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Minutes

Committee Hearing, January 14, 2002

Philadelphia City Council Committee HearingsJan 14, 2002

People mentioned

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  • Brian O'Neill

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COUNCIL COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, January 14, 2002 o'clock a.m. - - - 8 9 10 11 BILL NO. 010743 - Amending Chapter 20-600 of the Philadelphia Code, entitled "Standards of Conduct and Ethics," by adding anti-nepotism provisions prohibiting City officers and employees from taking or recommending certain personnel actions affecting family members; all under certain terms and conditions, PRESENT: COUNCIL PRESIDENT VERNA, Chair COUNCILMAN JAMES F. KENNEY, Vice Chair COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN ANGEL L. ORTIZ - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 1/14/02 RULES COMMITTEE INDEX (BILL 010743) WITNESS Donna Mouzayck, First Deputy Solicitor........ Law Department Evan Meyer, Senior Attorney, Law Department... 19 Fred Voigt, Executive Director................ 23 Committee of 70 Natalie Palermo............................... 28 (Self-described) victim of nepotism 3 1/14/02 RULES COMMITTEE - BILL 010743

Councilman Kenney

Good morning, ladies and gentlemen. Thank you for your patience. The Council Committee on Rules is now in session with a quorum consisting of Council President Verna, Councilmember Cohen, Councilmember Nutter, and myself -- and Councilmember O'Neill, sorry -- and Councilmember Kenny chairing the committee. We're here today to hear testimony on Bill 11 No. 010743, which is an ordinance amending Chapter 12 20-600 of the Philadelphia Code, entitled "Standards of Conduct and Ethics," by adding anti-nepotism provisions prohibiting City officers and employees from taking or recommending certain personnel actions affecting family members; all under certain terms and conditions. Please let the record show that Councilmember Ortiz is also in attendance. Our first witness scheduled for today is Donna Mouzayck, who is the First Deputy Solicitor for the Law Department. Please come forward. (Witnesses come forward.)

Councilman Kenney

The Chair recognizes Councilman Nutter. 4 1/14/02 RULES COMMITTEE - BILL 010743

Councilman Nutter

Thank you, Mr. Chairman. Before Ms. Mouzayck and Mr. Meyer start their testimony, the first deputy's testimony, I think it is clear that the City Solicitor could not be here today because of another personal matter. I did talk to the solicitor and I understand the nature of his inability to be here today, and as the sponsor of the bill, I have absolutely no problem with that. I wish him well, and so I know that if not for that, he wanted to be here, and I'm very comfortable with what he shared with me. Thank you.

Councilman Kenney

Please identify yourself for the record and proceed. Before do you that, Councilmember Clarke is also in attendance. Please identify yourself for the record and proceed.

Councilman Kenney

Good morning.

Ms. Mouzayck

Good morning. My name is Donna Mouzayck, and I am the First Deputy Solicitor for the Law Department. I'd also like to introduce 5 1/14/02 RULES COMMITTEE - BILL 010743 the person to my right, who is Evan Meyer, who is a senior attorney in our office, who was also asked to be present for testimony as of this morning from a request by Councilman Nutter. We have reviewed Bill No. 010743, which amends the Philadelphia Code by amending Chapter 8 20-600. This is commonly known as "the Ethics Code." The bill adds provisions regarding nepotism to the conflict-of-interest section and to the accompanying public disclosure and disqualification section. Specifically, the proposed bill prohibits City officers and employees from taking or recommending certain personnel actions affecting family members; further, the bill adds definitions of key terms used in the amendments. We have reviewed this bill for the purposes of determining the legality and for the existence of any drafting or format that might be confusing, not in conformance with the scheme of the code, or contradictory with other provisions in the bill or elsewhere in the code. It is our conclusion and our advice to City Council that the bill is legal and in proper form. 6 1/14/02 RULES COMMITTEE - BILL 010743 If there are any further questions, I'd be happy to answer.

