Peduto releases statement in support of pick as budget director

Bob Bauder
| Thursday, Feb. 6, 2014, 12:12 p.m.

Pittsburgh Mayor Bill Peduto announced his choice for budget director, who owes the Internal Revenue Service more than $83,000 in back taxes, before a background check was completed, according to the organization recruiting job candidates for the administration.

Peduto released a statement on Thursday backing Edward S. Kiely, 68, as director of the Office of Management and Budget, but he did not address the background check. Peduto, who was in Washington on Thursday, was unavailable for comment, and his administration did not return phone calls or emails. Kiely referred comment to the administration.

According to court records, Kiely owes the IRS $83,416 in back taxes and interest for tax years from 2006 through 2011. Records show that he paid $4,291 in tax liens from the city and Pittsburgh Public Schools on Jan. 2 and $2,030 in back state income tax on Nov. 25.

Political observers and city officials on Thursday questioned Kiely's ability to serve, saying residents deserve a full explanation of his hiring and background.

“He owes it to the public to explain in some depth why he's in this situation, so everything is clear why this happened and how he expects to take care of it,” said Moe Coleman, director emeritus of the University of Pittsburgh's Institute of Politics.

Kiely, a management consultant who works from his Point Breeze home, applied for the job through the Talent City website established by Pittsburgh charitable foundations at a cost of $250,000 to attract qualified applicants for Peduto's new administration.

The Pittsburgh Foundation, which is leading Talent City, released a statement saying the group forwarded the names of Kiely and four other candidates to Peduto for consideration.

It said all candidates go through background checks, but Kiely's had not been completed. Despite the mayor's announcement on Wednesday, Kiely's hiring is contingent on his passing the check, the statement said.

“The background checks cover criminal, credit, educational degree verification. ... Mr. Kiely was forthright about his tax issues in his discussions with the mayor, and his appointment is contingent upon the completion of a full and satisfactory background check that is currently being undertaken,” the statement read.

Councilwoman Theresa Kail-Smith said she questions whether Talent City is identifying the most qualified candidates. Peduto has announced plans to hire four people. Each has previous ties to him or city government. At least 60 people will be hired through Talent City, according to the Pittsburgh Foundation.

Kail-Smith said she plans to schedule a public meeting to learn more about the process.

“I'm questioning the entire use of it, to be quite honest with you. ... What are they doing differently than what our own Personnel Department can do?” she asked.

City Controller Michael Lamb said the controversy raises questions about Talent City.

“I do think there's a need for sort of an open report of their process, so that people can understand how these candidates were chosen and recommended and what the (candidate) pool was made up of,” Lamb said.

John Ellis, spokesman for the Pittsburgh Foundation, said Talent City has been successful.

“It is actually gathering together pools of candidates that are very highly qualified who would be great assets for our community,” he said.

Gerald Shuster, a University of Pittsburgh political communications professor, said Kiely's potential job relates to the issues about his debt.

“He's the one who's supposed to be the financial guru making recommendations for Peduto and the entire city,” Shuster said. “If he hasn't made those kinds of wise decisions himself, how can he do it for the city?”

The Peduto administration has blamed Kiely's problems on a client several years ago who represented “most of his business” and did not pay what was owed. Peduto Chief of Staff Kevin Acklin said he did not know whether there was litigation in the case, but it resulted in the federal, state and local tax liens. He said Kiely paid off his state and local debts and has arranged an installment plan to pay back the IRS.

Peduto said in his statement that Kiely complied with tax laws and would explain the situation to City Council, which can vote to accept or reject the nomination.

“Prior to submitting the nomination to council, Mr. Kiely will be scheduling meetings with members of council to discuss his substantial background in performance-based budgeting, and to explain the tax situation reported in the media,” Peduto said.

Peduto served as Kiely's campaign manager in a failed 1991 bid for city controller.

City Council members said they would reserve judgment until they have a chance to question Kiely.

“Of course it raises questions, but I'm not going to make any determination about someone's qualifications for a position based on media reports,” said Councilman Dan Gilman, who worked as chief of staff for Peduto when he was on council. “I plan to ask the administration and the candidate himself questions.”

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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