Construction manager: Comcast hired contractors at 10x usual rate to win Bobby Henon’s support for franchise deal

Philadelphia was poised to renew Comcast’s cable TV franchise in a deal that would generate billions of dollars in revenue for the company and hundreds of millions in taxes for the city when City Councilmember Bobby Henon voiced his objections.

It was November 2015, less than a month before the end-of-year deadline for City Council to approve the new 15-year agreement, when executives at the telecommunications giant began to realize that it might not be passed, due in part to Henon’s problems with Comcast.

After a meeting with Henon and community stakeholders, “I was concerned, really for the first time,” wrote Kathleen Sullivan, Comcast’s vice president for government affairs, in an email to several colleagues.

U.S. government prosecutors presented the email in federal court Wednesday during the corruption trial of Henon and union leader Johnny “Doc” Dougherty, who is charged with bribing the councilman to hold up the Comcast deal.

Dougherty’s union, Local 98 of the International Brotherhood of Electrical Workers, allegedly paid Henon for a no-show union job in exchange for doing the union boss’s bidding, a charge Henon denies.

Sullivan said Henon, who headed a council committee that was vetting the franchise agreement, had been angry for some time that Comcast had not hired one particular union electrical contractor, MJK Electrical Corp, which has offices in Philadelphia and Berlin, New Jersey.

MJK had demanded a “prevailing wage” that was higher than Comcast’s usual rate.

To try to resolve the impasse, Henon invited Sullivan and other Comcast executives to meet with Dougherty in his office on Dec. 2, just a week before council’s last chance to vote on the franchise before the proposed agreement expired.

A Henon staffer testified yesterday that, during the meeting, Dougherty said he might work to block passage of the Comcast bill, as he had done with another piece of council legislation some years earlier. Sullivan said today that she didn’t recall Dougherty making any threats, but he made it clear he wanted Comcast to hire more union workers.

Comcast had informally agreed years earlier to use union workers to install communication cables inside commercial buildings, but Dougherty wanted the company to hire them to lay cable lines in the street and to pay them at higher prevailing wage rates for that work, Sullivan and others said.

While Comcast had hired MJK Electrical in the past, it had resisted more recently because the company demanded wages 60% higher than the amounts the company usually paid non-union firms, testified Patrick Moser, a senior construction manager for Comcast.

Nonetheless, as Moser explained to his supervisors, in late 2015 he began negotiating with MJK co-owner George Peltz to hire the company again.

“I told them having George Peltz and MJK on board would help with any problems we were having,” Moser testified Wednesday, referring to problems Comcast faced with securing council support on the franchise agreement.

Peltz came back with a demand for wages that were even higher, ranging from twice as high to 10 times Comcast’s usual rates. Comcast management agreed to pay the higher amount, Moser said. MJK was eventually paid more than $9 million by Comcast for performing electrical work from July 2016 through April 2018, according to data presented in court today.

The reasons for Henon and Dougherty’s advocacy for MJK were not discussed in detail during Wednesday’s testimony. But Peltz admitted in federal court two years ago that he had given Dougherty $57,000 worth of free home and office improvements between 2012 and 2015. He pleaded guilty to a number of charges and was sentenced to serve a year and half in prison, making him the first defendant convicted in the federal investigation of Local 98.

‘I got him Darrell’s office’

Prosecutors spent much of the afternoon playing recordings of wiretapped phone calls in which Dougherty criticized Comcast officials for not conceding to his demands, and complained that Henon was not delivering results despite all the effort Dougherty had put into boosting Henon’s political position.

In several profanity-laden calls, the union boss repeatedly said that he persuaded Council President Darrell Clarke to hand over to Henon his council office space. He also said he worked to make Henon chair of the council’s Public Property and Public Works Committee, which handles legislation relating to franchise agreements.

“I am the one who went to Darrell and said, ‘Darrell, I think giving Bobby your office would be a f****** great move.’ I told Bobby when he got that, the only thing I needed was Public Property, and the only thing I needed was to hold up Comcast, because Comcast doesn’t give a f*** about anybody,” he said in a November 2015 call with a Local 98 official, Chris Rupe.

To Marita Crawford, Local 98’s political director, Dougherty complained that Henon said he was working with Comcast officials to fix deficiencies in the franchise renewal legislation. “Make it good for you and get it ‘cleaned up,’ but if it’s not good for me, then we got some f****** issues,” he says.

On another call with Crawford, the union boss expressed frustration with Henon. “He can play cute, he can’t f****** cute with us. He cried to me on the phone yesterday,” Dougherty says. “I got him f****** Darrell’s office.”

During a lengthy call with Henon, Dougherty said he was told the councilmember raised a number of important issues during a public hearing on the Comcast franchise, but none that Dougherty cared about.

“What you’re doing is right by what you got to do for the city … but none of our issues were addressed,” he says. “I only care about the couple things that were … excluded. I don’t care about where the Wi-Fi is. I don’t care about any of that,” Dougherty told Henon.

He discussed legislative language Henon was writing that would require Comcast to pay a “living wage” to employees, calling it useless. “That doesn’t help anything that I stand for, okay. It doesn’t help the Building Trades,” he says.

Over and over, Dougherty told his interlocutors he had two overarching goals. He wanted Comcast managers to stop contracting with Rhino Cable Services, a non-union, Malvern-based firm he believes is taking work away from union contractors, and he wanted them to hire union firms to perform work installing the company’s “business-to-business” suite of products.

“Comcast f**** us every f****** day with an outfit called Rhino,” he told Crawford on one call. “Rhino’s been up my a** for 10 years,” he tells Rupe.

Frustrated with Henon’s lack of progress on making Comcast bend on those two demands, he recounted to the councilmember his own success in holding up the company’s previous franchise agreement, 15 years earlier, until it agreed to make concessions. He urged Henon to play hardball in the same way.

“My goal now will be just to hold the agreement up. I am going to call and say, ‘Look, I don’t know why we are rushing [the franchise approval],’” he told Henon. “People hate Comcast, so if they are not going to give us anything that we want, I am not for the deal.”

Despite Dougherty’s complaints, City Council did approve the franchise renewal in December 2015, and Rhino continues to describe itself as a “major contracting partner” working with Comcast in the Philadelphia region.

The trial, now in its third week, is taking place two years after federal prosecutors brought a sprawling 116-count indictment against Henon, Dougherty, and several people with ties to Local 98. The charges have been split into two trials, with the current case focusing on the bribery charges against Henon and Dougherty. It is expected to last another two to three weeks.

Disclosure: The Electricians Union Local 98 represents engineers, camera personnel, editors, audio and maintenance techs at WHYY.