Where powerful Local 98 spent its millions: Health benefits, political donations - and Eagles tickets
What does it take to lead a union for 4,652 electricians - one the state's most politically powerful? Start with $30 million in campaign contributions spent over the course of 16 years on state and local candidates by the city's electricians' union, Local 98 of the International Brotherhood of Electrical Workers.
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What does it take to lead a union for 4,652 electricians - one the state's most politically powerful?
Start with $30 million in campaign contributions spent over the course of 16 years on state and local candidates by the city's electricians' union, Local 98 of the International Brotherhood of Electrical Workers.
Over the years, the union's money and manpower have helped elect mayors, City Council members, county commissioners, congressmen, state legislators, governors, and at least 58 judges, including the union leader's brother and five Pennsylvania Supreme Court justices.
Throw in tens of millions of dollars in spending a year - $26.2 million in 2015 alone. That paid for health benefits, $112,000 worth of Eagles tickets, $11,803 in holiday gifts bought from the upscale Coach store in Philadelphia, even $8,925 in spa services.
On Friday, federal law enforcement officials searched Local 98 headquarters as well as the home of the union's dynamic leader, John J. "Johnny Doc" Dougherty.
Sources said the investigation is a joint FBI/IRS probe into alleged misuse of union funds and has been underway for more than two years.
"Local 98 undergoes an extensive annual audit and is subject to many layers of financial controls and oversights," the union's spokesman, Frank Keel, said in a statement, "which makes us question media reports of allegations of financial impropriety as the basis of the investigation."
In 2015, IBEW Local 98 took in $33.2 million, with about $27 million from dues and most of the rest from sales of investment assets, according to an annual federal report filed with the U.S. Department of Labor.
In 2015, Dougherty received $406,532 from the union: $226,754 in salary and $179,778 in "disbursements for official business" and other expenses.
In comparison, Christopher Erikson, who leads the 27,817-member New York IBEW Local 3, took in $213,219 in 2015: $177,289 in salary and $35,930 in official disbursements.
Even for non-wonks, the 77-page Local 98 report makes fascinating reading. On page 49, there's a disbursement of $25,255 to Lore's Chocolates in Center City labeled "gifts for the goodwill of the union." Page 46 holds the item from Canal's Discount Liquors in Pennsauken - $10,255, including $6,194 in holiday gifts. The other $4,031 is unexplained.
"This document is chock full of questionable expenses, that suggest a taste for the finer things in life - more so than anything we've ever looked at," said Michael Saltsman, research director with the Economic Policies Institute. The group works closely with Center for Union Facts; both organizations are critical of unions.
In their defense, union officials say what they do to get and keep work for their members and to lobby for their interests politically is nothing different than what businesses do, except businesses don't have to file such detailed public reports.
Businesses also rent suites at ballparks. They also host pricey parties at New York's upscale Waldorf Astoria for the Pennsylvania Society, the annual January gathering for the state's political movers and shakers. So did Local 98, which spent $118,718 at the Waldorf for its party. Dougherty had decided to discontinue that party.
Businesses also spread money around to charities, just as Local 98 has done, contributing to the American Red Cross, for example, and the Fralinger String Band.
"John does spend a lot of money on civic activities and games," said Patrick Gillespie, who retired last year as the head of the Philadelphia Building Trades Council, a position now held by Dougherty in addition to his union post.
"It's just to get the [union's] name out there. There's nothing wrong with that," Gillespie said, adding that Dougherty has accountants "and very good lawyers who make sure he doesn't come anywhere near the margins of impropriety."
Union dues can't go for direct political contributions, but union funds can go to political action committees (PACs), which support campaigns.
So the more than $1.5 million in 2015 support to Dougherty's brother Kevin's successful campaign to become a Pennsylvania Supreme Court judge came from the union's PAC.
Starting in 2014, the union's PAC gave Tom Wolf for Governor $160,000 in direct contributions and another $44,000 in campaign support, including catering and office supplies.
Building a Better Pennsylvania Fund was another big beneficiary of Local 98's largesse. Since 2014, the electricians PAC gave $595,000 to the group known for supporting Mayor Kenney and U.S. Rep. Brendan Boyle.
But politics aren't a union's only function. For example, Local 98, like other construction unions, gave thousands of dollars in "market recovery" funds to union contractors.
"Market recovery" funds, common in construction unions, occur when a union contractor is bidding against a nonunion contractor to build a hotel or a hospital. The union gives the union contractor some money, allowing the contractor to submit a lower bid to the customer and win the work, both for the union contractor and its union employees.
In 2015, Local 98 spent almost $900,000 in recovery funds to keep its electricians working.
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