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REPRINTED FROM THENEXTMAYOR.COMApril 30, 2007 press release, (submitted via e-mail) |
FOR IMMEDIATE RELEASE
April 30, 2007
Contact: Kate Philips
215-988-0582
kate@bradyformayor07.com
PHILADELPHIA – Congressman Bob Brady today warned Philadelphians of a dangerous deluge of fake advertising expected to hit television airwaves in the coming days. In an apparent strike of the panic button, Tom Knox increased his brazen disregard for campaign finance limits by spending an astonishing $767,420 on broadcast and cable television advertising in just the next six days.
“We all knew that Tom Knox wanted to buy City Hall, but now it looks like he might make a run at buying the entire Avenue of the Arts too,” said Congressman Brady.
In his editorial board interview with the Philadelphia Inquirer, Knox continued his fake campaign – portraying himself as a crusading outsider while multiple news outlets report he’s really a connected political insider who has benefited repeatedly from pay-to-play politics.
Editor’s Note: Attached is a sampling of what won’t be in his fake ads:
KNOX’S RHETORIC
Knox claims not to have benefited from payday lending
“...We didn’t have any payday loans in the bank when we sold it. And the company we sold it to didn’t want payday loans, if we had ‘em. So when we sold it we didn't get anything.” (13:37 Part II)
REALITY
Yet Knox’s bank made 20% of profits from payday lending…and Knox made millions off the sale of the bank
Knox Made Nearly $20 Million Off Sale Of Crusader Bank: News articles have reported that Knox made over $17 million off the sale of Crusader Bank, while Knox himself estimated the figure at $18 or $19 million. (Philadelphia Inquirer, 11/27/05; Knox Inquirer Editorial Board Interview)
Knox’s Bank Made 20% Of Overall Profits Off Payday Lending: Bruce Levy, Knox’s associate and partner in Crusader Bank, estimated that payday lending produced roughly $1 million in profit during the first full year that the short-lived lending program ran. Later in the interview, he said the program produced about 20 percent of the bank’s overall profits that year. (Philadelphia Inquirer, 2/11/07)
Knox Admitted That Payday Loans Were Quite Profitable For Crusader Bank: Crusader’s payday lending practices proved profitable. Knox himself said that a big part of the bank’s success was driven by tax liens on homes and short-term payday loans, which have high effective interest rates. (Philadelphia Inquirer, 11/27/05; Philadelphia Business Journal, 4/25/03)
Crusader Made $1.4 Million Off Payday Loans In 2000: Payday loans produced a net income of $1.4 million for Crusader in the fiscal year ending June 30, 2000, the year before Knox sold the bank. In the quarter ending September 30, 2000, the bank reported $550,000 in income from payday loans with a total income of $1.8 million. (Philadelphia Business Journal, 1/19/01)
Crusader Engaged In Predatory Payday Lending: In 1999, Knox’s bank, Crusader Savings teamed up with payday lender National Cash Advance of Cleveland, Tenn. to offer short-term “payday” loans at high interest rates. (Philadelphia Business Journal, 4/25/03; Center for Responsible Lending, Payday Lending Overview; Philadelphia Inquirer, 11/27/05)
Knox Claimed To Be Serving A “Need” By Charging Exorbitant Interest Rates: Philadelphia Magazine reported that “Knox continues to point out that charging exorbitant interest rates to indigent people who tended to roll the loans over into more loans, spiraling their debt, was serving a ‘need.’” (Philadelphia Magazine, 5/07)
KNOX’S RHETORIC
Knox says he is against pay to play system…
The “pension fund is a pay-to-play patronage haven.” (21:30 Part I)
REALITY
…Knox knows about pay-to-play politics and pensions…he tried to steer a city pension contract to a firm he once owned
Knox Accused Of Mishandling Of City Pension Funds, Steering Millions To Company That Still Paid Him Money: In 1993, Knox was named in a class action lawsuit filed on behalf of 13,000 city employees, which alleged that he had an interest in the company he helped select to manage the city employee’s Deferred Compensation Retirement Plan. Knox was part of decisions that resulted in the transfer of money to Preferred Benefits Corp., a business Knox founded 20-years prior. At the time of the decisions, Preferred Benefits was paying Knox out over time. The lawsuit alleged that Knox was in partnership with Bruce Levy, the president of Preferred Benefit, when the decision was made to transfer the funds. Levy has been an associate working with Knox on several businesses, dating back to the 1980s, and has been involved in Knox’s campaign for mayor. At one point, the two formed Knox/Levy Associates, Inc. (Philadelphia Inquirer, 8/17/93, 3/27/07; Philadelphia Magazine, 5/07; Nexis Pennsylvania Secretary of State Records)
Knox Directed Over $1 Million To Rendell Campaign, Got No-Bid Contract Using Rendell Ties: Over the years, Knox has given Rendell $120,000 for his bids for mayor and governor and Rendell estimated that Knox had raised more than $1 million for his various campaigns. Using his ties to Rendell, Knox obtained a no-bid contract for the convention center. (Philadelphia Inquirer, 4/18/07)
Philadelphia Magazine – Knox’s Convention Center Goes To Heart Of His Claim Of Being Beyond Realm Of Politically Connected Deals, “It Doesn’t Wash”: The Philadelphia Magazine noted, “The deal goes to the heart of his claim of who he is, how he's presenting himself as he runs for mayor of Philadelphia. He claims to be beyond the realm of such politically connected phone calls and deals. It doesn't wash.” (Philadelphia Magazine, 5/07)
Contributed To & Raised Money For Casey’s Campaigns…Was Then Tapped By Casey To Run Insurance Company: Knox contributed to and raised money for Casey’s 1990 re-election campaign for governor. The state no longer maintains those records, so it is unclear exactly how much he gave and raised. Philadelphia Magazine wrote, “There are many other examples of the Knox mix of money and power. Knox was tapped by Governor Bob Casey to be CEO and special deputy rehabilitator of Fidelity Mutual. Knox who had contributed to Casey's campaigns, saw this as a stepping-stone to a CEO position somewhere. One was that trying to eviscerate the employee pension fund to pay off creditors resulted in a lawsuit the employees eventually won.” (Philadelphia Magazine, 5/07; Philadelphia Daily News, 4/25/07)
KNOX’S RHETORIC
Knox eschews pay-to-play in city contracts…
“In order to get a contract, you have to pay people off…contractors tell me all the time in order to get through the system you have to pay somebody.” (33:50 Part I)
REALITY
But Knox obtained no-bid contract using his ties to Rendell, whose campaigns he funded.
