Police Secondary Employment: Part III

Note: Part I of this series, which describes the problems and the costs of secondary employment, can be found here. Part II, which traces the first year of an effort by the city to recover these costs, can be found here.

PART III: THE CAPITULATION

When Luke Ravenstahl took the oath of office as the (Interim) Mayor of Pittsburgh on the evening of Friday, 01 September 2006, there can be no doubt that he had a huge number of things on his mind. Mayor Bob O'Connor had passed away from cancer just hours before, and Master Ravenstahl was being unexpectedly thrust into the role of the city's chief executive. He had quite a bit on his plate. There were speeches to make, paying tribute to the late mayor's dedication and public service. There were funeral plans to attend to. There were questions to answer about when the next mayoral election would be held. There was national press attention to deal with, due mostly to Master Ravenstahl's youth. And most importantly, there was an enormous amount of grieving to be done.

But at the same moment, there was still a city government to manage. Dozens, if not hundreds of different issues required mayoral attention, and many of these had languished, largely unattended to while Mayor O'Connor had been hospitalized. The city desperately needed a firm hand on the tiller, and Luke Ravenstahl was the only one who was in a position to provide it.

One of these many issues, which understandably would have been seen as a very low priority during the first few weeks of the Ravenstahl administration, was a set of proposed changes to the Pittsburgh Police Department's secondary employment policy. It would be almost two months before the new interim mayor would be able to turn his attention to this issue, but in the meantime others were already beginning to do the political maneuvering necessary to influence his eventual decision on this matter.

At that point, this much-needed and long-overdue attempt to reform the police department's policy on secondary employment was already over a year old. In many ways, it was a wonder – as well as a testament to its common-sense practically and inarguable necessity – that the reform effort was still alive at all. First introduced as a rather limited pilot program almost 18 months earlier, the new policy had beaten back an enormous number of challenges just to make it this far. It had survived the transition from one mayor, the mostly unpopular Tom Murphy, to the O'Connor administration. It had survived the changeover from one police chief – Robert McNeilly, who had personally championed these new policies – to the new one, Dominic Costa. It had survived the inevitable delays that resulted from these changes in city and police leadership. It had survived a Federal lawsuit filed by a Officer Daniel Novak, one of a small number of police officers whose contracting businesses had prospered under the old secondary employment scheme. It had survived an attempt by some members of the Fraternal Order of Police (FOP) to kill the program by cutting off the funds needed to purchase a key computer system. It had survived a decisive vote against it by Pittsburgh's City Council when the members reversed themselves just five days later. It had survived the vocal complaints from some of the business owners who hire off-duty police officers, most of whom did not want to pay the "cost recovery fee" that was a part of the new policy. And it had survived a grievance filed against it by the newly-elected leadership of the FOP, with the arbitrator ruling decisively in the city's favor. The question now was whether it could survive Luke Ravenstahl.

The new secondary employment policy had not necessarily come through all of these battles unscathed. It's implementation schedule was now far behind former-Chief McNeilly's original timeline. Even at this late date, only a limited range of off-duty jobs had been placed under city control. Most of the officer-run contracting firms were still operating as they had for years, hiring other police officers for off-duty security details at bars and sporting events. And most importantly, the cost recovery fee that the city was to charge under the new program had already been drastically scaled back.

When then-Chief Robert McNeilly first described his new secondary employment policy to the press, many of the financial details were still being worked out. It was unclear exactly what the city would charge for the officers' time, and it was unclear exactly how much of that money the city would retain to cover its financial exposure via the new cost recovery fee. But other local departments, such as the County Police and the Port Authority Police, charge a fixed 22% fee to cover their costs when their police officers work off-duty for private employers. Perhaps using these policies as a guideline, Chief McNeilly seemed ready to charge about the same amount. As the Post-Gazette reported at the time:

Police brass are currently crunching numbers to try to establish a fee structure, which could go as high as 20 percent of the amount paid to each officer. It is possible fees might be charged on a sliding scale. Some charitable groups, for example, might be charged less while bars, whose details tend to create the highest potential liability, might be charged more.

