneers. They are, more commonly, those who have learned how best to work with City Hall.

PHILADELPHIA IS HARDLY alone in its reliance on an entity like PIDC. Economic development organizations and programs abound across the country. Some are public, some are private, some are a mix of the two, but at their core, these programs and agencies all exist to create or save jobs and revitalize communities. And who can argue with that?

I’ll try.

At their worst and most venal, economic development organizations are little more than filling stations for politically connected developers and businesses, offering grants, tax breaks, dubious real-estate deals and low-interest loans for City Hall’s favorite sons. Some have become the playthings of powerful political figures: Think of Vince Fumo and Citizen’s Alliance for Better Neighborhoods, or Jerry Mondesire’s Next Generation CDC.

A more common failing is the well-intended organization or government economic development program that ends up squandering public money, or signing away tax revenue, or building boondoggles. Consider all the minor-league baseball stadiums built with public funds, the niche museums that nobody visits, the massive tax breaks offered to companies simply to move their operations across a county line. (Just this summer, Camden and New Jersey traded away $82 million in tax credits to snag the sad little plum of a new Philadelphia 76ers practice facility.)

The rationale for these sorts of giveaways is pretty simple: Without them, the jobs would go elsewhere. For low-income cities like Camden and Philadelphia, the need for jobs has been so acute, for so long, that the impulse to give away the store when wooing companies can be overwhelming.

But it’s an urge that Philadelphia, at least, should start to fight. The notion that we can’t compete with other cities or the suburbs just doesn’t hold up as well as it used to, given the spike in educated millennials living in the city, and that our population is growing again after decades of decline.

“This is internalized oppression. It’s like you’ve been told for so many years that you’re worthless that you begin to believe it about yourself,” says Greg LeRoy, executive director of Good Jobs First, a progressive Washington, D.C.-based nonprofit. “A lot of public officials in cities like Philly have internalized these beliefs, and that sets them up to be weak negotiators.”

PIDC has certainly had its own moments of weakness. It had a small financing role in the “Disney hole” at 8th and Market, and so far, with bookings dramatically off projections, the $786 million Convention Center expansion is looking more like an expensive folly than a boon to the city’s hospitality business. Then there are PIDC-assisted projects that could be reasonably argued either way: the subsidies for the stadium complex, incentives for Center City hotel construction, a low-interest loan to an on-the-ropes Tasty Baking.

When I put this critique of economic development to Rob Wonderling, president of the Chamber of Commerce and PIDC vice chairman, I can almost hear him shrugging over the phone. “What aspect of the free market is not subsidized?” he replies. “We’ve had incentives for a long time. They might have different names or flavors now, but we’ve always had them, whether you call it urban renewal or a tax incentive.”

GRADY, THANKFULLY, IS much more stingy. “If we worked our way out of existence, that’d be great,” he tells me at the Navy Yard. That’s highly unlikely to happen, of course, but it’s the right attitude.

And Grady seems to think we’re at a moment — with cities resurgent — where Philadelphia actually could become a place that needs PIDC just a little less. “Can we use this momentum to solve other problems?” he asks. “Can we use it to reenergize neighborhoods? Can we use it to put school systems on a different trajectory? Can we use it to continue to reinforce quality of life and the centrality of Philadelphia for this region?”

It’s good Grady thinks along those lines. Because while PIDC’s lasting prominence does Grady and his staff credit, it’s also an indictment of Philadelphia’s economic vitality and dynamism. The downside of relying so long and so extensively on an organization like PIDC is that it perpetuates the dependency of city businesses on City Hall. That’s a formula for a weak-kneed business culture, and it’s hard to see how that kind of dynamic creates more jobs than would a more independent, less risk-averse business class.

Grady, though, is a pragmatist. “I think it’d be great if we had a completely functioning market in Philadelphia,” he says. “In the meantime, we have to roll up our sleeves and intervene.”

Originally published as “The Dealer” in the September 2014 issue of Philadelphia magazine.

