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Accounting & Audit

Feds continue digging into Pittsburgh mayor’s office

A former police chief has been indicted, and the mayor has virtually disappeared from public view.

They hauled boxes out of Pittsburgh police headquarters, summoned mayoral bodyguards and a secretary before a grand jury, pored over city parking variances and gathered paperwork on private renovation work at the mayor’s house. A former police chief has been indicted, and the mayor has virtually disappeared from public view.

So just what are federal investigators up to?

What initially looked like a tightly focused federal inquiry into a questionable city of Pittsburgh contract has evolved into an apparently sprawling probe of Mayor Luke Ravenstahl’s administration and his personal dealings that seems to be turning over every rock and looking into every nook and cranny. Because aspects of the investigation have been aired in open court and others have come to the public eye through witnesses, the normally secret work of the Federal Bureau of Investigation, Internal Revenue Service and U.S. Attorney’s Office has become water cooler talk.

One former federal prosecutor said the transformation from an apparent narrow probe to what looks like a broad effort to run down various leads and tips is to be expected.

“Is it unusual for an investigation to start one way with a narrow focus and then balloon out into something else?” said Butler defense attorney Alexander H. Lindsay Jr., who was once an assistant U.S. attorney. “The answer is no.”

When reviewing potential public corruption, though, investigators have to walk a tightrope.

“A good criminal investigation is part science, part art, and the goal is to avoid fishing expeditions, but to follow the evidence,” said Fred Thieman, who was Western Pennsylvania’s U.S. attorney from 1993 through 1997. “The line between the two is oftentimes very unclear. You can lose a good case by not pursuing it far enough. On the other end of the spectrum, you can waste a lot of resources chasing your tail.”

When an investigation inflates in the already high-pressure world of local government, there can be personal and political ramifications beyond legal bills and potential indictments. Governmental leaders can lose focus, and public-sector performance can be threatened.

“Recent events involving past or present members of the [police] bureau have had an adverse effect on the reputation or image of this organization,” wrote Pittsburgh police Deputy Chief Paul Donaldson, “but these were the actions of only a few and do not adequately reflect the continuous dedicated service to the community and to each other, exhibited by our officers.”

Four police bureau employees were put on paid administrative leave in the midst of disclosures that city funds were being wrongfully channeled from the police bureau to accounts at a credit union.

No one in city administration has explained the reason for the leaves, but taxpayers have spent more than $40,000 to pay the employees to stay home and other workers have had to pick up the slack.

Whether the pall hanging over Grant Street will curb the current administration’s ability to do anything meaningful in its waning months may depend on both the probe’s course and the mettle of city leaders.

Radios to renovations

The investigation seems to have started with a tip to Allegheny County District Attorney Stephen A. Zappala Jr. about a contract the city awarded to Alpha Outfitters to install and maintain police car radios and computers. Mr. Zappala’s office turned the matter over to federal prosecutors and has not revealed where that tip came from.

The Alpha Outfitters probe resulted in charges against a former city systems analyst and a Robinson entrepreneur who was a friend of then-police Chief Nate Harper. The former chief was charged not in relation to the contract, but rather for allegedly diverting checks meant for the city into an unauthorized account, and then using the money for personal expenses.

Since then, the identities of some of those working with, or summoned by, the FBI, IRS and U.S. Attorney’s Office have become known.

Chief Donaldson has said he has met with authorities. Former city systems analyst Christine Kebr, who has pleaded guilty in connection with rigging a bid, had her sentencing delayed while she cooperates. And Mr. Harper, indicted on one count of conspiracy to divert city funds and four counts of not filing tax returns, has met with federal investigators at least seven times dating to May 2011.

Two police bureau finance employees, two mayoral security sergeants and a senior administrator went before grand juries.

Mr. Ravenstahl met Feb. 20 with authorities for two hours before pressuring Mr. Harper to resign that day, but he has not disclosed details of that discussion or said whether there have been subsequent meetings. Public safety director Michael Huss has refused to say whether he has had contact with investigators. Mr. Ravenstahl subsequently announced that he would not run for another term.

“Once the feds get involved and people start down the cooperation path, you never know what you’re going to end up with,” said veteran defense attorney Stanton D. Levenson. “And I think that’s what you’re seeing. They’re moving into areas they didn’t know about originally.”

Agents subpoenaed documents related to parking variances provided by the police bureau. Investigators obtained records of renovations to Mr. Ravenstahl’s Fineview home that are being done by a company owned by a man whose other business does millions of dollars in work for the city Department of Public Works.

When those public works contracts came under media scrutiny, city operations director Duane Ashley spent more than a day assembling information and explaining the process by which they were awarded. It’s a small example of the fallout from investigations.

Mr. Lindsay said U.S. attorneys understand the impact the subpoenas, speculation and grand jury activities can have on running a local government. But do they care? That depends, he said, on the prosecutor.

“You’re in this balancing act of wanting to conclude it with as much dispatch as possible and pulling the trigger, but at the same time you have to be as careful as possible,” Mr. Lindsay said.

But if the federal probe has affected city operations, it’s difficult to gauge how. Mayoral spokeswoman Marissa Doyle wrote in an email statement that, “We continue to proudly serve the people of Pittsburgh each and every day, and that will remain our focus over the next few months.”

