Philadelphia official fired for accepting meals, gifts from city contractors

A top official in the city's Division of Technology was fired Wednesday for accepting dozens of free meals from Verizon and other city contractors over a four-year period and secretly setting up a Verizon business-rewards account that provided him and others with $48,000 in gifts.

Joseph James Sr., who held a $124,800-a-year job as deputy chief information officer for communications and operations, was personally informed of his dismissal by Managing Director Richard Negrin and escorted from his office on the 18th floor of 1234 Market St.

Another official in the same department, Concetta D. Lilly-Pearson, was demoted and suspended for 20 days from her $88,351-a-year position for accepting a more limited number of meals and gifts. A third person, Francis G. Punzo, no longer employed by the city, was also implicated in the investigation.

The investigation by the city Inspector General's Office was spurred by a city employee's tip and lasted more than a year.

Inspector General Amy Kurland, a former federal prosecutor, said she had referred the case to the U.S. Attorney's Office for possible criminal prosecution and to the city Board of Ethics for possible violations of its regulations.

Verizon, which has a city contract worth about $12 million annually for telephone and data services, said it had terminated one employee and given "final written warnings" to five others, while reassigning the entire unit handling its account with the City of Philadelphia.

"Verizon holds itself to the highest standards of business conduct, and the conduct described by the inspector general does not meet that standard and violates Verizon policy," said spokesman Lee J. Giercynski.

Both James, 56, a city official for the last 16 years, and Lilly-Pearson, 51, a city employee for nearly 27 years, were accused of violating the city's Home Rule Charter and an executive order initially issued by Mayor John F. Street by accepting gifts and meals from Verizon.

James, Lilly-Pearson, and Punzo could not be reached for comment. James had worked for Bell Atlantic as the account manager dealing with the city before becoming the city's deputy commissioner of public property in 1995. In 2007, he transferred to the city's Division of Technology.

Lilly-Pearson's future city position was unclear.

Punzo, who left Verizon to join the Department of Public Property and now is back at Verizon, was accused of helping James establish a Verizon Business Link Rewards Account in 2005 that earned thousands of dollars in credits because of the city's business.

"They opened up the account on behalf of the city but didn't tell anyone about it," Kurland said. "It was all kept secret."

James and Punzo used the account, the city alleged, to obtain more than $48,000 in gifts, including television sets valued at more than $26,000, iPods, expensive Tumi tote bags, and a variety of gift cards at stores including Macy's and Best Buy.

So far, the city has been unable to track what happened to most of the items. "I can't say what James kept for himself, I can just tell you we can't find any of it," Kurland said.

"When you look at the things they ordered - the televisions, gift cards from Macy's and Barnes & Noble, thousand-dollar coffeemakers - it doesn't seem like the kind of things to be used for the benefit of the city."

The gift spree apparently stopped in September 2009 - leaving the city with Verizon reward points now valued at $107,600.

The Managing Director's Office is planning to redeem the credits for gift cards at Lowe's and Best Buy, to be used for community-beautification projects under its PhillyRising program.

Verizon was not the only city contractor implicated in the probe. Over a four-year period, from 2006 through 2009, the inspector general found, James accepted 39 business-related meals, 18 of them from Verizon and the rest from four other city contractors - Comcast, Shared Technologies, Motorola, and RCC Consultants.

Punzo was accused of accepting 122 meals from the five vendors, including 80 from Verizon, plus invitations from Verizon to four golf outings and tickets to six sporting events.

The meals included a dinner at Morton's steak house in December 2007, where Verizon thanked James, Lilly-Pearson, and Punzo for helping to renew the city's contract for telephone and data services, according to Kurland's investigation. Verizon also provided James with a Flyers ticket and a $77 cheesesteak delivery, the city said.

The gifts to Lilly-Pearson were relatively small - just two meals and two iPods, one kept for personal use and one given to a family friend, according to the investigators.

The 1951 charter states that "no officer or employee of the city . . . shall solicit or accept any compensation or gratuity in the form of money or otherwise for any act or omission in the course of his public work."

The mayoral executive order prohibits employees under the mayor's jurisdiction from accepting "anything of value, including any gift, gratuity, favor, entertainment or loan," from city vendors.

The Verizon spokesman declined to say whether company records showed any meals, gifts, or other favors provided to city officials or employees other than James and Lilly-Pearson.