Michael Nutter’s Incorruptible Administration

Illustration by Michele Melcher

Illustration by Michele Melcher

This is the Golden Age of ethics for the City of Philadelphia.

But I’ll grant that it might not seem that way.

Philadelphia’s Traffic Court devolved into such a stronghold of petty corruption that it was given a mercy killing last year by the state. It’s also true that four lawmakers representing Philadelphia in Harrisburg were caught on tape taking envelopes stuffed with cash from a lowlife lobbyist-turned-informant. And yes, there was that business with State Senator LeAnna Washington a few months back, and before that, charges against State Rep J.P. Miranda for allegedly creating a taxpayer-funded no-show job to funnel money to his sister.

The FBI raided the Philadelphia Sheriff’s Office last year. The feds are also poking around the Fattah organization, with a particular interest in Chaka Fattah Jr., the son of the Congressman.

But all of that is outside the orbit of City Hall. Neither Mayor Nutter nor City Council controls the behavior of state representatives or members of Congress, nor do they have meaningful say over the courts or sheriff’s office. Within City Hall, government is working more ethically and with far more transparency than it has in a long, long time.

It’s been nearly nine years since a City Council member was indicted, and the chamber is haltingly making more of its business open to the public. There hasn’t been so much as a whiff of public corruption to taint either Mayor Nutter or his inner circle. There is anecdotal evidence that a more ethical mind-set is taking root in the city’s rank-and-file workforce. Whistleblowers are tipping off city investigators at a prodigious pace, and behavior that was once nearly the department-wide norm — inspectors accepting tips or free lunch, for instance — has been drastically reduced.

The city’s campaign finance and ethics laws have grown far more robust than the state’s, and the city’s ethics enforcement agencies have more teeth and gumption than their Commonwealth counterparts. Whatever his other flaws, Michael Nutter’s leadership on ethics has been exemplary, and his success in cleaning up City Hall will arguably rank as his greatest accomplishment.

But will any of it last?

Outside the confines of City Hall — past Nutter’s reach — Philadelphia’s political culture appears just as corrupt as it’s ever been, if the recent flurry of investigations and charges is any indication. Next year’s mayoral field so far is a collection of political lifers with no particular interest in or special commitment to honest and open government (with the possible exception of City Controller Alan Butkovitz). And Philadelphia voters seem not to care about public corruption nearly as much as they did in the last mayoral election, when the indictment of State Senator Vince Fumo was still fresh in the public mind, as was the federal probe of Mayor Street’s confidants.

More pernicious is the idea, popular in some business and political circles, that Nutter’s shortcomings as mayor — his failures with Council, his struggles with city unions — owe in part to his distaste for cutting deals and his reluctance to grease the wheels of government and politics, lest doing so besmirch his sterling ethical reputation.

Put it all together, and one wonders how much longer the Golden Age will carry on.

“The most likely thing,” says Zack Stalberg, outgoing president and CEO of the Committee of Seventy, “is it all goes to hell very quickly.”

You don’t have to look very far to see what City Hall could become.

IN EARLY OCTOBER 2012, chief of staff Sean McCray confronted his boss, State Senator LeAnna Washington. He later told state investigators that he was concerned about Washington’s use of taxpayer resources — office equipment and staff time — to organize her annual birthday party, which doubled as a political fund-raiser. It was the same sort of abuse of power, on a smaller scale, that did in former House Speakers John Perzel and Bill DeWeese (among many others) in Pennsylvania’s Bonusgate investigations.

But if McCray had absorbed the lessons of that scandal, Washington apparently did not.

“I am the f___ing senator, I do what the f___ I want, how I want, and ain’t nobody going to change me,” Washington said, according to McCray’s testimony in the state Attorney General’s grand jury report.

Within that outburst are all the basic building blocks of public corruption. Observe the self-aggrandizement (“I am the f___ing senator”), the profound entitlement (“I do what the f___ I want”), and the naked contempt at the suggestion that one conform with campaign laws and ethical guidelines (“ain’t nobody going to change me”).