Councilman Kenney

Thank you very much. Does the gentleman have any testimony to offer?

Mr. Meyer

No. I'm here to answer questions.

Councilman Kenney

Thank you very much. The Chair recognizes Councilmember Nutter

Councilman Nutter

Thank you, Mr. Chairman. Just a couple quick -- a few questions. First, Ms. Mouzayck, thank you for your testimony. Is it the view from the Law Department that this particular bill and its provisions would strengthen the current Philadelphia Code provisions and make crystal-clear as to what the prohibitions are under the various circumstances? And I ask that question in the context of the opinion from the -- a court opinion from 1989 with regard to whether or not the Philadelphia Code statute was, in fact, crystal-clear.

Ms. Mouzayck

I don't think we have an 7 1/14/02 RULES COMMITTEE - BILL 010743 opinion as to whether or not it would strengthen it, but we do have an opinion as to whether it would make it more clear. The language is definitely more clear than the challenge that you were referring to in 1989. There were no specific provisions prohibiting nepotism, and this one clearly adds that language and makes it very clear that City employees are prevented from either taking personnel action or recommending personnel actions as it applies to family members. The code prior to that was silent, and in fact, there was one court opinion which had pointed out that the code was silent, and now the code is -- if this proposed bill was passed, it would not be silent as to those language deficiencies.

Councilman Nutter

Okay. Is it also your understanding, if you've had a chance to read through it, that the relative or the close family member, though, would still be able, under certain circumstances, would still be able to work in the government or various agencies, but the City officer or employee would be prohibited from taking any particular action in that regard; is that correct?

Ms. Mouzayck

Yes. The City employee 8 1/14/02 RULES COMMITTEE - BILL 010743 would be required to abstain, and under the disqualification provisions, it requires them to identify the interest and then to disqualify themselves from making the decision.

Councilman Cohen

I'm having great difficult hearing.

Councilman Nutter

Do you want me to re-ask the question?

Councilman Cohen

Yes, please. I heard the question but I didn't hear the answer.

Councilman Nutter

Okay.

Ms. Mouzayck

I'm sorry, were you going to --

Councilman Kenney

Would you just repeat the answer to the last question.

Councilman Nutter

Do you want me to repeat the question?

Ms. Mouzayck

Yes, please. Thank you.

Councilman Nutter

That's okay. The question revolved around while it's clear that the proposed provisions would prohibit the City officer or employee from either making the hire or recommending the hire of the close relative, I wanted to ask if, in the alternative, the close 9 1/14/02 RULES COMMITTEE - BILL 010743 relative or the family member would still be able to work for the City or for the government or for some agency as long as the City officer or employee relative did not take any particular action or did not make the recommendation; is that correct?

Ms. Mouzayck

That's correct. The employee would be required under the public disclosure and disqualification section to basically abstain from that decision.

Councilman Nutter

So the relative would still be able -- as long as they got basically --

Councilman Nutter

-- interview tests -- well, this doesn't cover civil service, but whatever the application process is, family members a or relative would be able to work in the government; you just couldn't have the City officer or employee (relative) participate in any of the decision-making or make a recommendation.

Ms. Mouzayck

Right. And that would include not taking any action or recommending any action, either of those two under this bill.

Councilman Nutter

Okay, thank you.

Councilman Kenney

Thank you. 10 1/14/02 RULES COMMITTEE - BILL 010743 During the course of your research for this bill, have you had the opportunity and are you familiar with the State Ethics Act?

Ms. Mouzayck

I am somewhat familiar with the State Ethics Act, and I can say that Evan Meyer is very familiar with the State Ethics Act.

Councilman Kenney

Could you tell me then whether or not the issue contemplated that we're dealing with here relative to an elected official recommending or appointing a relative, a close family relative, would be or would not be in violation of the State Ethics Act?

