The FBI raided homes and offices across Philadelphia and
South Jersey early Friday as part of a sweeping investigation of a powerful
electricians union and its leader, John J. Dougherty.
At the Local 98 hall at 17th and Spring Garden Streets,
FBI agents removed at least 100 boxes of paperwork and several computer hard
drives, loading them into a yellow Penske truck.
The FBI, acting in concert with the IRS, also searched
the City Hall office of Councilman Bobby Henon, a key Dougherty ally and a paid
union leader.
Federal authorities executed search warrants at more than
half a dozen locations, including Dougherty's house in South Philadelphia, his
sister's home next door, the Local 98 hall at 17th and Spring Garden Streets,
and the Mount Laurel home of union president Brian Burrows.
At midday at union headquarters, agents removed at least
a hundred boxes of paperwork, along with several computer hard drives, loading
them into a yellow Penske truck. The scene was repeated shortly after 3 p.m.,
as boxes, computer hard drives, and a laptop were carried from the union
business office nearby.
Seized were bank records, invoices, credit card records,
and tax forms, a person familiar with the investigation said.
Authorities also searched the City Hall and district
offices of Henon, City Council's majority leader. He holds an untitled position
with Local 98 of the International Brotherhood of Electrical Workers in which
he reports directly to Dougherty.
The union reeled from the sweep of the raids as it
struggled to determine the scope of the investigation.
Late Friday, a person familiar with the investigation said
it focused on the union's finances and its involvement in the political
campaigns of Mayor Kenney and state Supreme Court Justice Kevin Dougherty, who
is Dougherty's brother. Federal authorities are also scrutinizing Dougherty's
finances and taxes, the source said.
Kenney spokeswoman Lauren Hitt said the mayor had not
been contacted by federal authorities. Nor had any member of his
administration, she said. "We have no reason to believe the investigation
is in any way related to Mayor Kenney," Hitt said.
Dougherty has led the union since 1993, helping build it
into a major statewide campaign contributor. As one of the city's most powerful
Democrats, he was a key force in last year's elections, helping put Kenney in
the mayor's office and his brother on the state Supreme Court.
Dougherty briefly addressed reporters gathered outside
his Moyamensing Avenue home on Friday, saying, "Nothing's changed in this
house in the last 10, 15 years . . . except the tomato plants growing in the
backyard."
He set out iced tea and doughnuts for journalists who
stood under a hot sun.
His lawyer, Henry E. Hockeimer Jr., said Friday that
after years of federal scrutiny, Local 98 has put in place strict auditing
controls to make sure its financial transactions are in order.
"John was cooperative with the agents during their
search throughout the day," Hockeimer said.
After a news conference on another matter, Kenney was
mobbed by reporters asking about the FBI raids.
"I'm not going to have any comment on this because I
don't have any information," he said. "As it plays out, we'll see
what happens. But I don't have any other information and you can ask the
question 20 different ways, but there won't be any comment because I don't have
any information."
Dougherty and Kenney were childhood friends who grew up
together in the South Philadelphia world of Democratic politics. They later
became estranged and joined rival party camps, but reunited when Dougherty
helped lead a coalition of building trades unions that used an independent
expenditure group to raise money to support Kenney's 2015 mayoral bid.
Efforts to reach Kevin Dougherty were unsuccessful. A
spokeswoman for the state Supreme Court said she had "no statement or
information on this."
At City Hall, about a dozen FBI agents converged on
Henon's fourth-floor office, many wearing blue plastic gloves and going through
filing cabinets and desks, paper by paper.
They arrived before 7 a.m. and left around 2 p.m., taking
with them more than a dozen boxes of files and a computer. After asking a
reporter to leave, a man came outside and sat by the door, telling journalists,
"The office is closed."
Agents also raided Henon's district office on Torresdale
Avenue. Neither he nor his spokeswoman, Jolene Nieves, responded to requests
for comment.
The councilman's tenure as political director at Local 98
of the International Brotherhood of Electrical Workers coincided with the
union's meteoric rise in power. It became the biggest independent source of
campaign money in the state.
Since 2000, the union has funneled about $30 million into
political races, money that helped get Henon elected in 2011 to a seat being
vacated after 32 years by Joan Krajewski. He has embraced his ties to the
electricians' leader, saying that without Dougherty, "I wouldn't be where
I'm at."
At union president Burrows' South Jersey home, cars stood
in the driveway, but the shades were drawn.
Several neighbors said they saw the raid take place at 8
or 9 a.m., when four or five vehicles, including a marked Mount Laurel police
car, appeared at the home. Agents in FBI vests spent roughly an hour removing
boxes of files from the house, neighbors said.
