Pittsburgh police chief denies meeting with company or taking payments

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Pittsburgh Police Chief Nate Harper said Friday that he hasn't received a target letter related to a federal probe of a 2007 city contract, and he didn't get money from an entrepreneur who is charged with bribery, conspiracy and five counts of mail fraud.

Chief Harper's denial came at the end of a week in which several people associated with the contract appeared before a grand jury at the U.S. Courthouse. The probe has already resulted in charges against entrepreneur and former Harper friend Arthur J. Bedway Jr., who has pleaded not guilty to the seven charges, including bribery, and former city systems analyst Christine Kebr, who has pleaded guilty to conspiracy.

Both Mr. Bedway and Ms. Kebr went before the grand jury this week, stoking speculation about the identity of a "third individual" mentioned in charging documents and in a prosecutor's summary of evidence. That third individual, Assistant U.S. Attorney Robert Cessar has said, was with Mr. Bedway and Ms. Kebr on Sept. 15, 2006, and Oct. 27, 2006, when they met to plan the company Alpha Outfitters.

Asked whether he was involved in those meetings at which three people planned Alpha Outfitters' bid, Chief Harper said, "No."

"It'll take its course, and I don't have any comment on that, and I'll deal with that when I get back to work," Chief Harper said Friday afternoon in the driveway of his Stanton Heights home, referring to the grand jury investigation.

Chief Harper has been off of work since the Jan. 15 death of his mother. Police spokeswoman Diane Richard has been unable to provide definitive information about his whereabouts or status. The chief said he has been attending to his mother's arrangements and said he planned to return to the office Monday.

The chief said he never received any money from Mr. Bedway, saying any speculation to the contrary was "not accurate."

"No I didn't, and that'll come out as well," Chief Harper said.

He said he hasn't seen the indictment of Mr. Bedway, nor testified before the grand jury.

The grand jury appears to be looking at circumstances surrounding the city contract with Alpha Outfitters, a defunct firm that was paid nearly $337,000 from February 2007 to February 2010 to install radios and computers into Pittsburgh police cars.

On Oct. 2, 2006, a business called Renaissance Day Spa, based at Mr. Bedway's home, changed its name to Alpha Outfitters. It was officially owned by Lois Kolarik, who was at the time an employee of Carnegie-based Victory Security, which had as its chairman Mr. Bedway.

Federal prosecutors have said that Ms. Kolarik was a "straw owner" and that it was "falsely represented that Alpha Outfitters was a wholly owned women's business enterprise."

Female ownership was an advantage in city contracting processes, according to a former city official with knowledge of the process, because departments were under instructions to award jobs to minority- and women-owned businesses when that was fiscally responsible.

Alpha claimed to be 100 percent woman owned but did not have an official certification by the state Department of General Services as a women's business enterprise at the time, according to Troy Thompson, a spokesman for the agency. That designation was not granted until Jan. 8, 2009 -- more than a year after the city contract took effect.

While Alpha was coming together, Chief Harper's career was reaching its pinnacle.

He was the assistant chief in charge of investigations in September 2006, when Chief Dom Costa resigned. Mayor Luke Ravenstahl elevated him to chief and he was sworn in on Oct. 31, 2006. Numerous attendees at the swearing in noted that Mr. Bedway stood near him during the swearing in.

Associates of both Mr. Bedway and Chief Harper said the two have known each other for many years. Mr. Bedway has been a security contractor since 1981, and Chief Harper has been a city police officer since 1977. In 2011, Chief Harper told the Post-Gazette that he had ended the friendship because of how Mr. Bedway handled the Alpha Outfitters matter.

The city hired Ms. Kebr, of Castle Shannon, in 2001. Though Ms. Kebr worked for information systems, she was for years detailed to the police bureau, officials said. There she worked closely with Sgt. Gordon J. McDaniel, who was in charge of the city police vehicles.

Sgt. McDaniel appeared before the grand jury on Tuesday. He could not be reached Friday for comment, and his attorney declined comment.

