Two executives with Allentown contracts plead guilty in FBI corruption investigation

Two new defendants have pleaded guilty in the Allentown corruption investigation, both during unannounced hearings held over the course of the last three months.

Mark Neisser, a former executive with T&M Associates, and Patrick Regan, an executive with The Efficiency Network, both pleaded guilty to a single federal count — Regan to conspiracy to commit mail and wire fraud and Neisser to conspiracy to commit bribery offenses, court documents state.

The two defendants join seven others who have already pleaded guilty in an ongoing FBI investigation into an alleged pay-to-play scheme at Allentown City Hall. All nine have implicated an Allentown official identified as Public Official No. 3 whose description matches only Mayor Ed Pawlowski‘s as the man who directed them in a conspiracy to trade city contracts for campaign donations.

Pawlowski has not been charged in the case and has maintained his innocence.

T&M Associates, a New Jersey-based engineering firm, had several contracts with Allentown over the last five years. Multiple company executives, including Neisser, and the company’s political action committee made campaign donations to Pawlowski. Neisser, identified then as Donor No. 3, was named in a previous guilty plea entered by Pawlowski’s former campaign manager and friend Mike Fleck.

T&M Associates also did work in Reading where the FBI has been conducting a parallel investigation. Several defendants in that case have pointed the finger at a city official identified as Public Official No. 1, whose description matches only former Reading Mayor Vaughn Spencer.

Spencer has also not been charged.

Regan was a vice president for TEN, a company Allentown hired to upgrade its streetlights to more efficient models. He was also a donor to Pawlowski’s mayoral, gubernatorial and U.S. Senate campaigns, according to campaign finance records. The TEN contract was canceled in the wake of the investigation.

Federal prosecutors filed a sealed charge against Neisser on March 13, and he pleaded guilty April 3 while the case was still under seal and not visible to the public. The document outlining charges against Neisser was unsealed at prosecutors’ request on June 6, according to court records. He is scheduled to be sentenced July 10.

The charge against Regan was filed May 11 under seal and it remained secret until June 14, two days after he pleaded guilty. Regan’s sentencing is scheduled Sept. 13.

According to charging documents, Neisser, a former business development manager for T&M Associates, admitted to giving thousands of dollars in campaign contributions to Public Official No. 1 and Public Official No. 3 in order to gain a competitive edge for his company to receive municipal engineering contracts in Allentown and Reading.

Court documents state that Public Official No. 3 promised via a campaign operative to reward Neisser’s firm with an engineering contract if he arranged for a meeting with a “politically influential businessman” whom Neisser was connected to.

On Nov. 24, Public Official No. 3’s campaign operative met with Neisser and indicated that the city would steer a $300,000 contract to Neisser’s firm if the firm gave a campaign contribution. The campaign operative also said that Public Official No. 3 was interested in meeting the businessman, identified in court documents as Person No. 1. The operative said that the meeting was more important to Public Official No. 3 than the donation, court records state.

In December of that year, Neisser again spoke to the campaign operative offering $1,500 to Public Official No. 3’s campaign and agreeing to set up the meeting with Person No. 1. The operative indicated that Neisser’s firm would be awarded the contract.

In April 2015, Public Official No. 3 and Person No. 1 met during a meeting arranged by Neisser, according to court documents. However Neisser’s firm did not receive the contract. Following the execution of an FBI search warrant of Allentown City Hall, city officials opted to do the engineering work in house, court documents state.

Neisser’s influence in Reading

In Reading, court documents detail numerous conversations amongst Neisser, Public Official No. 1 and a campaign operative arranging for contracts to be steered to Neisser’s firm in exchange for campaign contributions.

In March 2012, two months after Neisser’s firm contributed $1,500 to Public Official No. 1’s inaugural fund, Public Official No. 1 directed city officials to award a $205,000 city engineering contract to the firm even though the firm was not were not the preferred bidder, court documents state.

