Right before Christmas, The Morning Call revealed that Bethlehem administrators had just spent over $335,000 in casino funds without City Council authorization, violating a year-old City ordinance.Business Administrator Dennis Reichard fell on the sword, claiming he was sorry and he didn't mean it and it won't happen again.
Not ever, ever, ever, ever, ever, ever, ever again. Ever.
What the Morning Call account fails to reveal is that Bethlehem's Callahan administration also spent $2 million more in its Treasurer's Escrow Account than authorized by City Council, a violation of yet another City Council ordinance. Since Bethlehem's Escrow Account contains money earmarked for federal and state grants and other specific purposes, dipping into those funds might be contrary to federal or state regulations.
Dennis Reichard is sorry about dipping into that account, too. He forgot, according to an Express Times account.
It won't happen again. The Callahan administration has at last seen the error of its ways, is truly sorry for its misguided conduct in the past, and has undertaken to give up escrow account dipping entirely and for ever. Recichard gave his solemn promise to that effect. Not ever, ever, ever, ever, ever, ever, ever again. Ever.
Until next year.
The Callahan administration apparently views these transgressions as some tempest in a teapot, but City Council member Jean Belinski has a different view. Often a thorn in the side of Mayor John Callahan, she finds it hard to believe this is some innocent mistake, especially since the Callahan administration dipped into the Escrow Account in 2008. At Council's December 22 meeting, this little old lady gave quite a powerful speech, which I've reproduced below:
I would like to bring up something that we learned about recently during the budget hearings that has been deeply troubling to me.
It has to do with the multiple violations of City ordinances by the Administration.
When the violations of the City ordinances were disclosed, the reaction of people in the room ranged from amusement to indifference. It really bothers me that people in the Administration violate laws. The excuse given was that they didn't know about the City laws. No one is above the law.
At the third budget hearing on December 2, Mr. Leeson asked the Administration where the extra money was deposited from the casino host fees. This was the money that came in over and above what was budgeted and authorized by City Council for spending in the 2009 budget. We were then told that the amount of extra revenue that came in over and above what was budgeted was $330,000. The exact figure was $335,643.00.
Mr. Leeson asked whether it had been deposited and reserved as required by law. The Business Administrator indicated that all the money had already been spent.
Mr. Reichard sent a follow up memorandum indicating that the gaming monies were received on October 19 and then completely spent on November 6, only 19 days later.
City Council was not briefed about this. City Council was not told about this. City Council was not asked for approval to do this.
On September 3, 2008, City Council passed an ordinance that states "No transfers of unappropriated funds shall be made from the gaming local share account without prior notice to and approval of City Council". The Mayor's signature is on this law.
This law was violated.
The justification given for violation of this City law was that they didn't know about the law. I find it hard to believe that no one in the Administration - the Mayor, the Business Administrator, the City Solicitors - knows about City laws.
The City Council meeting minutes indicate that this law was repeatedly mentioned and discussed at six different City Council meetings by either Chuck Nyul, Bob Pfenning or Dana Grubb on September 2, 2008, November 18, 2008, June 2, 2009, July 7, 2009 and September 15, 2009. It was also discussed at the City Council meeting on October 6, 2009, only seven days before the extra casino revenue was received. In fact, seven days before the revenue was received, Mr. Pfenning spoke to City Council on October 6, 2009 and the City Council minutes state the following: "Mr. Pfenning stated that City Council will now hopefully be approving from the Administration the request to spend $335,643.10 more than budgeted."
City Council President Bob Donchez wrote a memo to the Administration about their excuse about not knowing about the law. President Donchez said "Respectfully, I wish to comment that I found this response hard to accept." I agree with President Donchez.
Now let's go to the next ordinance violation by the Administration.
An ordinance passed by City Council on May 1, 2007, states that "No transfers of funds from the treasurer's escrow account shall be made to the general fund operating budget. . . without prior notice to and approval of City Council".
This ordinance was also signed by the Mayor.
In our 2009 general fund budget, City Council authorized borrowing of up to $1.8 million from the Treasurer's Escrow Account.
We have since learned, that the Administration did the following borrowing and transfer of funds from the treasurer's escrow account:
(1) On July 23, 2009 - $1.0 million dollars borrowed.
(2) On August 19, 2009 - $800,000 dollars borrowed. Now we have reached the maximum amount authorized by City Council. This is August, 2009.
