Allentown City Hall FBI probe expands with eight new names

Oct. 02--Federal officials expanded their investigation into Allentown City Hall on Thursday, requesting emails and other documents related to eight more people and businesses.

In an email marked "high importance," Allentown solicitor Susan Ellis Wild directed city staff to retain all electronic communications and documents -- including contracts, requests for proposals, bids, emails, correspondence, memos and notes -- pertaining to a list of people and businesses provided by federal investigators.

Along with the more than two dozen people, companies and entities listed on an FBI subpoena served on Allentown City Hall on July 2, federal officials have now requested documents relating to Tony Iannelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce; BSI Corporate Benefits, an insurance agency in Bethlehem; Anthony D'Are, a principal with BSI; developer Jeff Trainer; Blackford Development, a Lancaster-based group; Richard Welkowitz, president and CEO of Blackford; Parkway Corp., a Philadelphia parking development company; and Joseph Zuritsky, an executive with Parkway.

This is the second time city employees have been asked to retain documents in connection with the federal investigation. During the July raid, the FBI seized cellphones, computers and other electronic devices and requested thousands of pages of documents. The Allentown solicitor's office fulfilled that request in September, turning over more than 250,000 pages.

Wild said no new subpoena has been served on City Hall. Allentown officials agreed to the request from the U.S. attorney's office for documents in lieu of a subpoena, she said. The solicitor's office is expected to gather the newly requested documents over the next seven to 10 days, according to the email, which went out to city employees and was obtained by The Morning Call.

No one on the new list has been accused of wrongdoing or charged with a crime.

The FBI has been investigating Allentown's contracting process and possible connections to campaign donations to city officials. The investigation, which began about two years ago, has netted one conviction in Allentown. Developer Ramzi Haddad pleaded guilty last month to conspiracy to bribe an Allentown official identified in court documents as Public Official No. 3.

The public official had control over municipal contracts and announced a bid for U.S. Senate in April, the documents state, indicating the official was Mayor Ed Pawlowski, who has such authority and announced a run for Senate in April. He has since suspended that bid.

Court documents describe a wider pattern of corruption in which that Allentown official allegedly worked with staff to identify businesses with a financial stake in the city and hit them up for campaign donations. That official also took measures to conceal the alleged corruption, having his office swept for listening devices and using disposable "burner phones," the documents say.

Pawlowski has not been charged.

A parallel FBI investigation is underway in Reading, also looking at connections between contracts and campaign donations. Federal agents raided Reading City Hall eight days after the raid in Allentown and requested similar documents. Charges were filed in that case against Reading Council President Francisco Acosta, who pleaded guilty in August to conspiracy to commit bribery. He admitted taking campaign money in exchange for trying to sway council to repeal a city ordinance meant to curb political corruption.

Reading Mayor Vaughn Spencer, who was implicated in the Acosta case, has not been charged. He and Pawlowski both used campaign manager Mike Fleck, who operated consulting firm H Street Strategies in Allentown. Fleck's name is among the 20 names on both the Allentown and Reading subpoena lists. Sources have told The Morning Call he secretly recorded both Pawlowski and Spencer for the FBI.

Fleck abruptly closed his business the day of the Allentown raid and left his Allentown home days later. Friends have not seen or heard from him since. Photos of Fleck's wife at restaurants in the Atlanta area were recently posted on Facebook.

Allentown Council President Ray O'Connell said he was taken aback by the new list but not surprised that federal officials were broadening their probe. O'Connell said he hoped the investigation would be quick, decisive and fair.

"How many more additional lists will we have?" he said. "When you have additional lists coming out, it does nothing but darken the cloud over the city."

On the new list

--Trainer, an Allentown developer and co-owner of the Sands Bethlehem Event Center and Steel Ice Center in Bethlehem, said Thursday he was surprised to learn his name was on the list but offered no further comment.

--Welkowitz is one of central Pennsylvania's largest real-estate developers. His Blackford Development LTD has built several shopping centers and office buildings across the state. Welkowitz, who also has developed thousands of townhouses, apartments and single-family homes, declined to comment Thursday.

Trainer and Welkowitz are partners in Vision Entertainment, which built and operates the Sands Bethlehem Event Center. They have a long-standing business relationship that dates at least to their unsuccessful attempt to develop a hockey arena in Allentown in 2001.

--Iannelli is the longtime head of the Chamber, host of the weekly "Business Matters" on WFMZ-TV, Channel 69, and one of the Lehigh Valley's most recognizable business figures.