In April 2014, Public Official No. 1 directed another contract to Neisser’s firm, this time for $109,000, even though the firm was again not the preferred bidder. Two days later, Public Official No. 1 told a subordinate that he “cleared” a contract for Neisser’s firm, “so we need to get something from them,” according to a conversation quoted in court documents. The documents state that the conversation was in reference to a campaign contribution.

In October of that year, court documents state that Public Official No. 1 had another conversation with a subordinate, this time saying “I went out of my way for [defendant Mark Neisser’s firm]… That project, they weren’t even, they were, they were already ruled out…And I got them back in there and got them approved.”

That same month, a campaign operative directed by Public Official No. 1 called Neisser and indicated that the official was expecting a $1,500 campaign donation, court documents state. One day later, Neisser asked the campaign operative where to send money “to make sure that we don’t…have a direct affect on the Reading pay-to-play” law, court documents state.

In November 2014, Neisser met Public Official No. 1 for lunch where the pair discussed city contracts and campaign donations, according to court documents. Public Official No. 1 said he had to “assert” himself into a prior contract bidding process on behalf of Neisser and Neisser responded “I remember,” and “We appreciate your help.” Public Official No. 1 said he would “look into” an upcoming contract that Neisser’s firm was bidding on, and Neisser offered Public Official No. 1 four tickets and parking pass to a Philadelphia Phillies game.

Neisser’s guilty plea in the Allentown case is not his first brush with the law. Neisser was secretly recorded in 2001 by a staff member in his office as he offered to reward the employee for firing a local municipal solicitor at the behest of Democratic power broker George Norcross III, according to published reports. Norcross had an alliance with Neisser’s then firm JCA Associates which later became T&M Associates.

The tapes were part of a broader investigation into Norcross that spanned several years and was eventually deemed to be botched by then U.S. Attorney Chris Christie. In a 2006 letter to the acting attorney general, Christie said the investigation had been hampered by “poor oversight, inexplicable strategic decisions and a failure to fully develop potential evidence.”

Neisser accepted a plea bargain in that case and pleaded guilty to making illegal donations to a group of local Democrats. Christie chided the investigators who worked the case for allowing Neisser and others to take the deal without providing valuable information, according to published reports.

Streetlight contract

According to charging documents, Regan participated in a conspiracy with former Allentown Managing Director Francis Dougherty, also a defendant who pleaded guilty in the Allentown investigation, to give his company an advantage in the bidding process for the $3 million streetlight contract.

Charging documents state that Dougherty set up a process for Regan to re-write the city’s request for proposals on the contract and pass it through an intermediary to Dougherty, giving Dougherty a “degree of separation.” Regan was told that the process was designed to “eliminate competition,” court documents state.

In January 2015, the unidentified consultant for a firm named Company No. 1, gave Dougherty a thumb drive with suggested request for quotation and request for proposal language favorable to Company No. 1.

That month, Dougherty passed the thumb drive to his subordinates at the city’s public works office “with the intention of getting the public works office to write an RFQ (request for quotations) and RFP (request for proposals) which were favorable to Company No. 1.”

Before and during that process, Regan and others with his company made campaign donations to Pawlowski. On Jan. 28, 2015, Regan agreed to make such a donation after an unidentified person told him that the RFP was “exactly what Company No. 1’s consultant wanted, that the deal would be his, and that Public Official No. 3 had some plans and needed his vendors to give back a little bit,” according to court documents.

On Feb. 25, 2015, the unidentified person told Regan that the street light contract was “all teed up and ready to go for you,” according to court documents. In March 2015, Dougherty sent an email to the consultant for Company No. 1 with an RFQ tabulation memo attached. That memo included a list of Company No. 1’s competitors, court documents state.

On June 19, 2015, city officials mailed a contract award letter to Company No. 1 for the street lights contract. On June 30, 2014, a representative for Company No. 1 and Regan donated $1,000 each to Public Official No. 3’s political action committee, court documents state.

[email protected]

Twitter @emilyopilo