Ms. Mouzayck

I can say that there is a State Ethics Act provision, I think, that would warrant discussion. I don't think there's any specific language banning what we would consider nepotism. The language specifically prevents a public official from using the authority of his office for the private pecuniary benefit of himself or a member of his immediate family. So it would require some interpretation as to whether or not that would apply to an employment situation.

Councilman Kenney

But in general terms, if the appointment or decision enriched the 11 1/14/02 RULES COMMITTEE - BILL 010743 individual through a salary, that would be a pecuniary interest of either that family unit or that extended family member.

Ms. Mouzayck

Yes. I think the State Ethics Act also requires that it be significant -- rather, the language says if it's insignificant, you wouldn't have to count that, so --

Councilman Kenney

I'm sorry, a significant or insignificant level of --

Ms. Mouzayck

In other words, if it was de minimis in enrichment, I think that you wouldn't have to consider that.

Councilman Kenney

Well, hypothetically, if I wanted to appoint my brother to a $50,000-a-year job on my staff, would that be in violation of the State Ethics Act?

Ms. Mouzayck

I think I would need more facts than that to come to a conclusion as to whether it was an actual violation. I could say generally, however, that the State Ethics Act would have to be considered because you would be using your authority of your office for the purpose of a pecuniary benefit, whether or not you had directly lobbied for that, whether or not 12 1/14/02 RULES COMMITTEE - BILL 010743 you abstained when that employment action came up, I think, would be the relevant inquiry.

Councilman Kenney

Well, in my particular case, the hypothetical I've given you, I'm the sole appointing officer or sole appointing authority for my staff so, therefore, I would suspect that if I had taken that action, I would be close to being in violation, if not in violation, of the State Ethics Act. Is that a fair statement?

Ms. Mouzayck

If you were the person who made that decision, then I think that you would have a problem. From the limited information that you gave me, it sounds like you would have that authority, and if it was the sole authority, it would be a problem.

Councilman Kenney

Thank you. Councilmember Cohen or -- David? Councilmember Cohen.

Councilman Cohen

Tell me, in the -- I've seen different newspaper references to the Supreme Court case in which I was one of the parties, and the case has -- brings different reminders to people. During the court argument, the Supreme Court justice asked with respect to the three people 13 1/14/02 RULES COMMITTEE - BILL 010743 that were involved in the case, asked whether any of them did anything other than satisfactory work. The answer was no, each of them did excellent work. The court then wanted to know, Well, then why is there a case, what is the complaint? I raise that issue because I think that's what's involved. Anybody else in the City of Philadelphia other than members of my family can come to me for a recommendation for appointment to some position in City government, and there's certain jobs for which Councilmembers are permitted to make suggestions, as anyone else could make suggestions or offer recommendation. The one I can't do it for, if this bill became law, would be a child of mine. So I want to know why it is that a child of a public official should be prevented from having the same rights to go to an elected public official in seeking support, because I happen to believe that the family tradition in public service is an excellent tradition. I don't think it's something to be ashamed of. I think it's something to be boasted about. I think that people who work for 14 1/14/02 RULES COMMITTEE - BILL 010743 public-service organizations like municipalities or states or federal governments have a special duty to do outstanding work. And in the City Council, that's been our experience, that people who have come in related to other public officials have done outstanding work. So I don't see at all the need for this kind of action, I don't know the menace that exists in the City government which calls out for clarification or for cleansing, because I think our City employees, however they get to the job, overwhelmingly do an outstanding job. It seems to me a wrong bill because it punishes people, it makes public service seem something less than desirable, it tends to limit public service to one member of a family, when I think it would be much better if we created the concept of public service, that it's a great tradition to have. I think it would be wonderful if more people in families pursued public service rather than pursued merely profit-making. And, therefore, I don't see this bill as meeting any problem that exists in the City of Philadelphia. We have problems with campaign 15 1/14/02 RULES COMMITTEE - BILL 010743 financing; yet this body has been unable or unwilling to do anything about that. But it seems to me that we're dealing with a non-existent problem that does not need correction. And I submit as Exhibit A the fact that in my judgment, and in the judgment of many other people, when my wife worked as my chief aide in City Council, she was regarded as an extraordinary public servant, and many, many people throughout the City supported her, and if they didn't, they had the option: They could have defeated me in my campaign for reelection. I made a decision that by the employment of my wife in that particular office, limited as it is to service, my office would be able to offer to people would be far, far greater, and the good would be far greater than any negative comment. And it seems to me that we're dealing with a non-existent problem, and we have many important problems to solve.