Members of his administration said he’s always been a hands-off mayor and that he expects them to do their jobs without him looking over their shoulders. If he’s been preoccupied, they’re not aware.

“He’s not an extremely hands-on mayor. He’s very visionary. He’s very intelligent,” Mr. Ashley said in an interview Friday. “So he gives you the leeway.”

He said that he usually consults the mayor when he’s unable to achieve something at the department level. Last week, he said, the mayor helped him resolve an issue with a “strongly worded email,” though he declined to go into detail because it’s a personnel matter.

He said the federal investigation has been the subject of “water cooler gossip” around the office, but that he’s too busy to engage.

“Very few of us have water coolers,” he said. “We don’t have time to speculate.”

But Mr. Ashley acknowledged that the mayor’s lame-duck status has created somewhat of a distraction for city staff, especially for those who will need to find new jobs come January.

Mr. Huss also said it has been largely business as usual. He is working on an effort to remake the police bureau’s Special Events Office, which schedules side jobs for officers and has been the subject of recent scrutiny.

“That work is all still going on, and it’s very important work and it can’t stop for any distraction,” he said. “I’ve told all my people, ‘Keep your eye on the ball. Stay focused on the job.’ “

Council President Darlene Harris said the mayor has never been very engaged with her council office, a departure from his predecessor, Bob O’Connor, who famously would stroll the hallway of the fifth-floor wing that holds members’ offices. She said she has “never had consistent contact with the mayor” and instead deals directly with department staff.

“I’ve always worked with numerous people to get things done,” she said. “In that matter, I haven’t had any difficulties.”

Recently, their paths crossed at a Comprehensive Municipal Pension Trust Fund meeting, where the mayor is a board member, and at a news conference.

“Other than that, I don’t know much of what has gone on over at the mayor’s office,” she said.

Rumor-rich environment

Despite the best efforts of even the most discreet investigators, the media sometimes become privy to subpoenas and the existence of the grand jury’s secret proceedings — although not their content. Stories follow, and that can magnify the personal consequences.

Eight years ago, then-Mayor Tom Murphy, during his final year in office, faced a well-known federal investigation into the firefighters contract awarded in 2001, and that union’s endorsement of him in that year’s primary. Did that distract him or his administration?

“No, because I always thought it was a joke,” Mr. Murphy said Thursday. “I knew I had done nothing wrong.

“It cost me a lot of money in legal fees, but it was not something I thought about day in and day out.”

The probe of Mr. Murphy’s administration lasted nearly two years, never appeared to grow much beyond the fire union contract, and ended in 2006 with an unusual announcement that was neither an indictment nor an exoneration. Mr. Murphy agreed to cooperate with federal, state and local authorities in identifying flaws in Pennsylvania’s collective bargaining system, but nothing came of that pledge.

Former U.S. Attorney Mary Beth Buchanan, who oversaw that investigation, was not available Friday.

Mr. Murphy bristled at what he characterized as the media’s assumption that he was guilty.

Good investigators know they have to proceed carefully, especially in places like Grant Street, Mr. Murphy said. “They’re dabbling in areas that are rumor-rich and oftentimes unnecessarily inflammatory and prejudicial for people and their reputations,” he said.

For months, city police officers have regularly related to reporters midweek rumors of indictments allegedly pending for the following Friday of specific numbers of people. The media has responded by scrambling to learn whatever it can about the direction of the probe.

“There are times when media exposure hurts investigations, simply because there are some situations where the scarcity of information and who knows what when can be very important, and the proliferation of information can impact an investigation,” Mr. Thieman, the former federal prosecutor, said.

Media attention sometimes helps, he added. “Good reporting and public facts can cause people to come forward who know things.”

Whether Mr. Ravenstahl can mirror Mr. Murphy’s nonchalance is unclear. So far, he has handled the pressure differently.

For two months, since announcing March 1 he would not run for another term, Mr. Ravenstahl has severely limited his public appearances. Since a late March lawsuit challenging UPMC’s tax status, he hasn’t launched any sweeping initiatives.

The mayor has been largely out of the public eye of late, last making an appearance during a promotion ceremony for police and firefighters May 9, the day after his secretary and two police bodyguards testified before the grand jury. He refused to answer reporters’ questions, delivering a brief statement and then briskly making his way out of council chambers.

“So, I’m just going to make a statement” he said in his statement. “As I said yesterday, we’ve continue to cooperate with the authorities and we’ll continue to do that. I’m not going to answer any questions about anything specifically from yesterday. We’ve cooperated from the beginning. We’ll continue to do that and, like I said, I look forward to the revelation of all the facts.”

On May 13, the mayor was due to appear at the presentation of the Pittsburgh Downtown Partnership’s “State of Downtown” report, but canceled. His office sent an email to media minutes before the event was supposed to start announcing he did not plan to show.

Veteran defense attorney Robert Del Greco, who represents Mr. Harper, said he isn’t privy to the direction of the investigation. He knows well, though, the personal toll such probes can take on targets, subjects and even witnesses.

“I generally believe that, absent being in the emergency room with an unidentified ailment, the next potential worst thing is being a subject of a federal investigation,” Mr. Del Greco said. “Once you are the subject of it, and theoretically on the wrong side of it … your chances of prevailing are not good.”

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Copyright 2013 – Pittsburgh Post-Gazette