These cost recovery rates, which were pretty much in line with those charged by other municipalities, would not be sustained once Mayor O'Connor and Chief Dominic Costa took over the police department. Documents used during the lawsuit filed by Ofc. Novak, for example, show that the Pittsburgh Pirates were charged a recovery fee of only 10% at the start of the 2006 season. The team, however, was rather unhappy about paying even this discounted rate. Several of the invoices sent by the city to the Pittsburgh Pirates contain handwritten changes made by team officials. All of them show the 10% fee being crossed out and replaced with a 5% figure. Moreover, many of the line items relating to the work performed by individual officers are simply scratched out, drastically reducing the amount that the Pirates were paying to use our police officers. A bill for nearly $2,300, covering the period from 15-17 April 2006 was reduced to just $736. Another invoice for $1,261 was reduced to a mind-boggling amount of just $57.31. Clearly, the exact amount of the city's pricing structure for secondary employment – including the cost recovery fee – was not yet firmly established, and at least some private employers paying less than others.

By the end of the summer 2006, after the arbitrator had ruled on the FOP's grievance against the new policy, Police Chief Costa reached a final decision about the pricing structure of the city's cost recovery fee. Instead of charging a percentage of the officers' wages, as most police departments do, he decided to charge a fixed amount for every hour worked. His plan was to change $4 per hour (per officer) when a secondary employer allowed the city to staff an off-duty detail, and $5 per hour if the employer wanted to hire a specific police officer to do the work. When there was no desire to employ a particular police officer, these details would be assigned on a "rotating seniority" basis.

Because these amounts are not expressed as percentages, it's very difficult to compare the Costa fee structure with what other departments charge. It all depends upon how much each individual police officer is being paid to do the work. In the case of Devon Werling and Sergeant Mark Eggleton, described in Part I of this series, the two police officers working at the "O" that evening were being paid $24 per hour (under-the-table and tax free) by the restaurant. In this case, Chief Costa's proposed fees would amount to something between 16% (if the "O" had no preference for a particular police officer) and 20% (if the restaurant specifically wanted Sgt. Eggleton and Ofc. Roberts to work for them, perhaps because life at the "O" had gotten boring, and nothing spices things up like another lawsuit). But at the higher rates that some officers command, which can reach $38 per hour, these fees would amount to between 11 and 13%. And at the rates that the city listed on its invoices to the Pittsburgh Pirates – roughly $43 per hour for each Sergeant and $49 for each Lieutenant – the percentage would be far less than that.

However watered-down this new cost recovery fee structure may have been, the key point is that the secondary employment system was largely set up and ready to go at the time that Luke Ravenstahl became the interim mayor of Pittsburgh. It had been approved by two different previous mayors and two different police chiefs. It had been ruled sound by both a Federal judge and an independent labor arbitrator. It had been voted on and approved by City Council. And these reductions in the city's cost recovery fee meant that there was no longer any valid reason for private employers to complain about the plan; they were getting a far better deal than they would have received from any other police department in the Pittsburgh area. There was simply no reason why this secondary employment program should not go forward. No reason, that is, apart from Luke Ravenstahl himself.

For those who had tried for so long to hold onto the "good old days" of making good (and often tax-free) money from off-duty employment, Bob O'Connor's death – however tragic from a personal standpoint – was nothing less than a wonderful and fresh opportunity. Perhaps this new mayor could be convinced, unlike the two mayors before him, that this cost recovery plan was somehow a bad deal for the City of Pittsburgh. Perhaps there was some leverage that they could use to make this decision more politically palatable (or at least expedient) for the new mayor, even if it was obviously not in the best interest of city taxpayers. And perhaps there was some way to eliminate the resistance of Police Chief Dominic Costa, who – having now bought into the new secondary employment policy – would be certain to fight any renewed effort to kill it off.

By 28 September 2006, less than a month after Luke Ravenstahl took the oath of office, Dominic Costa was no longer the city's police chief. At the time, Chief Costa cited medical problems as the primary reason behind his departure. That part was almost certainly true. It's also true that a new mayor would normally be entitled to select his own people to head up key posts such as chief of police. But in this case, Interim Mayor Ravenstahl has never seemed inclined to rid himself of any other O'Connor appointees, so Chief Costa's departure does stand out as being noticeably unusual.

Regardless of the reasons behind Chief Costa's sudden retirement, it was obviously good news for those who were arrayed against these reforms to the secondary employment program. There is an enormous amount of speculation about just who these people were, and also about what other kinds of lobbying were happening at about the same time. If you read the many comments that have been left here on The People's Republic, you will find that a large number of them zero in directly on the role that Dennis Regan – Mayor O'Connor's Director of Intergovernmental Cooperation and (at this time) Interim Mayor Ravenstahl's Director of Operations – was playing in these rejuvenated attempts to rescind the program. The role of police officer Frank Rende, who was Mr. Regan's defacto brother-in-law, is also brought up on a recurring basis.

