scouring-union-financials

USDOL Report Gives Inside Look at Johnny “Doc” Corruption Investigation

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For years federal investigators have been scrutinizing International Brotherhood of Electrical Workers (IBEW) Local 98 officers’ management of its forced-dues filled union treasury.  Thanks to Local 98’s 2016 federal financial disclosure reports, we have a peek inside federal investigators’ concerns. (Note: At the time of publication of this post, IBEW Local 98 had not filed U.S. Department of Labor (USDOL) LM-2 reports for 2017 and 2018.). 

Red flags pop up all over IBEW Local 98’s 2016 USDOL LM-2 report “Item 69 – Additional Information” section.  It will seem obvious to you by looking over Item 69 (see below) that Philadelphia Union Boss Johnny “Doc” Dougherty has been a person of interest to the investigators for several years.

The union disclosures provide details of a financially mismanaged union.  For example, IBEW Local 98 officers reported:

  1. Petty cash totaling $7,000 stolen from two union rental cars.
  2. And admitted that IBEW Local 98 union officers unwittingly loaned $271,462 to Business Manager John J. Dougherty. 
  3. Giving over $1.5 million to politicians, many with close ties to Dougherty.  (See below the complete Item 69 as filed by IBEW Local 98 union officers.)

Also, worth noting from the IBEW Local 98’s LM-2 report:

  • Union Liabilities increased 240% from 2015 to 2016
  • The union gave the following businesses $803,950 in subsidies from a union treasury which included forced-union dues and fees:
    • Independence Electric, Inc.
    • Cascio Electric
    • Dougherty Electric, Inc.
    • AJM Electric, Inc.
    • Rue Electric, Inc
    • MJK Electrical Corporation
    • McGoldrick Electric Inc
    • Massa Construction Corp
    • M. Gitlin Company, Inc
    • Sunlight Electric
    • Silas Bolef Co
    • Shelly Electric Co., Inc
    • Whitemarsh Electric
    • RCR Electrical Contractors, Inc
    • Pinnacle Electrical Construction, LLC

And for those who have not seen the 154-page indictment that includes Dougherty, other IBEW Local 98 officials, political candidates, and employers, click here to view the indictment pdf file.

Johnny “Doc” Dougherty (source: bizjournal)

Unfortunately for electrical workers in Philadelphia and Pennsylvania, the state does not have a Right To Work Law and the hardworking men and women laboring under IBEW Local 98 union contracts are forced to continuing paying into this corrupt union or quit their jobs.  

America can do better. Pennsylvania can do better.  Philadelphia, the birthplace of America’s declaration for freedom over a tyrant, should choose to end the ability of the Johnny Docs of this world to tyrannize hard working Americans.

Draw your own conclusions. (Click here to download the entire 2016 IBEW Local 98 LM-2 Report including Item 69).

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IBEW Local 98 2016 Form LM-2 [verbatim]

Question 69 – Additional Information [note: Johnny “Doc” Dougherty is a Business Manager]:

General

As required, the President and Financial Secretary of Local 98 have signed this Form LM-2 on behalf of Local 98.  All of the representations made in this Form LM-2 are made to the best of the President’s and Financial Secretary’s knowledge, information and belief as of this date, relying on figures developed by the Union’s staff and its independent auditors, and with the advice of the Union’s outside professional advisors, and are qualified and limited by, and subject to ongoing review and possible revision as a result of ongoing federal and internal investigations of Local 98’s financial practices.

Explanation of Response to Question 13

A. Credit Card Charges by Business Manager.   During the year 2016 Local 98 paid certain expenses charged to the Business Manager’s credit card for which the Local Union either did not receive, does not currently possess and/or has been unable to locate a receipt or other adequate documentation of the business purpose.  Some expenses were charged on the Business Manager’s (BM) union-provided credit card; others were charged on the Union Office (UO) credit card, although the charges on the UO credit card may have been made by union employees other than the Business Manager.  The amount of these expenses is listed below by classification of the type and time period of the expenses.  

Most of these expenses have been separated between January 1, 2016 to August 5, 2016 and August 6, 2016 to December 31, 2016.  For the period January 1, 2016 through August 5, 2016, the records were removed by the Federal Government and were returned in such a way that receipts and/or other documentation was missing or unable to be located.