No one answered a knock on the Burrows' door. Shortly
afterward, two police officers arrived in separate vehicles and said the family
had called to say they wanted a reporter to leave.
A search also took place at Doc's Pub in South
Philadelphia, a building once owned by Dougherty, Burrows, and the head of the
union's apprentice program, Michael Neill.
Agents also searched Neill's house, a neat brick rowhouse
in South Philadelphia. No one answered the door at the house late Friday
afternoon.
At the bar, Steve Pakech, 70, described Dougherty as a
sort of neighborhood organizer who takes care of people in the community.
"He put a lot of people to work. He does a lot for
the neighborhood," Pakech said. "It's election time, and I think [the
FBI is] just trying to bother people."
A source close to Dougherty said the union leader was
taken by surprise by the raids, unaware until federal agents arrived that such
a large investigation was underway.
An FBI spokeswoman said the searches were part of an
ongoing inquiry, but declined to provide further details.
A law enforcement official, speaking on condition of
anonymity, said the investigation had been underway for more than two years and
involved the possible misuse of funds. Another official said the investigation
involved a "broad scope" of activity that dated back years.
"They are looking at the wrong guy," insisted
Patrick Gillespie, former business manager of the Philadelphia Building Trades
Council, a position now held by Dougherty, who replaced Gillespie when he
retired last fall.
Every few years, Gillespie said, the FBI decides to
investigate Dougherty, and they always come up empty.
"My heart goes out to John," he said. ". .
.This is almost like a rogue situation. It's like they're after terrorists."
Frank Keel, spokesperson for Dougherty and Local 98, said
his boss and other union officials were cooperating with the investigation.
"I can tell you that the allegations of financial
impropriety are somewhat puzzling, because IBEW Local 98 is subject to multiple
audits throughout the year and multiple levels of scrutiny," he said.
"It's somewhat puzzling that they're investigating John's home, because
nothing in John's home or about John's home has changed in the last 10 years,
since the last time the FBI raided John's home. This seems to be a
pattern."
Indeed, the union chief is no stranger to law enforcement
scrutiny.
In February, the FBI and Pennsylvania Attorney General's
Office opened an investigation into an incident in which Dougherty punched a
nonunion contractor at a South Philadelphia worksite. Philadelphia District
Attorney Seth Williams said his "long-standing professional
relationship" with Dougherty barred him from handling the matter, and
referred the case to the Attorney General's Office.
No charges have been filed.
Federal agents previously searched Dougherty's house in
2006. In its request for a search warrant, the FBI alleged that Dougherty's
bank records showed a pattern of deposits and withdrawals of substantial
amounts of cash in "what appears to be an effort to conceal financial
dealings."
No charges were filed.
The FBI said that from 2002 to 2005, Dougherty deposited
about $106,000 in cash that could not be traced to any known source, according
to the warrant application. The FBI also alleged that Dougherty received about
$300,000 in free renovations to his South Philadelphia home.
Dougherty's lawyer told investigators that the labor
leader received $200,000 from his wife's parents to pay for much of the
renovations. But federal agents subpoenaed his in-laws' bank records and found
that they lived "paycheck to paycheck" and had no "large sums of
cash" to give to their son-in-law, according to the 55-page application.
A government filing shows that in 2015 Dougherty received
$406,532 from the union, including $226,754 in salary. Union documents say he
spent 80 percent of his time representing the union and its administration, and
10 percent on political activities and lobbying.
Burrows, the president, earned a total of $189,677, most
of it in salary, and including $15,231 for business expenses.
Most top officers earned between $145,000 and $190,000.
The union has a membership of 4,652, and assets of $37
million, records show.
In 2015, the union paid tens of thousands of dollars to
electrical contractors in what are called "market recovery funds,"
according to federal documents. Those funds are commonly paid to a union
contractor that may be bidding against a nonunion crew for work.
That allows the union contractor to submit a lower bid
and win the job. This often happens in the suburbs, where building trades have
a weaker grip on the labor market.
One of the largest payments, $100,000, went to Dougherty
Electric, a South Philadelphia company.
In 2008, company owner Donald "Gus" Dougherty,
who is not related to John Dougherty, pleaded guilty to federal criminal
charges that included doing free work for the union chief.
Gus Dougherty was sentenced to two years in prison and
ordered to pay $1.6 million in back taxes.
Staff writers Jeremy Roebuck, Dylan Purcell, Jane Von
Bergen, Emma Platoff, Mari A. Schaefer, Olivia Exstrum, Janaki Chadha, Chris
Hepp, Susan Snyder, and Aubrey Whelan contributed to this article.
Source: Philly.com
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