(3) On October 26, 2009 - $2,000,000 dollars borrowed. This is above what City Council authorized by ordinance in the 2009 general fund budget.
The Administration responded that it had run out of cash. It had no money and the unpaid bills had to be paid. I don't question that we ran out of money and the bills had to be paid. What I question is why City Council was not notified and its approval sought as required by law, to authorize the borrowing transfer and expenditure of these funds. City Council meets twice a month and we hold many committee meetings in between. Yet, we were never told.
I think it is a serious matter when the Administration violates City ordinances. I don't think that anybody should be above the law.
I don't think this should be overlooked. It should not be laughed at.
I would like to know what the consequences and ramifications are of violations of these City laws.
Therefore, Mr. President, I have asked the City Council Solicitor to review this matter and offer an opinion concerning what the consequences and ramifications are of violation of these City ordinances.
Jean Belinski
Member of City Council
John Stoffa has signed County Contracts without consulting Council and has violated the Charter. He gets a pass from Ohare who says it was a harmless mistake and he apologized.
ReplyDeleteI am aware of one instance in which Stoffa did screw up and sign a contract before it was approved. He nevertheless presented it to Council. He did not repeat the error for two years in a row. Nor did he ignore 6 reminders.
ReplyDeleteI love how you try to link this to Callahan.
ReplyDeleteIt doesn't work too well, so it looks more pathetic than anything.
Based on posts like this, Dent must be pretty freaked, huh? Is it because Callahan outraised him in the last quarter?
I'd probably be grasping for whatever I could find too.
Bethlehem administrators have been pulling this crap since Cunningham.
ReplyDeleteThey constantly use funds that they have no right to in order to meet City expenses.
Through the years it has been the water and sewer fund -- the parking authority etc.
Always Reichert claims he's sorry that he didn't know he couldn't use "that money". It is absurd how often Reichert falls on the sword.
The most odious to me was water authority money because people who did not live in Bethlehem, yet who are on the Bethlehem water system, were bearing the burden of the choices made by elected officials in Bethlehem, people they did not elect.
It was nice of Mike Schweder to give Babbles Belinski a going away present. How is Babbles going to vote now that she can't look to Schweder?
ReplyDeleteBelinski does nothing without Schweder telling her to do so.
Love the Shenanigans box. It reminds me of the good old days when Americans bought products made in Taiwan instead of China!
ReplyDeleteRylock, I have to ask - what is your rationale that Callahan's administration violates the law and it should not be 'linked' to Callahan?
ReplyDelete"The Buck Stops Here." Harry Truman, President - and a Democrat by the way.
All politicians needs to learn a little personal accountability and responsibility. If they were in grade school they'd flunk that part of the curriculum.
The Banker
I have to agree with two of the posts. This stuff has been going on forever. Even when Delgrosso was Mayor..The city has always been taking from one account or another to balance budgets. Belinski knows that. However, when Delgrosso did it as interim mayor she had no complaints..She's nothing but a shill for Schweder. Now that he's gone she'll just be a lone voice of crazy..
ReplyDeleteWhy does Reichard still have a job?
ReplyDeleteHe's either ignoring the law or he's incompetent.
Bernie,
ReplyDeleteThis is wild.
Hey Rylock, it's pretty easy to link Callahan to this because he is the frickin' mayor, last time I chwecked. but this has nothing to do w/ Dent. This concerns another of my pet peeves - good government.
ReplyDelete"Bethlehem administrators have been pulling this crap since Cunningham."
ReplyDeleteNo matter how far back this goes, the simple realoity is there are Ordinances now, and they are not being followed.
"It was nice of Mike Schweder to give Babbles Belinski a going away present."
ReplyDeleteNotice the attempt by the Callahan administration to marginalize the critic. She's Babbles. I've seen this sort of thing before.
I have no interest in the political in-fighting that goes on among the various sub-Democratic parties in Bethlehem, but the City Council does have the right to expect the Mayor to follow its own ordinances, especially when it involves the spending of public money.
" Now that he's gone she'll just be a lone voice of crazy.."
ReplyDeleteSee my comment above. Trying to marginalize her for doing her job will not sell well here. In my world, watching how public money is spent is far from crazy.
"when Delgrosso did it as interim mayor she had no complaints.."
ReplyDeleteUm, there was no casino when Delgrosso was mayor. And there was no Ordinance providing for City Council oversight.
All politicians needs to learn a little personal accountability and responsibility. If they were in grade school they'd flunk that part of the curriculum.