These amounts have been reported in Schedule 11, Column G.

Type of Expense                                                                                          Period                       Amount

BM Credit card charges, inadequate receipts, no receipts and/or no documentation                                                                               

1/1/2016 – 8/5/2016           $17,416

BM Credit card charges, inadequate receipts, no receipts and/or documentation                                                                                     

8/6/2016 – 12/31/2016      $6,142

UO credit card charges, inadequate receipts, no receipts and/or no documentation                                                                               

1/1/2016 – 8/5/2016           $5,132

UO credit card charges, inadequate receipts, no receipts and/or no documentation                                                                               

8/6/2016 – 12/31/2016      $1,554

BM Bank Wire, inadequate receipts, no receipts and/or no documentation                                                                               

1/1/2016 – 8/5/2016           $3,250

B. Petty Cash.

For the period 1/1/2016 to 12/31/2016, petty cash in the amount of $8,355 was withdrawn in the name of the Business Manager for use by Union officers and employees and for which the Union has inadequate or no receipts and/or documentation.  These amounts have been reported in Schedule 11, Column G.

C. Personal Charges.   During January and February 2016, expenses were reimbursed to the Business Manager for charges on his personal credit card that the Business Manager incurred for union business purposes.  The total reimbursement was $40,050.  $30,474 of this amount had adequate receipts and documentation, and is reported in Schedule 11, Column F.  The remainder is included in Schedule 11, Column G.  In February 2016, the Business Manager reimbursed Local 98 for personal charges that were paid by Local 98 in 2014, totaling $5,998.

In July of 2018, the Business Manager reimbursed Local 98 for personal charges that were paid by Local 98 in 2014, totaling $5,633, and for personal charges paid by Local 98 in 2015, totaling $15,743. The amount due to the Business Manager for charges on his personal card for those years has not been paid to the Business Manager.

During 2016, the Business Manager charged certain union expenses on his personal card and personally paid for other union expenses.  The Business Manager has not yet been reimbursed for these union expenses that he personally paid for.  During that same year, Local 98 paid for certain personal expenses of the Business Manager.    The amount of personal expense disbursed by Local 98 was $10,179 of which $96 was reimbursed to Local 98 in November 2016 and has been reported on Schedule 2 for the Business Manager, $3,665 was reimbursed to Local 98 in March 2018, and $6,418 was reimbursed to Local 98 in July 2018.

D. Legal Fees Paid in Error.   The Business Manager has advised that three (3) lawsuits for which certain legal fees were paid by Local 98 were brought in his personal capacity and, therefore, were mistakenly paid by the Local Union.  The legal fees were paid over the course of six (6) years and totaled $248,228.  These fees were billed by and paid to the same law firm that was engaged in other legal work on behalf of the Local Union.  Of that amount, $1,885 was paid during the year ended December 31, 2016, and has been reported on Schedule 2 for the Business Manager, and $8,225 was paid in the year ended December 31, 2017.  Those legal fees, with interest, were repaid in July 2018.

E. Cash Stolen from Union Rental Car.   In September 2016, while at the IBEW International Convention in St. Louis, a series of items were stolen from a rental car, including between $3,300 and $3,700 of petty cash, as well as receipts for expenditures made with petty cash.  A police report was filed.

F. Cyberfraud. In April 2016, Local 98 was the victim of cyberfraud theft, resulting in a loss of $206,000 over a 4-day period.  Bank of America was able to recoup $58,955 and Wells Fargo Bank was able to recoup $8,041 for a net loss of $139,004.  The cyberfraud theft was timely reported by Local 98 to the Economic Crime Unit of the Philadelphia District Attorney’s Office.  That office referred the matter to the office of the United States Attorney for the Eastern District of Pennsylvania.  Local 98 contacted the U.S. Attorney’s office on several occasions in 2016 and 2017 and was advised that an FBI agent would be assigned to the matter.  To date, Local 98 has not been contacted by the FBI.   In addition, Local 98 filed a claim with its insurance carrier for the loss; however, the carrier has denied the claim.