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Federal indictments for union leader, city councilman center on construction industry

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The key points of the federal indictment, broken down

AP

Philly was rocked last week when the federal government handed down a 116-count indictment against powerful Local 98 IBEW union leader, John Dougherty, accusing him of fraud, bribery, and using union funds as his “personal bank account.”

Included in the indictment are charges against city councilman Bobby Henon, who is accused of taking bribes from Dougherty to support council activities that were in the union leader’s interest. Many of those activities had to do with Dougherty’s aim to replace non-union workers with union employees on construction-related projects around the city, according to the indictment.

Six others, including five members of the union and Anthony Massa, head of Massa Construction, are accused of misusing union funds and lying to the government about it.

Much of the 160-page indictment has raised questions about the city’s construction industry and some of its key players, which we’ve broken down here for a clear recap of the situation. (Want details? Philly.com goes into them.)

Who is John Dougherty?

Dougherty has been a major figure in the construction industry—albeit an often controversial one—for nearly 30 years, since he started as business manager of the Local 98 chapter of the International Brotherhood of Electric Workers (IBEW) in 1993.

He was also Chairman of the Board of the Philadelphia Redevelopment Authority during Mayor John Street’s administration in 2000-2008.

“As a labor leader, he’s been vigilant in exposing the rampant underground economy in the city’s construction industry,” Local 98 IBEW spokesperson Frank Keel said in an email to Curbed Philly last week.

The Market East project in Center City also has Dougherty to thank, Keel said. He added that Dougherty worked hard to sell the idea of the Market East development to National Real Estate Advisors and the IBEW in D.C.

According to Philly.com, though, Dougherty has also protested and disrupted several construction sites that were using non-union labor.

And industry leaders have had concerns regarding the union’s influence—even control—over construction projects in the city.

“Our members are made of union and non-union workers,” said Joe Perpiglia, president and CEO of the Eastern Pennsylvania chapter of Associated Builders and Contractors, while discussing the impact of Dougherty’s indictment. “We’ve done a whole lot of work [in the city], and we believe that’s a right that really shouldn’t have a labor affiliation tied to it—and that’s the control.”

“That control was absolute and that was a directive,” Perpiglia said, adding, “I hope these indictments shed some light on what’s going on.”

Councilman Bobby Henon’s role

Some of the most damning allegations put forth in Wednesday’s indictment stem from Dougherty’s relationship with Henon, who was elected to his position as the councilman for district six in 2011. He was also appointed Chair of the Committee on Public Property and Public Works, handling issues related to properties and buildings in Philly.

Prior to his tenure on the city council, Henon was a political director for the Local 98 IBEW, where he got to know Dougherty.

“At defendant John Dougherty’s direction, defendant Henon drafted, supported, advocated, and sponsored Philadelphia City Council legislation, resolutions, and other Council legislative activities that were favorable to defendant Doughtery’s personal, professional, or financial interests,” the indictment said of Henon’s relationship with the union leader.

First, the indictment claims the Dougherty gave Henon “personal benefits” during his tenure as city councilmember, like a salary from Local 98 and sports tickets, and that he hid the close nature of their relationship from the public.

In turn, Henon did several things in his unique political position that were beneficial to Dougherty, the indictment claims.

In one incident detailed in the indictment, after Dougherty heard a non-union company was installing MRI machines at the Children’s Hospital of Philadelphia (CHOP), he called and threatened the administrator at CHOP saying, “You don’t want a city thing shutting it down. We have had other hospitals shut down because of that.”

Henon then doubled down, complaining to the Department of Licenses and Inspections about the MRI machine’s installation.

In another incident, Dougherty heard that a non-union worker “received too much fiber optic cable work,” from Comcast in 2015 and complained to Henon about it. The councilman then had his chief of staff urge Comcast to hire MJK Electrical Corporation, an associate of Dougherty’s, the indictment said.

In 2015, when the Teamsters Union put out an ad that portrayed Dougherty in a negative light, Henon threatened to propose the controversial Soda Tax, which he knew their union opposed. Writing a text to Dougherty, he said, “I’m going to f*** them... There will be consequences,” according to the indictment.

Embezzlement charges for personal construction projects

Apart from the relationship between Henon and Dougherty, much of the nearly 160-page indictment deals with the fraud and embezzlement charges brought against Dougherty.

His position gave him access to funds and allowed him to, “repeatedly and persistently steal from Local 98 and put his own self-interests over that of the membership of the union,” according to the federal indictment.

Since 2010, Dougherty, along with Local 98 President Brian Burrows and another Local 98 leader, Michael Neill, is accused of using union funds to pay for renovations and construction work at a bar Dougherty owned. The indictment, which charges Burrows and Neill with misuse of funds and making false statements, claims the three men also used union funds to pay for construction projects on their own homes, including a project to repair termite and water damage at Dougherty’s home.

Union funds were also used to pay for air conditioning repairs at Burrows’ Mount Laurel, New Jersey home, and to repair stairs at Neill’s house in Philly.

As for who took on the work, investigators say Massa is to blame. He’s accused of having his company, Massa Construction, complete the projects and of lying about the nature of their work, claiming the construction projects were done on Local 98-owned buildings.

The total amount of union funds used for personal construction projects amounted to nearly $400,000, according to the indictment.

Dougherty and several other union members are also accused of using union credit cards to buy dinners at restaurants, sports tickets, sandwiches, and groceries—falsely reporting them as purchases for Local 98, the indictment said.

What’s next?

Dougherty and Henon have both pleaded not guilty to the accusations against them. Henon’s plea came while he would normally have been in a council meeting Thursday morning.

A bill he was going to introduce Thursday, which would “explore economic crimes” in the construction industry, was introduced by Councilman Bill Greenlee in his absence, according to PlanPhilly. The bill would create a new Contractor Review Board within the Department of Licenses and Inspections to expand the department’s inspection efforts, according to the site.

As for the impact the indictments will have on the construction industry in Philly, Pat Eiding, Secretary-Treasurer for the Buildings and Construction Trades Council said he doesn’t anticipate any affect on construction projects in the future.

“Folks will try to see some sort of a breakdown in our solidarity,” he said, adding that the unions in Philly have faced many difficulties in the past. “If there’s some sort of a thought in people’s heads that union movement will be weaker, it’s a fool’s mission to try and get a story going (about that).”

  • U.S. v. John Dougherty, et al. [Philly.com]
  • Read the full Johnny Doc, IBEW Local 98 indictment [Philly.com]
  • On the job site and behind the scenes, Johnny Doc shaped Philly’s skyline. Will he still? [Philly.com]
  • Philly Soda Tax: 4 Important Ways It Will Affect This City [Curbed Philly]
  • Councilman indicted on union corruption charges introduces contractor review bill [PlanPhilly]