City Controller: Nutter Aide Used Nonprofit Like a “Slush Fund”

Former Mayor Nutter's response to the allegations? "The controller is a liar, a snake and a hypocrite." Also: "He is a sad and sick person."
Michael Nutter Alan Butkovitz

L: Michael Nutter (Photo by Matt Rourke/AP) R: Alan Butkovitz (Photo via Curtis Blessing)

City Controller Alan Butkovitz alleged during a press conference Tuesday that a top aide to former Mayor Michael Nutter used a nonprofit “as if it were a special slush fund.”

Butkovitz called the news conference to discuss the findings of his office’s audit of the Mayor’s Fund for Philadelphia. He said the review revealed several questionable expenditures allegedly made by the fund’s former chairperson and Nutter’s onetime city representative, Desiree Peterkin-Bell

The Mayor’s Fund is an independent non-profit funded primarily by the Philadelphia Marathon and intended to better the city through scholarships and city programs like My Brother’s Keeper and Philly Free Streets. In 2014, the fund contained $500,000, according to Butkovitz, which was then split into two accounts: $300,000 went to the grants fund, and $200,000 was placed in a “reserves account.”

“The grant fund was for scholarships and for grants to organizations that were going to perform any of the five core functions. Then the reserve account was for anything else, without definition,” said Butkovitz. He added that the reserves account was created without approval by the board of the Mayor’s Fund. “So, basically, they took $200,000 out of a $500,000 fund and had no rules for how they were to be spent.”

Butkovitz further alleged that he suspected the reserves account was specifically created in order to misuse funds. He said issues regarding the Mayor’s Fund were initially brought to the attention of the City Controller’s office by the fund’s executive director, Ashley Del Bianco. The review began in January of 2016, and included examining $400,000 in expenditures between 2014 and 2015. “Instead of making grant awards, it appears the former chairperson used the reserves account as if it were a special slush fund,” Butkovitz said. “Only five of the 21 sampled expenditures appeared to be grant-related.”

Butkovitz questioned several credit card purchases, including a $766 one-way flight from San Francisco to Philadelphia, $704 spent on 33 Uber rides in June of 2015, $333 spent on travel in Portland, Oregon, $52,000 in expenses at the Philadelphia Courtyard Mariott from September to October of 2015, and an $80 pair of shoes from Macy’s. According to the review, one of several credit cards linked to the account was in the name of Peterkin-Bell, who is no longer chairperson of the Mayor’s Fund or employed by the city.

“The fund established a process by which expenditures were closely scrutinized to ensure that they met the criteria established by the fund, which were, broadly stated, that the purpose of expenditures was to fit within Mayor Nutter’s five goals,” Peterkin-Bell responded in an email today, according to Billy Penn. “The fund’s Executive Director, Ashley Del Bianco, signed off on expenditures to indicate her approval that all criteria had been met. Ms. Del Bianco signed off on all of the expenditures made by the fund, including those listed by the controller.”

Because Peterkin-Bell is no longer a city employee, she is under no obligation to cooperate with the investigation, Butkovitz said.

“We don’t have subpoena power,” he said. “So if she’s interested in putting her version forward, she should cooperate with us.”

But according to Peterkin-Bell, she has not yet been given the opportunity to do so. The former chairperson referenced “the controller’s failure, contrary to his office’s own practice, to give me the opportunity to review the preliminary report or to correct its mistaken assumptions.”

Also being called into question is the $45,000 tab from the former mayor’s trip to Rome.

“There was an effort to make sure nobody figured out how the Rome trip was paid for,” said Butkovitz. “If they had done it through regular city channels, if they had processed that trip through vouchers and through the treasurer’s office, we would have insisted on receipts. And they knew that there would have been all sorts of scrutiny and control of that. So a decision was made to circumvent the city process.”

Nutter strongly denied the allegations on his website in the following statement:

“I stand 100% behind the statement by Desiree Peterkin-Bell regarding the Mayor’s Fund and its expenditures.  All expenditures were approved by the Board’s Finance Committee, and the Executive Director in accordance the established procedures. Funds cannot be spent without the Executive Director’s approval, and the board chair cannot expend funds. This is the usual hatchet attack job by Butkovitz, timed to try to get some attention for himself while the FBI is diligently doing their job in other matters in Philadelphia. The controller is a liar, a snake and a hypocrite. There is no truth in what he says, every expenditure was proper and for an approved purpose and he never talked to either Desiree Peterkin-Bell or myself about any concerns, which is standard procedure, before releasing this slanderous, libelous and vicious bile from his mouth. He is a sad and sick person.”

According to Butkovitz, the investigation will continue with a review of records for all accounts related to the fund dating back to 2008.