Under scrutiny from an ongoing FBI investigation, Philadelphia labor leader John J. Dougherty repaid his Electricians’ union nearly $280,000 last year — an amount the union said he had inadvertently used over the previous six years to cover personal expenses and legal fees.
That disclosure was tucked into a little-noticed attachment to an annual financial statement filed in July with the U.S. Department of Labor by the union, Local 98 of the International Brotherhood of Electrical Workers.
But it could take on new relevance as federal authorities prepare to reveal the results of their years-long probe into the union’s operations — a development that sources familiar with the investigation said could come this week.
Those sources, who were not authorized to publicly discuss the case, have said that investigators focused, in part, on allegations that Dougherty and other Local 98 officials improperly used union money.
On Monday, George Peltz, a New Jersey electrical contractor, became the first to plead guilty to charges in the case, admitting that he had illegally provided nearly $57,000 in home and office improvements to an unnamed union official free of charge.
It remains uncertain whether Dougherty or others ultimately will face charges related to the union’s spending.
Dougherty — widely known as “Johnny Doc” — has repeatedly denied wrongdoing, most recently last week in an interview with Fox29.
“I think the men and women [of Local 98] would stand by me because I know we didn’t do anything wrong,” he said.
Asked about the recent Labor Department filing, Dougherty’s lawyer Henry E. Hockeimer Jr. maintained that his client’s reimbursement to Local 98 last year was not unusual.
“John goes a million miles an hour,” Hockeimer said. “This is what he has done throughout his tenure there. He has a personal card. He has a business card. Some things get charged on one, some get charged on the other. The union’s business office and finance people sit down with him periodically to settle up accounts and sort out the charges.”
Still, the July filing with the Labor Department, which covered the union’s finances in 2016, is remarkable in a number of ways.
Notably, union officials filed it more than a year late. They blamed the delay on the FBI, which seized dozens of boxes containing relevant paperwork in a series of coordinated August 2016 raids on Local 98’s Spring Garden Street headquarters as well as the homes and offices of union officials and allies, including City Councilman Bobby Henon.
In the more than two years since, the union has submitted no other annual reports, despite federal rules requiring it to do so within 90 days of the end of each fiscal year.
The July report also represents the first time in at least a decade that Local 98 has acknowledged in its financial filings any intermingling of Dougherty’s personal and business expenses — or gone to such lengths to explain them.
Of the $280,000 Dougherty reimbursed his union in 2018, nearly all of it — $248,000 — served as repayment for legal costs incurred in three lawsuits over six years.
Union officials described their payment of those legal bills as a mistake and acknowledged they should have been covered by Dougherty since the suits were brought in his personal capacity and not in his role as Local 98’s business manager, a post he has held since 1993.
While noting that Dougherty repaid the costs last year with interest, the report did not identify the lawsuits in question and a Local 98 spokesman declined to do so when contacted Monday by the Inquirer.
During the relevant period, Dougherty brought two defamation suits against the Inquirer — one of which was dismissed in 2014, and the other was settled three years later. He brought a related suit against the newspaper’s outside counsel in 2013 alleging they had breached their duty to him as a former client.
No explanation was given for the other $31,448 that the union said Dougherty had spent on his personal expenses between 2014 and 2016. The report noted that he had repaid it all last year, and that he had yet to be reimbursed for money of his own that he spent on union business in that same period.
Although union officials maintained that Dougherty’s repayments had nothing to do with the ongoing investigation, L. George Parry, a white-collar defense lawyer and former federal prosecutor, described the settling of debts detailed in the filing as notable. It is not uncommon for subjects of an FBI investigation to spend time going over financial records and clearing up any issues that might become a focus of the probe, he said.
But after the 2016 FBI raids on Local 98 offices, union officials specifically boasted of the stringent auditing controls they had put in place after an attempt a decade ago by federal authorities to build a case against their leader.
“This would seem to indicate otherwise,” Parry said, referring to the 2016 financial statement. “It certainly raises questions about how money is managed at the union.”
The filing’s lateness and contents could raise red flags with IBEW’s international organization, said Marick Masters, a labor specialist at Detroit’s Wayne State University.
“This is ripe for the international to investigate,” he said. “They certainly would have known about this.”
The union’s filing also acknowledged other financial irregularities, including an additional $23,600 that Dougherty charged to his union-issued credit card in 2016 for which no receipts or explanation could be found.
Documentation also was missing to justify $8,300 that Dougherty spent from Local 98’s petty cash fund and $3,250 in bank wires he took out between January and August 2016, the report said. The filing noted that some of the pertinent records may have been swept up by the FBI and returned to Local 98 “in such a way that the receipts and/or other documentation was missing or unable to be located.”
The union also reported that it had lost more than $209,000 in 2016 to theft — including more than $3,300 in cash it said was stolen from a car that Local 98 officials had rented while attending the IBEW International Convention in St. Louis. Union representatives reported the break-in to police, the report said.
The vast majority of the stolen funds, however, were drained from Local 98 coffers in what the report described as a four-day “cyberfraud” attack.
The Labor Department filing contains few details on the incident except to say that it was reported to both the Philadelphia District Attorney’s Office and the U.S. Attorney’s Office.
“After providing the U.S. Attorney’s office with all known details of the theft, we have not heard anything back in more than a year,” said Frank Keel, a Local 98 spokesperson.
As for the threat that charges against the union’s own leadership could be imminent, Keel said Dougherty and others weren’t letting it distract them.
“We’ve been hearing that the government was set to announce something for years on end,” Keel said. “We don’t let whispers distract us from continuing to move Philadelphia forward and provide a helping hand to organizations and families in need.”
Staff writer Craig R. McCoy contributed to this article.