Linchpin government witness testifies against former ally, friend, Fattah

A riot.

That’s what Gregory Naylor, longtime confidant and consultant to Congressman Chaka Fattah, said would happen if the right people didn’t get paid on time.

That’s why Fattah took out a $1 million loan to fund his faltering campaign for mayor in 2007, Naylor said, testifying against his former friend during the second week of the congressman’s RICO trial in federal court Wednesday.

Naylor, 66, pleaded guilty last year to a number of finance-related schemes the government claims were initiated by Fattah and five of his cohorts. Each ischarged with conspiracy, wire fraud, mail fraud, bribery, falsification of records, money laundering and related offenses.

Naylor admitted Wednesday he helped conceal the theft of federal grants and private, charitable funds to repay a loan from wealthy businessman Al Lord to help Fattah through his 2007 mayoral bid. He did this by preparing false invoices for services rendered through his consulting firm, SLA.

“So why did you create this fake invoice?” Assistant U.S. Attorney Paul Gray asked Naylor.

“So it would hopefully hide the transaction that took place earlier,” he replied, referring to the Lord loan.

“I had a conversation with…the congressman to simply talk about the close of the campaign, because after an election, it’s always newsworthy, and reporters always inquire about funds and how the money was spent and things like that.”

“What was the invoice meant to do?”

“Answer that question.”

Early polls in 2007 showed Fattah – whose real name is Arthur Davenport ­– in second place in the five-candidate race for mayor. But not long after Fattah lost the race to Michael Nutter, Lord came knocking. He wanted repayment. Naylor testified Wednesday that he had never met Lord, but he assumed that perhaps he could wait to be repaid, because of his vast wealth.

Each time Naylor would go to Fattah, asking about the money, Fattah would come back with the same answer – “I’m working on it.”

“There wasn’t much sense of urgency, was there?” asked Gray.

“All the responses were always the same. Everybody knew we had a problem. I operate on a need-to-know basis,” said Naylor.

“You didn’t need to know how this illegal loan was paid back?”

“That’s correct.”

Later, Naylor admitted he spent Fattah campaign money on Chaka “Chip” Fattah Jr.’s student loan debt to Drexel University. Fattah Jr. is currently serving five years’ jail time for defrauding banks, clients and the Philadelphia School District out of a total of $1.1 million.

The Fattah Sr. case continues Thursday before U.S. District Judge Harvey Bartle III.