For example, an anonymous comment contained a plea for me to examine, as part of this series, the actions taken by these two men:

Don't underestimate the childish antics of Denny Regan and Frank Rende. Seriously, the man brought nothing but self-interest (including the interests of his girlfriend and her brother) to the table - he didn't want to be king so he could implement good government objectives he had been dreaming of over the years... As [former Police Chief] Dom Costa said in his statement, Denny was trying to stop the city from doing cost recovery as early as March, on behalf of his friend Frank. While the rest of us were concerned about Denny as Public Safety Director for obvious reasons, Denny was salivating over the opportunity to play his childish little games on his friend Frank's behalf and stop the program.

Another comment mentions the personal connections between Mr. Regan, Ofc. Rende, and former FOP President Eugene Grattan, who had spearheaded an unsuccessful attempt to kill the secondary employment program in City Council:

Everybody knows that Gratton [sic]… worked closely with Rende on O'Connor's campaign and Gratton was bragging about killing McNeilly's off-duty program. … It's no secret that Rende has a big mouth and was bragging about his role in trying to kill the program thru Gratton and Regan.

I have no doubt that Dennis Regan and Frank Rende are capable of truly odious behavior. That fact has long been established by a seemingly endless string of previous incidents. It is also very clear that Ofc. Rende has engaged in a rather noteworthy amount of secondary employment, and that these side jobs must supplement his city income quite handsomely. The proposed change to a "rotating seniority" system in assigning off-duty jobs would obviously lead to a reduction in Ofc. Rende's off-duty income. Furthermore, there can be no doubt that Mr. Regan had a history of going to extreme lengths to benefit the career of Ofc. Rende. In fact, just weeks after Chief Costa left the police department, Mr. Regan's efforts on Ofc. Rende's behalf would be directly responsible for the failure of his nomination as Public Safety Director and his dramatic fall from grace in city government.

For all of these reasons, it is certainly quite reasonable to believe that both of these men were quite interested in seeing the secondary employment program go away. And, at least in the first month of the Ravenstahl administration, they may both have been actively engaged in the attempts to kill it off. But their role in Interim Mayor Ravenstahl's final decision, which would not be made until November, is rather less clear. By that time, Mr. Regan had been suspended from his posts, and Ofc. Rende could only have been viewed as politically untouchable by the Ravenstahl administration.

What is very clear is that, with or without the help Mr. Regan and Ofc. Rende, the lobbying to suspend the secondary employment policy was well underway. Ganymede, the anonymous correspondent who was introduced in Part II of this series, claims that many of the city's bigger secondary employers were beginning to complain – once again – about the cost recovery fee. The Pirates and the Steelers were especially vocal in their opposition, despite the fact that their arguments had already failed to convince two mayors, two police chiefs, and the arbitrator who had handled the FOP's grievance proceedings. As Ganymede tells it, "… we had a deal [with the teams] in June, but it appears they came back to the well with Luke's arrival…" in the mayor's office.

On 04 November 2006, these efforts culminated in a letter sent to Interim Mayor Ravenstahl by the president of the FOP, former police Sergeant James J. Malloy. The text of this letter, provided by Ganymede, stated in part:

Your Honor,

I'm writing to inform you that a small revolt is taking place over the increase in the amount of money that a company must pay to hire a Pgh. Police Officer for an off duty detail. There is no complaint about the salary to the Officer but the arbitration award gave the City the right to set the amount of the cost recovery fee.

The cost recovery is money that is taken from a company or employer to pay for legal defense or compensation injury of the Police Officer that works an off duty detail.

Then the award was handed down. There was an amount set at four dollars as the cost recovery fee and although there was a lot of grumbling, it was pretty much accepted.

Presumably, Mr. Malloy means that these amounts had been "pretty much accepted" by the FOP membership, because he goes on to list the businesses that were no longer happy with this agreed-upon (and highly reduced) pricing scheme:

The list of discontents is growing but I believe that the Steelers organization, the Pirates and now the Giant Eagle has balked at the new number of $5.00 per-hour.

I would ask that you intercede in this issue and reduce the recovery cost to $2.00 per hour for the Officers hired off the seniority list at the Special Events Office and $2.00 additional dollars per hour if you want to hire a specific Officer, which would return the cost recovery fee back to the original amount of $4.00 dollars which the Companies or employers had accepted.

It would in fact make it much more palatable to the employer and based on the amount of money that is being charged for the total number of details hours that are work in a month's time, it will create a fund of approximately $25,000 dollars per month in cost recovery funds.

