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How an obscure Philly nonprofit launched by Vince Fumo ended up in Johnny Doc’s control

An obscure Philadelphia nonprofit that has received millions of dollars in taxpayer money might be a blueprint for how political and patronage networks can grow. It was shepherded by former Sen. Vince Fumo and eventually taken over by his protege-turned-rival, union leader John J. Dougherty.

Former State Sen. Vincent J. Fumo (left) pictured with labor leader John J. Dougherty in 2004 at the Palm. Fumo was instrumental in creating a civic nonprofit called Interstate Land Management Corporation, which has received millions of dollars in taxpayer money over the years to fund upkeep of state-owned land under Interstate 95 along the Delaware River waterfront. Dougherty later became the board chairman.
Former State Sen. Vincent J. Fumo (left) pictured with labor leader John J. Dougherty in 2004 at the Palm. Fumo was instrumental in creating a civic nonprofit called Interstate Land Management Corporation, which has received millions of dollars in taxpayer money over the years to fund upkeep of state-owned land under Interstate 95 along the Delaware River waterfront. Dougherty later became the board chairman.Read moreFile

The January indictment of John J. Dougherty offered a scathing portrait of the city’s most powerful labor leader, one who prosecutors say leveraged his political influence to advance his interests and used union members’ dues like coins from his personal piggy bank.

But the 162-page document wasn’t meant to be an encyclopedic account of how Dougherty rose to power and how he exerted it. It didn’t even mention all the boards and agencies where he’s played a role.

Take Interstate Land Management Corporation. The obscure civic nonprofit was formed 30 years ago for what seemed a worthwhile purpose: to maintain parcels of state-owned land near I-95 along the Delaware River. Over the years, it has quietly received millions of dollars in taxpayer funding to pay for landscaping work between the Walt Whitman and the Ben Franklin Bridges.

In another light, Interstate might be viewed as a blueprint for how political and patronage networks can grow. It was created by state law and shepherded by one of the city’s most infamous politicians, State Sen. Vince Fumo, 20 years before he was convicted and imprisoned for corruption.

Over the last decade, Dougherty and his allies took control. Within the last five years, a political consultant for Local 98 of the International Brotherhood of Electrical Workers, the union run by Dougherty, was added to the Interstate payroll as executive director, and two of Dougherty’s top union aides collected monthly rent checks from the nonprofit. And the board chairman? Dougherty’s longtime chiropractor and friend: James Moylan, who’s now embroiled in his own criminal case.

“Dougherty takes interest in every board. That’s what he does,” said ex-City Councilman Frank DiCicco, who clashed with Dougherty over the years and whose former district included lands Interstate manages. “It’s power. Be able to get things done. What those things are, I don’t know.”

Interstate is one of the countless civic nonprofit groups across the city and state created and managed by community members with insight and devotion to a specific issue, but funded through public money. Over the years, such nonprofits have become focal points in the corruption cases against some of the region’s most prominent politicians, including Fumo and former Rep. Chaka Fattah.

David Thornburgh, president of the good-government group Committee of Seventy, said the public should be wary of nonprofits controlled by public officials, their allies and backers.

“That opens up all kinds of avenues for self-interest and funneling contributions to friends, relatives, and cronies,” he said. “That was not quite what I think the IRS had in mind when they started to recognize nonprofit organizations.”

A day before Dougherty’s indictment was announced, Moylan was charged in a separate matter, accused of stealing tens of thousands of dollars from another nonprofit. But no one has accused either man of misspending any of the hundreds of thousands of dollars Interstate receives each year from the state.

The nonprofit isn’t referenced in either indictment, and there’s been no call within Interstate for Moylan to step aside. Federal agents subpoenaed documents from the organization “a while back," according to its treasurer, Andrew W. Sacksteder, though he said he couldn’t recall the details of the request.

Through his attorney, Moylan declined to comment. But the attorney, Joseph Capone, said the chiropractor discussed resigning from his unpaid position as Interstate’s board chairman after he was charged but opted not to. Moylan had long been active in his South Philadelphia community and once served as Mayor Jim Kenney’s zoning board chairman. According to Capone, Interstate’s leadership wanted him to stay.

Lots of money, few details

How exactly Interstate spends its money is a bit of a mystery.

