An aide to Philly’s new sheriff says he questioned ‘slush fund’ spending — and she fired him

A top aide to new Philadelphia Sheriff Rochelle Bilal said he was fired and escorted out of the office by armed deputies after raising concerns about controversial spending practices that have dogged the agency for years.

Brett Mandel, who lasted just five weeks as Bilal’s chief financial officer, said her first order of business was to continue spending with little budgetary planning or oversight. She spent out of a multimillion-dollar fund of money from fees collected by the office for sheriff’s sales, serving writs, and other duties, Mandel said, describing it as a “slush fund.”

Mandel said that he was fired and ushered out on Feb. 10 after raising concerns about that and a practice of handing out expensive contracts for advertising sheriff’s sales.

Bilal, who ran for Philadelphia sheriff last year vowing to end “two decades of scandal after scandal after scandal" in the office, declined to be interviewed for this story. Her office did not deny any of Mandel’s allegations.

“As a new administration in office, we are carefully reviewing all past practices for efficiency as well as propriety so we can operate the office with transparency and integrity on behalf of all of the citizens of our city,” Bilal said in a statement.

She’s not alone in reviewing the books. City Controller Rebecca Rhynhart on Tuesday announced that her office began in January an audit of the Sheriff’s Office bank accounts from 2015 to 2019.

“Many questions have been raised about the finances at the Sheriff’s Office and financial management over the years at the Sheriff’s Office,” Rhynhart said. “When we are done that audit a few months from now we’ll have findings and recommendations for the sheriff and the public.”

The Sheriff’s Office, with a budget of $27 million in the 2020 fiscal year and 428 employees, is responsible for the court-ordered sale of foreclosed and tax-delinquent properties, along with courtroom security and transporting prisoners to court. Bilal’s annual salary is $130,668.

After winning, she declared that she would “eliminate the dark cloud” of scandal by reforming the office’s practices.

Mandel, a former deputy city controller who advised Bilal’s transition team on financial matters before she was sworn into office Jan. 6, said his first experience with what he called “off budget” spending out of the office’s fees fund came the day she was inaugurated. A $300 parking ticket was dropped on his desk, issued to a Sheriff’s Office captain for illegally parking in a handicapped spot. Mandel said he refused to pay it with off-budget funds.

Next came six-figure contracts, to be paid out of the same fund, he said, for a quartet of consultants: Micah C.T. Sims, Teresa Lundy, Rodney Little, and Correy Thomas.

Mandel, a longtime good-government advocate who ran unsuccessfully as a Democrat for city controller in 2013, said he did not know if those contracts were ever signed by the Sheriff’s Office.

Barbara Grant, a spokesperson for Bilal, repeatedly refused to say if the contracts were signed. She said the new sheriff, who has held office for two months, deserves “a reasonable amount of time to sort things out” when it comes to contracting practices.

Mandel said he told Bilal and Undersheriff Sommer Miller that he would refuse to sign checks as CFO unless the city Solicitor’s Office issued an opinion declaring the off-budget spending legal. He was fired before the opinion was issued, but Mandel said he was “told by a top city legal authority” that the opinion supported his position that the spending was not legal.

"The more I dug into the legal underpinnings of the question of the spending of this quote 'off-budget money,’ it became clear to me that it was legally problematic,” Mandel said.

A spokesperson for the city’s Law Department said in a statement that, “As a general matter, the Law Department cannot confirm or deny whether City officials request legal opinions, which are privileged and confidential.”

Lundy and Little worked for Bilal’s campaign, helping her defeat then-Sheriff Jewell Williams’ bid for a third term in last year’s Democratic primary.

Sims, a campaign adviser, is executive director of Common Cause Pennsylvania, a good-government group in Harrisburg. The website Billy Penn reported last month that Common Cause’s board of directors didn’t know he was consulting for the new sheriff.

Lundy refused to say if she had a contract with the Sheriff’s Office and suggested it was improper to examine Bilal’s performance before she had spent 100 days on the job. Sims and Little did not respond to requests for comment.

Another contract, for less than six figures, was drawn up for communications consultant Dave Scholnick, who confirmed Mandel’s departure from the office but declined to explain it. Scholnick stopped working for the office not long after that, but declined to say why.

Mandel retained text messages and emails in which he expressed concerns about off-budget spending to Bilal, who spent 27 years as a Philadelphia police officer, and Miller, an attorney new to the office.

In some, he notes that his onetime boss, former City Controller Jonathan Saidel, shared his concerns about off-budget spending, especially after they consulted with sheriff’s offices in Montgomery and Bucks Counties and found the practice was not used there.

Saidel, who served on Bilal’s transition team, said he has “concern about any practice that happened in the Sheriff’s Office in previous years.” But he also said it’s too soon to say if Bilal will continue with the problematic spending.

“I would wait and see how things turn out and how things move before making decisions on how the office is representing the city,” he said. “I do think the sheriff is making a concerted effort to not add on to the problems of the past.”

Mandel also provided a memo he wrote to Miller, Sims, and Scholnick on Feb. 5 — five days before he was fired — about the Sheriff’s Office spending $6.3 million in fiscal year 2019, before Bilal took office, to advertise mortgage and tax-lien sales. Mandel called that spending “beyond the legal requirement“ to alert the public to those sales. He noted the firm placing those sales notices collected $719,320 in commissions that fiscal year for work that could be done by Sheriff’s Office employees.

Bilal’s statement to The Inquirer was provided by Grant, one of the partners in Cardenas Grant, the firm paid to place the advertisements. That firm’s contract ends on March 31.

It’s unclear whether Bilal will continue that practice and, if so, who will get the contract. Grant also refused to say if Bilal will use competitive bidding for future contracts with her office.

Mandel said his refusal to sign off on the spending created tension in the office. His title was changed 17 days into his tenure to “lead budget and integrity officer." He said the title change was explained this way: “It was the sheriff’s preference to have a CFO who had a formal accounting background.”

Mandel’s primary objection to the spending practices is that every dollar the Sheriff’s Office spends from fees or on advertising is money that could be returned to homeowners who have their properties taken in legal actions. Those homeowners receive money left over after the city sells the properties.

”So if there’s too much money being spent on advertising, that’s picking the pocket of the former homeowner,” Mandel said.

Bilal promised to reform an office long beset by corruption and scandal. Williams was accused of sexual harassment in three lawsuits — two from the Sheriff’s Office and one from his time as a state representative. Williams has denied wrongdoing. Former Sheriff John Green is serving a five-year federal prison sentence after pleading guilty to bribery charges.