The grand jury report was damning enough, and Washington’s city-suburb-straddling district competitive enough, that the “fucking senator” will be out of a job at the end of the year, having lost her primary election in May.

Washington’s guilt or innocence is an open question. But what is clear, and has been for decades, is that Philadelphia’s political culture is full to bursting with small, venal characters — most of whom you’ve never heard of — who imagine that they are somehow owed money, respect and even a little power in compensation for their long years of service at Democratic Party chicken dinners.

The Philadelphia Democratic City Committee is a clanky, stripped-down shell of the machine it was in decades past. But most of the candidates for public office in the city, high and low, still enter politics through the party systems. And in those systems, political support is still routinely bought and sold, and considerations like policy views and credentials distantly trail factional considerations, party loyalty and bald transactional politics.

And so some city pols, schooled in ward politics, too often conclude that there is nothing particularly wrong with taking a check from a donor and acting on his behalf, or accepting a handsome gift or wad of cash from a lobbyist and listening closely to her recommendations. It’s just politics, see?

But the party’s influence doesn’t explain everything, and really, it isn’t necessary to understand the existential source of corruption in the city. It’s good enough to know and accept that corrupt impulses are probably a permanent part of Philadelphia’s political culture. “There’s no way to legislate morality. We’re never going to completely get rid of the stuffed envelope,” says Michael A. Schwartz, the former head of the U.S. Attorney’s public corruption unit and now a partner at Pepper Hamilton.

And that’s fine. The great, encouraging lesson of the past six years is that with vigilance, an ethically minded administration can keep a reasonably tight lid on corruption.

But that’s not the lesson a lot of prominent Philadelphians have taken from the Nutter administration. I spoke with numerous leaders in labor and business, with politicians and developers, and found many who think that Nutter’s emphasis on ethics has worked to make him a less effective mayor, and to gum up the works of city government.

None advocate corruption, of course, not knowingly. But they do talk about Nutter’s rigidity. And they speak fondly of Mayor Rendell’s flexibility, his fast-tracking of favored projects, his ability to get what he wanted from City Council. You hear this a lot: “At least with Rendell or Street you could make a phone call and get something done.” Nutter, they say, is too enamored of process, too ethically high-and-mighty to roll around in the muck with Council, too mindful of his image to do business with other players who favor a more transactional approach to politics.

This is a dangerous and damaging line of thinking, a classic case of false correlation. Running an ethical government doesn’t preclude adept politics. But there’s no getting around the fact that too many influential Philadelphians have conflated this administration’s emphasis on ethics with Nutter’s inability to enact much of his agenda. “I hear this argument a good deal, and I think it’s wrong, but I see how people make the connection,” says Stalberg. “In a bizarre way, the administration is giving honest government a bad name.”

Early impressions are lasting ones, and the early days of the Nutter administration were a trial, for a lot of different reasons. For instance, Nutter upended the development process — one of the most corruption-prone points in city government — shortly after taking office, and it was a long time before the new system was churning at a reasonable pace. The economic calamity of 2008 and 2009 didn’t help, further cementing the impression for a lot of elites that Nutter’s government just didn’t work.

That was true enough in the first years of the administration. But what about now? It’s better. Not perfect, but better. “It’s not like we’re pondering the creation of the universe. We’re not slowing anything down,” Nutter says when asked if it’s possible that his emphasis on ethics has made it more difficult to get business done. “We’ve got tons of cranes in the sky. Stuff is happening. The government is not in the way, or slow.”

Actually, government is still pretty slow, but Nutter has the right of this. Indeed, some of the difficult reforms that choked government most in the Nutter years — planning and zoning, a decades-overdue property tax overhaul, the creation of a land bank — have the potential to make City Hall work both more quickly and more ethically in the years to come. So does Philly311, the call-center service that, as Nutter puts it, “means that everyone has access to city services, not just people who happen to know people.”

The problem is that much of the Nutter administration’s other work to create a more honest city government can be undone all too easily by whoever comes next.