Its $870,000 annual budget includes $250,000 a year — potentially guaranteed until 2089 — from a roundabout lease arrangement with the city, PennDot, and the Philadelphia Parking Authority for revenues from a city parking garage. The rest comes from money it makes off of leasing the public land it manages, for which it pays $1 in rent per year.

Today, the organization oversees things like mowing and replacing benches on PennDot-owned parcels near I-95, including Foglietta Plaza and other sites in Society Hill, Queen Village, and Pennsport.

Interstate officials say the nonprofit also focuses on improving services — like installing new lighting, creating a dog run, a space for day-care and summer camps — across all of its parcels, including in “under-maintained and homeless riddled areas.”

Supporters of the organization say it is responsive to community concerns about things like overflowing trash cans, illegal dumping, and vandalism. “Every time we’ve called, our concerns have been addressed,” said Eleanor Ingersoll, president of the Queen Village Neighbors Association. She said Interstate leases a parking lot to her group, which generates revenue for neighborhood grants, street cleaning, and other projects.

City and state officials have never audited the nonprofit, and Interstate declined to share with The Inquirer its board minutes, a list of detailed expenses, or any internal documents beyond the limited descriptions and dollar figures listed on its publicly available tax filings.

Sacksteder, a community activist and electrical contractor, said Interstate was subject to rigorous annual audits conducted by a third-party accounting firm. The audits are provided to each board member and available to the city and state officials who appoint many of them, he said.

Despite Dougherty’s recent influence, credit for creating Interstate lies with another larger-than-life figure in Philadelphia’s tradition of patronage: Fumo, the longtime former state senator and Dougherty’s mentor-turned-nemesis.

When I-95 was being built in the 1970s and ‘80s, neighborhoods were decimated and rowhouses taken by eminent domain. Residents were frustrated by the bureaucracy of dealing with city, state, and federal officials, so when the state wanted to build Center City access ramps to the highway, the legislature demanded the creation of an entity that would be responsive to local quality-of-life concerns.

Fumo, whose South Philadelphia district encompassed some of the affected areas, led the way.

The result was Interstate Land Management Corporation, established by a 1988 state highway funding law that authorized $2.3 billion in capital projects and mentioned the nonprofit in a few paragraphs tucked in near the bottom of the 11,148-word piece of legislation.

In Fumo’s words, Interstate would provide funding to the community “without having to go through the aggravation” of the annual appropriations process in Harrisburg.

Led by the powerful state senator, the group’s nine-member unpaid board — appointed by various elected officials, community groups, and public entities — also fought against development of the proposed Foxwoods Casino along the Delaware waterfront.

Interstate’s funding comes in part from occasional infusions of public money — like a $1 million reimbursement grant it was awarded by the Wolf administration last year to repair decades-old sidewalks. Its steadiest source of income, though, is the $250,000 it gets each year in revenues from a PPA garage on Vine Street in Center City.

Since 1992, the PPA has shelled out about $8 million under those terms, said PPA spokesperson Marty O’Rourke, but the state couldn’t verify the total passed onto Interstate. The state treasurer’s office verified that checks totaling $250,000 a year were sent to Interstate in the last five years, but said its records did not extend to the early years of the contract.

Local 98 makes its mark

Dougherty joined the board in the mid-2000s. By then he had more than a decade under his belt as the de facto leader of Local 98, and through the union had helped elevate John F. Street to mayor. But it was in the ensuing years that he amassed the political and financial influence that is credited with electing judges, the mayor, and even the governor.

By September 2013, Dougherty was elected chairman of Interstate’s board. Under his leadership and with help from other new appointees, the treasurer said, Interstate reevaluated its overhead, cut costs, boosted services, and streamlined operations “after 20 years of stagnation.”

“Our grass has never been greener, our flowers more colorful, and our trees better cared for than at any time in the 29-year history of ILMC,” Sacksteder said in an email.

In a statement, Dougherty spokesperson Frank Keel said the labor leader “did not seek out nor want the additional responsibility of chairing ILMC’s board.” Keel said State Rep. Mike O’Brien, who died of a heart attack last year after years representing a district that includes areas where Interstate manages land, “essentially begged John to step in and save it.”

