Former Philadelphia Gas Works chief financial officer Ramon Sharbutt was sentenced last week to six to 25 months in prison for bilking $40,000 from the troubled utility.
Sharbutt, 56, is the first executive of the city-run PGW to be sentenced to jail in a financial scandal that rocked the already-weak utility two years ago and played a role in sending the credit to near-junk status.
In addition to the jail sentence, Common Pleas Court Judge D. Webster Keogh ordered Sharbutt to pay $47,663 in restitution. He will be eligible for parole in six months.
Sharbutt, who served as CFO from January 1996 to January 1999, was arrested in October 2000 following an extensive grand jury investigation of PGW that led to the arrest of three other top executives, including former chief executive officer James Hawes.
On March 27, Sharbutt pleaded guilty to forging his employment contract with PGW in attempt to keep approximately $37,000 of relocation reimbursements. He also pleaded guilty to a misdemeanor count of theft by deception for phony airline ticket reimbursements and to a felony count of theft by deception for using PGW's corporate credit card for more than $2,000 in personal purchases.
Calling Sharbutt a "con man," assistant district attorney Karen L. Grigsby said the former PGW executive falsified his resume to get the PGW job. In his resume Sharbutt said he was a veteran of military intelligence, but Army records showed he was discharged after a year for unsuitability. Sharbutt also falsely claimed to be both a certified financial manager and a certified management accountant, Grigsby said.
Sharbutt was hired after Cole Warren & Long -- a Philadelphia professional search firm appointed by former Mayor Ed Rendell -- recruited him to rescue PGW when the utility was nearing technical default on its bonds and did not have a functioning board.
Grigsby said the conduct of Sharbutt and fellow executives contributed to PGW's decline, including the continuing erosion of its credit rating. Wall Street rating agencies had upgraded PGW after its management restructuring, but then downgraded it in 1999 for several factors, most importantly, the management crisis at the utility, she said. For example, in 1996 Fitch Ratings assigned an A-minus rating but rated the utility BBB-plus in 1999. That year, Moody's Investors Service downgraded PGW to Baa2 from Baa1, citing the management crisis.
Deborah Estrin, former PGW human resources director, pleaded guilty in January for using her corporate American Express card for personal purchases. She was sentenced to three years probation for theft.
Hawes and former chief operating officer Gregory Martin were charged and arrested for theft in connection with using $60,000 of PGW funds to pay for security systems, electric lighting, and decorative gas lanterns for their personal residences. They are scheduled to stand trial later this year.