ReplyDeleteThe Banker
The IRONY that this post is from A BANKER is amazingly hilarious.
By the way, I see Villa posted the same time as me. We are two different people, thank goodness.
ReplyDeleteCentral, Another difference is that your comments will stay while trolls will be taken out with the garbage.
ReplyDeleteDemonization of bankers is even more hilarious.
ReplyDeleteInterest-free loans for everybody!
Time to give the delete button a workout, O'Hare.
IRONPIGPEN
Hey Iron, come on, not all us bankers are evil!
ReplyDeleteGuess now I have to take it just like the lawyers have for years...
The Banker
The Ordinance which Belinski refers to may not even be legal. There was debate between the solicitors for council and the city when it was passed.
ReplyDeleteAlso, do you really think the City Council will move to bring legal action against the Mayor? No way. Especially not with Schweder and Leeson there.
Sorry, this post, to me, is very cloudily written.
ReplyDeleteWhen I read it the first time that night at 3am, it almost seemed like you were trying to make Callahan's administration synonymous with city council.
"The Ordinance which Belinski refers to may not even be legal."
ReplyDeleteBelinski refers to two ordinances. If either is illegal, why did Callahan sign them into law?
"Sorry, this post, to me, is very cloudily written."
ReplyDeleteRylock, I can always be more clear, to be sure. Perhaps you're a bit confused bc you are so busy following federal issues that you don't see local government quite the same way.
I'm not being a smart ass. But it is incredibly difficult to keep abreast of local, state and federal issues.
What happened here is that city administrators who report to Callahan violated two specific ordinances concerning the spending of public money, depriving city council of oversight.
Business administrator Dennis Reichard falls on the sword, as he is wont to do, but it is clear to just about everyone that he is acting under Callahan.
Totally! No offense taken. I've been following federal stuff for so long and have only recently tried to divulge in the local issues.
ReplyDeleteSo your problem here is that a city administrator spent money (that the city had) without notifying city council?
There are two problems with this. One, the administrator authorized the payment. Two, the controller should have stopped it. Callahan is only culpable as far as permitting the administrator to continue without reprimand.
ReplyDeleteCity administrators did two things. First, they spent casino money w/o prior apporval from City Council, in violation of an Ordinance signed by the mayor. Second, they dipped into the treasurer's escrow for $2 MM mopre than authorized by City Council, possibly endangering federal and state grants in the process.
ReplyDeleteSo far as I know, the Controller has no unilatreral authority to stop these payments. She conducts audits as an independently elected official, but has no involvement in day-to-day operations. The person who does have such involvement is the Mayor.
he has been taken to task before for dipping into the treasurer's escrow account. This time, city officials did so in complete violation of a city ordinance.
Basically, public money was spent without the oversight demanded by City Council. Part of that money could have endangered federal and state programs. This is poor fiscal management at best, and at worst, could be criminal.
Anon 204, your thought is exactly what is wrong with society today - no accountability. It's Callahan's administration, he is responsible. To allow him to lay it off like that is just wrong.
ReplyDeleteIf that means people get fired or charged with crimes, so be it. Then let's talk honestly and openly about what happened and how to best prevent it from happening again.
And before anyone else starts, I feel the same way about R administrations (and other businesses) - hold them all accountable.
The Banker
Bunker, you are a partisan hack! Mayor Callahan has brought about a remarkable rebirth in Bethlehem. You Ohare and the other haters please just stay away. The people here are happy with the best government in the state.
ReplyDeleteThe Mayor is one bright spot in a dismal Lehigh Valley polical scene!
Banker,
ReplyDeleteI actually put 12 years or so in financial industry.
I could tell you everybody wants a no interest loan at no cost, but I imagine you already know all about it.
So, if I say, for example --- "Capitalism is bad, um-kay." --- I will leave it for you to decide whose chops I am busting, the bankers, or perhaps those of others.
IRONPIGPEN
Who the hell is Joe Callahan?
ReplyDeleteIs he running for something or trying to stay out of jail?
"Bunker, you are a partisan hack"
ReplyDeleteSo, this is acceptable, this is not personal, O'Hare?
Being a trained lawyer who did pass the Bar, I am sure you are aware of the term "precedent".
Your allowance of that remark sets no precedent to be applied equally to all regardless of race, creed, color, religion, political orientation, favorite ping-pong team, etc, or what?
