Chester receiver in the city’s bankruptcy case says the mayor threatened him and used a racial slur

The state official who has filed for bankruptcy on behalf of the City of Chester testified Tuesday that the mayor once had threatened him physically and called him the N-word.

In addition, said Michael Doweary, the receiver that Pennsylvania appointed to oversee Chester’s troubled finances, a council member had called him a “slave master.” Doweary, Mayor Thaddeus Kirkland, and the council person all are Black.

In testimony later in the day in Commonwealth Court, Kirkland acknowledged the racial slur, and said that at a subsequent meeting he “apologized for my words and actions,” but the 68-year-old mayor added, “I don’t physically threaten anyone.”

» READ MORE: Chester's bankruptcy, how the city got here.

Doweary, who is asking Judge Ellen Ceisler to suspend the powers of the mayor and council, cited Kirkland’s behavior as evidence of the Delaware County city’s resistance to the receiver’s attempts to help resolve a deepening financial crisis in one of the state’s poorest municipalities. Under the proposal, authority would be vested in a “chief operating officer,” who would report to the receiver.

Such a decision would be at the very least rare — as are municipal bankruptcies — say public finance specialists. Said Ceisler, “We are in unchartered territory.” Ceisler questioned just what role the city’s elected officials would have under that arrangement.

“They need help,” agreed city solicitor Kenneth R. Schuster, but adding that the mayor and council were duly chosen by voters. “It’s a form of government that, like or not, is democracy.”

The city, once one of the nation’s most important industrial centers, is confronting prodigious financial issues. Its pensions are underfunded by about $48 million. The 2022 total budget was $58 million, a little more than the projected revenues.

Tax rates are high, and the tax base is depleted. The anticipated 2022 annual payment from Harrah’s Philadelphia Casino, $11.2 million, represented more than all real estate tax levies combined. “Collections are terrible,” said Schuster. “Really folks can’t afford to pay these taxes once they’re behind.”

In two days of hearings and in earlier court filings, Doweary and his chief of staff, Vijay Kapoor, argued that decisions made by Kirkland and council members spoke to the need for intervention.

» READ MORE: Chester lost $400,000 in a phishing scam.

They cited a $400,000 phishing scam by the council member in charge of city finances, something the receiver’s office was not told about until October, four months after it happened. On Nov. 10, Doweary filed the bankruptcy petition. That same council person also had issued $1,500 in unauthorized gift cards.

They pointed to the fact that the city gave 120 hours of vacation time to an employee while he was incarcerated for alleged child sex crimes.

The history of the city’s response to Doweary and his staff his been one of “resistance,” Tiffany Allen, the receiver’s attorney, said in her opening statement Monday.

The city, which has been in “distressed” status since 1995, was placed into receivership on July 1, 2020. In the beginning, the receiver’s staff and the city had “cordial” discussions, Kapoor testified, but the relationship soured “as we continued to dig in.” The staff was kicked out of City Hall, and now has offices in the nearby Crozer building.

» READ MORE: William Penn once envisioned Chester as Philadelphia

Doweary said his most hostile confrontation with Kirkland occurred during a meeting in February 2021 at which they had a disagreement over the rehiring of what Kirkland said were “some” employees.

“The mayor became irate,” Doweary said. Kirkland then “got up and walked around the room” and was pointing a “finger in my face. Had the mayor been any younger I would have thought there was a chance for some physical harm.” He said another person at the meeting stepped between them.

Doweary said Kirkland had made other pejorative comments to him, adding, “The word that sticks out the most is he called me N—.”

Asked by receiver attorney Allen if he thought that was inappropriate, Kirkland responded: “I do. I do.” However, he said his anger was incited by Doweary’s remark that, “’You’re incapable of having an intelligent conversation.’”

Doweary said that at a meeting two weeks ago, aimed at staving off the Commonwealth Court hearings, Kirkland had warned him to “watch your back,” something Kirkland denied.

Kirkland said that while relations with the receiver have been “heated” at times, “we always come back to the table.”

“Clearly we need better relations,” said Schuster. “I truly believe the receiver is well-intentioned. The council is well-intentioned.

“We resolved a lot of issues that didn’t have to come before this court.”

The hearings were scheduled to resume Wednesday. It was not known when the judge would render a decision.