BACK IN 2007, a few weeks after winning the general election, Nutter announced he was hiring a pair of former federal prosecutors who specialized in City Hall corruption cases as his internal watchdogs. Until her retirement earlier this year, Joan Markman was the city’s Chief Integrity Officer. Before that, she was best known as the lawyer who tried former city treasurer Corey Kemp (and sent him away for a decade). Nutter gave her an office next to his own, and the authority to check in on pretty much anyone at any time. In essence, Markman — and her successor, Hope Caldwell — have been there to act as internal checks on unethical behavior before it happens.

The Inspector General, Amy Kurland, is more about catching the bad guys, both in and out of government. Kurland made her rep in the U.S. Attorney’s office taking down 13 corrupt plumbing inspectors in Philadelphia’s Department of Licenses and Inspections, and she’s been just as tough working for the city. Between 2008 and 2013, the work of Kurland and her investigators led to 54 arrests, the firing or resignation of 193 city workers, and a total savings to taxpayers of about $46 million.

Together, Nutter’s Chief Integrity Officer and Inspector General have been one hell of a deterrent to bad behavior.

But it could all go away with the next mayor, and some of it almost certainly will. I’d be shocked if Nutter’s successor hires a Chief Integrity Officer. The position of Inspector General will likely survive — the office has its origins in the Goode administration — but City Council has previously questioned Kurland’s budget and resisted Nutter’s calls to make the office permanent with a City Charter amendment. The next mayor would have plenty of cover to neuter the Inspector General by cutting the staff or budget.

Nutter’s other ethics-oriented reforms are just as vulnerable: the broader release of government data (including corruption-prone contracting records), the prohibitions on nepotism and taking of gifts by members of his administration, and the regulations on outside employment, among others. All are executive orders, not law.

Optimists — and there are some — point to the legal changes that have been made, and to an ethics movement that predates Nutter. The city’s strong campaign finance law was created, not by Nutter, but by Councilman Wilson Goode Jr., and it faces no serious local opposition. (The U.S. Supreme Court’s views on campaign finance may be a different matter.) And this year, Council approved a new policy banning any non-cash gifts worth more than $99. That’s not perfect, perhaps, but it’s an improvement.

What’s ultimately most important, though, is the tone from the top. Mayor Street was never indicted in the City Hall investigation that dogged his tenure, and there’s never been any evidence that he corrupted his office to enrich himself. But too­ many of his associates were unethical; too­ many felt they had a green light — or perhaps just a yellow one — to better their own lots while in positions of trust and influence.

On Nutter’s watch, there’s only a red light. The Mayor has fallen short in plenty of areas, but he’s been a leader on ethics, and it shows. “It’s a daily focus,” Nutter says. “It’s a mind-set. It’s the question you always ask before any decision: What’s the right thing to do?”

That’s the right question. Will the next mayor ask it?

Originally published as “Incorruptible” in the July 2014 issue of Philadelphia magazine.

Ajay Raju Profile: The Big Raju

The Dilworth Paxson CEO in his $3.1 million Society Hill home. Photography by Chris Crisman

Dilworth Paxson CEO Ajay Raju in his $3.1 million Society Hill home. Photography by Chris Crisman

Might as well start with the hair.

“My life,” he says, “is driven by my obsession with my stupid hair.”

“My wife,” he says, “hates my hair. She wants me to have no gel.”

“When I discovered gel,” he says, “it was like Aha! Caveman discovers wheel.”

“My brother,” he reports, “says, ‘It’s a previously frozen raccoon that died on the road and was tarred over and then they put it on Ajay’s head.’”

“I’m the Indian Don King.”

Born near Bhopal, brought by his parents to Northeast Philly at the age of 14 speaking no English, Ajay Raju has transformed himself from a kid who felt insecure ordering at McDonald’s to a polished 44-year-old law partner who is quickly and deferentially seated at his preferred table (rear corner near the bar, where he can see everyone come and go) in the posh 1862 dining room at the Union League. He nonchalantly requests dishes not on the menu — tonight, grilled salmon and salad, since his weight is his other obsession. “I’m a peacock,” he’ll say, again and again.