There are a number of interesting points to this letter. To begin with, Mr. Malloy states that the employers are balking at the "new number of $5.00 per-hour", when that amount would have been charged only when the employer was seeking to hire a specific police officer. The $5 fee could have been avoided by these employers if they were willing to allow the Special Events Office to assign the police officers needed for their security details. Secondly, Mr. Malloy – acting on behalf of the FOP membership – is arguing only that the amount of the cost recovery fee should be reduced; he is not requesting that the fee be eliminated entirely. Finally, Mr. Malloy claims that even at these highly reduced amounts – which correspond to a rate of just 5% of the typical officer's wages – would bring in $25,000 per month, or $300,000 per year, for the City of Pittsburgh.

If a reduced rate of merely $2 per hour was enough to bring in $300,000 per year, then logically the Costa plan was capable of bringing in no less than $600,000. And if the Pittsburgh Police Department were to mirror the policies of other local agencies, the FOP's own figures suggest that the revenue from secondary employment could have easily climbed past $1.2 million per year. Every knowledgable source who has contacted me on this issue, however, is convinced that the FOP's figures grossly underestimate the potential revenue from the cost recovery program. Depending on how you run the numbers, it's possible that a standard 22% plan could attract even more money for the taxpayers of Pittsburgh. Mayor Ravenstahl had a golden opportunity to do a great service to his consituents. All he would need was a little backbone.

And this is the point where our story reaches its most astonishing moment. On 21 November 2006, just two and a half weeks after receiving this letter from the FOP president, Interim Mayor Luke Ravenstahl ended the cost recovery program in its entirety. He didn't just go along with the FOP request to reduce the cost recovery fee; instead, he completely elminiated it. The city would now receive no revenue whatsoever from its secondary employment program. As the Post-Gazette reported at the time:

Pittsburgh Mayor Luke Ravenstahl nixed a plan yesterday to tack a city service fee on top of the charges private businesses pay for the services of off-duty police officers.

The plan would have added $4 or $5 an hour to the charge for an officer's services on "detail" outside a bar, cultural offering, sporting contest or other event.

"I didn't want to create hardships for businesses," Mr. Ravenstahl said. "A lot of [private businesses] were going to reduce the number of officers they hired" if the fee was added.

He added that the city has struggled to put enough officers on the streets, and the privately paid details supplement the coverage the city is able to provide.

"I didn't want to see the reduction of officers on detail, because quite honestly, they're officers in uniform on the street," he said. ...

The mayor said cultural facilities like Heinz Hall, sports teams including the Steelers and Pirates, and bar owners complained about the proposed fee. ...

Fraternal Order of Police President Jim Malloy said he was with the mayor when he made the decision, and he applauded it.

The Post-Gazette's article makes the whole process seem like a rational decision by the young mayor, made after extensive consultation with the union leadership and the business community. In fact, however, the decision was made during a single meeting, held that very day, where only a very one-sided view of the cost recovery plan was presented. There were no members of the city's law department present. There was nobody there from the Special Events Office. And despite the fact that this decision would eliminate at least $300,000 in new revenue – and possibly much more money than that – there was no discussion whatsoever with the Act 47 or Intergovernmental Cooperation Authority (ICA) boards, which were overseeing all of the city's budgetary decisions in the wake of its 2003 bankruptcy.

On that very day, FOP President Malloy sent a letter to his members which provides, albeit unintentionally, a far more accurate depiction of the how ill-considered Master Ravenstahl's decision really was:

My Fellow FOP Members:

I am pleased to report to you that a week ago I asked for a meeting with Mayor Luke Ravenstahl to talk about reducing the cost on Off Duty Detail Cost Recovery Program.

This afternoon we met at the Mayor's office (Mayor Ravenstahl, Yarone Zober, Chief Harper, Deputy Chief Donaldson and I).

After a good deal of discussion Mayor Ravenstahl stated that he did not think that there had been enough input from the business community and therefore has suspended the Cost Recovery Program indefinitely.

There shall not be any fee charged to any Company for an Officer working any Off Duty Detail. Effective immediately.

When you see Mayor Ravenstahl tell him, Thank You...

It is the last line of Mr. Malloy's letter, the plea for the membership to "thank" Interim Mayor Ravenstahl, that is perhaps most telling here. Because, just as when former Mayor Tom Murphy secured the "gratitude" of city firefighters a few days before the 2001 primary, there is only one way for public worker unions to "thank" politicians in Pittsburgh, and that's by voting for their benefactors en masse. Master Ravenstahl was essentially purchasing the FOP's support in the upcoming primary with at least $300,000 – and potentially quite a bit more – of our money.

