Contractor admits giving John Dougherty a price break

A Philadelphia contractor pleaded guilty yesterday to a plan to spare labor leader John J. Dougherty the full cost of extensive renovations to Dougherty's home.

But the plea by Donald J. "Gus" Dougherty Jr., a longtime friend of John Dougherty's who is not related to him, does not mean he will cooperate in the federal probe of the union chief. Indeed, the narrowly framed plea means he might not even surface again as prosecutors pursue the investigation.

After the contractor pleaded guilty, a spokesman for John Dougherty said the union official knew nothing of Gus Dougherty's intent to give him a discount.

"This was Gus' plan and Gus' plan alone," said Frank Keel, spokesman for the powerful business manager of Local 98 of the electricians union.

"John never agreed or intended that he would get a deal or pay anything other than the fair market value of the job," Keel said.

Gus Dougherty, 42, owner of Dougherty Electric Inc. in South Philadelphia, has now pleaded guilty in federal court to 99 criminal counts. Earlier, he admitted pocketing about $1 million in required payments to a Local 98 health and welfare fund, evading taxes on $2.6 million in income, and bribing a banker, in part with free electric work and plumbing.

Assistant U.S. Attorney Anita Eve said she would seek a prison term of about 31/2 years. Gus Dougherty is to be sentenced Aug. 15.

In the hearing, Gus Dougherty pleaded guilty to a plan to charge the labor leader for only part of the cost of the extensive renovations to his home. He also admitted he sent John Dougherty a bill for the work in 2006 only after the contractor learned he was under federal investigation.

In all, prosecutors have said, Gus Dougherty's crews did $115,600 of work on the home on Moyamensing Avenue in South Philadelphia. Under federal labor law, it is illegal for contractors who hire union labor to give things of value to union leaders.

On April 16, Gus Dougherty pleaded guilty to 98 of the 100 charges filed against him but said he would go to trial on the charge involving John Dougherty's Philadelphia home and on a similar charge that he sold a Shore house to the labor leader for $20,000 below market value.

At the time, John Dougherty was running in the Democratic primary to succeed retiring State Sen. Vincent J. Fumo. He failed to win the nomination in the April 22 primary.

A month later, Gus Dougherty struck his second deal with prosecutors. As part of the deal, made public yesterday, prosecutors agreed to drop the charge involving the house in Wildwood.

Gus Dougherty's lawyer, Eric W. Sitarchuk, said politics had nothing to do with his client's new plea. He said it was not until after the primary that prosecutors offered to drop the charge involving the Shore house.

According to court documents, John Dougherty maintains that he paid Gus Dougherty, as general contractor, $252,000 toward the work on his home. He says he did so by putting up $52,000 of his own and $200,000 that his father-in-law provided.

In court filings, prosecutors say bank records fail to show any withdrawals by John Dougherty or his father-in-law to raise the $252,000. Nor, prosecutors say, are there bank records to show that Gus Dougherty deposited the money. Sources said parties involved told authorities that the money was delivered in cash.

In a recent filing, prosecutors called the story of the $252,000 payment "a sham" and "a charade."

Gus Dougherty's guilty plea yesterday was limited in scope. He admitted only that he intended to cut the labor leader a break on the renovations cost. He was silent about what amount, if any, was actually paid.

Yesterday, Keel said: "John Dougherty paid Dougherty Electric in full for the renovations performed on the house."

In court, prosecutors have made it plain that their grand jury probe of John Dougherty is active, though he has not been charged with a crime.

Under legal precedent, prosecutors would be barred from citing Gus Dougherty's guilty plea at any trial of John Dougherty unless Gus Dougherty testified, which could make him subject to cross-examination.

However, Dan Richman, a former federal prosecutor who teaches at Columbia University Law School, said prosecutors might not want to call Gus Dougherty because he has not agreed to cooperate.

If the defense were to call Gus Dougherty to confirm the alleged cash payments, that would mean that a jury would hear about his guilty plea.

As a result, Gus Dougherty might not testify in any future case, Richman said.

"There are often trials where there's an offstage person who nobody wants on the stand," Richman said. "Those are weird trials, but they happen."

The plea does eliminate one problem for prosecutors.

In recent weeks, Gus Dougherty's lawyer, Sitarchuk, had said he would call John Dougherty as a defense witness at Gus Dougherty's trial about the house renovations.

He asked a judge to grant John Dougherty immunity with regard to future prosecution use of any such testimony. Prosecutors said doing so could jeopardize their continuing investigation. With the guilty plea, that issue is moot.