Within months of Dougherty’s elevation to board chairman, Interstate hired a Local 98 political consultant, Ed Kirlin, as executive director, on a $36,394 annual salary plus benefits, tax filings show. By June 2017, Interstate had more than doubled his salary, to $85,783, plus gave him $14,809 worth of benefits.

Around the same time of Kirlin’s arrival, the nonprofit moved its office from a residential space in Penn’s Landing to a building at Second and Mifflin Streets owned since 2005 by Local 98 union president Brian Burrows and its apprentice-training director, Michael Neill, and began paying them $850 a month in rent.

Prosecutors cited that building, at 1837 S. Second Street, in the indictment of Dougherty, Burrows, Neill, and other Local 98 officials. They allege that Burrows and Neill embezzled thousands in union funds to pay for contracting and maintenance work on the facility. (Dougherty is accused of embezzling money for personal use and bribing City Councilman Bobby Henon, among other charges.)

Each have pleaded not guilty to the charges.

Keel, Dougherty’s spokesperson, would not say whether Dougherty knew or disclosed to other Interstate board members that his union associates owned the building where the nonprofit relocated.

For years, the building had housed the Pennsport Civic Association, which had been run by Dougherty. It also is three doors down from what used to be Doc’s Union Pub, a bar owned until 2016 by Dougherty, Burrows, and Neill, that was also mentioned in the indictment.

Sacksteder, the treasurer, said he didn’t know who owned the Pennsport building when Interstate moved there, but he defended the decision, saying it was more accessible to the community the nonprofit hoped to serve and allowed it to slash its monthly rent payments by $700. Burrows and Neill sold it in May 2015 for $373,000, more than twice what they paid for it, records show.

Sacksteder said Kirlin’s hiring also made sense from a financial perspective. He was willing to work for less than the nonprofit’s previous executive director — who was paid $107,156 plus $20,964 in benefits — enabling them to add another employee, Sacksteder said.

Before coming to the nonprofit, Kirlin had minted a reputation in Philadelphia political circles. He was a key player in a plot to distribute tens of thousands of anonymous flyers attacking Democrat Michael Nutter in the final days of the 2007 mayoral primary. He snapped enough pictures of DiCicco, a Dougherty foe, over the years that the councilman called him Local 98’s “director of arts and crafts.” The nickname stuck.

In a letter to The Inquirer, Kirlin, 64, called serving as Interstate’s executive director “nothing short of the culmination of my life’s work.”

At Interstate he has been able to fulfill a lifelong connection to the neighborhood the nonprofit serves, he said. His grandmother, he said, was among the dozens of families in Pennsport, Queen Village, and Whitman displaced by eminent domain during I-95 construction in the 1960s. Kirlin himself was a founding member of the Pennsport Civic Association and he cites his work with at least a dozen community groups and causes over the years.

“My family, John Dougherty’s family, other Board members’ families and hundreds like ours lived through that period, and it was much more than buildings that were demolished by the highway,” he wrote. “But we are a resilient community.”

Dougherty left Interstate’s board in 2015, with Moylan, his confidant, at the helm. Moylan had been appointed to the board by a consortium of community groups that controls two seats. Sacksteder has the other.

Moylan has denied the charges announced against him in January: that he allegedly stole more than $50,000 from two other nonprofit organizations between 2013 and 2016 to pay his personal and business expenses, including his home mortgage and office rent.

Reached for comment, representatives for Mayor Jim Kenney and PennDot Secretary Leslie S. Richards, each of whom control two board seats, declined to speak to Moylan’s position, deferring to Interstate’s board. State Rep. Mary Isaacson, who shares a board appointment on alternate years with a fellow Philadelphia Democrat, State Rep. Elizabeth Fiedler, said she was unaware of any Interstate board discussions about Moylan’s case.

The board met again Tuesday; Moylan’s status remains unchanged. “No need for any action has been suggested by any board member,” Sacksteder said in an email Thursday.

Moylan’s attorney, Capone, noted that Moylan’s position is unpaid and said he’d done excellent work at Interstate, but he didn’t elaborate on specific projects. “There’s a lot of oversight there,” Capone said. “Every dollar is watched. Every dollar’s accounted for.”

He also pointed out that neither Dougherty nor Henon, who has also been charged, has resigned from their posts.

“Given the fact that everyone else has been indicted [and] nothing has changed in terms of titles and everything else … ,” he said. “Jim is still innocent until proven guilty.”