Darby Township solicitor's own company collects the township's taxes

IN SEPTEMBER 2005, Darby Township Solicitor Michael Pierce presented a proposed tax-collection contract to the township manager for the manager's "review and approval."

The township's three Republican commissioners voted unanimously the following month to approve that deal, under which a small company, EM Services Inc., would be paid a commission to collect current and delinquent taxes and fees from residents and businesses.

It's a convenient arrangement for Pierce, the president-elect of the Delaware County Bar Association who is considering running for district judge in Aston Township.

Although Pierce presented the contract to Darby Township officials in his capacity as the township's lawyer, his signature began appearing on EM Services' documents in January 2006, only three months after commissioners approved the contract.

Pierce is now president of EM Services, according to state records, while continuing to serve as township solicitor, a patronage post he's held since 1989.

Records show that Darby Township has paid hundreds of thousands of dollars to his tax-collection company, a politically connected firm co-founded in the early 1980s by a former Darby Township official and the brother-in-law of a powerful GOP leader.

Some current and former township officials say they weren't fully aware of Pierce's dual role.

"I found that out much later," said Raymond Pollard, a former Democratic commissioner who was on the board in 2005. "My take on it is that it's a conflict of interest. It just looks shady."

But Darby Township isn't the only Delaware County town in which Pierce's politics and profits have intersected.

Pierce has a similarly cozy business deal in Darby Borough, where Municipal Resource Recovery Systems (MRRS) is paid to collect delinquent sewer and trash fees. Pierce, who was Darby Borough's solicitor from 2000 to 2004, co-founded MRRS in 2003.

Both companies have the same Media address as Pierce's law firm, Pierce & Hughes, which also has received tax dollars from a municipality in which Pierce holds a government position.

The Daily News reported in June that Pierce, as president of the Chester Heights Council, had been co-signing borough checks to Pierce & Hughes for legal work conducted by his law partner, Paul Hughes.

The Delaware County District Attorney's Office said Friday that investigators from the Pennsylvania State Ethics Commission found "no cause of action" to investigate whether Pierce violated the state Ethics Act in Chester Heights.

Hughes, however, resigned in May as Chester Heights' conflicts and litigation solicitor, a position he'd held since 2004, after the borough received a request for records pertaining to the Pierce & Hughes payments.

In his resignation letter, Hughes cited his "trial schedule and the economics of my practice" as reasons that he could no longer serve Chester Heights.

But Chester Heights was small potatoes for the law partners.

Their tax-collection business in Darby Township alone is much more lucrative. The town of about 10,000 residents paid EM Services at least $280,000 between 2006 - when Pierce and Hughes became officers of the company - and 2009. Hughes co-founded MRRS with Pierce and is listed in state records as the vice president of EM Services.

Records show that Pierce and Hughes are only the most recent beneficiaries of the Darby Township contract.

EM Services was established in 1982 by Martin Reape Jr. and William Dowd. Reape, who died in 2007, was a former Darby Township controller. Dowd is the brother-in-law of Tom Judge Sr., the longtime Darby Township GOP chairman who ran the Delaware County GOP from 1975 until last year.

Jack Ryan, Darby Township's longtime manager, said he believes that the township has been paying EM Services since about 1983. But the exact date and terms of the original contract could not be determined because, according to Ryan, the contract with Dowd and Reape was destroyed by water damage.

"We lost that in a flood," Ryan said of the first EM Services contract, after the Daily News filed a right-to-know request for a copy of the contract.

Judge, who serves as Darby Township's secretary but is generally regarded as its de facto governmental leader, said he does not have a financial interest in the company. Pierce is among Judge's closest political allies.

The website shared by MRRS and EM Services does not list any clients other than Darby Borough and Darby Township. The site states that the companies are "unable to accommodate guests. Please do not attempt to visit our office."

Neither Ryan nor Darby Township Commissioners president Lawrence Patterson could recall exactly how the 2005 contract altered the township's pre-existing contract with EM Services. Ryan said he believed it might have reduced the commission the company was receiving. But EM Services was paid at least $85,754 last year alone, one of the highest yearly payments in recent years.

Ryan and Patterson said they did not consider it a conflict of interest for Pierce to serve as solicitor while running a tax-collection company that has a township contract. It appears from township records that Pierce, as solicitor, reviewed the EM Services contract on behalf of the township. He mentioned the contract in his "solicitor's report" at the October 2005 commissioners meeting, according to the meeting minutes.

"When he presented the contract to the commissioners, he was not an officer of the company," Ryan said.

Barry Kauffman, executive director of the government-watchdog group Common Cause Pennsylvania, said Pierce's apparent role in the company three months after the township approved its contract "doesn't look good," although it is unclear from the publicly available information whether Pierce engaged in a conflict or broke any laws.

"The timeline certainly raises red flags," Kauffman said.

Pierce did not include EM Services on his statements of financial interests until 2008, and the company didn't appear on his statements this year or last year. Pierce does list MRRS on those forms. On the companies' website, EM Services is described as "a division of" MRRS.

Ryan said Darby Township is probably benefiting by outsourcing the collection of business-privilege and local-services taxes to EM Services. But, he said, the township doesn't have any documentation of a cost-benefit analysis or similar assessment of the tax-collection contracts.

"I would think it's a better collection rate because I certainly don't have the time to go out and knock on doors," Ryan said.

Republican commissioners have a 3-2 voting majority in Darby Township. The Democratic commissioners in October 2005 - Pollard and Arnold Covert - were both listed as absent for the EM Services vote. The three Republicans voted in favor of the contract.

Covert, who still serves on the board, said last week that he was unaware that Pierce was getting a percentage of the tax revenue.

"No, not to my knowledge," Covert said, adding that he intended to request documentation on the arrangement.

Pollard, who was elected in 2001 and served only one term, said it didn't matter that he and Covert were absent from the 2005 meeting because the three Republican commissioners likely would have voted to approve the contract anyway.

"They could vote that tomorrow is Friday if they chose to," Pollard said. "Everything out here is connected with Tommy Judge - if it happens. If it doesn't happen, Tommy Judge is against it."

Lee Taliaferro, a former Democratic commissioner in Darby Township, said he was not aware of Pierce's tax-collection commission when he rejoined the board in 2006 after an eight-year hiatus.

"I did find about it, yes, but I was not aware of it originally," Taliaferro said. He referred additional questions to the sitting commissioners.

Asked whether Pierce's interest in EM Services was widely known in Darby Township, Patterson, the commissioners president, said, "I would think so."

"It's all public record. It's not like there's anybody that's hiding behind any shield," Pierce said in June.

Pierce has since declined to comment on his municipal-business deals or the anomalies in Chester Heights public records, including his apparently photocopied signature on abstention memos regarding Pierce & Hughes, and an abstention memo for a meeting that didn't occur.

Republican sources say Pierce is considering running for district judge in Aston to replace David Murphy, who pleaded guilty in July to 64 counts of forgery and identity theft and two counts of perjury.