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Philly controller: Mayor's Fund stonewalls investigation

Alan Butkovitz blasted the Mayor's Fund for Philadelphia as not cooperating in his continuing investigation into the nonprofit's operations.

City Controller Alan Butkovitz
City Controller Alan ButkovitzRead moreDAVID SWANSON / Staff Photographer

City Controller Alan Butkovitz has blasted the Mayor's Fund for Philadelphia as not cooperating in his investigation into the nonprofit's operations.

"The ongoing refusal to provide documents and assist with auditors, along with the questionable activity we already identified, signals that millions of dollars could potentially be susceptible to fraud and misuse," Butkovitz said during a Tuesday news conference. "It is unfortunate our staff has been presented with this type of behavior and lack of transparency."

The Mayor's Fund is a nonprofit, run mostly by city officials, set up to advance the mayor's policy goals. It manages about $12 million in grants. The fund has come under scrutiny over the last year by the controller and in stories by the Inquirer and Daily News that raised questions about fund spending and the oversight of its managers.

Butkovitz said that in his office's third look at the fund, he sought to review $800,000 in expenditures from various accounts. In the review, auditors found that one of the accounts was $110,000 in the red, and another didn't identify a source for a $198,000 grant for the Philly Champions youth sports program.

Mayor's Fund executive director Ashley DelBianco, who was the initial whistle-blower in the controller's review of the fund last year, rejected Butkovitz's allegations that she and her staff are being uncooperative.

"We don't see it that way. We've responded promptly within the scope of investigation as he had laid it out in our letter of agreement," DelBianco said, referencing the document signed last year that allowed the controller to investigate the nonprofit that, while run by city officials, is technically not a part of government.

"I'm pretty surprised that his concerns are coming out through a press conference," she said. "He can reach out to me at any time."

In January 2016, DelBianco asked the controller to look at the Philadelphia Marathon reserve account because she had concerns over how those funds were being approved and spent. Last summer, the controller held a news conference announcing that the former chairwoman of the fund, City Representative Desiree Peterkin Bell, used the Marathon account as a "slush fund."  Peterkin Bell sued the controller over his remarks and report. (The lawsuit was eventually dismissed.) Former Mayor Michael A. Nutter jumped into the fight, calling Butkovitz a "snake" and a "liar."

The newspapers reported this year that Peterkin Bell incurred $52,000 in charges on fund credit cards in 2015, a sum that covered 458 Uber rides, meals at expensive restaurants, and purchases at Macy's. She did not provide documentation to justify the spending.

The papers also discovered that her predecessor as fund chair, Melanie Johnson, was caught misspending fund money in 2012 and had to repay the city $733.

Following those stories, the Kenney administration announced overhaul plans for the fund, including new grant guidelines and moving the operations of the Philadelphia Marathon to the Managing Director's Office. City Representative Sheila Hess, who has been chairwoman of the fund under the Kenney administration, said that a new board of directors and an executive director would be selected this fall. A spokeswoman for the fund said Tuesday that a new director and board would be announced in October.

Butkovitz said Tuesday that as his office continued to seek documents, his auditors started getting the cold shoulder.

"The fund had a lot more enthusiasm at the earliest part of the audit, when our attentions focused on people who were no longer there. As our focus expanded and encompasses people who are still at the fund, that enthusiasm declined a lot," he said.

DelBianco disagreed with that and said she and the fund's attorneys were reviewing the controller's "complicated" requests. "We had questions whether we could release the specific documents he was requesting," she said.

DelBianco said she and the lawyers are still "working on it."

Butkovitz, who lost his reelection bid in the May primary, said he was concluding his investigation into the fund. He is asking State Attorney General Josh Shapiro to pick up the investigation.

On Tuesday, Shapiro's spokesman Joe Grace said that the Attorney General's Office "has opened an investigation into the Mayor's Fund." He declined to comment further.