“He has one quality that you definitely do not see in the legal class — pizzazz,” says one of Raju’s friends. “They buy their clothes at Joseph A. Bank. And obviously Ajay does not shop there.” In fact, Raju appears in advertisements for Boyds; his shoes, which can run up to $12,000 a pair, come from Tom Ford.

“We’ll see whether the personal flamboyance undoes him in this town,” this observer says. “At this point, it seems not. He’s going to be a player.”

It’s not as if he’s waiting on the bench now. On this late-winter night, Raju is little more than a month into his new job as CEO and co-chairman of Dilworth Paxson, one of Philadelphia’s most storied law firms. He moved there after nearly a decade at Reed Smith, a much larger firm with an international presence, where he managed the Philadelphia office and was acknowledged as a top rainmaker among 1,800 partners worldwide.

There are those who think Raju’s move to a smaller, more Philly-focused shop is really about having a home in a politically connected firm and dressing himself in the double-breasted, pin-striped aura of Richardson Dilworth, the legendary mayor and political reformer. He already sits on a dozen nonprofit boards around town, ranging from the Art Museum to the Zoo. He has his own political action committee — Center PAC — that has helped raise money for Tom Corbett and Bob Casey. Raju, possessed with what he calls “immigrant impatience,” has been raising money for politicians since he was a teenager. (As a young peacock, he disguised fund-raisers as fashion shows.) Raju calls Center PAC an “incubation platform” and plans eventually to help launch the political careers of civic-minded business types. People like him.

During talks about his move to Dilworth with its longtime partner Joe Jacovini, who stepped aside from running the firm for Raju to move in, the two men had a number of meetings right here in full view at the Union League. “They thought a merger was happening — this crowd,” Raju says, glancing across the table to the full and noisy bar area. “It’s almost like they analyze your stools to see what you ate this month. In New York, nobody would give a rat’s ass. Here, they watch everything.”

Of course, he’s a guy who doesn’t mind being watched. Peacocks don’t try to hide. While he may not be ready to run for mayor, he’s long been running for something. At this point, he has a self-appointed position; call it ch­eerleader-in-chief. Ajay Raju is making a deliberate effort to make sure people don’t just look — he wants them to look and listen.

It’s the reason he’s spending hours tonight dining with someone who can bring him no legal business, who offers no new connection in the guarded back corridors of power and influence. He’s here despite the objections of those around him.

“I can honestly tell you that every friend and adviser tells me not to talk to you right now,” Raju tells me just before — diet be damned — ordering dessert, his third helping today of Union League brownies with peanut butter ice cream. (It’s a long story that involves having two lunches.) “‘You can gain nothing with a profile of you; nothing good comes out of it. It doesn’t get you anywhere.’

“But I think it’s the perfect time. I have this idea, and I want the message to get out there.”

Dominic Pileggi: The Grown-Up

Pileggi outside his home in Chester. Photography by Colin Lenton

Pileggi outside his home in Chester. Photography by Colin Lenton

At the Court Diner in Media, the rest of the table orders chipped beef, pancakes and omelets. Then the waitress asks Senate Majority Leader Dominic Pileggi what he’d like to eat.

“Wheat toast. Dry.”

Dominic Pileggi, 56 years old, is the straight man of Pennsylvania politics, a figure who at first blush is as dull as his breakfast in a statehouse overpopulated by the corrupt, the comical, and a large and growing cohort of ultra-conservatives.

By design, Pileggi rarely makes headlines. By nature, his thinking is nuanced and his politics are precise. He smiles and talks far less than most politicians. Actually, he smiles and talks less than most morticians.

No matter. When Pileggi, whose district includes parts of Delaware and Chester counties, does speak, the entire capital listens — very closely. “He is the most powerful person in Harrisburg,” says Ed Rendell, within seconds of being asked about Pileggi. “He may have been the most influential person in Harrisburg when I was governor.”

