A summary of the ongoing federal investigations in the two cities.
Last updated: 5/12/16
Federal prosecutors have launched investigations into Reading and Allentown city governments, saying officials in both cities traded favors for campaign contributions.
Last July, the FBI raided the office of then Mayor of Reading, Vaughn D. Spencer, along with city halls in Reading and Allentown. Since then, five city officials, a consultant, a developer, and the head of an engineering firm have pleaded guilty to conspiracy charges.
Here’s what we know about the investigations at this point.
Federal prosecutors say a public official, referred to as “Public Official #1,” tried to bribe another official to orchestrate the repeal of certain city anti-corruption statutes.
He also awarded millions of dollars in city contracts to vendors in exchange for campaign contributions, prosecutors say.
Public Official #1
The court documents describe several officials without naming them.
Public Official #1 is described as a Reading official “who had the power to sign into law ordinances that had been passed by City Council,” as well as a candidate in the Democratic Party’s primary election in May 2015.
Observers say only (now former) Mayor Spencer fits that description. Spencer has not been charged with a crime. But The Reading Eagle reports that he has received a “target letter” from federal authorities. A person is a “target” if prosecutors have “substantial evidence” linking him/her to a crime that’s been committed, according to the U.S. Attorney’s Manual.
Spencer’s lawyer declined a request for comment.
Francisco AcostaCity: ReadingTitle: (Former) City Council PresidentCharge: Conspiracy to commit bribery
Prosecutors say Acosta accepted a bribe of $1,800 from “Public Official #1.” In exchange, he promised to orchestrate the repeal of city anti-corruption statutes that were blocking the official from keeping certain political contributions, they say.
Acosta never deposited the check; he was holding off until a later date to hide the scheme, according to federal prosecutors. The repeal was defeated unanimously after Acosta recused himself from the vote.
Acosta pleaded guilty to the charge in August 2015. He was later sentenced to two years in federal prison.
Eron LloydCity: ReadingTitle: Special assistant to (former) Reading Mayor Vaughn SpencerCharge: Conspiracy to commit bribery
Federal prosecutors say Lloyd devised and implemented the bribery scheme involving Acosta. They also contend that he conspired with Public Official #1 to award city contracts to vendors who donated to the official’s campaign.
Lloyd pleaded guilty to the charge in November 2015. He faces a maximum of five years in prison, an unspecified fine and three years supervised release.
Federal prosecutors say a public official in Allentown, referred to as “Public Official #3,” awarded city contracts and other favors in exchange for campaign contributions.
Court documents say this official’s goal was to maximize contributions in order to show that “his fundraising prowess had improved since an earlier, failed attempt at winning statewide office.”
This official also tried to conceal the conspiracy by destroying records, sweeping offices for listening devices and using disposable phones, according to prosecutors.
Public Official #3
He’s described in court documents as an Allentown elected official who had control over certain municipal contracts and announced a bid for U.S. Senate on April, 17, 2015.
“Mayor Pawlowski has never accepted an improper payment, engaged in pay-to-play, or even been offered, let alone accepted a bribe,” Pawlowski’s attorney, Mark E. Schamel, wrote in a statement released in September 2015. Schamel added that the mayor is “a trusted public servant who has never misused his office.”
Ramzi HaddadCity: AllentownTitle: DeveloperCharge: Conspiracy to commit bribery
Prosecutors say Haddad agreed to raise $25,000 in campaign contributions to Public Official #3 in exchange for that official intervening in municipal inspections on one of the developer’s buildings in Allentown.
Haddad pleaded guilty to the charge in September 2015. He faces a maximum of five years in prison, a $250,000 fine and three years of supervised release.
Dale WilesCity: AllentownTitle: (Former) Assistant city solicitorCharge: Conspiracy to commit mail and wire fraud
Prosecutors say Wiles awarded a city tax collection contract to a partnership of firms whose principals donated to Public Official #3.
Wiles pleaded guilty to the charge in November 2015. He faces a maximum sentence of 20 years in prison, a $250,000 fine and three years of supervised release.
Garret StrathearnCity: AllentownTitle: (Former) Finance DirectorCharge: Conspiracy to commit mail and wire fraud
Federal prosecutors say that, like Wiles, Strathearn conspired with Public Official #3 to award the city’s tax collection contract to firms run by campaign donors.
Strathearn pleaded guilty in January 2016. He faces a maximum sentence of 20 years in prison, a $250,000 fine, and three years of supervised release.
Mary Ellen KovalCity: AllentownTitle: City Controller; Chair of Allentown Parking Authority’s Board of DirectorsCharge: Conspiracy to commit honest services fraud
Federal prosecutors say Koval used her position as controller and her influence over the Allentown Parking Authority to help Public Official #3 hand out favors in return for campaign contributions. In return, Public Official #3 offered her political support, including campaign contributions and appointments to boards, commissions and authorities.
Koval pleaded guilty to the charge in January 2016. She faces a maximum of 20 years in prison, a $250,000 fine, and three years of supervised release.
Michael FleckCities: Allentown and ReadingTitle: Former political consultant for the campaigns of Reading Mayor Vaughn Spencer and Allentown Mayor Ed Pawlowski.Charge: Conspiracy to commit extortion and bribery; tax evasion
Michael Fleck is one common link between the investigations in Allentown and Reading. In July, the FBI issued subpoenas for records related to dozens of people and entities in Reading and Allentown. Fleck was on the lists in both cities. The same day, he moved out of his home and shut down his consulting firm, H Street Strategies, according to The Morning Call.
And in April, he admitted that he and his political clients exchanged city contracts and other favors for campaign donations. He also admitted to evading nearly $78,000 in income taxes on his consulting business over several years.
He faces up to 10 years in prison and a possible fine.
Fleck was also a consultant for former Pennsylvania Treasurer Rob McCord, who pleaded guilty to federal extortion charges in 2015. Prosecutors say he tried to strong-arm contractors into donating to his campaign. He faces up to 40 years in prison. It’s unclear if the investigations are related.
Matthew McTishCities: Allentown and ReadingTitle: President of engineering firm McTish, Kunkel & AssociatesCharge: Conspiracy to commit bribery offenses
Federal prosecutors say McTish donated to the campaigns of Public Offical #1, Public Official #3, and Mary Ellen Koval, in exchange for consideration on municipal contracts. McTish’s engineering firm relied heavily on contracts with Pennsylvania cities, including Allentown and Reading.
McTish pleaded guilty to the charge in April, and the court documents were unsealed in May. He faces up to five years in prison, a possible fine, and three years of supervised release.
More questionsThis April, Allentown Managing Director Francis Dougherty resigned from his position with the city. He has not been charged with a crime, and it’s not clear if he had a role in any alleged pay-to-play schemes.
What we do know is that his name was included in a federal document related to the investigation. In July 2015, federal investigators subpoenaed all records, related to a list of people and entities in Allentown, that were “created by, received by, or in the possession of” Dougherty, his staff or any Allentown public official who had office space in City Hall since 2005.
Before Dougherty was Allentown’s second-in-command, he was the acting chief of operations for the Philadelphia School District. In 2010, he alerted federal investigators and Philadelphia Inquirer reporters of a $7.5 million contract he believed his superiors had awarded based on racial preference and personal ties to the firm.
He was later fired, filed a lawsuit against the district, and won a settlement of $725,000.