This decision reflects, once again, on Luke Ravenstahl's astonishingly poor judgement. He ignored the years of work that had gone into building this secondary employment program. He threw away months of negotiation that had already been held with the business community. He allowed union leaders to manipulate him without troubling to hear the other side of the story. He caved into the whining complaints of the businesses who hire these officers, when two previous mayors had had the stones needed to stand up to them. He left city taxpayers on the hook for ever-increasing secondary employment costs that rightfully belong to the businesses and police officers that create them. He eradicated an already-weakened revenue stream when he could have taken the golden opportunity to strengthen it. He failed to consult with City Council, or even with the boards who oversee the city budget. And he did all of this for the sake of about a thousand police officer votes.

But as bad as all these things are, the actual situation is – if such a thing is possible – even worse, and it extends well beyond the eradication of the city's cost recovery fee. Recall that the original secondary employment plan contained two distinct elements. On top of the cost recovery fee, the city also intended to take over all of the scheduling and staffing of these off-duty jobs through the use of the police department's Special Events Office. From what was reported by the Post-Gazette's Rich Lord at the time of Master Ravenstahl's capitulation, it seemed that at least this part of secondary employment scheme would continue, and was even welcomed by the police union:

The Police Bureau will continue to manage the details, handing out assignments to officers, the mayor said.

Prior to the institution last year of a computerized system for assigning and managing details, the jobs were dished out by entrepreneurs within the police force, who often took a lucrative cut.

The computer system "metes out details more fairly to officers all over the city," [FOP President] Malloy said. "You don't have to have an in with anybody."

All of that would have been nice, had it only been true. But in fact, this part of the secondary employment system was already being ignored and abused by many members of the Pittsburgh Police department. In October, buried in a story on the withdrawal of Dennis Regan's nomination as Public Safety Director, the Post-Gazette mentioned the following allegation against Officer Frank Rende:

The bureau now has a computerized system that officers use to sign up for side jobs providing security at private businesses. Passwords limit the number of lucrative side jobs an officer can take on, and allow the bureau to track employees' moonlighting.

In May of this year, Officer Fred Crawford signed a memorandum confirming that he had given Detective Rende permission to use his password and work his side jobs.

As an interesting sidenote, this little transgression with his password apparently did no harm to the career of Officer Fred Crawford. As mentioned in a post on the Burgh Report, he has since been promoted and now serves as the Interim Mayor's personal bodyguard. The complexity of all the back-scratching and personal relationships here can quickly become overwhelming.

But aside from the fact that some police officers have managed to get around the computer system's restrictions, there is also a very real problem with it simply not being used at all. The old system, in which a small number of police officers own and operate the contracting firms which arrange most of the off-duty employment apparently continues to this very day. After a long series of back-and-forth comments in an earlier post, one of the commenters summed it up this way:

The [Special Events Office] isn't being used for the "big jobs" (Pirates, Steelers, Pens, basketball, concerts) or for bars, etc. They have a computer system [plus] 2 cops running the program, but only a fraction of the jobs are being scheduled through the system. All of McNeilly['s] and Costa's efforts to make the system uniform were wasted once Luke fell for the lines given by the businesses (the same lines Murphy and O'Connor didn't fall for).

From all indications, every element of these long-planned and much-needed reforms to the secondary employment system are quickly unraveling within the Pittsburgh Police Department. We paid for a computer system to manage it, but it isn't being used. On those occasions where the system is used, its controls are being subverted by public servants who share passwords with each other, and who apparently face no significant consequences for doing so. We are have paid (and continue paying) two city employees to manage the Special Events Office, but it is being bypassed and becoming irrelevant. The old-style patronage system of cops staffing these off-duty details with their friends and supporters continues unabated. We have lost what could have been a vitally important stream of revenue. We remain stuck with the burden of funding the off-duty, private businesses of our police officers. We remain on the hook for the lawsuits, injuries, and worker's compensation claims that result from these secondary employment details. And our mayor is perfectly happy to see all of this happen, despite the lessons provided by the two men who proceeded him, simply because he wants the FOP to "thank" him in May.

We have spent a lot of money. We are destined to end up spending a lot more. We tried to fix things. And we have absolutely nothing to show for it. It's time for the City of Pittsburgh to find a new mayor.

Part I of this series, which described the costs associated with police secondary employment, was posted on Sunday. Part II, which appeared yesterday, examined the attempts to implement a cost recovery plan during the Murphy and O'Connor administrations.