It would be hard to argue with Rendell. At the Pennsylvania Society, that annual December bacchanal of the state’s political class held at New York’s Waldorf Astoria, Pileggi stood at the front of a receiving line hundreds deep at his invite-only affair, the queue chockablock with lawmakers and lobbyists and executives keen to pay homage. That speaks to Pileggi’s political talents, of course, but it’s also a referendum on the sorry state of governance in Pennsylvania. The Commonwealth has rarely been known for better-than- average public-sector effectiveness. But the current rot goes well beyond the state’s middling norm.

Tom Corbett is among America’s least popular governors. Our Supreme Court is riven by a vicious feud and tainted by corruption. Tea Party conservatives have hijacked the House, and in the past five years, the General Assembly as a whole has lost five of its most ruthless — and effective — operators to scandal, including Philadelphia’s own Vince Fumo and John Perzel.

Indeed, Philly’s standing in Harrisburg has arguably never been weaker. Worse, every few weeks brings fresh news that the city’s delegation is not just impotent, but venal: In January, State Rep J.P. Miranda and his sister were charged by District Attorney Seth Williams with conflict of interest, perjury and criminal conspiracy. In March, State Senator LeAnna Washington was hit with felony corruption charges by Attorney General Kathleen Kane for allegedly dragooning her taxpayer-funded staff into campaign work. A week later, the Inquirer broke the story that Kane had dropped a problematic probe into four more city lawmakers alleged to have been caught on tape taking cash from a lobbyist-turned-informant.

And Pileggi? In this field of scrub pines, he stands out like a redwood.

Ask around, and you’ll find precious few serious Pileggi critics. He has fans in the press, who appreciate the remarkably strong open-records law he pushed through a reluctant Harrisburg in 2008. His caucus, though more conservative than he, knows he won’t charge ahead without them. Democrats are almost pathetically appreciative of Pileggi’s willingness to include them, to seriously think over their arguments. And Philadelphia’s leaders consider him nothing short of the best friend the city has in the state’s Republican power structure.

“He’s the competent grown-up,” a Democratic Senate staffer says, sighing reluctantly. “You have a dysfunctional House, you have a governor and administration that after four years don’t know what they’re doing. And you have Pileggi.”

Power Crowd Attends Arthur Makadon Memorial

The Inquirer reports on Monday’s memorial for Arthur Makadon, the Philadelphia lawyer who was connected just about every insider in town. Roughly 300 people showed up for the memorial at the Kimmel Center.

In addition to Rendell, Mayor Nutter attended, along with other leaders of local government and business.

“I and several others are faced with the problem of who shall we call when faced with a complex problem,” said Rendell. “He had no agenda, and he told the truth.”

He avoided philanthropic giving, but was generous to fellow lawyers at Ballard, staff, friends, family, and others, Stewart said. He was cynical about politics, but willing to offer politicians his advice, which often was sought.

David L. Cohen, executive vice president of Comcast Corp., former chairman of Ballard Spahr, and a longtime friend, praised Makadon’s loyalty and his legal skills. “If you ever had a matter that involved the [fate] of your company or your personal reputation, there was no better lawyer to go to,” Cohen said.

Makadon died July 24 at age 70.

Philly Insider Arthur Makadon Dead at 70

The Inquirer (paywall) reports:

Arthur Makadon, 70, one of the most influential figures in Philadelphia’s legal and political realms for the past three decades, died Tuesday at University of Pennsylvania Hospital, his firm announced Wednesday morning.

Makadon, a graduate of the University of Pennsylvania Law School, was a former chief assistant district attorney in Philadelphia under Arlen Specter. He would become one of Ed Rendell’s chief advisers as mayor and governor, first recommending his protege, David L. Cohen, to Rendell during is mayoral campaign. A 1996 Inquirer profile called him “an insider’s insider.”

Makadon chaired Ballard Spahr between 2002 and 2011 and was a partner at the time of his death. He was 70.

