The Mayor and the FBI Raid: Atlantic City Is Stained Once Again

ATLANTIC CITY, N.J. — At a lavish inaugural gala in March for the new mayor of Atlantic City at Resorts Casino, donors and supporters with business before the city paid up to $35,000 per table to celebrate with the new administration. Among the revelers was former basketball star Dennis Rodman, wearing tinted shades and a black hat as he strolled past an ice sculpture and stacks of cured meat and fresh mozzarella.

The gala was a fundraiser for a tiny nonprofit, Connecting the Dots, that has five employees. One of them is the new mayor, Frank Gilliam.

But there is no record to be found of how much money was raised or the names of the donors. Connect the Dots has not filed a required disclosure form with the IRS since 2015, when it listed $5,200 in donations.

Now the nonprofit is part of a federal investigation into Gilliam, which was thrust into public view on Monday in a raid of his home by the FBI. For hours, agents combed through the house, carrying out boxes.

The raid is the talk of the city, and with few details emerging about it, rumors are multiplying. For his part, the mayor, who has not been charged with a crime, has continued to show up at City Hall.

The FBI visit follows a campaign marked by accusations by several political associates of disappearing campaign funds.

Swept into office on a wave of cash and the promise of a brighter future, Gilliam, 48, carried new hope for a city where life is often a daily struggle. As Atlantic City’s third African-American mayor and a native son, Gilliam raised expectations that more residents might benefit from the riches that flow into the casinos along the ocean, but never seem to reach the poorer neighborhoods.

Instead, that faith has been shaken by the frustratingly familiar scene outside Gilliam’s home: grim-faced men and women in navy blue windbreakers with three bold yellow letters — “FBI” — stretched across the back.

Here was another Atlantic City mayor whose future was placed in doubt by accusations of corruption. These include missing campaign cash and political donations meant for the Democratic Party rerouted to his own coffers. To make matters worse, an early morning brawl in October outside a casino that was captured on videotape left the mayor with a literal black eye.

A gambling Mecca where piles of cash change hands every day, Atlantic City has been home to a series of politicians toppled by their own avarice. The history goes back at least to Enoch “Nucky” Thompson, the political boss romanticized in HBO’s “Boardwalk Empire” who turned the resort into a refuge for bootlegging and prostitution during Prohibition.

Sen. Harrison A. Williams of New Jersey, the last U.S. senator to be convicted of corruption and sent to prison, sought to use the lure of new Atlantic City casinos to enrich himself through stock in a titanium company as part of the infamous Abscam bribery scandal in the late 1970s and early 1980s.

Mayor Michael J. Matthews lamented in 1984 that “greed got the better of me” as he admitted to committing extortion.

His successor, James L. Usry, was charged with conspiracy, bribery and accepting gifts as a public servant, pleading guilty to taking thousands of dollars in campaign donations to muscle through an ordinance that would have benefited a donor.

And in 2007, with federal agents investigating falsified military records, Mayor Robert W. Levy fled the city, disappearing for more than two weeks before turning up in a rehabilitation clinic and later saying he lied to receive veterans benefits.

Gilliam declined to be interviewed for this article; his office did not respond to a list of emailed questions.

Under Gilliam, Atlantic City was supposed to be on the cusp of a fresh start after the collapse of the casino industry — fueled by competition from casinos in surrounding states — brought the city to the brink of bankruptcy.

Though the state took control of the city in 2016, somewhat limiting the mayor’s fiscal powers, there were signs that the city was turning a corner: Two casinos opened this year, sports betting has become a booming industry months after it became legal, the city’s bond rating has improved and a new campus of Stockton University opened within the city limits.

In many ways, Gilliam’s own life story could be a parable for his hometown’s struggles, successes and aspirations.

In 1973, when Gilliam was 3, his father fatally stabbed his mother. Gilliam, in an interview after his election, said that he still remembered his mother and that her murder made him appreciate that “you can have something one day and now it’s gone.”

As Gilliam progressed through Atlantic City’s public schools, he developed a reputation as a supremely confident youngster who could be a friendly charmer one moment and an angry bully the next, according to a family friend who spoke on the condition of anonymity to avoid getting pulled into any investigation.

He made his mark on the basketball court. As a senior, he was a starting guard for the Atlantic City High School Vikings, and, despite his 5-foot-9 frame, a solid contributor. Tom Williams, who has been a play-by-play announcer for South Jersey high school sports since 1964, recalled Gilliam as scrappy and “aggressive defensively.”

Gilliam went on to Delaware State University, but has said that he left within a year because of poor grades. He returned home, had a son and worked in casinos as a security guard and bar porter.

Eventually, he enrolled at nearby Stockton College of New Jersey (now Stockton University) and graduated in 1998 with a bachelor’s degree in criminal justice. After becoming mayor this year, he returned to the campus in July and told incoming freshmen that he considered himself lucky because he could have ended up in jail.

“In 1993, my world was a whirlwind,” he told them. “I had no idea, I had no clue, and I had no vision. I am in Atlantic City doing nothing but wreaking havoc, doing things I know I shouldn’t be doing.”

