Update: 4:32 p.m.
On Wednesday morning, federal officials handed down a blistering indictment of labor leader John Dougherty, head of IBEW Local 98, and District 6 Councilman Bobby Henon.
Six other people were also charged as co-conspirators in what prosecutors paint as an extraordinary embezzlement scheme that defrauded the union’s dues-paying members and turned its bank account into a personal slush fund.
Considered the most powerful union in the state, Local 98 has a ton of political clout between Philadelphia and Harrisburg. Via campaign donations — in excess of $30 million over the last two decades — it helped elect Mayor Jim Kenney and various other city councilmembers. Dougherty’s own brother sits on the state’s highest court, largely thanks to the union’s political largesse.
There are 116 criminal charges levied against those named in the indictment, which span from embezzlement of hundreds of thousands of dollars to falsification of federal income tax reports. For Henon, the corruption charges also include depriving city residents of honest public service by using his seat to do Dougherty’s personal bidding.
Actions surrounding the alleged crimes played a role in several major recent happenings in Philadelphia, like the enactment of the soda tax and the negotiation of the city’s massive contract with Comcast. Prosecutors emphasized that the wide-reaching allegations do not target the union itself — just several of its most influential leaders.
“The bottom line is that this indictment alleges John Dougherty and his co-defendants used Local 98 funds as their own,” said First Assistant U.S. Attorney for the Eastern District of Pa. Jennifer Arbiter Williams.
Both Dougherty and Henon released statements on Wednesday denying any wrongdoing.
The defendants are scheduled to appear before a judge on Friday afternoon. If convicted of all the charges, both the powerful union leader and his ally councilman could spend decades in prison.
Here’s a rundown of the allegations and how they’re connected to the events of the past few years.
Embezzling money from the union account
What it means: Dougherty and others used union credit cards to pay off personal expenses amounting over $600,000.
Who’s charged: Johnny Doc, Brian Burrows, Michael Neill, Marita Crawford, Nico Rodriguez, Brian Fiocca, Anthony Massa
- Doc’s Union Pub: Owned by Dougherty, Burrows and Neill before they sold it about two years ago, the bar benefitted from Doc’s theft. It underwent construction work and renovations that were paid for from the union’s Apprentice Training Fund, federal prosecutors allege.
- Pennsport building: Dougherty’s multi-use building at 1837 South 2nd St. was maintained and renovated using stolen money.
Repurposing union workers for personal errands
What it means: Federal authorities allege Dougherty worked a ring of union-payrolled men to do personal errands unconnected to the union’s business, effectively depriving dues-paying members of their work.
Who’s charged: Johnny Doc, Marita Crawford
- Dougherty’s family members apparently benefited from a range of personal services on the union’s dime. Most of the allegations focus on Dougherty directly ordering subordinates to perform tasks for relatives and close associates, from power-washing a sidewalk to, uh, watering the tomatoes at Dougherty’s home. In some cases, Marita Crawford, Local 98’s political director, also personally benefited from the free union labor.
Stealing services from the public
What it means: By taking direct orders from John Dougherty, the indictment alleges that Councilman Bobby Henon robbed the public of its right to honest services from an elected official.
Who’s charged: Bobby Henon, Johnny Doc
- Soda tax: Henon was an early supporter of Philly’s tax on sweetened beverages, and he asked his district staff to prep the materials to advertise it. The indictment suggests this was a clapback at the Teamsters Union, which opposed the tax and ran a negative political ad on Johnny Doc.
- PPA audit: At the advice of Dougherty, Henon expressed his disapproval of auditing the Philadelphia Parking Authority.
- Comcast deal: In one particularly detailed and damning allegation against Henon, prosecutors present evidence that the councilman took direct orders from Dougherty in negotiating the city’s lucrative contract with Comcast. At one point, to calm an irate Dougherty, Henon reportedly said: “I don’t give a fuck about anybody, alright, but fucking you and us, and you know that.”
- Hospital intimidation: The indictment also alleges Dougherty used Henon to enact vengeance on agencies for personal and union-related vendettas. In one case, Dougherty allegedly asked Henon to punish a private hospital for using non-union labor to install an MRI machine. In text exchanges captured by federal prosecutors, Dougherty warned a CHOP official that “we have had other hospitals shut down because of that.” When the hospital moved ahead with its planned construction and L&I did not intervene at Henon’s request, the councilman told Dougherty he’d “personally walk over” and handle it. (“I’ve done nothing wrong,” Henon wrote in a statement Wednesday.)
- Towing vengeance: In another instance cited by prosecutors, Henon allegedly helped Dougherty seek retribution against a towing company after Dougherty had to pay $200 to get his vehicle back. “Just tell them you have heard nothing but complaints,” Dougherty allegedly told Henon. “Just smoke ’em.” Henon later instructed a staffer to make a surreptitious recording at the company’s impound lot and then introduced a resolution to hold hearings on the company’s business practices.
What it means: Elected officials aren’t supposed to accept cash as an influence in their public policy work. This indictment alleges Bobby Henon did that — receiving tens of thousands of dollars in campaign contributions, home repairs and tickets to concerts and sporting events.
Who’s charged: Bobby Henon
- The bribery charges are largely related to Henon’s alleged actions outlined above on behalf of Dougherty.
Lying to the IRS
What it means: Dougherty and his employees opted not to report hundreds of thousands of dollars in income to the IRS, deciding instead to use it for personal expenses like their own home renovations.
Who’s charged: Johnny Doc, Brian Burrows, Michael Neill, Marita Crawford
- Doc’s Union Pub and the Pennsport Building: These buildings also benefited here — some of that undeclared income went directly to their renovations and repairs.
Accepting money he shouldn’t have
What it means: Dougherty is accused of accepting thousands of dollars in gifts — security systems, big-screen TVs and gift certificates from MJK Electric owner George Peltz. Problem is, federal law prohibits employers from paying off union officials unless it’s at fair market price.
Who’s charged: Johnny Doc
- Comcast, again: Johnny Doc helped MJK Electric become a preferred vendor for Comcast, which earned the company more than $2 million of work.