Developer says he told Dougherty not to pay

Developer Peter DePaul said yesterday that labor leader John J. Dougherty had repeatedly asked to pay rent during his temporary stay at DePaul's luxury apartment building, but that he had rebuffed the top union official.

"I didn't charge him. He wanted to pay me. I told him it wasn't necessary," DePaul said in a telephone interview.

Federal authorities investigating Dougherty have been looking into his stay at DePaul's Dockside apartment building on Penn's Landing, focusing on whether the labor leader truthfully reported the length of his stay on an official disclosure form, according to sources familiar with the matter.

On the form, labor leaders must declare gifts they receive from employers of union workers. Dougherty said he had stayed "10 or 20 days."

DePaul said Dougherty originally had asked him to rent a place at Dockside for two or three months. DePaul said he didn't know how long Dougherty had ended up staying, and had told federal authorities that.

Dougherty is one of three candidates seeking the Democratic nomination for the state Senate seat being vacated by Vincent J. Fumo, who is facing a September trial on corruption charges.

Frank Keel, a spokesman for Dougherty, declined to comment Friday and did not return a telephone call yesterday seeking comment. Dougherty has said the federal investigation - said by sources to be exploring several potential tax and labor-law crimes - would find no wrongdoing on his part.

DePaul responded yesterday from Florida to messages left at his office and home on Friday. He said he had testified in February before a federal grand jury about providing Dougherty with the free apartment.

According to DePaul, he thought federal investigators had dropped the apartment matter because they first asked him about it two years ago and hadn't followed up.

When he was called before the grand jury, DePaul said, "I was shocked."

Dougherty said on his disclosure form that he had stayed at Dockside in 2005. At the time, his wife was recovering from a stroke, and they were having their Pennsport home extensively renovated.

DePaul said Dougherty had first asked about renting a unit at the Dockside in October or November 2004, saying he would pay rent. DePaul said he would not take any payment.

On Jan. 14, 2005, the pair spoke at the Cathedral Basilica of SS. Peter and Paul in Center City during the funeral for G. Fred DiBona Jr., president of Independence Blue Cross, DePaul recalled. He said Dougherty again had pressed to pay for his stay, but DePaul cut off the conversation, saying he didn't want to talk about the issue at church.

DePaul said he had promised to call Dougherty about the payment issue and had done so around May 2005. Again, DePaul said, "he wanted to pay me. I told him to forget about it."

DePaul said he had been moved by the Dougherty family's struggle with health problems. "I was just a little sympathetic to him," DePaul said. "My first wife died when she was 40."

DePaul said he had told federal investigators that they were "making a mountain" out of a minor matter.

"Everybody's trying to make something out of nothing," he said. "I happen to know John Dougherty."

DePaul, 80, added: "I have just met him over the years. I used to go to a lot of political cocktail parties."

He dismissed the notion that it was inappropriate for Dougherty to get free shelter. Dougherty is the longtime business manager of politically powerful Local 98 of the electricians union. He is also chairman of the Redevelopment Authority and former treasurer of the Philadelphia Democratic Party.

Federal law makes it a crime for labor leaders to take gifts from contractors who employ union workers.

However, DePaul said, as a developer he hires contractors, but is not one himself. He said it was up to the contractor to decide whether to use union or nonunion labor.

"I don't do any business with that union," DePaul said, referring to Local 98.

DePaul also said that with one exception, his businesses had had no dealings with the Redevelopment Authority.

In 2001 and 2002, DePaul tangled with staff at the authority over their push to enforce a city law requiring developers to put aside 1 percent of their construction budget for art. DePaul asked to be exempted from that requirement at Dockside, but ultimately agreed to install a $500,000 sculpture of a fish there.

Asked about that dispute, DePaul said yesterday: "John agreed with me, but his staff did not."

Perhaps the biggest issue in the race to replace Fumo is the dispute over plans for two casinos, SugarHouse and Foxwoods, on Philadelphia's waterfront in the Senate district. DePaul is among the owners of Foxwoods. Its ownership group had not yet been put together when Dougherty stayed at Dockside.

According to DePaul, he viewed Dougherty as a critic of Foxwoods.

On the campaign trial, Dougherty has said he generally supports casinos but may not be able to support Foxwoods' plans unless they satisfy neighborhood concerns.

Federal authorities also have been investigating the relationship between Dougherty and a childhood friend, South Philadelphia electrical contractor Donald "Gus" Dougherty. On Tuesday, Gus Dougherty is to plead guilty to charges including bribing a bank executive and cheating on his taxes. However, he will go on trial on charges of illegally providing John Dougherty with $115,000 worth of electrical work at his home, and giving the union leader a $24,000 discount on a Shore house.

John Dougherty has not been charged.