Harry the Muckraker

Harry J. Karafin glittered when he walked the streets of Philadelphia, the perfect personification of the man who had risen from rags to riches. In 1939, when he was 24, he started newspapering as an $18-a-week copy boy for the Philadelphia Inquirer. He was promoted to clerk, then to reporter. Harry had nerve. He dug. He probed. He was brassy, tough, cocky. Harry had pull at city hall. With the help of a former assistant district attorney, he browsed freely through confidential files in the D.A.'s office to get leads for his searing exposes of rackets and corruption. By the 1950s, his byline appeared regularly; by last month, there was no dispute that he had raked more muck, produced more exclusive stories and uncovered more crookedness than any other reporter in the 196-year history of the Inquirer. Also, last month the Inquirer fired him.

The reasons are in the current issue of Philadelphia, one of the glossy, city-centered magazines that are now catching on across the U.S. (TIME, Dec. 24, 1965). Digging just as hard as Karafin, Philadelphia Writers Gaeton Fonzi and Greg Walter began by investigating a racket involving fly-by-night companies that bought retail items on credit, unloaded them fast at discount prices, and then went into bankruptcy. The trail led to the doorstep of a 600-lb. operator named Sylvan Scolnick. Arrested, prosecuted and convicted, Scolnick started singing. Karafin, said Scolnick, was a good friend, so good, in fact, that he vouched for Scolnick's moral character and signed his application for a gun permit. Not only that, he also served as president of a company set up to keep track of the merchandise handled by the bankruptcy-bound companies.

Doing Well. This helped explain how Karafin, on an $11,000 Inquirer salary, could wheel around town in a pair of expensive Buicks, live in a house worth $45,000, buy $20,000 worth of furniture, and install such extras as central air conditioning and a custom-built staircase. And deck his wife in furs and jewelry, and vacation in Europe and Puerto Rico, and dabble in the stock market. But it was only part of the explanation. Philadelphia's reporters also discovered that Karafin was doing very well in a public relations sideline of investigative reporting.

One type of operation that obviously needed investigation in the late 1950s was the home-repair racket. Fast-buck operators would talk a homeowner into making improvements such as installing a new heating system or aluminum siding. The owner signed a credit agreement. The work, usually cheap and shoddy, got done and the fast-buck men sold the credit agreement at a discount to a broker, commercial finance firm or a bank. If too many angry and defrauded homeowners threatened, the company simply folded. It was a business particularly vulnerable to bad publicity, and Karafin and Scolnick said so to one of its practitioners, Joe Py. Public Relations Man Karafin, they said, could help Py. He had a lot of friends and could provide valuable advice, especially since the Pennsylvania State Banking Department and the Philadelphia district attorney's office were looking into the business. They asked for a $5,000 retainer. Py said he would think it over.

While he was thinking, a Karafin story appeared in the Inquirer under an eight-column headline, warning Philadelphians that house-repair frauds were spreading. "High pressure salesmen" were preying on "unwary home owners." A spokesman for the Better Business Bureau was quoted as saying that "the only way to stop this racket is to expose it." Scolnick and Karafin again dropped around to see Py, found him convinced. Py wrote two checks, one for $3,000 and another for $2,000. Thereafter, Karafin stopped by Py's office every Monday morning for a regular retainer check. Over the next four years, Py paid Karafin close to $12,000. Many other companies and associations connected with the home-repair and credit-paper business also hired Karafin, paid him tens of thousands of dollars.

Trail of Checks. In 1962, Philadelphia's city controller stopped payments to the Broadway Maintenance Co., which serviced the city's lights and parking meters, charging negligence, destruction of records, padding of bills and payoffs to city officials. Reporter Karafin raked no muck this time. Instead, he came to Broadway's defense, accusing the controller of making wild charges, praising the company for its "good maintenance program." Eventually a judge ordered the controller to stop blocking payments to Broadway, and the firm received a new $800,000-a-year contract from the city. All the time Harry was covering the story for the Inquirer he was on Broadway's payroll, getting $10,000 a year. He still was as of the beginning of March.

Reporter Karafin watched out for the interests of the small guy as well as the big. Once, when a lonely, 51-year-old bachelor crippled with arthritis sued a dance studio for inveigling him into paying for 1,000 hours of lessons, Karafin wrote an incisive story about the case. Then Karafin called on the head of the company that owned the studio. Thereafter, Karafin wrote no more dance studio stories. A lawyer friend of Karafin's worked out a settlement by which the company repaid the bachelor a fraction of the money he had been charged. Karafin was paid more than $2,000 "for services rendered."

Philadelphia's reporters followed a trail of information and canceled checks to other public relations clients. The Pennsylvania Refuse Removal Association, for example, paid Karafin $1,000 after some of its members were charged by a federal grand jury with conspiring to fix prices (the members were found guilty anyway). And when the president of a Philadelphia loan firm was subpoenaed by a state senate investigating committee in 1962, he quickly signed on Karafin, paid him $12,000 over the next few years.

When Karafin got wind that Philadelphia was planning a story on his activities, he filed for an injunction, charging that Fonzi and Walter had illegally obtained his tax returns. Philadelphia fought the suit, and published. Afterwards, a bank dealing in credit paper that had paid Karafin $6,000 a year fired Karafin as its public relations representative. Other businessmen who paid for Karafin's services now say they did so reluctantly. "I don't like to deal with Harry," said one client, "but he can do things for you. It's like castor oil. You don't like to take it, but sometimes you have to."

At the Inquirer, the reaction was one of red-faced embarrassment. The paper's management gave Karafin his severance pay--47 weeks worth--belatedly instructed all reporters to notify the company of any outside employment. One reporter who admitted doing freelance work for a public relations firm was warned to sever these ties immediately. And then "with profound sadness and bitter regret" the Inquirer published in this week's Sunday edition a ten-column story all about the mucky career of Star Reporter Harry J. Karafin.

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