Sheriff skirts deal with Nutter on contract approvals

Please note: This article is published as an archive copy from Philadelphia City Paper. My City Paper is not affiliated with Philadelphia City Paper. Philadelphia City Paper was an alternative weekly newspaper in Philadelphia, Pennsylvania. The last edition was published on October 8, 2015.

AxisPhilly has found that the Sheriff's Office is assigning tens of thousands of dollars worth of no-bid contracts to companies and individuals without city approval.

Sheriff skirts deal with Nutter on contract approvals

Two years ago, Mayor Michael Nutter and Philadelphia Sheriff Jewell Williams made a deal.

The sheriff agreed, among other things, to follow city regulations that require that all contracts go to the city’s Law Department for approval.

The mayor, in exchange, agreed to continue to fund an embattled office whose elimination Nutter had called for several times over the last few years.

It was a truce that would allow the city to at least claim a victory for transparency: Nutter’s push to dissolve the Sheriff’s office followed a report by City Controller Alan Butkovitz accusing former Sheriff John Green of allowing an outside company without a valid contract to essentially run the office’s real-estate division for millions in commissions. The company, Reach Communications, disputes this and claims it operated under a valid agreement made under Sheriff Green. The matter is under litigation.

Under this new deal, enshrined in a Memorandum of Understanding and signed by Mayor Nutter and Sheriff Jewell Williams, there would be none of that: “All contracts of the Sheriff’s Office,” the agreement stated, “shall be in writing and shall require approval” by the city’s Law Department — almost word for word what’s already required by the City Charter.

There is evidence the Sheriff's Office is not complying with that 2011 agreement.

AxisPhilly has found that it is assigning tens of thousands of dollars worth of no-bid contracts to companies and individuals without city approval.

How this could happen — why the Sheriff hasn’t cleared these contacts with the city, and why the city hasn’t taken steps to intervene — isn’t clear. The Sheriff's office has repeatedly refused to answer questions about its contracting procedures, and the city declined to comment as well.

Contracts for at least four companies with which the Sheriff has acknowledged doing business are not listed in city records as being approved by the Law Department. Other documentation, as well as information from sources close to the office, suggests that the number of individuals and companies who have been on the Sheriff’s payroll — without the approval or scrutiny of the city — is much larger than that.

The City Charter requires contracts from all agencies — whether city Departments or independently elected, like the Sheriff’s Office — to be approved by the city’s Law Department.

And all contracts sent to Law are supposed to be marked “conformed,” (approved, essentially) in the city’s electronic contract database before the city will issue a check. Yet several companies currently working for the Sheriff aren’t listed as having approved contracts in the city’s database.

At least three contracts the Sheriff’s office has acknowledged having — with Cardenas Grant Communications, City Line Abstract Company, and Philadelphia Search and Abstract, LLC — were never fully approved by the city's Law Department.

And not one of 14 contracts submitted by the Sheriff to the city’s electronic contract database for approval by Law was ever actually approved.

This is not to say these companies aren’t doing legitimate work, or working under good-faith understanding that their contracts are valid. The fact that the city hasn’t approved the Sheriff’s contracts is really a question for Sheriff and the city.

But it’s a question where the answer matters.

The fact that at least some these companies were paid without their contracts ever having been approved indicates that the Sheriff's Office has been paying these vendors using its own funds, avoiding the system built into the city’s normal contracting procedures.

Normally, before the city can issue a check it has to pass approval from the city’s Law Department and the City Controller. It's part of the system of internal controls practiced by the city for years for every expenditure by every department and agency.

It’s also required by city law. The Philadelphia Home Rule Charter explicitly states that for all city offices (including the Sheriff), “The [Law] Department shall prepare or approve all contracts,” and that the “Director of Finance shall approve” contracts as well.

In its lawsuit against Reach Communications, the city cited these very clauses, maintaining that those contracts would have been denied had they been submitted to the Law Department.

Circumventing the city’s contracting and procurement processes means circumventing the scrutiny of those offices — in exactly the same way the city and Controller accused former Sheriff Green of doing shortly before he resigned under pressure. The Controller’s audit revealed an agency that had lax accounting standards and that had skirted normal contract procedures for no-bid contracts — contracts which the Sheriff can assign more or less at will, and which have often gone to companies owned by or connected to political players.

The 2011 memorandum was designed to halt non-transparent finances by putting all contracts under routine scrutiny by the Law Department and the Controller.

The City Controller’s office, which is supposed to act as an independent auditor of all city agencies, noted in an email that if contracts were being issued outside of normal practices, they would never come across the Controller’s desk.

“If a contract is not prepared or reviewed by the City’s Law Department as required by …. the Home Rule Charter then payments on that contract would not come through the city’s finance system or to the City Controller’s Office,” said Harvey Rice, a deputy to Controller Alan Butkowitz.

The Law and Finance Departments. as well as Mayor Nutter's office, declined to comment on these apparent violations of the Memorandum of Agreement.

Nutter Spokesman Mark McDonald cited “ongoing litigation,” as a reason for the silence. But the litigation to which McDonald refers is a pair of lawsuits between the city, former Sheriff Green, and Reach Communications, which are seemingly unrelated to new contracts entered into by Green's successors, interim Sheriff Barbara Deeley and Jewell Williams.

When pressed for clarification, McDonald wrote only that AxisPhilly's questions about current Sheriff's office procedures “are still issues squarely at the center of pending litigation.” He declined to elaborate.

But these explanations, says Mark Zecca, a longtime top lawyer for the city who ran for Controller this year, don’t hold up — and don’t take the city or Controller off the hook.

“The Sheriff absolutely is required to go through the normal procurement and finance requirements — it's in the Charter. The Sheriff isn't allowed to just go out his own, no way," Zecca said. “If you’re Finance Director, you’ve got to put a stop to that. You don’t have to be blind if you don’t want to be blind.”

Zecca says the city’s Law and Finance departments should be enforcing the rules of the City Charter — and that the Controller, as an independent check, should be raising alarms about city inaction as well as investigating the Sheriff’s contracts himself.

City Controller Alan Butkovitz, meanwhile, declined to comment on the specifics of AxisPhilly’s findings but says that another audit is underway.

“We are currently engaged in an audit of the Memorandum of Understanding,” Butkovitz said in a statement.

Sources in City Hall and City Council, speaking on background, suggest that while there may be private frustration with the Sheriff's Office, the political will to publicly criticize the Sheriff simply isn't there.

Behind the scenes, the city has been working to help the Sheriff implement a much-needed new computer system (named “JEWELL,” just like the Sheriff). And city agencies like the Revenue Department appear to have absorbed some of the contracts for work previously done by the Sheriff.

AxisPhilly shared these findings with the Sheriff’s Office for comment more than a week ago, but received no explanation as to why so many contracts do not appear in city records as having been approved.

In an email on Sunday, Sheriff spokesman Joe Blake wrote that he had already answered our questions. AxisPhilly disagrees and has re-submitted them for comment.  

This article is part of an ongoing series on the Philadelphia Sheriff's Office. Follow Isaiah Thompson on Twitter.


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