Two veteran Phila. political consultants face tax charges

Federal prosecutors yesterday brought a tax-evasion charge against a longtime fixture on the Philadelphia political scene, saying that he did not declare hundreds of thousands in consulting fees.

Peter D. Truman, 74, has been a key figure in ward politics for decades, and was often turned to by state judicial candidates seeking to navigate the intricacies of street-level politics.

Federal authorities yesterday also charged another veteran Philadelphia consultant, Chester A. Fulton III, with tax evasion.

Both were accused, in separate cases, of failing to declare income from their political consulting work in 2005, and both have agreed to plead guilty to one count of filing a false income-tax return, said their defense attorney, Mark Wilson.

Truman - despite his lawyer's assertions about a guilty plea - denied that in an interview yesterday.

Truman said he was accused of cheating the federal government out of "more than $150,000," and said that was also not true.

According to the government, Truman charged judicial candidates consulting fees of $25,000 to $35,000, and Fulton charged up to $50,000. Such fees in exchange for political help are legal and are a staple of Philadelphia politics. But taxes must be paid on the income.

Federal prosecutors also said Truman paid periodic cash "finder's fees" of up to $20,000 to a "one-time elected official" and political consultant. The money was from fees paid to Truman by candidates running for office.

Fulton is also accused by the government of embezzling $145,000 from a company he founded, ACDM L.L.C., that ran a city-funded program for the homeless.

In a telephone interview yesterday, Truman acknowledged he had been questioned by federal agents for the last two years. He said he "thought they were satisfied," and expressed surprise that the criminal charge had been filed.

A former police officer, state representative, and clerk of quarter sessions, a Philadelphia court administrative job, Truman denied not paying the $150,000 in income taxes. "There's no truth to that whatsoever. That couldn't be true."

The federal document outlining the charge against him says that he earned $700,000 between 2001 and 2007 from political candidates, but from 2001 through 2005 reported "less than $10,000" in net income, the document says.

"Truman did not provide his accountant with bank records showing the hundreds of thousands of dollars in deposits . . . from his consulting business."

In 2005 he reported $24,700 out of "$223,400 additional taxable income," according to the government.

Assistant U.S. Attorney Louis D. Lappen declined to say whether the charges were part of a larger investigation.

Wilson, the defense lawyer, said both Truman and Fulton "have signed a plea agreement."

"Everybody decides to plead guilty for different reasons," he added.

Lappen also declined to discuss the alleged embezzlement. A spokesman for Mayor Nutter, Maura Kennedy, said, "We intend to work with the U.S. Attorney's Office to recoup these dollars."

According to the federal court document, Truman used his influence over "18 to 19" of the city's 69 ward leaders to help state judicial candidates through a group called the "New Progressive Alliance." It included civic and political leaders, and still functions.

"Using this influence . . . Truman was able to convince ward leaders to support candidates who paid him a fee and place the name of defendant Truman's favored candidates on sample ballots issued by ward leaders," the charging document states.

Sample ballots, and hiring workers to turn out the vote, are longtime practices in Philadelphia and are not illegal.

Truman said that he served as a consultant for the New Progressive Alliance until recently, and that a veteran associate, Chuck Finney, was filling that role now.

Finney could not be reached for comment yesterday.

Fulton has been involved in politics for 25 years, specializing in organizing field operations to turn out the vote on Election Day. He collected more than $500,000 between 2001 and 2005.

In 2005, he obtained a contract to operate a homeless shelter for men just released from prison and became 49 percent owner of the firm, which received $2.5 million from the city. The embezzlement charge relates to funds that were supposed to be used for construction work on the shelter building.

Fulton "maintained an expensive lifestyle," including a private school for his child and "high-end" autos for him and his wife, and he purchased a house on the Main Line worth more than $500,000, the charge says, "despite reporting virtually no net income" from the consulting business.

A message left at his home was not immediately returned.

Contact staff writer Nathan Gorenstein at 215-854-2797 or ngorenstein@phillynews.com.

Inquirer staff writer Thomas Fitzgerald contributed to this article.