Democratic campaign consultant accused of bilking pandemic relief programs out of $2 million

PHILADELPHIA — A Philadelphia campaign consultant, charged earlier this year with using stolen labor union funds to illegally support political candidates, has been hit with a new federal case — this time for allegedly bilking pandemic relief programs out of nearly $2 million.

Prosecutors say Tracy Hardy — a former aide to ex-Mayor John F. Street and later chief of state to state Sen. Sharif Street — lied on applications for government-backed loans about the revenue brought in by businesses he owned and the wages they were paying their workers.

Just one of Hardy’s companies — Lou & Choo’s Lounge, a North Philadelphia nightspot he and his wife took over in 2014 — brought in nearly $1.8 million in fraudulently obtained loan proceeds between July 2020 and April 2022, according to court filings unsealed this week. Instead of using the money to keep the business afloat, investigators say Hardy spent it on cars, property, sports tickets and travel.

Hardy, 51, faces multiple counts of wire fraud and making false claims against the United States for the fraud scheme. Court records indicate he is expected to plead guilty at a hearing next month and could serve prison time.

His attorney, Brian McMonagle, did not immediately respond to requests for comment Thursday.

But this isn’t the first time Hardy has found himself on the wrong end of a criminal probe.

More than a decade ago, he was a central witness in a scandal — and subsequent federal prosecution — involving campaign-finance violations during Washington, D.C. Mayor Vincent Gray’s underdog bid in 2010 to unseat his predecessor.

Prosecutors in that case alleged Hardy led a secret get-out-the-vote push for Gray backed by a $660,000 donation from a wealthy businessman who insisted his contributions be kept off the books.

Though Hardy was never charged, state prosecutors in Pennsylvania accused him in another election-related scheme earlier this year.

Attorney General Michelle A. Henry charged Hardy and Chris Woods, the former head of one of Philadelphia’s largest labor unions — District 1199C of the National Union of Hospital and Healthcare Employees — with stealing more than $150,000 from union members to back candidates in the city’s May 2019 Democratic primary election.

Prosecutors in that case said Woods disguised the missing money as payments to renovate the bar in his union’s Old City headquarters. Hardy, they maintained, inflated a bid he submitted to the union for that work on behalf of another company he owned, Manayunk Construction & Development Corp., by at least $45,000.

He allegedly submitted two other sham bids at higher price points purporting to be from other firms to make it appear the bidding process had been competitive. But, authorities say, Hardy and Woods used the excess funds on the project to back their political scheme.

State campaign finance laws prohibit unions from donating directly to political campaigns out of their general funds. Instead, those contributions must come from affiliated political action committees that are funded through voluntary contributions from members’ paychecks.

Yet, in the two months before the May 2019 primary, District 1199C’s PAC never had more than $3,500 in the bank, according to campaign finance records.

Investigators have not identified the candidates who benefited. But that year, District 1199C endorsed several candidates, including Jim Kenney, who was seeking his second mayoral term at the time, and City Councilmember Isaiah Thomas, who went on to win a general election race securing a seat on the board.

The union’s backing also helped to elect crime victim advocate Movita Johnson Harrell to a state House seat representing the 190th District in West Philadelphia during a special election in March of that year. She pleaded guilty to charges of embezzling from a nonprofit she ran and resigned her seat within eight months of her swearing in.

Woods’ lawyers have described the account prosecutors have given of his actions as a “limited, one-sided view.” His case remains pending in state court.

But the federal case filed against Hardy this week adopted some of the allegations from the state’s case and charged him with one additional count of wire fraud for bills he sent District 1199C for the bar renovations.

Woods, who was not charged, was identified in court filings only as “Person 5.”