Records show BRT worker sold parts to SEPTA on company time

While overseeing property assessors in September at the city Board of Revision of Taxes, Barry Mescolotto also made time for his family business - selling train parts to SEPTA.

At 10:04 a.m. one Thursday, he e-mailed SEPTA purchasing agent James Richeal, stating that Trans-lectric Supply Inc. wanted to submit a quote. Richeal responded that the deadline had passed but might be reopened in a few days.

Just after noon, Mescolotto sent a short thank-you. Two hours later, he e-mailed another SEPTA official about a mixup in labeling another shipment. "Sorry for the confusion," he wrote.

E-mail and payroll records obtained by The Inquirer show that on at least 16 days over the last two years, Mescolotto bid on SEPTA contracts and handled other business matters for Trans-lectric on days he was working at the BRT.

Mescolotto also helped straighten out assessment errors for the transit agency last year after SEPTA's lawyers said some of its properties were being wrongly taxed, the e-mails show.

As a government agency, SEPTA does not have to pay property taxes - except when it collects rent from tenants.

Mescolotto wrote to one SEPTA attorney in an e-mail in November that BRT staff members had "missed some of the past years" on assessment forms, adding: "We will have them cleaned up. Happy Thanksgiving!"

In an interview, Mescolotto acknowledged sending e-mails or faxes while working at the BRT but said he did not do it often and confined such activity to personal time.

"I do get a lunch hour when I'm entitled to spend time with myself, and I do get a break in the morning and afternoon I'm entitled to," Mescolotto said. "I really don't make a habit of that. From time to time, there may have been some e-mails or whatever."

He also said he saw no conflict in his dual roles as a businessman bidding on SEPTA contracts and as a property assessor helping to determine the agency's tax bill.

"To me, I don't see where there is a conflict," he said. "They are worlds and worlds apart. They don't ever cross. One has absolutely nothing to do with the other."

Zack Stalberg, president of the Committee of Seventy, the nonprofit civic watchdog, took a different view of Mescolotto's dual role.

"There's certainly the appearance of a conflict, and as long as there's the appearance, there's the possibility of a real conflict," he said.

Legal experts said Mescolotto's use of BRT facilities to conduct his family's business might run afoul of state Ethics Commission rulings prohibiting the use of government resources for private business activities.

The e-mail records, meanwhile, provide new details about the extent of Mescolotto's involvement with Trans-lectric, a company that supplies replacement parts to transit agencies. His wife, Valentina, is the company president.

The city inspector general in May issued a report criticizing Mescolotto for failing to pay business privilege taxes and for failing to report his work for Trans-lectric on his financial disclosure forms.

Mescolotto, whose annual salary at the BRT is $89,424, provided records last week showing that his wife - under her name, not the company's - had paid business taxes for six of the last 10 years. The city says the company owes $6,751.

The inspector general's report on Mescolotto was another embarassment for the BRT, the agency that determines the tax values for all 577,700 Philadelphia properties. City officials are studying how to reform the agency after an Inquirer series in May documented widespread cronyism, dealmaking, and alleged manipulation of values.

In interviews with The Inquirer and the inspector general, Mescolotto said that his wife ran the business and he only helped out while off the clock at the BRT.

"He stated that he has not performed work for her during BRT duty hours," the inspector general's report states.

In an interview, Mescolotto said: "I help her out when she needs me. Nights, weekends, and on my own time."

The e-mails seem to tell a different story.

On those 16 days from May 2007 to May 2009, Mescolotto e-mailed SEPTA on Trans-lectric business during BRT working hours, records show. Older e-mails were not retained by SEPTA.

On Oct. 7, at 3:33 p.m., Mescolotto messaged SEPTA engineer Benjamin Leonard saying he had sent some samples of electrical brush assemblies that Leonard needed to test. In the same e-mail, he asked Leonard whether any of the pilot motor armatures that Trans-lectric supplied had "run backwards."

