FBI probing Philadelphia Parking Authority, sources say

The Philadelphia Parking Authority has caught the attention of the FBI, according to three former authority employees who say they have been interviewed by federal agents in recent weeks.

The three said the investigators asked about the authority's finances, management, and red-light camera program.

"It was about a wide variety of things," said former PPA employee Nick Marrandino, referring to his interview with agents in October. "They're just looking at a lot of different aspects there."

Two other former PPA employees also said they had been approached by investigators. Neither was willing to discuss their conversation with agents publicly.

The variety of topics discussed suggests that agents are casting a wide net, though it remains unclear just how far the inquiry has developed.

PPA spokesman Martin O'Rourke said Thursday that the agency had not been contacted by federal authorities. An FBI spokeswoman in Philadelphia said, as per Justice Department policy, she could neither confirm nor deny the existence of any investigation.

News of that investigation comes after Auditor General Eugene DePasquale issued a scathing condemnation of PPA management under the watch of its former executive director, Vincent Fenerty Jr.

In two audits, DePasquale lambasted the agency's lax financial controls, which gave Fenerty free reign to misspend thousands of dollars on excessive raises for senior-level managers, credits for paid leave, and perks such as golf outings, local dances, and gift cards for employees.

That mismanagement, DePasquale said, cost the city and the Philadelphia School District thousands of dollars the PPA was required to pay to both entities under the requirements of its charter.

Attorney General Josh Shapiro said last week that his office planned to review DePasquale's findings for possible criminal violations that might have occurred. It was unclear whether that effort would run parallel or in cooperation with the FBI's probe.

Fenerty, who resigned in 2016 in the wake of two sexual-harassment scandals, could not be reached for comment. He had been the PPA's top executive since 2005.

The PPA is responsible for operations far beyond the parking responsibilities its name suggests. Its staff of about 1,000 handles booting and towing in the city, has oversight of taxis and limos, along with some responsibility for the ride-hailing companies Uber and Lyft, and manages red-light cameras.

The former employees interviewed by the FBI said that the agents did not identify specific targets of their investigation.

Marrandino, who worked as a quality assurance officer at the PPA from 2014 to 2017, said two agents visited him at his home. He said he spent about two hours walking them through the specifics of the PPA's red-light camera program.

One other former employee interviewed by the FBI said the program was the subject of questions when an agent visited at his house about two weeks ago.

The red-light camera program brought in about $21 million in fiscal 2017, according to a letter the PPA sent this year to PennDot. Almost half of that — $10,541,496 — was used to maintain the system and its operations. Net revenue from the cameras is supposed to go to transportation improvements statewide, with Philadelphia receiving half that money, city officials have said. The PPA has managed the red-light cameras for the city since 2006 and currently operates 134 cameras.

The Xerox Corp. was contracted to operate the red-light cameras from 2014 through 2017. During that time the program was plagued by malfunctions and inefficiencies, according to PPA reports on camera performance obtained by the Inquirer and Daily News.

The PPA shifted the red-light camera contract this year to a company spun off from Xerox, Conduent Local & State Solutions. Xerox has not been contacted by federal investigators, a spokesman said. A number of personnel who worked on the red light camera program now work for Conduent, but a spokesman for that company said he was not aware of any law enforcement authorities contacting personnel there.

A December 2016 report Marrandino compiled and provided to the Inquirer and Daily News found that images captured by the cameras in Philadelphia included hundreds of thousands of photos that did not capture a red-light violation. PPA staff was forced to sift through the images to determine which actually showed violations. That cost the agency significant amounts of overtime, according to sources, though specific figures were not available.

"Some of those snapshots were guys on wheelchairs crossing the streets," Marrandino said in interviews last week. "Some of them were ghost images; there was nothing there."

Some cameras, according to the report, had accuracy rates as low as 3 percent.

The cameras also had a troubling rate of downtime under Xerox's stewardship. From April 2014 to April 2016, cameras were out of service for 37,171 hours, according to Marrandino's report, which found Xerox responsible for 90 percent of that failure rate.

The terms of PPA's contract with Xerox required the company to pay penalties to the agency for cameras that malfunctioned. PPA officials reported Xerox properly reimbursed the agency for the times the cameras had failed.