Months after he relocated here, Karachiwala was getting rate-payer dollars in benefits that no other official at the city-owned utility ever had before.
And that's saying something because Hawes overspent the $90,000 in relocation costs he obtained in his three-year contract by $28,000. The PGW board is reviewing what to do about Hawes' overspending.
So far, Karachiwala, whose employment offer didn't specify a spending limit, has run up more than $70,000 in relocation expenses. That number is expected to grow substantially when he finally sells his Iowa home.
Indeed, it's his 2,800-square-foot, four-bedroom home on 10 acres in a pleasant development outside Sioux City, Iowa, and his inability to sell it that started the PGW cash spigot gushing.
When he accepted an offer to become a PGW vice president at $135,000 a year in November 1996, Karachiwala wrote back that he was ``honored'' to accept the post and pledged to ``do the utmost to be worthy of the confidence placed in me.''
Karachiwala has tested that confidence by failing to detail his PGW American Express card expenses for more 18 months, incurring $13,000 in expenses that include inappropriate charges for meals and office equipment, the Daily News disclosed Friday.
His expenses are now being scrutinized by an outside auditor hired by the PGW board.
Ben Hayllar, the city's finance director and a PGW board member, says Karachiwala will be required to repay the company for inappropriate charges.
All of the moving expenses were approved by his bosses at PGW.
While Karachiwala's moving expenses may be modest by some private sector standards, they are something very new to PGW.
As a result of what Karachiwala and another PGW official received in supplemental benefits, the company was spurred finally to adopt a relocation policy last summer, one that is far less generous than Karachiwala's terms.
As he settled into his new job running the critical gas management operation at PGW in early 1997, Karachiwala was getting bad news from Plymouth County, Iowa.
Initially, he asked $295,000 for the home. But as time passed, he lowered the price first to $275,000 and then to $249,000. And even at that price, he's never had an offer. Meanwhile, he located a home in Mount Airy that he wanted to buy for $221,000.
In mid-April 1997, with the closing date nearing, he asked his boss, Chief Operating Officer Gregory Martin, to ask Hawes if the company would make him a no-interest or low-interest loan to be used as a bridge loan for the Philadelphia purchase.
Two days later, Hawes agreed to help with a swing loan for six months. After weeks of back and forth, PGW officials decided to pay the interest on a $55,000 swing loan. Initially, the deal was for six months but eventually PGW picked up about $5,200 in payments over 12 months.
The company also agreed to pay for six months of mortgage payments back in Iowa, about $7,400.
Under the new relocation policy, swing loans and mortgage support on old homes no longer are provided.
Shortly before settlement here, PGW advanced Karachiwala $22,000 toward his Philadelphia closing costs. The June 1997 closing cost only $14,244.
Karachiwala should have promptly reimbursed the company $7,756, and PGW's new policy makes that clear.
But in Karachiwala's case, the payment came back to PGW on Aug. 14 - 14 months after the closing and several weeks after the Daily News raised a host of questions about his expenses.
Karachiwala said the Daily News inquiries were not the reason he repaid the company. ``That is not the correct way of looking at it,'' Karachiwala said.
Earlier, through a company spokesman, Karachiwala explained he held the money in anticipation of selling his Iowa home.
He also contended that he was told by one of his bankers, though he can't recall whom, that the conversion of a $45,000 construction loan into a conventional loan last April might have carried additional closing costs.
Finance Director Hayllar said the PGW board's auditor hasn't examined that issue yet.
``I'm glad that Mr. Karachiwala hasn't made that argument to the board yet. We wouldn't accept it,'' he said, referring to the loan conversion as a reason for not returning the $7,756.
As part of his arrangement with PGW, Karachiwala was to try renting his Iowa home during the prolonged sales effort. Any rent would offset the special payments PGW was making to him.
Karachiwala has made no rental offset payments to PGW. He says that's because he hasn't rented his Iowa home.
But Paul Kerwin, the real estate agent handling Karachiwala's property, said in an interview that the property had been rented briefly and sustained damage by the renter's ``animals.'' Karachiwala says the animals are his.
Kerwin also said the property is now for sale and renting is not being considered.
Carol Davis, a Century 21 real estate agent in Sioux City who knows Horeslake development in nearby Plymouth County, said there is substantial demand for rental homes like Karachiwala's. ``I'm surprised they haven't rented it,'' she said.
Karachiwala also stands to receive another benefit.
If and when Karachiwala sells his Iowa home, a provision approved in a January memo with the company allows him to collect up to $12,000 on any losses connected with the sale.
Asked if he will lose money on a $249,500 sale price, Karachiwala said, ``Well, I had the property on the market for $295,000 and I have reduced it by $50,000.''
As to whether he'll collect, he said, ``That would depend on Mr. Martin, my supervisor.''
Deborah Estrin, PGW Human Resources vice president, said she has heard colleagues describing comments from Karachiwala's wife, Carole, who had worked in her unit for about six months until she resigned last week, that she would never sell her Iowa home and that she intended to return there.
On his wife's comments, Karachiwala had no comment.
But his two personal cars, a Corvette and a Ford Windstar, may provide a clue: Both have Iowa plates.
Finding leaks in cash flow This is another Daily News investigation of lax financial controls at the city-owned Philadelphia Gas Works, which is struggling with major cash-flow problems created by the mild 1997-98 winter.
PGW has been rocked by Daily News revelations that its president, James Hawes III, accepted gifts from vendors in violation of company policy, made donations to his alma mater with company funds and charged personal expenses to the company. He later repaid PGW.
On Friday, the Daily News disclosed PGW's out-of-control corporate credit-card system.