In 2005, PhillyMag ranked Makadon No. 31 in the list of 50 people who run this town, deftly outlining his influence in just a few sentences:

31. Arthur Makadon
chairman, Ballard Spahr Andrews & Ingersoll. Rank in 2000: 80

Friend to Rendell, Cohen, Specter and Street; head of the city’s most politically connected law firm; a go-to guy for dealmakers and those who want to make them. Makadon, 62, is also considered by many to be the one lawyer you’d want to hire if you got in trouble in Philadelphia. (Just ask the Mayor: Makadon’s repping him in the federal corruption probe.)
Strength: Far-reaching credibility that gives him rare access to insiders across the legal, political and business spectrums.
Weakness: Doesn’t suffer fools gladly. If he thinks you’re an idiot, he’ll say so, no matter who he offends.

The 50 Most Influential Jews in the World

The Jerusalem Post released its hotly anticipated “50 most influential Jews in the world” today, and all we can say is, there are probably a couple dozen mothers out there who are plotzing. So much better than being a dentist.

Below, I’ve singled out some favorites, particularly those with a local connection. Enjoy!

Binyamin Netanyahu, Prime Minister of Israel

Rank: No. 3
Local connection: Bibi went to Cheltenham High School, from which he graduated, and which obviously determined his success as a world leader. The best sentence on his entire Wiki page is this one: “To this day, he speaks American English with a Philadelphia accent.
A true InfluJew? Well, yes, of course. He’s the ultimate macher. But he’s ranked No. 3 behind his own country’s finance minister, Yair Lapid, who gave him a real run for his money in Knesset elections. You just know Netanyahu is thinking, “Am I wrong, or is ‘finance minister’ less of a big-deal title than ‘prime minister’?”

Jon Stewart, comedian/newsmaker

Rank: No. 7
Local connection: Stewart is from Trenton, which is close enough.
A true InfluJew? Absolutely. He influenced my mother to influence me to send him a letter professing my love well before he was on Comedy Central but well after I should have known better. Several years later, after he was significantly more famous, I did a phone interview with him that remains one of my career lows. I thought I needed to be clever, so my first question was, “Is it true that Trenton makes and the world takes?” Confused silence, then all downhill from there.

And that does it for the Greater Philadelphia names on the list! Thanks for coming, we’ll see you next week!

Ben Smith, BuzzFeed editor
Rank: No. 28
A true InfluJew?: As an individual, yes. With BuzzFeed, you never know (at some point, there was a smug Jewish guy all hyped about Friendster–he’s not on this list, you’ll notice). Smith helms a website that has influence in terms of popularity, sure, but more importantly, in terms of the questions it raises: How can we provide good content–of any kind–and make money? Can we break down traditional walls that ruled print publications? What are readers looking for? Is there room for long-form narrative as well as goofy lists? I had no idea Smith’s power went so far beyond my fishbowl Twitter feed. I emailed Smith to ask how he felt about being on the list, with a jaunty, “Mazel tov!” He didn’t write back.

Debbie Wasserman Schultz, U.S. state representative/TV pundit

Rank: No. 10
A true InfluJew? Debbie Wasserman Schultz. Listen to that name. While others on the list have changed their names to seem less Jewish (Jon Stewart, looking at you, albeit still somewhat shamefacedly), Wasserman Schultz embraces her heritage, acting as a smart, articulate role model to awkward girls everywhere. Between her name and her spiral curls that are obviously, publicly, intractably impossible, she unapologetically represents one of the most Jewish places on Earth: Florida’s 23rd Congressional district.
Pro Jew tip: Because even her enunciation is Jewish, look for Wasserman Schultz’s appearances on Meet the Press; a chat with her is all the inoculation you’ll need to get through The McLaughlin Group.

