Atlantic City still No. 1 for colorful corruption

Saturday, March 17, 2007 | 12:58 p.m.

ATLANTIC CITY, N.J. - The message former City Council president Craig Callaway intended to convey with his raised middle finger was probably quite different, but the 40-month prison term he started this week for bribery shows that when it comes to flamboyant political corruption in New Jersey, Atlantic City is No. 1.

One third of last year's City Council is either in prison or on its way there. Four of the last eight mayors have been arrested on corruption charges, and three other councilmen were arrested in 1989 in a corruption probe dubbed "Operation Comserv," a reference to bribes paid to public officials that were euphemistically referred to as doing one's "community service."

From the mayor who took $10,000 from an undercover agent in return for agreeing to sell a former city landfill to the mob, to the bullhorn-wielding, brick-throwing Callaway, who told a federal judge he took $36,000 in bribes "for the people," few places can top Atlantic City when it comes to public officials breaking the law with such color and creativity.

"Atlantic City is on a fast train to hell," said Virginia McCabe, a radio talk show host who publishes an Internet newspaper about Atlantic County.

She was chosen by Callaway's crew to receive the first copy of a video showing another City Councilman exchanging money with a woman in a motel room, and receiving oral sex.

Callaway, who raised his middle finger to reporters as he entered the courthouse to be sentenced on Tuesday, admitted to the FBI he set up Councilman Eugene Robinson in the secretly filmed motel encounter. Callaway then admitted to the FBI that he tried to use the recording to blackmail Robinson into resigning, according to prosecutors.

But Robinson refused to quit, and contacted authorities, who are investigating. The councilman, who also is a Baptist minister, said the sex was consensual, and the money he gave the woman was to buy sodas.

Callaway joined a long list of politicians in Atlantic City who found the illicit opportunities of public life too tempting to resist.

Mayor James L. Usry was charged in 1989 in "Operation Comserv," and pleaded guilty to taking a $6,000 campaign contribution without planning to report it. He was admitted into a pre-trial intervention program that expunged his conviction; only one of the councilmen charged with him was convicted.

His predecessor, Michael Matthews, was convicted in the mob landfill deal. And two earlier mayors also went down on corruption charges.

Two former councilmen who pleaded guilty along with Callaway last year are expected to be sentenced in a few weeks.

Ingrid Reed, director of the New Jersey Project at Rutgers University's Eagleton Institute of Politics, said the decline of Atlantic City before the arrival of casino gambling in 1978 led to a leadership vacuum that continues today.

"One of the reasons we are seeing this dysfunctional government - and that's what it is, when you have corruption and people taking bribes - is because of the inexperience and lack of strong governmental systems," she said. "It makes it easier for people who seek personal gain from public service."

There never is a good time for municipal corruption to occur, but observers say this is a particularly bad time, with several of the city's 11 casinos planning expansions, and at least two new casinos planned for the resort.

Don Hurley, a leader of a residents' group who hired a bus to carry opponents of Callaway to his sentencing, said the former council president's actions have further damaged the already dingy reputation of Atlantic City.

"This has hurt the city's image among developers in the city, and among ordinary people who think their vote just doesn't count and who have lost faith in government," he said.

U.S. District Judge Joseph Rodriguez struck a similar theme in sentencing Callaway.

"Public corruption is a malignancy in the bloodstream of democracy," he said. "To the extent that public confidence deteriorates, the country is run by the person who offers the highest dollar. When this happens, there's no virtue, there's no morality, there's no decency, and the average person suffers."