Gilliam’s official biography says that after Stockton College, he received a master’s degree in social work from the University of San Francisco. But a spokeswoman for the university said that claim was “inaccurate”: The school has neither records of Gilliam nor a graduate program in social work.

Gilliam held several jobs in the early 2000s. He worked for Covenant House, according to news reports. He founded a youth basketball program, Atlantic City Starz. He was elected to the City Council in 2009. His legislative achievements include an ordinance that imposes fines for any helium balloons that are released outdoors. He also worked assiduously to promote development in the city.

“I think he saw himself as more business-friendly, or more business well-versed, than other political people,” said a former local official, who also did not want to be identified because of the continuing investigation.

Gilliam’s campaign for mayor started with a spigot of cash that never seemed to turn off.

All told, his campaign and allies raised nearly $525,000, an unheard-of sum for an Atlantic City mayor’s race and more than three times that of the next highest mayoral war chest in recent history.

Irregularities concerning campaign money started showing up in the primary campaign. Gilliam promised his Democratic running mate, George Tibbitt, that he would hold onto a dozen or so checks written to Tibbitt’s campaign. The checks, each for $300, were never deposited into Tibbitt’s account, according to four people familiar with the episode.

The race also featured the first super PAC in city history to focus solely on the mayoral election. Called “Our Atlantic City,” it raised more than $220,000 in support of Gilliam, largely from real estate companies and unions.

The super PAC helped power an effective, if controversial, get-out-the-vote operation. Run by a local political kingmaker named Craig Callaway, the group paid messengers $30 per trip to deliver mail-in ballots to voters.

Don Guardian, Gilliam’s Republican opponent, was suspicious of the group’s activities and, according to an account in The Philadelphia Inquirer, he paid an informant to get a job as a messenger with Callaway, in an attempted sting operation. With a voice recorder tucked into his pocket, the informant went with Callaway to the county courthouse to sign out a ballot that he was supposed to deliver to a voter, who would then mail it in. He gave the ballot to Callaway, not to the voter.

Callaway told The Inquirer that he took the ballot to the voter himself, but Guardian still claimed fraud. A judge denied his request for a review of mail ballots.

Gilliam won by 79 votes.

But questions about the disposition of campaign money ruptured the Democratic ticket and turned some of Gilliam’s allies and friends against him. One dispute followed a fundraiser organized by Callaway to help Gilliam cultivate the city’s Asian and Indian population. The donors, many of them taxi drivers and small shop owners, operate largely in cash and raised nearly $5,000 that night.

Proud of their fundraising prowess, the group spread the money out on a table to take a picture of it.

Minutes later, it was gone.

Gilliam denied in local news reports that he had anything to do with the missing money. But Callaway has his doubts.

“He attempted to reach for the money and I said, ‘Don’t touch that money,'” Callaway said. He said he was standing next to Gilliam and turned to take the photo. “I turned back around,” he said. “It was gone.”

Callaway added that he did not see Gilliam take the money, but only noticed that it went missing.

In October, a $10,000 check sent to the city Democratic committee from the county party was intercepted by Gilliam and was deposited into his campaign account, appearing in a report with the New Jersey Election Law Enforcement Commission.

Gilliam claimed it was an honest mistake.

But Democratic associates of Gilliam’s filed a criminal complaint accusing him of purposefully taking the $10,000. A judge dismissed the complaint, saying there was not enough evidence to move forward with a charge.

“As soon as those checks started coming across, that’s when Frank changed big time,” said Tibbitt, who ran on the same ticket as the mayor. In his first act as mayor, Gilliam tried to give himself a salary of $140,000 — a $37,000 raise. He is also an employee of Connecting the Dots, the local charity where the funds from his inaugural gala were directed.

The executive director of New Jersey Election Law Enforcement Commission, Jeffrey M. Brindle, said money raised at an inaugural event can benefit any of several entities, including a charity. “But it’s kind of a little bit of a gray area when you’re talking about the individual himself runs the charity,” Brindle said.

FBI agents started interviewing several allies and aides to Gilliam in February, a month after he assumed office, according to three people who said they had been approached by the FBI and who requested anonymity because they were not allowed to disclose having spoken with federal agents. Interviews have continued throughout the year. The mayor’s deepening legal troubles seemed to highlight for some in the city that the veneer of progress — the new casinos, coffee shops, yoga studios and apartment developments — was a mirage.

“Propaganda,” said Donnie Russell, owner of the Pic-A-Lilli Pub, a working-class bar near the shore. He pointed to a boardwalk dotted with vape stores and dollar shops, the blighted blocks and the people struggling with substance abuse.

The new businesses nearby and the talk of revival meant little to him, and the mayor’s problems came as little surprise.

For Atlantic City to return to what it was when his pub first opened in 1991 — it was “fabulous,” he said — it needed a deep scrub, from the overflowing garbage bins on the boardwalk to the city’s leadership.

“They need to clean the place up,” Russell said. “The mayor and all them — they don’t worry about cleaning it up.”

He paused. “They hurt the city.”