In March 2007, Ms. Kebr confirmed at her plea hearing, she helped to prepare the city's request for proposals that would invite companies to bid on the job of installing hundreds of computers and radios.

Mr. Bedway, prosecutors have said, arranged for Alpha Outfitters to rent a garage in Esplen. He and Ms. Kebr together drafted Alpha Outfitters' bid, prosecutors said.

Back at her city office, Ms. Kebr then reviewed the two proposals received. The bid process was complex and the prices quoted were close. For instance, Alpha Outfitters bid $235 for each installation of the computers, versus $240 for competitor Staley Communications.

Staley was not a minority- or women-owned business.

Ms. Kebr recommended Alpha Outfitters, according to federal prosecutors. Alpha Outfitters installed the equipment, was paid in several installments, and later went out of business.

"The city did get good value from Alpha Outfitters," said Kate DeSimone, the city's senior counsel for information technology. "The taxpayers did not get ripped off."

Ms. Kebr confirmed at her plea hearing last month that she got two payments of $3,000 each from Mr. Bedway -- one in December 2007, and the other in March 2009. An Allegheny County investigating grand jury began to look into the contract in 2010, but turned it over to federal investigators.

Ms. Kebr, who had been earning $60,591, quit her city job in 2011, saying she found a more lucrative position.

Victory Security has thrived, winning private and public work, including two contracts with the Housing Authority of the City of Pittsburgh. Under one pact, set to expire July 31, Victory Security provided guards for authority buildings for around $1.5 million a year. Under a second pact, Victory Security was providing constables to patrol communities for around $1.2 million a year, but the authority cancelled that arrangement in August, because officials were not satisfied with the firm's performance.

Chief Harper has confirmed that Victory Security for a time employed his wife, Cynthia Harper, who retired from the Pittsburgh Bureau of Police in 2004. He has said that she left the job at Victory because they were bothered by rumors that she was a ghost employee.

People who did business with Mr. Bedway have been investigated before.

Mr. Bedway's initials appear in an October indictment of Richard A. Rydze on 185 counts related to alleged improper prescription of steroids, narcotics and other drugs. According to sources close to the matter, the patient described in the indictment as AJB is Mr. Bedway.

The indictment said that Dr. Rydze in 2008 diagnosed AJB with pituitary dwarfism, despite the patient's normal height and history as a karate competitor and bodybuilder. Dr. Rydze, the indictment said, then wrote 196 prescriptions for AJB from 2007 through early 2012, prominently including drugs sometimes used by athletes and bodybuilders.

Federal investigators looked at construction contracting done in Florida in the late 1990s by a firm affiliated with Mr. Bedway. Construction manager Frank T. Grzandziel, who hired Mr. Bedway's firm, pleaded guilty to wire fraud in relation to kickbacks, and was sentenced to four years and nine months in prison. Mr. Bedway, in a 2006 bankruptcy filing, claimed that he and Victory Security Chief Executive Officer Kathleen Bowman paid $950,000 to settle a civil lawsuit stemming from the development work, but said that he "wholly denies" wrongdoing in the matter.

Transfers of money in 2004 between Mr. Bedway and Jason P. Unangst were the subject of federal criminal charges filed in 2009. Unangst, accused of selling shares in nonexistent used mobile homes, was sentenced to four years and three months in prison for transportation of property taken by fraud, and for money laundering. Mr. Bedway was never charged, but was referred to as a "confederate" by prosecutors at Unangst's plea hearing.

Mr. Bedway's attorney, Martin Dietz, declined comment. Also declining comment was U.S. Attorney David J. Hickton's office. The attorney representing Ms. Kebr could not be reached for comment.

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Jonathan D. Silver: jsilver@post-gazette.com or 412-263-1962. Rich Lord: rlord@post-gazette.com, 412-263-1542 or Twitter@richelord. First Published January 26, 2013 5:00 AM


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