In November, when SEPTA notified Valentina Mescolotto that it had rejected sample brushes, she wrote back that her husband had already picked them up on Nov. 7 - a day Barry Mescolotto was listed as on the job at BRT.

He sent some e-mails on days when payroll records showed him out sick. Others came during days when he was on vacation or comp time. In all, about half of Mescolotto's e-mail traffic on SEPTA contracts came during days when he was working at the BRT. The records show he used private e-mail for Trans-lectric business, not his BRT account.

Over those two years, the records show, he e-mailed SEPTA officials twice as often as did his wife.

The inspector general also noted that Mescolotto used a BRT fax machine to send company documents to SEPTA.

Mescolotto, the agency's acting chief assessor for the last year, has applied to get the job permanently.

Kevin Feeley, BRT spokesman, said the issues surrounding Trans-lectric would be "given the appropriate consideration."

Trans-lectric has operated out of Mescolotto's modest Northeast Philadelphia home since 1987, selling parts for electric rail cars to SEPTA and other public transit agencies.

Mescolotto said his wife grew up around that business; her father ran a manufacturing company. The company essentially acts as a middleman between manufacturers and public transit buyers.

"She's been in this all her life," Mescolotto said. "There's no real magic to it."

In the last five years, the company has sold $917,859 in parts to SEPTA, typically through winning competitive bids. Mescolotto said the profit margin is small, usually $15,000 to $30,000 a year.

Valerie Leva, a former purchasing SEPTA agent, said that when she had questions and called Trans-lectric, she typically would speak first with Valentina Mescolotto. But Barry Mescolotto usually was the person who would call back with the answers.

"She would take messages," said Leva, who left SEPTA four years ago.

SEPTA's current purchasing director, Andrew K. Cohen, said that other purchasing agents described similar interactions with Valentina and Barry Mescolotto.

Joe Finnerty, marketing vice president of Hoyt Corp. in Englewood, N.J., said Mescolotto had been selling Hoyt parts to SEPTA for the last 20 years. The company, which makes contacts for electrical engines, was co-founded by Mescolotto's late father-in-law.

"He does a wonderful job," Finnerty said of Mescolotto. "There are few guys in the country who say they understand the rail system in their area."

Finnerty said Mescolotto had also handled the sales of Hoyt parts for PATCO and a few other agencies.

Asked about Mescolotto's wife, Finnerty said "she does a lot too," handling customer service issues.

John J. Contino, executive director of the state Ethics Commission, said his agency investigates public officials for using equipment for their or their relatives' private businesses. Some have been fined, records show.

"Using government facilities is the kind of conduct that we have looked at in the past," Contino said.

He said the ethics agency, in considering these cases, typically weighs the frequency of the use - and the results.

"In using the government facilities, did a person win contract though their work?" he said. "If so, how much were the contracts worth?"

The Ethics Commission typically does not become involved in insignificant cases, such as an employee's using a government fax machine to file a health insurance claim, he said.

A typical penalty is a fine - sometimes pegged to the pay the violator collected while not doing his public job.

On Dec. 11, 2007, another BRT work day, Mescolotto and a SEPTA buyer exchanged e-mails about reopening one contract to replace some bad parts, caused by incorrect drawings on SEPTA's end. The next day, Trans-lectric got an $18,211 deal.

Mescolotto listed Trans-lectric on his BRT disclosure forms some years, but stopped doing so several years ago. He said he only listed the company when he was paid - usually for money he had fronted the corporation.

"If I didn't get anything . . . there was nothing to report as far as I could see," he said. "That's the way I saw it, anyway."

In its report, the city inspector general raised one additional issue: Trans-lectric never obtained a business privilege license, as required.

"Nobody realized it was needed, was what it came down to," Mescolotto said. "It was not high on a list of things to do."

He said the company would soon get that license, as well as pay back taxes and interest. He said he was still gathering records from years when the taxes went unpaid: 1999, 2000, 2001, and 2007.

"We're getting her current on that," he said.

Look up property values, and read "Tax Travesty," a three-part series on chaos and cronyism inside the BRT, at http://go.philly.com/brtEndText