When City Council passed a tax on sweetened beverages in June 2016, Mayor Jim Kenney heralded the measure as a way to change “the narrative of poverty in our city” by funding an expansion of pre-K.
To Electricians union leader John J. Dougherty and Councilman Bobby Henon — two of the key players who helped steer the controversial legislation through Council — it served another purpose, according to prosecutors: punishing a political enemy.
“Let me tell you what Bobby Henon’s going to do, and he’s already talked to [elected local public official]," Dougherty told another Electricians union official in May 2015, according to prosecutors. "They’re going to start to put a tax on soda again, and that will cost the Teamsters 100 jobs in Philly.”
That revelation emerged Wednesday as a glaring example of the way prosecutors say Dougherty has exerted his power, as the U.S. Attorney’s Office unveiled a 116-count indictment against Henon; Dougherty, who is business manager of Local 98 of the International Brotherhood of Electrical Workers; and six others affiliated with the local.
It also points to the case’s possible ripple effects — from City Hall to Harrisburg and Washington — as the political world adjusts in a municipal election year to the potential fall of the most powerful labor leader in Philadelphia.
Local 98 has been the biggest independent source of campaign funding in Pennsylvania during the last few election cycles, and it has had a significant role in shaping the judiciary, putting 60 of its preferred candidates on the bench, including Dougherty’s brother, Kevin, elected to the state Supreme Court in 2015.
In addition to races for mayor and Council, dozens of vacancies in county courts across the state will be on the ballot in 2019, including in Philadelphia, along with an expected two positions on Superior Court.
In the highest-profile race, the indictment could threaten to taint Kenney’s signature achievement as he seeks reelection in November. It also gives new ammunition to the beverage industry to target Council candidates this year who support the 1.5-cent-per-ounce tax.
Prosecutors say Henon’s support for the tax was part of a corrupt bargain he struck with Dougherty in exchange for a $73,131 salary from Local 98 and tickets to sporting events worth $11,807.
“It may have been a revenge plot by Local 98, but it wasn’t to do with me,” Kenney told reporters at City Hall on Wednesday. The mayor — who has known Dougherty since childhood, attended high school with him, and came up through the trenches in the city’s political wars — said his finance director suggested the idea for a soda tax shortly after he took office in 2016. Kenney’s predecessor, Michael Nutter, had unsuccessfully floated the idea.
Henon said Wednesday that he had done nothing wrong and would remain in office.
Still, the soda lobby is expected to spend heavily in Council races as part of its bid to repeal the tax. The building trade unions, which support Kenney’s levy on sweetened beverages because it also funds renovation projects for city properties, could try to match that campaign spending.
Kenney’s bid for a second term for now appears strong. No Philadelphia mayor has lost a bid for reelection since the City Charter was amended nearly seven decades ago to impose a two-term limit.
Former City Controller Alan Butkovitz entered the Democratic primary in November and State Sen. Anthony H. Williams may join the race in the next three weeks. Will they, avowed opponents of the soda tax, use Kenney’s connections to Dougherty to pound the
It could be awkward, as both have received contributions from Local 98 over the years. Yet while opponents have long attacked the tax as a job-killer, the indictment offers a new line of attack.
After the Teamsters ran a TV ad during the 2015 primary that portrayed Dougherty in a negative light, prosecutors say, Henon and Dougherty responded by threatening to push the soda tax, which the Teamsters opposed.
The Teamsters, who had fallen out of favor with Dougherty amid a labor dispute at the Convention Center, had endorsed Williams in the Democratic primary for mayor. Local 98 and most of the city’s other unions backed Kenney.
A month after Kenney took office in January 2016, Dougherty and Henon discussed how to pass the tax, the indictment says.
Prosecutors say that after a Kenney administration official explained to Dougherty how the tax would benefit the city, Dougherty replied, “You don’t have to explain to me. I don’t give a f—. Listen, my goal is to make sure you are alright, that’s all.”
On March 1 of that year, prosecutors say, Dougherty texted Henon to “stay IN FRONT” of the soda tax, and in May instructed him to start talking to other Council members about the measure.
The indictment says that when Henon told Dougherty that they could win one unidentifiedCouncil member’s vote with a “little, like, hug,” Dougherty responded: “Let him know that once you get this stuff, there’s gonna be a ton of major league jobs, that his wife [is] more than qualified for.”
>>READ MORE: Read the full Johnny Doc, IBEW Local 98 indictment
The next month, Council passed the tax on a 13-4 vote. Henon voted in favor of it.
Given Local 98′s outsize role in campaigns, the indictment raises the question of whether candidates in this year’s municipal elections who have enjoyed or sought Local 98′s support in the past will keeptheir distance. Also to be determined is whether Local 98 remains a political force, or retreats to play defense against the feds.
Another ripple effect of Dougherty’s legal woes could be on the 10-year property tax abatement on new construction, which has helped fuel a building boom that created union jobs. Many members of Council want to cut or end the program, to spend more on schools and affordable housing. Council President Darrell L. Clarke last year cosponsored a proposed 1 percent tax on new construction, which Dougherty helped kill.
Will there be another attempt to change the abatement program with a weakened Dougherty?
At a minimum, many political leaders will be fielding awkward questions in the days ahead. Perhaps no one more so than Kenney, who won the 2015 election for mayor with the union leader’s help. Local 98 has been saying for weeks that its entire focus for 2019 is helping the mayor win a second term.
First Assistant U.S. Attorney Jennifer Arbittier Williams brushed aside reporters' questions Wednesday about whether Kenney had been interviewed or scrutinized during the investigation, saying she was unable to discuss details of the probe. She stressed he was neither a defendant nor named anywhere in the indictment.
Still, it could be an inescapable issue during the campaign. On Thursday evening, Kenney is scheduled to hold a fundraiser at a Center City steakhouse, with tickets going for $2,500, $5,000, or $11,900. The invitation, paid for by Local 98, says checks should be sent to Marita Crawford, the union’s political director.
Crawford is one of the union officials now under indictment.
Kenney noted that contributions come from members, not the union leadership. “I’m a union mayor," he said Wednesday. "And I support union activities and union work.”