The Chamber has an annual contract with all three Lehigh Valley cities, including a $30,000 contract with Allentown to organize marketing and community events in the downtown, Iannelli said. Iannelli, who last contributed $200 to Pawlowski in 2007, said he considers the mayor a friend. He said he was shocked to learn his name was on the FBI's list.

"In the most humble, non-defiant way I can say it, I'm totally surprised," he said, adding he's never been contacted by the FBI.

--Parkway Corp. specializes in projects involving parking garages. The company is one of six bidders for a retail and residential development slated to be built around a city parking garage under construction at Sixth and Walnut streets.

--Zuritsky is chairman and CEO of Parkway. He contributed a total of $5,000 to Pawlowski's local campaign fund in 2014 and 2015. He also donated $500 to Pawlowski's unsuccessful gubernatorial campaign in 2013.

Zuritsky did not return a call to Parkway Corp. seeking comment.

Parkway executives contributed a total of $13,000 to Pawlowski's U.S. Senate campaign, including the $5,000 that came from Zuritsky.

--BSI Corporate Benefits is an employee benefits consulting firm. Its clients include the city of Allentown, the Lehigh Valley Phantoms and the Lehigh Valley IronPigs. The group honored Pawlowski at its C-Suite Healthcare Summit in September 2014.

--D'Are is a principal at BSI. He donated $5,400 to Pawlowski's campaign for U.S. Senate.

D'Are did not return a call or email seeking comment.

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THE LIST

On July 2, the FBI served a subpoena on Allentown City Hall for records relating to billing by and efforts to procure work for the following:

Arts Academy Charter School (Abe Atiyeh owns building)

Abe Atiyeh (Lehigh Valley developer, owner of two area nursing homes)

Pennoni Associates (Philadelphia engineering and design consulting firm)

Nelson Shaffer (consulting engineer at Pennoni Associates)

McTish Kunkel (an Allentown engineering firm)

Matthew McTish (principal in Allentown engineering firm McTish, Kunkel & Associates)

Northeast Revenue (Wilkes-Barre municipal collections service that does work for Allentown)

ESCO

TEN (The Efficiency Network, a building efficiency company in Pittsburgh)

Patrick Regan (national director of government programs at The Efficiency Network (TEN))

T&M (T&M Associates is an engineering consulting firm headquartered in New Jersey)

Mark Neisser (Business development manager at T&M)

Sean Boyle (principal in Boyle Construction Management, Allentown)

Sovereign Enterprise (Hanover Township (Lehigh County) corporation organized by James Hickey)

James Hickey (consultant, former Democrat Party operative, former Northampton County director of administration)

Ramzi Haddad (Lehigh Valley developer)

5C Security (investment of Rosen Partners, a New York City firm headed by Jack Rosen)

Jack & Jordan Rosen (Jack heads Rosen Partners in New York City, Jordan is his son)

Hamilton Development Partners (private development arm of Michael Fleck's former company)

Mike Fleck (former Allentown-based campaign adviser to Allentown Mayor Ed Pawlowski and Reading Mayor Vaughn Spencer)

Sam Ruchlewicz (worked for Mike Fleck)

J.B. Reilly (CEO of City Center Investment Corp., which has built or proposed nearly $500 million in office, hotel, retail and apartment development in Allentown's 127-acre Neighborhood Improvement Zone)

Norris MacLaughlin & Marcus (Allentown law firm)

Scott Alinson (sic) (Allinson is an attorney at Norris McLaughlin & Marcus)

Richard Somach (attorney at Norris, McLaughlin & Marcus)

Duane Morris (Philadelphia law firm)

Alan Kessler (attorney at Duane Morris)

Sean Kilkenny (attorney at Friedman Schuman)

Stevens & Lee (firm with offices in Pennsylvania, New Jersey, Delaware, New York City, Virginia and South Carolina)

On Oct. 1, the U.S. attorney's office asks for the same records on these people and businesses:

Tony Iannelli (president and CEO of the Greater Lehigh Valley Chamber of Commerce)

BSI Corporate Benefits (an insurance agency in Bethlehem)

Anthony D'Are (a principal with BSI)

Jeff Trainer (an Allentown developer and co-owner of the Sands Bethlehem Event Center and Steel Ice Center in Bethlehem)

Blackford Development (based in Lancaster)

Richard Welkowitz (president and CEO of Blackford)

Parkway Corp. (a Philadelphia parking development company)

Joseph Zuritsky (an executive with Parkway)

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