Councilman Nutter

Ms. Mouzayck, let me take you off the hook because I'm sure you'll probably have no real ability to respond to my colleague. 16 1/14/02 RULES COMMITTEE - BILL 010743 Councilman, let me say for myself first and foremost that with regard to -- as you've raised at a previous action by yourself involving Florence Cohen, who I have the greatest admiration for, I don't think you have anything to feel bad about or to have to justify. Florence Cohen was a great public servant and I know continues to be a very strong support and advisor for you. But let me go further, though, and say that in the larger context, whether -- because you raised it, whether it was a family member of your present or any other member of City Council present or past who has had a family member serving with this body, I make no comment with regard to the previous service of any of those individuals other than to compliment them all. Now, this is not a commentary about the past or past actions. It is, though, about future and looking forward. The fact of the matter is that this situation does not exist here in City Council at the moment, which, quite honestly, I thought would make it easier for people to deal with this particular issue. I don't think that family members, as the 17 1/14/02 RULES COMMITTEE - BILL 010743 question was asked earlier and I think answered very appropriately, I don't think that family members would be prohibited from pursuing whatever their choice was in public service. Public service is a great area. I'm not at the moment necessarily sure that I'll recommend it for Olivia, but if that's her choice, that's fine. You know, as well as do I, that with these positions come certain privileges and also certain restrictions. There are many things that public officials and at times our families cannot do, whether legally or in the court of public opinion, because of the various positions that we hold. So it is not, quite honestly, a bill in search of a problem. And as the great legislator that you are, sometimes when there's nothing going on often is the time to try to take action on something, not just waiting to be reactive. You've been very strong in that particular area as a legislator. So, no, I don't think that there is some calamity or tragedy that's going on presently in the public sector. This is an issue that has been looked at in the past. I think the testimony here 18 1/14/02 RULES COMMITTEE - BILL 010743 this morning makes fairly clear that not only our Philadelphia Code but also the State Ethics Act is not particularly clear for any of us in this particular regard, and if there is an ability to create clarity and put this issue to rest once and for all, that was my only intention. It is in no 8 way, shape, or form any comment at all and certainly not a comment in the negative about anyone's choice and who is in their office at any point in time. Everyone in this City Council and our staffs I know work very, very hard. That, again, quite honestly, is not the issue or who the individuals are or what their qualifications are. So I wanted to get that on the record. You and I have been have had that conversation privately, but I think it important that the record be clear about what this bill is about and what it's not about. Thank you, Councilman.

Councilman Kenney

Any other questions for these witnesses?

Councilman Nutter

Just one for Mr. Meyer. Mr. Meyer, while you're here, could you 19 1/14/02 RULES COMMITTEE - BILL 010743 just provide us with some background information. The City has a City Board of Ethics; is that correct?

Councilman Nutter

You might need to identify yourself for the record.

Mr. Meyer

My name is Evan Meyer and I'm a senior attorney in the Law Department and I'm also counsel to the Ethics Board.

Councilman Nutter

Okay. And when was the Ethics Board created?

Mr. Meyer

The Ethics Board was created approximately in December of 1962.

Councilman Nutter

And how was it created?