Knox “No Stranger To No-Bid Contracts”: While Knox has said in the mayoral campaign that he would like to get rid of “no-bid” contracts in city government, the Philadelphia Inquirer noted that he “is no stranger to no-bid contracts” having sought and received one through the Convention Center in the 1990s. Knox asked the center’s chief executive to name his firm, Philadelphia Insurance Associates, the health-insurance broker for the center’s employees. In all, Knox's firm was paid $28,000 in commissions as the center's broker until 1998, when Knox and his co-owners sold the firm. The business, which had about 100 clients, went for $1.6 million. (Philadelphia Inquirer, 4/18/07)
Convention Center Chief Did Not Know What Knox Did For His Commission, Philly Taxpayers Picked Up “A Chunk Of Knox’s Stipend”: The Center’s chief executive, Bob Butera had no idea what Knox actually did for that money. Butera said that if he had known Knox was making so much back then just for being broker of record, he would have called Blue Cross directly and negotiated a lower premium for the Center's policy. According to Philadelphia Magazine, “In an indirect way, given that city taxpayers pick up the Center's cost overruns, we, the citizens of Philadelphia, were paying a chunk of Tom Knox's stipend.” (Philadelphia Magazine, 5/07)
KNOX’S RHETORIC
Pledges to lower campaign finance limits…
Knox said he would reduce campaign finance limits in Philly: "I'm gonna make it less." (35:50 Part I)
REALITY
…Knox has given hundreds of thousands to politicians, including $150k to Rendell.
Gave Nearly $300K To Candidates Including High Profile Philly Politicians – Street, Fumo, Weinberg: Knox has contributed nearly $300,000 to political candidates over the last 10 years, including Gov. Rendell, Mayor Street, state Sen. Vince Fumo and former mayoral candidate Marty Weinberg. (Philadelphia Daily News, 4/25/07)
Rendell Said Knox Raised Over $1 Million For His Campaigns: Over the years, Knox has given Rendell $120,000 for his bids for mayor and governor and Rendell estimated that Knox had raised more than $1 million for his various campaigns. (Philadelphia Inquirer, 4/18/07)
Gave To & Raised Money For Casey’s Campaigns: Knox contributed to and raised money for Casey’s 1990 re-election campaign for governor. The state no longer maintains those records, so it is unclear exactly how much he gave and raised. (Philadelphia Magazine, 5/07)
…Knox can afford limits. He can spend millions of his own money on misleading ads, money he earned in part from a company that engaged in predatory lending.
Philadelphia Magazine – The Knox On TV “Bears Little Resemblance To The Connected Insider He Is In Real Life””: Knox has spent $5 million on TV ads portraying himself as an outsider but the Philadelphia Magazine said “the crusading outsider Tom Knox plays on TV bears little resemblance to the connected insider he is in real life.” (Philadelphia Inquirer, 4/24/07; Philadelphia Magazine, 5/07)
Philadelphia Magazine – The Tom Knox Portrayed In His TV Ads Is “A Fiction”: And the hints of Knox chummily using his connections in politics are, likewise, maybe not so awful in and of themselves, especially given how anyone with a long career in insurance and banking with the success Knox has had almost certainly stumbles over a few ethical lines along the way. But what they both tell us — his time in the Rendell campaign, his career in business — is that the Tom Knox of his campaign ads, a guy who was front and center in saving the city once and now wants to change the way the game is played in City Hall, is a fiction. (Philadelphia Magazine, 5/07)
Knox Made Millions Off Bank That Engaged In Predatory Payday Lending, Said He Was Serving A “Need” By Charging Exorbitant Interest Rates: In 1999, Knox’s bank, Crusader Savings teamed up with payday lender National Cash Advance of Cleveland, Tenn. to offer short-term “payday” loans at high interest rates. Knox netted $17.2 million from the sale of Crusader in 2001. Philadelphia Magazine reported that “Knox continues to point out that charging exorbitant interest rates to indigent people who tended to roll the loans over into more loans, spiraling their debt, was serving a ‘need.’” (Philadelphia Business Journal, 4/25/03; Center for Responsible Lending, Payday Lending Overview; Philadelphia Inquirer, 11/27/05; Philadelphia Magazine, 5/07)
As the next Mayor of Philadelphia Bob Brady will bring hope back to our city by fighting crime, investing in education and creating opportunity for all Philadelphians. www.bobbradyworks.com