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Controller: Diverting money into chief's non-city account would be theft

| Friday, Feb. 15, 2013, 2:39 p.m.
Justin Merriman | Tribune-Review
Former Pittsburgh police Chief Nate Harper, pictured here on Feb. 15, 2013, when he was still chief, pleaded guilty to diverting about $70,000 from the police department's special events office into a private credit union account. He was released from federal prison on Friday, May 29, 2015.

A bank account created by Pittsburgh police Chief Nate Harper's office is not an authorized depository for city money, the city controller said on Friday.

“If there are city employees who are diverting city revenue to a non-city account, that's a theft, and it should be properly reported to law enforcement,” said City Controller Michael Lamb.

Harper, 60, of Stanton Heights did not return a message seeking comment. His spokeswoman, Diane Richard, declined to discuss the account at the Greater Pittsburgh Police Federal Credit Union in Elliott.

Mayor Luke Ravenstahl said he knew nothing about the account and could not comment because he “does not know all the facts.”

The chief's office opened an account at the credit union, a privately held institution for members, board President Frank Amity said. Several names were on the account, but Amity declined to identify them — except for Harper — or to describe it further.

Federal agents armed with subpoenas this week took records from the account on several occasions, Amity told the Tribune-Review on Thursday.

City officials, including Lamb, whose office is responsible for oversight of city money, said they did not know about the account until hearing media reports. They did not know if it held city money.

Lamb said the city has eight authorized depositories, and the credit union is not one of them. He said only his office or the city Finance Department are permitted to set up accounts for city money.

Harper lacks the authority to create such an account.

Richard said the police bureau's Office of Personnel and Finance handles police money.

“As with all ongoing investigations, the (Pittsburgh Police Bureau) takes the position that no statements will be made at this time,” Richard wrote in an email.

Deputy police Chief Paul Donaldson this week said federal authorities are investigating the use of money from the police special events office.

The manager of the Office of Personnel and Finance, Sandy Ganster, 56, of Overbrook, met with investigators in the U.S. Attorney's Office on Friday afternoon. She left the Federal Courthouse, Downtown, without speaking to reporters.

Ganster has worked for the city for nearly 30 years and has been in her current job since 2003.

Shortly before Ganster entered the federal courthouse, a man walked in carrying a white box similar to the nine boxes that FBI agents seized from police headquarters this week and bearing the words, “Tammy Davis office” on the side.

Davis, 46, of the Hill District works as a clerk in the police payroll office, one of several the FBI raided this week. She is one of four police employees, including Cmdr. Eric Holmes, Sgt. Barry Budd and Officer Tonya Montgomery-Ford, who started a consulting business with Harper.

Davis could not be reached for comment. Last week she said there's not “anything to tell” and hung up on a reporter.

Records seized by the FBI from headquarters on Tuesday relate to secondary employment, training and travel from the Special Events and Personnel and Finance offices. City Solicitor Dan Regan said the seizure came from a grand jury subpoena.

A federal grand jury is investigating whether Harper was involved in awarding a contract to a shell company set up by his one-time friend Art Bedway, 63, of Robinson. It's unclear if the records seizure is connected to the Bedway case.

Harper has said he did nothing wrong. Ravenstahl on Friday reiterated his support for the chief.

Ravenstahl spokeswoman Joanna Doven referred questions about the credit union account to Regan.

“A lot of this info is coming in as you and I speak,” he said. “We're gathering all of this information. We're making attempts to confirm it. There's some fact-finding that has to occur. Once those things happen, then we can make informed decisions.”

Finance Director Scott Kunka said he knew nothing of the police account and echoed Lamb, saying Harper is not authorized to create accounts on behalf of the city.

Elizabeth Township police Chief Robert McNeilly, who served as Pittsburgh police chief from 1996-2006, said he used the police credit union for personal finances but not department money. He said the chief's office never had an account there during his tenure.

“It had to be started since I left there,” McNeilly said. “If it existed before, nobody told me about it.”

McNeilly said the only sources for funding were through the operating budget and money from assets forfeited by criminals.

“If I wanted to buy the deputy chief a cup of coffee, I did it from my own pocket,” he said. “There was no funding for the chief to purchase anything.”

McNeilly said he replaced a commander with Ganster when he civilianized the Personnel and Finance Office about 12 years ago.

City Council members contacted said they were surprised to hear of the credit union account.

Councilman Patrick Dowd of Highland Park said all city managers should know they are prohibited from setting their own bank accounts.

“You don't have off-book accounts,” Dowd said.

Councilwoman Theresa Kail-Smith, who chairs the Public Safety Committee, said she and other council members know only what they've heard and read in the media. She said she hopes the FBI can clarify the situation.

“This whole thing is very disturbing,” she said. “I personally don't see how it can be good for the department.”

Councilman Ricky Burgess said he could not comment on the account without first-hand knowledge of what happened, but he offered his support to Harper.

“Until and unless there is evidence of impropriety, I will support this chief of police because oftentimes these investigations are politically motivated,” Burgess said.

Bob Bauder and Margaret Hardingare staff writers for Trib Total Media. Bauder can be reached at 412-765-2312 or Hardingcan be reached at 412-380-8519.Staff writer Bobby Kerlikcontributed to this report.

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