By Bob Bauder

Published: Tuesday, February 26, 2013, 12:01 a.m.
Updated: Tuesday, February 26, 2013

City Controller Michael Lamb knew three months ago that Pittsburgh police officers suspected problems with accounting of money at the center of an FBI investigation.

But Lamb said Monday his office didn't immediately begin auditing the special events office when a police union official contacted him because auditors were busy. Auditors instead looked at the police records room because of a department theft, Lamb said, delaying the audit of money paid for moonlighting officers until two weeks ago. By then, FBI agents had seized records from police headquarters.

Mayor Luke Ravenstahl's office blames Lamb for not auditing police accounts sooner. Finance Director Scott Kunka said the controller's office, before Lamb's election, set up the system used to account for moonlighting cash.

“I think to suggest that I should have known about an account that was set up specifically for the purposes of keeping it secret from me is a stretch,” said Lamb, who is running for mayor.

Businesses wanting police security pay the city for officers' wages amounting to about $40 per hour, plus an administrative fee of $3.85 per hour.

The fees could total as much as $4.2 million over the past six years, Acting Chief Regina McDonald has said.

Officer Bob Swartzwelder of the Fraternal Order of Police Labor-Management Committee said the union contacted Lamb in November about money paid to moonlighting officers.

“Essentially, we were on a fact-finding mission at that time,” Swartzwelder said.

Lamb said his office asked questions in December of police administrators, though he didn't know who, in the personnel and finance office. The manager of that office, Sandy Ganster, met with the U.S. Attorney's office this month.

The FBI is looking into whether any of that money landed in unauthorized accounts at the Greater Pittsburgh Police Federal Credit Union for police use on trips, at restaurants and at hotels. The investigation led to the ouster of Chief Nate Harper. He has not been charged with any crime.

Lamb said his office, which has six financial auditors, could not audit special events until it investigated the theft from the police bureau's Central Records Reporting Unit. Former clerk Terri Randolph, 48, of Bon Air is awaiting trial for theft of $17,000.

Ravenstahl and Public Safety Director Michael Huss, who oversee the police department, deny they knew about the special accounts, even though police brass and Ravenstahl's bodyguards carried debit cards drawn from the credit union.

Ravenstahl has hired former Washington County District Attorney Steven Toprani to independently review police policies governing officers moonlighting or forming side businesses. City officials cannot say what that review will cost taxpayers.

Toprani met on Monday with Solicitor Dan Regan to determine his price and a timeline for the job, Regan said.

Toprani couldn't be reached for comment. His review won't include credit union accounts the FBI is investigating, Regan said.

“We don't want to interfere in any way with that investigation,” he said.

Regan said he doesn't know if the accounts are in individuals' names or were opened in the name of the Police Bureau or one of its offices. The difference could be significant since banking secrecy laws would limit the credit union's ability to discuss individual accounts absent a subpoena or warrant.

Regan would not say what the city learned from the partial records it has, including names associated with the account.

“We're hearing a lot of things,” Regan said. “I think it's important that we be diligent and we only try to make decisions based on what we know.”

Another officer said that rank-and-file police in 2011 suspected someone inside special events was directing choice details to friends. Officer Jesse Riddile said he set up a website parodying the office, referring to the “Detail Mafia.”

“It was a joke,” he said. “There were rumors something was going on in special events and we were making fun of it.”

Staff writers Margaret Harding, Bob Kerlik and Brian Bowling contributed. 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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