Mr. Meyer

The records aren't real clear on that. I asked the Department of Records a number of years back if they could provide me with a mayor's executive order or other document that created the Board of Ethics, and they sent me a stack of stuff from their archives, which included some press releases from the City representative's office and some newspaper articles. Those articles and press releases indicate 20 1/14/02 RULES COMMITTEE - BILL 010743 that Mayor Dilworth first and Mayor Tate after him appointed separate citizens committees to advise the mayor on ethics and without a formal executive order being issued, so far as we're able to determine.

Councilman Nutter

So the Ethics Board was not created by either a statute in the City Charter or by an ordinance of City Council amending the Philadelphia Code?

Mr. Meyer

No, it was not. Chapter 11 20-600 of the Philadelphia Code, the Ethics Code, when it was passed in 1963, recognized the previous existence of the Ethics Board, but did not in my view create it.

Councilman Nutter

Okay. And that particular section, Chapter 20-600, has been amended, the Code seems to indicate, in 1974, 1982, 1983, and 1984; is that fairly accurate?

Mr. Meyer

I believe so, Councilman, yes.

Councilman Nutter

Okay. And does our particular code provision specifically mention -- Mr. Meyer, can you give us a general gist of what some of those amendments were?

Mr. Meyer

I really can't. I have the code with me, which is footnoted as to which 21 1/14/02 RULES COMMITTEE - BILL 010743 provisions were amended in what years, but I would have to research it to tell you what the specific amendments were.

Councilman Nutter

Right, okay. And how often does the Ethics Board meet?

Mr. Meyer

The Ethics Board meets when they have business, which is generally when there are requests to the Ethics Boards for an opinion.

Councilman Nutter

Does it meet on an active and regular basis?

Mr. Meyer

The board had not met for a number of years. Mayor Street recently appointed a whole new board, which held an initial meeting in December.

Councilman Nutter

Okay. And, I'm sorry, maybe I didn't hear you. I think I asked a question with regard to current code provisions. Is there any specific mention of either employment or appointment made by various officials? Is there any specific reference made to employment?

Mr. Meyer

In terms of nepotism?

Councilman Nutter

Yes. In terms of hiring relatives, is there any specific reference in any of the prohibitions regarding specifically the 22 1/14/02 RULES COMMITTEE - BILL 010743 terminology "employment"?

Mr. Meyer

I have to take a minute and look. (Mr. Meyers looks through documents and confers with colleague off the record.)

Mr. Meyer

Councilman, I don't believe there's anything in the City Ethics Code that refers to employment. There may be provisions in the Charter that refer to City officials having influence in civil-service matters.

Councilman Nutter

Okay. Just a couple last questions. We recently did a survey of the 10 largest cities by population in the country. And with the exception of Phoenix, for which we have no 17 information, are you aware that only Philadelphia and Detroit are the only cities of the 10 top cities in the country that do not have specific prohibitions with regard to government officials and the hiring of relatives?

Mr. Meyer

I have not done any research comparing what other cities do, Councilman.

Councilman Nutter

Okay. Is there any mandatory requirement for either ethics training or 23 1/14/02 RULES COMMITTEE - BILL 010743 education in the City?

Mr. Meyer

Other than the requirement in the Code that a copy of the Code itself be provided to each employee I am not aware of any other provision that requires training.

Councilman Nutter

Okay, thank you very much.

Councilman Kenney

Any other questions for these witnesses? (No further questions.)

Councilman Kenney

Okay, thank you. The next witness is Mr. Fred Voigt. (Witness comes forward.)

Councilman Kenney

Good morning. Please identify yourself for the record.

Mr. Voigt

Good morning. I'm Fred Voigt, Executive Director for the Committee of 70.

Councilman Kenney

Please proceed.

Mr. Voigt

The testimony that I've presented to you is identical to the testimony I presented to a similar committee back in 1993. There have been some minor editorial changes, but essentially what my testimony does is set forth a position that the Committee has taken for the better 24 1/14/02 RULES COMMITTEE - BILL 010743 part of 30 years, which is that nepotism has no 3 place in government. It does not mean that family members shouldn't be in government; it's, rather, nepotism itself, which means in the hiring of that person for municipal service, a relative ought not have a role in that. And we've taken that position, as I say, for the better part of 30 years. It has an interesting history in that we've had a variety of city solicitors opine over those years as to whether or not there were such prohibitions either in the Charter or in the Ethics Code itself. As you know, the matter was the subject of rather intense litigation, which reached the Supreme Court, which, based on a technicality, ruled that the State Ethics Code did not apply. Now, that case was decided not on a substantive basis but, rather, on a procedural basis. That led to the 1993 attempt by the Committee chaired by then-Councilmember Joe Vignola to amend the Code.

Councilman Kenney

That's your testimony?

Mr. Voigt

That's my testimony.

Councilman Kenney

Thank you. Councilman Nutter, I assume, has questions 25 1/14/02 RULES COMMITTEE - BILL 010743 for you. But just in general, this information prepared by Councilman's office relative to the 4 largest cities in the country, which appears here 5 that -- I don't know whether it's a -- it's notable 6 here that the two cities who don't have ethics 7 provisions are the two cities that lost population, 8 had a net population loss over the last 10 years. 9 All of these other cities -- I don't know whether 10 that's just happenstance or whether there's anything to it. But could you -- maybe in your conversations with people in similar positions like yours throughout the country, why cities like New York and Los Angeles, Chicago, Houston, Dallas, San Antonio, why they feel a need for strict anti-nepotism laws on their books and why cities like Philadelphia and Detroit, seemingly two cities backsliding in population and in other areas, are -- don't have it.

Mr. Voigt

Well, a lot of those cities didn't have such rules; they have them now and they have them now for particular reason that are specific to each of those cities. We all have a different kind of experience that is city by city, 1/14/02 RULES COMMITTEE - BILL 010743 and it's very difficult to go and make comparisons. You know, oftentimes I would talk to reporters who would bemoan Philadelphia corrupt and contented or whether it's the Commonwealth of Pennsylvania, and during the summers, I go to a little tiny state, which is absolutely beautiful, right on the water, and it is the most corrupt state in the United States, and I would come back and tell them tales about little old Rhode Island where you had three chief justices in a row in the State Supreme Court gone. So, you know, they have all sorts of prohibitions in that state; they just don't have to honor them. What I'm suggesting to you is that I think it's important that we do impose those kinds of limitations here -- not because of any particular individuals who have served in the past, but because it's a more appropriate way to conduct our government. As to Detroit, you know, everybody's different. Los Angeles has some of the most stringent rules in the country and yet their police department is perhaps the most corrupt in the country. I just wouldn't make those kinds of 27 1/14/02 RULES COMMITTEE - BILL 010743 comparisons.

Councilman Kenney

Can you tell me just in your opinion why the public needs to believe that elected officials or family members of elected officials should not have the kind of influence that appear -- that may give the appearance if I or other elected officials like myself can appoint my individual family members to paid positions?

Mr. Voigt

It's called "transparency" and it's what's most important about the democratic process and what distinguishes us from a lot of other countries that don't have transparent processes, where the individuals are serving in government for their own betterment, not for the benefit of the public. And it's very important that it be clear that people aren't self-serving and self-dealing, using their positions to benefit themselves or their families.

Councilman Kenney

Thank you. Councilman Nutter, do you have any questions for this witness?

Councilman Nutter

No. 24

Councilman Kenney

Any other questions? (No further questions.) 28 1/14/02 RULES COMMITTEE - BILL 010743

Councilman Kenney

Thank you very much. Natalie Palermo, please. (Witness comes forward.)

Ms. Palermo

Good morning.

Councilman Kenney

Good morning. Please identify yourself for the record.

Ms. Palermo

My name is Natalie Kaczor-Palermo, and I'm a mother of a son and a victim, we are both victims of nepotism.

Councilman Kenney

Please proceed.

Ms. Palermo

Okay. I'm reading. I'm here today to say no to nepotism because to say yes would mean I support nepotism's abuse of power, control, deception, and corruption. "When watching men of power in action, it must be always kept in mind that whether they know it or not, their main purpose is the elimination or neutralization of the independent individual, the independent voter, consumer, worker, owner, thinker, and that every device they employ aims at turning men into a manipulable, animated instrument which is Aristotle's definition of a slave," by Eric Hoffer. Nepotism has a life of its own. It dictates, it makes decisions (sometimes in the 29 1/14/02 RULES COMMITTEE - BILL 010743 bedroom), it knows outcomes, it intimidates, and often becomes a tower of power. Now, I'm not saying that this will be the outcome of the proposed nepotism appointment for the City of Philadelphia; however, I am sitting here today to say that my son and I are victims of the ugly hand of nepotism. I feel that even the slightest hints of improprieties in government should be avoided. Nepotism will never and can never serve as a positive force for the majority of people. It must remain negative to maintain its supreme power of selectivity and control over the masses. Nepotism violates human justice, it decides one's fate without a hearing, and it removes the appeals vehicle. On January 21, 2002, we will celebrate Dr. Martin Luther King's birthday. This is a man who fought tirelessly for justice for all. One of his famous quotes is, "Injustice anywhere is a threat to justice everywhere." Clearly, this quote is appropriate for nepotism as it take hostages and creates victims such as my son and I. My son is a 33-year-old man who, unfortunately, resides in one of the City's group 30 1/14/02 RULES COMMITTEE - BILL 010743 homes, "KenCCid," since June of 2000. I chose this agency because I thought it was family-friendly. The first person we met was a clinical director who worked at this agency for years. He was a 6 wonderful human being who was progressive and worked 7 beyond the call of duty. On October 11, 2001, he 8 was forced to resign and was told by the president 9 of the board that his services were no longer 10 needed, which the agency insisted he voluntarily 11 resigned. 12 I was shocked and immediately followed my 13 motherly intuition and began to inquire and 14 uncovered some disturbing facts and information 15 about Helene Steinberg, who was the executive 16 director of this agency and the agency's illegal 17 hiring practices, etc. I requested a meeting with Miss Steinberg and questioned her vision for this agency and what direction she was going in. This meeting lasted only seven minutes until -- when she became infuriated and told me to get out of her office, threatened me, and told me that I could take my son elsewhere if I didn't like it, and also I could report her to Mr. Mike Covone if I wanted to. Mike Covone is the Deputy Commissioner of 31 1/14/02 RULES COMMITTEE - BILL 010743 Mental Health and Mental Retardation Services of Philadelphia, and Miss Steinberg is also engaged to him. She was appointed to this position in October of 200 by Mr. Covone and Mr. Richard Gold, who is legal counsel to and a board member of KenCCid and also on the board of and legal counsel to Philadelphia Mental Health Care Corps. Both of his parents are also board members of KenCCid. Miss Steinberg hires her mother to work in the office, nephew and nieces of her loyal employees who cover up for her. Miss Steinberg is allowed to make her own hours and whatever her job description is, nobody knows. She reports late for work, consistently is out of work, and whenever the wind blows, cancels more meetings than she attends, and the staff place bets on whether or not she will cancel. She pays someone else $100 an hour to do her work. All --

Councilman Kenney

Can I interrupt you for a second? I don't mean to stop your testimony.

Councilman Kenney

We have this before us to read. If you could kind of just synopsize it. I would just urge you to be very careful in what 32 1/14/02 RULES COMMITTEE - BILL 010743 you're alleging because I don't know this person and I don't have an opinion either way, but I just --

Ms. Palermo

Yeah, it's all --

Councilman Kenney

I mean, some of the things you're alleging here, you know --

Ms. Palermo

Okay, (indecipherable) or whatever, but it's been out there already, yeah.

Councilman Kenney

I just --

Ms. