Dougherty, Henon, 6 others charged with embezzlement, theft, wire fraud

Jennifer Arbittier Williams, first assistant U.S. Attorney, discusses the federal indictment at a press conference involving John Dougherty and Bobby Henon.
Photo credit Kristen Johanson/KYW Newsradio
By KYW Newsradio 1060

UPDATED: 1 p.m.

PHILADELPHIA (KYW Newsradio) — City Councilman Bobby Henon and longtime electricians union IBEW Local 98 official John Dougherty (known as "Johnny Doc") have been indicted.

#BREAKING: unsealed indictment, charging Johnny Doc & councilman Bobby Henon, and other union officials. @KYWNewsradio

— Kristen Johanson (@KristenJohanson) January 30, 2019

The indictment, released Wednesday morning, charges Henon and Dougherty, as well as six other union officials — union President Brian Burrows; union Political Director Marita Crawford; union employees Michael Neill, Niko Rodriguez and Brian Fiocca; and local business owner Anthony Massa — with embezzlement, theft, wire fraud and other public corruption offenses. 

Press conference on indictment of John Dougherty and Bobby Henon about to start

— Kristen Johanson (@KristenJohanson) January 30, 2019

Collectively, the defendants are accused of embezzling $600,481 from Local 98, according to the U.S. Attorney's Office. In total, federal prosecutors announced 116 charges against the union officials.

According to the indictment, Dougherty used his control as business manager of Local 98 "to repeatedly and persistently steal from Local 98 and put his own self-interests over that of the membership of the union."

He used Local 98 as his personal bank account, utilizing three Local 98 credit cards in his name to purchase groceries, household goods, and meals, as well as a way to pay contractors who worked on his home and other personal properties, including a tavern pub that he owned. He also used the account to divert union funds to others for personal use.

Prosecutors say Henon accepted a salary from the union for certain services, as did Dougherty. Henon used his position to threaten others, because Dougherty told him to, officials say.

U.S. Attorney Bill McSwain has been recused from the investigation to prevent conflict, said First Assistant Attorney Jennifer Williams.

Williams said Henon and Dougherty were in a position of trust, and they violated that trust. 

The complete, 159-page indictment can be viewed here.

"The indictment alleges that this exchange of contracts for personal gifts was an abuse of the trust placed in Dougherty as a leader of a labor organization and that it was a federal crime," Williams said.

"This indictment charges that Robert Henon received a Local 98 salary and other benefits from John Dougherty in exchange for Henon advancing Dougherty's personal, professional and financial agenda," she continued. "This indictment charges that John Dougherty used Local 98 dollars to pay Philadelphia Councilman Robert Henon so that Henon would do his bidding from his seat on City Council. This indictment does not allege that city councilmen are prohibited from receiving private income, but it does allege that a public official, who accepts that money in exchange for taking actions on behalf of a third-party, breaches the duty of honest, faithful and disinterested service the public official owes to the people he serves."

Henon accepted the personal benefits from Dougherty, "knowing that the benefits were given in exchange for Henon's performance of official acts at the direction of" Dougherty, the indictment read.

Henon is also accused of having L&I shut down construction work at locations where non-union labor was happening, as well as "allowing Dougherty to demand concessions by Comcast during the franchise contract negotiations between the city and Comcast," which resulted in Comcast hiring a contractor Dougherty favored.

If convicted of all charges, the defendants will face decades in prison. The investigation is ongoing.

An arraignment is scheduled for Friday at 1:30 p.m.

MORE: Second person charged in FBI probe into IBEW Local 98

After the two-and-a-half-year investigation, two people were charged last week in connection with the probe. Prosecutors indicted Dougherty's chiropractor James Moylan Tuesday, claiming he stole more than $45,000 for a nonprofit he set up, called Neighborhoods for Fair Taxes. The money, prosecutors say, came from IBEW Local 98's charitable fund. 

In court documents, officials say Moylan wrote a letter to Dougherty and asked for support for his nonprofit. He then received a $50,000 check from the union. They say it was mostly spent on Moylan's personal and business expenses. 

Moylan has been indicted on 17 counts of wire fraud. He was the second person charged in the probe. On Monday, George Peltz pleaded guilty to tax evasion and making unlawful payments to Local 98 union official homes and businesses tied to Peltz, Moylan, and Dougherty. 

All quiet, no sign of anyone at John Dougherty’s home in South Philly, which was raided in 2016. @KYWNewsradio

— Tim Jimenez (@TimJRadio) January 30, 2019

In August 2016, FBI agents raided the homes and businesses of Dougherty, Moylan and Peltz, as well as two offices connected to Henon. Henon worked as an electrician and served as political director for IBEW before running for council in 2011. He was re-elected to a second term in 2015, representing most of Northeast Philadelphia. Dougherty has worked with IBEW Local 98 since 1993. 

My video from Aug. 2016, outside union leader John Dougherty’s house in South #Philly. Fed authorities taking boxes, TV and computers from Johnny Doc’s house. ⁦⁦@stevetawa⁩ ⁦@PatLoeb⁩ & ⁦@_MikeDeNardo⁩ staked out in other locations that day

— Kristen Johanson (@KristenJohanson) January 30, 2019

RELATED: City Hall abuzz after Henon, Dougherty charges, but no one's saying much

IBEW Local 98 released a statement on Wednesday afternoon.

"For 25 years John has devoted all his energies to Local 98 and to those working in the trades in Philadelphia. Everyday his focus is on his family and his other family, IBEW Local 98. Every move he makes is done in order to better the lives of the membership of Local 98. And the dramatic increase in wages, health care benefits and the overall standard of living for the membership is a testament to that singular focus. To allege that John in any way attempted to defraud the Union he cares about so deeply is preposterous. He looks forward to his day in court and the opportunity to clear his name."

Henon also released a statement following the press conference, emphasizing he has "done nothing wrong."

"I have always reported every penny of my union income to the City, and the State. I have never committed fraud in my life. I have always served my constituents with honesty, integrity and have always put my constituents and the people of Philadelphia first. I will continue to serve, I look forward to clearing my name and I will never waiver in my pursuit to protect and serve the working people who live in and built this city."

Mayor Jim Kenney said Wednesday the investigation is "disappointing."

RELATED: Kenney 'sad' about Local 98 indictment, says it has nothing to do with him

"The justice system will work its way and there will be a conclusion. ... I can't comment on any more because I haven't read it, and it has not been released yet, so speculation isn't appropriate at the moment."

.@PhillyMayor on impending Local 98 action: "It's sad. Disappointing. But the justice system will work its way and there will be a conclusion. I can't comment on any more because I haven't read it. It hasn't been released yet. So speculation isn't inappropriate at the moment."

— Mike DeNardo (@_MikeDeNardo) January 30, 2019

Asked whether Henon should resign, Kenney said Henon should make that decision based on what's best for his constituents, noting that if Henon were to resign now, his constituents would be unrepresented for 10 months.

City Council President Darrel Clarke responded to the charges, calling them "grave," saying they must be taken seriously, and advising faith in the justice system to reveal the truth.

"As president of City Council and a fellow lawmaker, I sincerely hope the allegations of public corruption are not true.
"The law is clear on our obligation as a City if the charges are indeed proven true. Until that time, Majority Leader Henon is entitled to defend himself if he believes the government’s allegations to be erroneous. "The terms of any elected official’s service absent a legally disqualifying offense should be determined by the people they serve. As such, Majority Leader Henon has a duty to proceed in the best interests of the 6th District and the City of Philadelphia."


KYW Newsradio's Kristen Johanson, Steve Tawa, Pat Loeb and Mike DeNardo contributed to this report.