Federal prosecutors have indicated for the first time that attorneys for a Pennsylvania debt collector accused of bribing Cook County officials to gain at least one county contract have begun discussing a plea deal to potentially bring the prosecution to a close.
Prosecutors with the office of the U.S. Attorney in Chicago made the revelation in a routine filing before U.S. District Judge John Z. Lee, updating the judge on the status of the prosecution of Donald Donagher Jr. and his company, Penn Credit.
“The parties are engaged in plea negotiations, which are more complex than in the ordinary case,” the federal prosecutors wrote in their April 26 status report to Judge Lee. “The parties continue to engage in discussions and anticipate reaching a conclusion to those discussions shortly.”
The update comes about two months since Judge Lee refused to dismiss much of the charges prosecutors brought against Donagher and Penn Credit.
Donagher and Penn Credit were indicted in March 2019. Donagher was Penn Credit's CEO. The charges included allegations the debt collector had sought to bribe court clerks, including former Cook County Circuit Court Clerk Dorothy Brown, to land or keep contracts.
Prosecutors further accused Penn Credit and Donagher of similarly seeking to bribe court clerks in Florida, as well.
Penn Credit, of Harrisburg, Pa., held a contract for several years to collect debts, including unpaid taxes and fees, for several Cook County offices, including the Circuit Clerk’s office; the Cook County Department of Revenue; the Cook County Health and Hospital System; and the Cook County State’s Attorney’s Office.
Under the contract, Penn Credit would receive contingency fees of 17%-25% on all debts collected on behalf of the county.
According to the indictment, Donagher and Penn Credit, from 2009 to 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.
Prosecutors asserted that the pattern began in Cook County in June 2011, when Donagher allegedly used Penn Credit to contribute $5,000 into a scholarship fund through Circuit Clerk Brown’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.
Following the indictment, a Cook County spokesperson in 2019 said the county’s various offices were “reviewing” Penn Credit’s contract.
Spokespeople for Cook County did not reply on May 13 to questions from the Cook County Record concerning those reviews, and whether Penn Credit still had any contractual relationship with any Cook County office or department.
In January 2021, according to online county records, the Cook County Board considered contracts with two new debt collectors, AllianceOne Receivables Management, of Trevose, Pa., for the Circuit Clerk’s and the State’s Attorney’s offices, and Nationwide Credit & Collections Inc., of Oak Brook, for the county Health and Hospitals System, and also the State’s Attorney’s office.
Brown opted not to seek reelection to the Circuit Clerk's office in 2020, ending two decades in office there. She was succeeded by former State Sen. Iris Martinez (D-Chicago.)
Brown has not been charged in connection with the Penn Credit indictments. The actions alleged in the indictment preceded Martinez's arrival at the Circuit Clerk's office, and Martinez is not implicated in any way with the alleged misconduct.
In federal court, Donagher and Penn Credit asked Judge Lee to dismiss the charges, arguing the federal case fell short under the U.S. Constitution and Supreme Court precedent. At its core, the defendants’ argument centered on the assertion that the government can’t show their alleged actions on behalf of former Circuit Clerk Dorothy Brown resulted in an “official act” by the Circuit Clerk’s office on their behalf.
In a ruling in late February, Judge Lee narrowed the charges slightly, forbidding prosecutors from continuing with allegations stemming from specific campaign contributions to Brown and other court clerks.
He said federal law, as interpreted by the Supreme Court, does require prosecutors to establish a “quid pro quo” when pressing charges over contracts and other favors resulting from campaign contributions.
However, the judge said that same reasoning doesn’t apply to the charges linked to alleged bribes that did not involve campaign contributions.
In this case, Judge Lee said, prosecutors need only establish that Penn Credit and Donagher sought to “reward” Brown for awarding the debt collection contracts.
“What matters is that the act of awarding a government contract is a decision or action on a ‘specific and focused’ question or matter within the duties of a county clerk,” the judge wrote, noting the court clerk’s office had the power to award such contracts.
“Furthermore, the nexus between the payment and the official action is satisfied so long as the gifts were given ‘in connection with’ the award of contracts,” Judge Lee wrote.
He allowed two full counts of the five-count indictment against Donagher and Penn Credit to stand, as well as the bulk of an additional count, so long as it did not seek to criminalize certain campaign donations.
Donagher and Penn Credit are represented by attorneys Theodore T. Poulos and Terence H. Campbell, and others with the firm of Cotsirilos, Tighe, Streicker, Poulos & Campbell, of Chicago.