Scooter Braun, music biz exec
Rank: No. 22
A true InfluJew?: Look. When I saw this list, Scooter Braun was the first name that came to mind, if only for his moniker. That name–“Scooter”–is so steeped in Torah, Braun could only have done better if he were named Moishe Wasserman Schultz. Think of the famous Jewish rat named Scooter, whose narrative earned this writer the Philadelphia Aratamy Award, and all those Anglo Saxons nicknamed Scooter who kept Jews out of golf clubs. Would there be a Larry David without the WASP Scooters of the world? Scooter Braun really didn’t even have to manage some kid named Justin Bieber to get on this list. But it’s a good thing for him that he does.

Sheryl Sandberg, Facebook COO

Rank: No. 8
A true InfluJew?: Yes, in fact, she’s inspired this Borscht Belt joke they tell at Kutsher’s in the Catskills: “How did Sheryl Sandberg rank higher than Mark Zuckerberg on the influential Jews list?” “How?” “She leaned in to the top 10.” Ba-dum.

Sumner Redstone, media magnate
Rank: No. 21
A true InfluJew?: Oh, yes. In fact, there’s an irony here. Anti-Semites often recur to that preposterous notion that Jews rule the country–the banks, the media, the government–a massive takeover that could never have happened (and if it did, why am I living in a third-floor walkup?). For many years in the 20th century, a Jewish person could only become powerful in one of these realms by downplaying the Jewish background. In the case of octogenarian Redstone, who does have a nice piece of the media pie, well, I’m sorry if I shock you, but “Sumner Redstone” was not his given name.

Lena Dunham, writer/actor/producer

Rank: Higher than Elie Wiesel, Natan Sharansky, Sumner Redstone, Michael Chabon, Matthew Bronfman and everyone else who comes after No. 18
A true InfluJew?: Without question, and I find the enmity she inspires distasteful and chauvinistic even though she inspires it in me too. Dunham emceed a Purim Ball and listed her favorite things about being Jewish: “Potato pancakes, gelt (why would anyone want regular money when there’s money that is chocolate inside?!), matzo balls, musicals, my grandpa, lifting people up in chairs, being worried all the time so that when something truly bad happens, you’re really ready for it.”

Bar Refaeli, model

Rank: 38
A true InfluJew?: I’m putting this in the category of This Is Why We Can’t Have Nice Things, Jewish List Edition. From the Jerusalem Post because I sure ain’t gonna do it: “The supermodel and former Sports Illustrated cover girl is one of the—if not the—highest-profile Israelis in the world. Face it: Middle America knows her face, name and assets much, much better than the No. 1 entry on this list, not the least since she was voted No. 1 on Maxim magazine’s Hot 100 list of 2012. Whether it’s the fact that she was splashed all over gossip magazines during her on-and-off relationship with A-list actor Leonardo DiCaprio, a shout-out in a Kanye West song or making out with a nerd in a Super Bowl ad, Refaeli is everywhere, all around the world.”

The commissioners of the NHL, NBA and MLB
Rank: No. 50
True InfluJews?: At least when they’re grouped together and otherwise nameless.

Another One Bites the Dust: Lenfest Foundation to Cease Grant Giving

One of Philadelphia’s mega-philanthropies is willingly winding down its operations, after more than a decade of mega-giving. The Lenfest Foundation, which was founded by billionaire H.F. “Gerry” Lenfest and his wife Marguerite, is planning to sunset most of its major investments over the next 10 to 15 years. Lenfest, personally and through his charity, has disbursed $1.2 billion to Philly-area programs since founding the group in 2000. The 82-year old also chairs the board of the Interstate Media Group, which owns the Daily News and the Inquirer. [Insert snarky joke about having enough charities on his hands already.]

“I’m not in ill health. I don’t believe in perpetual foundations. We’ve given away the bulk of our wealth already, and I will have a diminished role in the future. My success in business was finding people who were better at doing things than I was. It’s a logical evolution.”

This news, as the Inquirer notes, leaves the William Penn Foundation in a class by itself, as the Annenberg Foundation and the Pew Charitable Trusts have shifted operations to Southern California, and Washingon, D.C., respectively. And WPF is having an identity crisis of its own. [Inquirer]

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