Lehigh Valley

Firm president admits to bribing Allentown, Reading officials

PHILADELPHIA - The president of an engineering firm that, federal prosecutors said, was a target of pay-to-play schemes in both Allentown and Reading has admitted to bribing leaders of those two cities.

Matthew McTish pleaded guilty on April 28 to one count of conspiracy to commit bribery offenses, according to court documents unsealed by U.S. attorney's office on Tuesday.

The plea is part of an ongoing FBI investigation that began last summer, when agents raided the city halls in both Allentown and Reading, as well as the homes of Allentown Mayor Ed Pawlowski and then-Reading Mayor Vaughn Spencer.

McTish, identified in previous court papers as "donor #2," is president of McTish, Kunkel & Associates, a firm that heavily relies on contracts with government organizations in Pennsylvania, including Allentown and Reading, officials said.

Spencer, continuing to be referred to by prosecutors as "public official #1," and Pawlowski, referred to as "public official #3," identified certain engineering firms, including McTish's, as promising targets for their "pay to play schemes," the feds said Tuesday.

Both mayors, prosecutors said, believed the firms would rather lose thousands of dollars to their campaigns than to lose millions of dollars' worth of city contracts.

McTish admitted that, under pressure from both mayors and their subordinates, he agreed to pay thousands of dollars in campaign contributions in order to be considered for municipal contracts in Reading and Allentown, officials said.

McTish said he also agreed to continue raising money for public official #1 even after he lost re-election so that public official #1 could help McTish's firm before he left office. The money would be public official #1's "best chance of retiring his campaign debt," according to court documents.

Spencer lost his bid for re-election in the May 2015 primary; he left office in January 2016.

Neither Spencer nor Pawlowski has been been charged in the case, and Pawlowski has resisted calls from Allentown City Council to resign.

McTish, said prosecutors, also agreed to reward then-Allentown controller Mary Ellen Koval with a campaign contribution for her efforts in helping public official #3 to steer a contract to his firm.

Koval later resigned and pleaded guilty to a count of conspiracy to commit honest services fraud.

After rewarding Koval and public official #3 for their efforts, McTish learned that Allentown had canceled its plans for a contract with his firm. When McTish met with public official #3 to discuss the prospects of future contracts with Allentown, public official #3 asked for even more money, specifically at least $21,600 before a federal campaign reporting deadline of June 30, 2015, according to court documents.

At the time, Pawlowski was seeking the Democratic Party's nomination in the race for one of Pennsylvania's U.S. Senate seats.

Public official #3 claimed that winning the election would allow him to provide greater assistance to McTish's company, officials said.

McTish, according to prosecutors, was unhappy with public official #3's demand but gave a $2,500 contribution on order to maintain his company's viability for future contracts from Allentown.

Pawlowski ended his Senate run following the FBI's raid of Allentown City Hall last July.

McTish's attorney, Laurel Brandstetter, released the following statement on her client's behalf:

"Since Matt's name first surfaced in the FBI investigation last summer, he has been coming to terms with his role in the culture of corruption that was once rampant in Reading and Allentown.

"Matt participated solely out of concern that if he didn't, his firm would lose business to a firm that did.

"Matt is cooperating with the authorities because he believes it's his responsibility to help combat the rampant greed that persists in the awarding of government contracts.

"Matt's sentencing on one count of conspiracy to commit bribery is scheduled for Aug. 2, 2016. In the meantime, McTish Kunkel has developed and is implementing an aggressive ethics and compliance program for everyone in the firm.

Matt has also stepped down as president of MKA. His brother, David McTish now serves as president."

McTish, 57, of Orefield, Lehigh County, faces up to five years in prison, a possible fine and three years of supervised release.

McTish's admission follows a string of guilty pleas from other people involved in the scheme, including Michael Fleck, a onetime member of Easton City Council who managed both Pawlowski and Spencer's political campaigns; Garret Strathearn, Allentown's former finance director, Eron Lloyd, a former Spencer aide; Dale Wiles, a former Allentown assistance solicitor; and Ramzi Haddad, a Bethlehem entrepreneur.

Spencer's attorney told WFMZ's Ryan Hughes that he has no comment on McTish's guilty plea and the new allegations against his client.

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