Pittsburgh officials Friday could not explain the existence of an account at the Greater Pittsburgh Police Federal Credit Union that is under FBI scrutiny and was said to be set up by the police chief's office.
Controller Michael Lamb said there was no reason a fund set up by the chief's office should exist at the federal credit union.
"If a check is made payable to the City of Pittsburgh, the treasurer of the City of Pittsburgh, that deposit would not go to the police federal credit union because they are not an approved depository for the City of Pittsburgh," Mr. Lamb, a mayoral candidate, said.
Mr. Lamb, who is conducting an audit of secondary employment funds at the police bureau, said the Greater Pittsburgh Police Federal Credit Union is not one of the 15 approved depositories for funds meant for the city.
Investigators with both the FBI and IRS have been removing documents from the credit union for the past week in connection with an account opened by the office of police Chief Nate Harper, the president of the credit union's board of directors said Friday.
A source familiar with the investigation told the Pittsburgh Post-Gazette that the visit by federal agents is connected to a subpoena served Monday on the city Law Department.
The 78-year-old member-owned, nonprofit financial institution on Chartiers Avenue in the city's West End functions similarly to a bank with a clientele that includes active police officers.
Frank Amity, president of the credit union's board of directors and a retired city homicide detective, said multiple subpoenas have been served on the institution via its CEO Karen Janoski.
Ms. Janoski could not be reached for comment. On Friday morning, a woman who appeared to be a credit union employee at the Elliott institution told a reporter that Ms. Janoski did not wish to be interviewed.
Mr. Amity said he has not seen the subpoenas.
"They're looking at an account that the chief's office opened up. What they're looking for, they don't tell us. There's just one account, as far as I know," Mr. Amity said. "It's opened by the chief's office, so I don't know what kind of an account they have there. It's not a personal account. There's other names on it."
Asked how he knew the account was connected to Chief Harper's office, Mr. Amity said, "Because it's opened by the people in the chief's office."
Police Deputy Chief Paul Donaldson said through spokeswoman Diane Richard: "I have no statement to make. It is our position that when a matter/incident is under investigation that no statement will come from the bureau."
When asked Wednesday about a rumor that police brass closed a police bureau account at the credit union, Deputy Chief Donaldson said, "No, I'm not aware of that, honestly. The money from the special events office typically is funneled into the general fund, and that covers the police officers for compensation, etc., suits against the officers, things like that. Other than that, I think I'd be the wrong person to talk to about that."
A week earlier, Assistant Chief George Trosky said, "[Money] was deposited in the credit union and taken out of the credit union. I don't know what it was called or what the money was used for. It's something to do with special events."
Mr. Amity declined to say whether the account in question was active or closed, how much was in it, whose names are on it or who could withdraw money from it. He said he believes it was opened in the past five years.
Mr. Amity characterized the account as "not a whole hell of a lot of money, I'll tell you that ... It's not tens of thousands."
The city Law Department arranged to have federal agents guided Tuesday around Pittsburgh police headquarters on the North Side, where the FBI removed boxes of documents from the bureau's special events and personnel and finance offices.
Deputy Chief Donaldson has said he believes the FBI is investigating allegations of internal misappropriation of funds involving the two offices.
"They've been in for about a week, on and off. They're just giving us different subpoenas for different things. I don't know what the heck the account was used for," Mr. Amity said, noting that a credit or debit card was associated with the account.
Asked why he thought multiple subpoenas were served on a single account, Mr. Amity said he thought investigators were engaged in a "fishing expedition."
"What's happening is they subpoena one thing, they take that in and check that out. That develops into something else, so they give us another subpoena for another thing," Mr. Amity said.
City solicitor Daniel Regan this week said the subpoena served on police headquarters was linked to a federal grand jury investigation.
Mr. Amity said everything about the account appears to be legitimate, although he acknowledged that he did not know the parameters of what the chief or individuals in his office could do with such an account.
"I don't see anything wrong with the account," Mr. Amity said. "I don't know what authority [Chief Harper] has, what his office can do, what it can't do."
Special events handles the coordination of officers' moonlighting. Private employers typically send checks made out to the city to the office.
The money includes payment for the officers, which is handled through their payroll department, and a surcharge known as a "cost recovery fee." That surcharge totaled nearly $800,000 last year.
After the checks are recorded in the special events office, they are forwarded to the bureau's personnel and finance office. The checks are then supposed to be deposited in city accounts. Mr. Lamb is trying to figure out where exactly that money goes.
Ultimately that money should be deposited into one of the various city accounts.
"That might mean one bank account. It might mean several bank accounts. And that's something we're trying to wrap our hands around right now," Mr. Lamb said.
The checks are sent from the police bureau to the city Office of Management and Budget on Grant Street, according to city Finance Director Scott Kunka. Whatever checks are received from the city's various departments are deposited daily. Deposit slips are sent to the controller's office, he said.
"We send the information over to the controller for the actual accounting of the funds," Mr. Kunka said.
Mr. Kunka said his office had little insight into how secondary employment funds were accounted for in the police bureau.
For example, his office does not see invoices to verify that the amount an entity was billed matches the amount being deposited. That verification should be done by the police bureau and the controller's office, he said.
"I can't audit myself," Mr. Kunka said. "The controller's office is supposed to make sure it's correct."
Mayor Luke Ravenstahl has said he thought the FBI visit to police headquarters was tied to a federal grand jury that is investigating how a city contract to install radios and computers in police cars was awarded in 2007 to Alpha Outfitters, a company prosecutors say was formed by Arthur Bedway, Chief Harper's one-time friend.
Chief Harper said he was not involved in the meetings to set up Alpha Outfitters and accepted no money from Mr. Bedway.
Jonathan D. Silver: email@example.com or 412-263-1962. Liz Navratil: firstname.lastname@example.org, 412-263-1438 and on Twitter: @LizNavratil. Molly Born and Moriah Balingit contributed. First Published February 16, 2013 5:00 AM