(I never went to law school but I am a big fan of the Chinese team ever since Nixon, for the record)
IPP
From January 2008
ReplyDelete"Meg Holland held a press conference today to release her first year's agenda as the newly elected City of Bethlehem Controller. Reporters from the Morning Call, the Express Times, the Bethlehem Press and the Channel 69 News attended the press conference. Holland provided a detailed listing of her agenda, which included the following:
1. Hire a Deputy Controller
2. Attend monthly pension board meetings and review reports
3. Establish fraud deterrence and prevention practices
4. Establish purchase order procedures and authorization controls. . . . ."
Sorry, state law says that the controller is responsible to see that all expenditures are done in compliance with law. The controller establishes the procedures and the controls to protect the taxpayer from illegal acts.
Ask Wally DeCrosta, he would never let a nickel be spent without his personal authorization.
Bethlehem City Ordinance:
ReplyDelete"111.02 TO REVIEW AND APPROVE WARRANTS FOR PAYMENT.
(a) The City Controller shall review all warrants for the expenditure of City monies and, if satisfied that such expenditure is within the budget allotment pertaining thereto, shall sign the warrant before it is presented to the City Treasurer for payment. In so doing, he shall also pre-audit all claims and demands against the City prior to payment and shall approve warrants for payment thereof only if satisfied that such payment is in accordance with law. (Ord. 1730 §331. Passed 2/13/62.)"
ultimate responsibility is with the controller.
I do not believe that, under bethlehem's HRC, the Controller is responsible for day-to day activities. I believe that is the function of the Business Administrator. I will be looking into this.
ReplyDeleteIron Pig Pen, That certainly is a personal shot and could be deleted. But you had to go and respond to it before I could get to it. I'd probably allow it to stand because it adds some flavor to this debate.
ReplyDeleteThe topic here is Callahan's shenanaigans, not my comments policy. You get deleted bc you somehow end up blaming Obama or Muslims for everything, both under your pen name and anonymously. Honestly, it gets boring after awhile.
Iron, I was just kidding around too - I just hope Bankers stay above lawyers or I'll never hear the end of it...
ReplyDeleteAlso, the 'partisan hack' crack doesn't bother me. Anyone who has read what I've written knows that I'm anything but.
I like the direction this post took in terms of finding out who is responsible for what, but I stand by my comment that it's Callahan's administration and therefore his ultimate responsibility. And all politicians needs to be held to the same standard.
The Banker
The business administrator is an appointed officer. Purchases and payments originate in that office. In turn, approval for payment rests with the controller. Yeah, under the Harry Truman policy of "the buck stops here", it all ends at Callahan's desk. But, his role in this overpayment is not as great as you rock throwers want to believe. He does not approve or authorize payments on a day to day basis. That function really belongs to the controller. DeCrosta was really disliked because he held up payments all the time while he investigated. Obviously, that policy has not continued.
ReplyDeleteBernie you are so biased against Callahan and have your head so far up Dent's behind I don't trust a word you say.
ReplyDeleteThe Controller has no responsibility ... the Business Administrator does these transfers without the COntroller even being made aware of them...
ReplyDeleteprove it
ReplyDeleteIron, I was just kidding around too - I just hope Bankers stay above lawyers or I'll never hear the end of it...
ReplyDeleteLawyers didn't destroy the world economy. Bankers did. And then they took taxpayer money and paid it out in bonuses. These shmucks are the worst of the worst.
A lawyer, an insurance salesman and a banker were gathered by a coffin containing the body of an old friend. In his grief, the banker said, "In my family, we have a custom of giving the dead some money, so they'll have something to spend over there."
ReplyDeleteThey all agreed that this was appropriate. The banker dropped a hundred dollar bill into the casket, and the insurance salesman did the same.
The lawyer dropped in a check for $300 and took out $200 change.
Truth be told, but poor government in Bethlehem was traditionally covered by BSC. Streets department failed to budget prperly, a call to BSC resulted in all the slag needed to treat slippery streets in the winter. Just one example.
ReplyDeleteSince the demise of Big Steel, the City turned to the landfill to find money; when the landfill was no more it was on to the golf course, the water authority, the parking authority, even the housing authority. Any of this is illegal, but no one ever complains or comes forward. When told that the only way the authority can give the City money is if there is an exchange of services...this is not what the City wants to hear. You can go back to at least Cunningham and maybe further. Nothing new here.
VOR