Ammo, DJs, a $9,000 mascot: Inside the Philly sheriff's 'slush fund' spending

He said he was particularly surprised to learn that a sheriff could purchase a $9,000 mascot with service-fee revenue.

"I thought, 'This can't be real,'" Farmer said.

Recurring problem

Bilal, a former Philadelphia police officer, ran for sheriff in 2019 as a self-described reformer looking to clean up an office roiled by scandals and years of financial mismanagement — including the spending of millions out of off-budget bank accounts.

But immediately after Bilal took office in 2020, her first chief financial officer, Brett Mandel, said a member of her transition team handed him a folder that described "contract obligations to the sheriff's allies and associates." He was told to use the off-budget funds to pay these costs, according to a whistle-blower lawsuit he later filed.

Mandel, a former deputy city controller, refused and was terminated from the job within weeks. He said he later learned that Bilal herself had started signing checks from off-budget funds. In June 2021, the city paid about $465,000 to settle Mandel's lawsuit, including $77,802 to cover Bilal's legal costs.

Despite Mandel's high-profile dismissal, no one in City Hall fixed the problem.

In May 2022, an audit by then-City Controller Rebecca Rhynhart concluded that both Bilal and her predecessor had been spending this money inappropriately and "operating outside of the checks and balances established in the Home Rule Charter meant to protect taxpayer funds from mismanagement or misuse." (Earlier, Rhynhart's auditors had to issue subpoenas to Bilal's staff because they would not provide basic financial reports.)

"During multiple interviews, Sheriff's Office's management stated that it believes fees collected from the public for services provided are funds to be used at its discretion," read Rhynhart's audit, which found that the practice "increases the risk for fraud, waste, mismanagement and/or abuse."

Auditors obtained a legal opinion from the city solicitor confirming that Sheriff's Office revenue must be turned over. A key recommendation in the audit: "Remit all fee revenue to the city."

Once again, city officials took no public action to halt this spending.

"Everybody knows this is going on," Mandel said last week. "It's like a wink-and-a-nod deal."

Following the money

Some of the off-budget spending over the last year was used for typical law enforcement expenses, including $276,000 to equip deputies with Axon Taser devices; $118,000 for ammunition or other tactical gear; about $50,000 to Bustleton Bikes for the sheriff's bicycle patrol unit; and $2,000 for vet bills for the department's K-9 unit.

But public money also found its way to a wide variety of expenses largely unrelated to the office's official purpose.

In 2022, the sheriff planned a free, two-day pop-up health care clinic at the Pennsylvania Convention Center. The costs were supposed to be covered by sponsorships, but they fell short, leaving the Sheriff's Office on the hook for $312,500. The office reported in a year-end review that it had tapped the off-budget account to cover "lodging, meals, and transportation for the medical staff and volunteers."

In recent years, the office says it has expanded its public outreach to include more than 100 community events a year, from regular food giveaways to an autism awareness day. Many of the supplies and other costs associated with these events are underwritten by off-budget money, including branded merchandise featuring the office's seal or items with Bilal's name or image.

Last year, Bilal faced a bruising primary against deep-pocketed Democratic challenger Michael Untermeyer. Campaign finance reports from that period showed Bilal's campaign lagged the lawyer in fundraising, and was $28,000 in the hole after the May primary.

In the six months before the vote, the sheriff hosted a string of events, running up $26,000 on such costs as catering, DJs and pop-up tents, as well as shirts, trading cards, and pom-poms, some of which were given away at community events.

In September 2023, before the general election, bank records show, the department cut a $23,000 check to Staples Promotional Products, an arm of the office supply giant that produces custom branded drinkware, pens, clothing and other products. Four more checks in the following months, totaling $7,900, were paid out for polo shirts and fleeces, or to other branded merchandise suppliers — marked "promotional products" in one memo line.

After Bilal's reelection in November, a $3,750 catering bill for her "inaugural luncheon" in January was again paid by checks from the Operation Cost Payable account. And, in recent weeks, Bilal has continued to embark on still more promotional efforts, launching a paid podcast on local radio station WURD, and sponsoring articles on local news websites.

Farmer, the local finance expert at UNLV, said it is not unusual for government agencies to spend money on promotional items and community engagement. But he said there should be outside oversight over all of the money, rather than a department making its own decisions on how to use public money.

"If you keep saying you have a shortfall in other areas, it raises the question of, 'Do you need more polo shirts?'" Farmer asked.

Vargas said this spending could also have another purpose: cultivating support from voters and politicians who control the purse strings.

"When the next budget happens," Vargas said, "the sheriff can go to their clients and say, 'We've given you all these things, and done all these cool, random events. Now, it's your turn to come out and support us.'"

Little scrutiny

At Wednesday's budget hearing in City Council, during which Bilal requested an additional $12.6 million — a nearly 40% increase to the office's $32.8 million budget — Council members complimented Bilal on her frequent appearances at community events.

The sheriff faced little scrutiny, while some, such as Council President Kenyatta Johnson, were effusive in praise.

"I just want to thank you for your hard work and your dedication and working in partnership with members of Council and the city of Philadelphia," Johnson said.

Still, since 2020, the city has budgeted for tens of millions in expected fee revenues from the Sheriff's Office that it has not received. According to one city report, fees from the department were projected to be $11.3 million in 2023, but instead the city received nothing.

That report blamed the missing funds on the ongoing pause on the sale of tax delinquent properties in the Sheriff's Office that started with the COVID pandemic. That pause continues today, due to Bilal's office issuing an invalid contract that outsources those sales to an online auction house. The sales are supposed to resume this summer.

Mayor Parker's spokesperson, Joe Grace, said last week that neither the city's longtime finance director, Rob Dubow, nor any other official in the administration would answer questions about how the revenue is collected or spent.

"We expect the fees to increase as sheriff sales resume," Grace said in an email.

Yet, the sheriff's bank records show funds continued to pour into the discretionary account anyway, including a $1.5 million bank transfer last November.

Marisa Waxman, executive director for the Pennsylvania Intergovernmental Cooperation Authority, which oversees Philadelphia's finances and approves the city's five-year budget plan, said the board was aware of long-running issues involving money "being held improperly and a lack of internal controls" within the Sheriff's Office.

Andrew McGinley, vice president of external affairs at the Committee of Seventy good-government group, said the city charter is clear on the matter.

"These funds belong to the city of Philadelphia, not an individual office," McGinley said. "That's public money."