Philly School District settles last case from $7.5 million no-bid camera contract

The Philadelphia School District has resolved the last lawsuit stemming from its 2010 no-bid contract for surveillance cameras – and in the end, the cost in damages, settlements, and fees was almost as high as the contract itself.

The four lawsuits that grew out of the $7.5 million emergency contract to install surveillance cameras at 19 schools cost the district and taxpayers more than $7 million. More than $2 million of that went to the Tucker Law Group, a Center City firm that represented the district.

The years of litigation started with a November 2010 Inquirer story that former Superintendent Arlene C. Ackerman had pushed aside a Bucks County firm that had begun preliminary work on the camera project and improperly handed the job to a favored Mount Airy contractor.

In addition to being sued by the firm that lost the work, the district ended up facing court claims from administrators who said they were retaliated against for leaking documents or unfairly became scapegoats in the controversy.

The final settlement came in a Common Pleas suit filed in 2011 by Augustine Pescatore, a commander in the district's Office of School Safety. Pescatore received $99,000 from the district to settle the libel and defamation suit, records show.

The district also agreed to post a statement on its website saying that an investigation by outside attorneys begun in December 2010 into the camera contract found "no wrongdoing by Commander Pescatore … who had been placed on paid administrative leave pending the investigation."

In his suit, Pescatore said that when he returned to work after the investigation he was reassigned to the patrol division. He alleged he was defamed, demoted, and made a scapegoat over the controversy that had erupted over the camera contract.

The agreement required Pescatore and L. Kenneth Chotiner, his attorney, to keep the terms confidential. Chotiner declined comment, as did Megan Lello, a district spokeswoman.

The settlement was reached in late June. The district provided a copy of the settlement to the Inquirer and Daily News on Thursday in response to a request under the state's Right-to-Know Law.

The saga began when a district source told the newspaper that Ackerman, who is now deceased, had ordered that the emergency contract to install surveillance cameras at 19 schools the state had deemed "persistently dangerous" be given to IBS Communications Inc., a small minority firm based in Mount Airy. Security & Data Technologies Inc. (SDT), the Bucks firm that had begun preliminary work on the contract, was on a state list of companies approved for emergency, no-bid work. IBS was not.

As controversy over the contract mounted, Ackerman and her administration placed Pescatore and five other administrators on paid leave while the district launched an inquiry into who leaked contract documents.

Four lawsuits ensued.

A federal jury in 2015 found that Ackerman and another former administrator had violated the First Amendment rights of Francis X. Dougherty by placing the former deputy chief of operations on leave during the leak investigation and recommending he be fired.

In his suit, Dougherty disclosed that he had been a source for the Inquirer article and contended he was fired in retaliation for talking with reporters and contacting state and federal authorities to express concerns about the contract.

The SRC agreed to pay Dougherty $725,000 to settle his claims and cover part of his lost wages and legal bills. (Dougherty, who later became managing director of Allentown, is now awaiting sentencing after pleading guilty in the spring to conspiracy to commit wire fraud in connection with a $3 million contract for streetlights in that city.)

Last year, federal jurors found that the district and Ackerman had discriminated against SDT when she directed that the contract be awarded to IBS because it was a minority-owned firm. Jurors awarded SDT $2.3 million in damages. At the time, the federal judge who presided over that case lambasted the district for its "overly aggressive" defense of Ackerman, saying its "scorched earth" legal tactics had cost the district millions of dollars.

The judge also ordered the district to pay SDT $1.3 million more to cover the firm's legal bills, costs, and interest on the judgment.

Instead of returning to federal court for the third case, the district settled the civil rights and defamation suit of John Byars. Late last year, the district agreed to pay the former district procurement director $425,000 to end his claims that he had been defamed, wrongfully terminated, and made a scapegoat amid the fallout from the camera contract.

The agreement Pescatore signed to end his suit said that he and the district had settled because they wanted to "avoid the time, expense and uncertainty associated with the litigation. …"

Neither the district nor any of the former district officials, employees, and members of the School Reform Commission who were named as defendants in the suit admitted any fault or liabilities.