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Indictment: Cook County's hired debt collector charged with bribing county officials to secure county contract

Friday, March 15, 2019
Cook County record
by Jonathan Bilyk

Indictment: Cook County's hired debt collector charged with bribing county officials to secure county contract

Filings

By Jonathan Bilyk | Mar 15, 2019

The owner of a Pennsylvania debt collection company, which for years has chased down those who owe money to Cook County, has been indicted on federal charges of allegedly bribing court clerks, including Cook County Circuit Court Clerk Dorothy Brown, to land such contracts.

On March 15, U.S. Attorney John R. Lausch Jr., of the Northern District of Illinois, announced the charges against Donald Donagher Jr., who had owned and served as CEO of Penn Credit Corporation.

Brown was not charged and does not face allegations of wrongdoing in connection with Donagher's indictment.

According to the indictment, Donagher and Penn Credit, from 2009 to November 2016 used campaign donations and free political services, among other offerings, to secure “favorable treatment for Penn Credit” in the pursuit of lucrative debt collection deals with Cook County and several Florida counties.


Cook County Circuit Clerk Dorothy Brown

According to the indictment, the pattern began in Cook County in June 2011, when Donagher allegedly used Penn Credit to contribute $5,000 into a scholarship fund through the Cook County Circuit Clerk’s office.

Shortly after, Penn Credit secured the contract with Brown’s office to collect debt owed to the Circuit Clerk.

A few weeks later, Donagher allegedly sent an email advising his employees and a lobbyist in Illinois that he had promised the campaign of Dorothy Brown – referred to in the complaint as “Clerk A” – “10k of ‘early’ money.”

A month later, Donagher allegedly donated $10,000 to Brown’s campaign organization, according to the indictment.

And later, the indictment said, Donagher directed Penn Credit employees to make “hundreds of thousands” of political calls on Brown’s behalf for free.

In 2012, the indictment alleges, Donagher sent an email to two lobbyists in Illinois, asking them to make sure Penn Credit "was getting an equal share of debt collection work" and to remind Brown they "made a shitload of calls" for her.

In 2014, the indictment alleges, an employee of Brown’s office sent him an email thanking him for “underwriting the expense for the Clerk of the Circuit Court of Cook County’s Women’s History Month Celebration.”

According to the indictment, Donagher forwarded this email to others, and allegedly wrote: “I told her we are fans of [first name of Clerk A]. We gotta stay ahead of (a competitor, not named in the indictment)!!”

The indictment further lists a number of other donations and services performed by Donagher, Penn Credit or Penn Credit employees, not identified in the indictment, on behalf of Brown’s political campaign and other projects affiliated with the Circuit Clerk’s office, all of which were intended to help Penn Credit secure the Circuit Clerk’s office’s debt collection contract and more favorable terms.

According to the indictment, Donagher allegedly carried out similar activities to secure contracts in Orange, Brevard and St. Johns counties in Florida.

In all, Donagher, 67, faces one count of conspiracy and five counts of bribery.

According to a release from the U.S. Attorney’s office, if convicted, Donagher could receive up to 5 years in prison under the conspiracy charge, and 10 years for bribery.

In Cook County, Penn Credit has also been contracted to collect other debts, as well.

In 2015, the Cook County Board, under County Board President Toni Preckwinkle, hired Donagher’s company to pursue county residents who owe “use tax” on the purchase of vehicles, as well as a “full range” of other debts, including debts owed Brown’s office and to the Cook County Health and Hospital System.

The contract is scheduled to expire in 2020.

Under the contract, Penn Credit stands to take in contingency fees equal to about 17-25 percent of the amount collected from all debts referred to it by various county agencies.

Further, a Chicago law firm, Tristan & Cervantes, with whom Penn Credit works, can claim an additional 35 percent of all amounts collected from the cases referred for prosecution.

According to Cook County tax records, use tax collections increased nearly 111 percent from 2011-2016.

In response to questions from The Cook County Record, Cook County spokeswoman Becky Schlikerman said county officials are aware of the indictment, and the county's "legal and procurement teams are reviewing the contract at this time."

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