Police Slush Fund Scandal
2:41 pm
Tue February 26, 2013

Lamb: Poor Bookkeeping Allowed Pittsburgh Police Slush Fund

Pittsburgh Controller Michael Lamb said poor accounting practices in the city treasurer's office opened the door for possible misappropriation of city revenue to a special fund used improperly by Pittsburgh police.
Credit Noah Brode/90.5 WESA

Pittsburgh Controller Michael Lamb said the city’s Finance Department has misrepresented off-duty police pay by lumping in a city administrative fee along with the officers' hourly rate.

Lamb said this is the type of poor bookkeeping that could have allowed the department to skim off funds to a private slush fund while still paying officers the full amount owed to them.

"Some of that money was pass-through money that should have gone right to an officer, [but] we have learned now that some of that money was actually revenue to the city that should have been properly credited as revenue to the city," said Lamb, a candidate for mayor.

Lamb said the poor bookkeeping could have resulted in the loss of $700,000, but he stopped short of saying that the misrepresentation was intentional on the part of the Ravenstahl administration.

The administrative fee of $3.85/hour is meant to end up in the city's coffers to offset costs associated with deploying the police officers to private businesses and events. However, the funds appear to have ended up in an account at the Greater Pittsburgh Police Federal Credit Union. The misappropriation is apparently the subject of an FBI investigation, which resulted in last week's ouster of Police Chief Nathan Harper.

Lamb said although he was approached in November by Bob Swartzwelder, a police officer who was concerned about the management of the pay for off-duty officers, neither he nor Swartzwelder suspected fraud at the time — just mismanagement. Lamb said he launched an audit of the Bureau of Police Special Events Office in January as more details came out.

Mayor Luke Ravenstahl's office has criticized Lamb for not starting the audit sooner, when Swartzwelder first raised concerns.

At a press conference on Tuesday, Lamb also announced a new fraud hotline that will open on Friday. One of Lamb's auditors will run the hotline, gathering information on possible fraud, waste, and abuse from city employees, city vendors, and the public. The number is (412)255-4777.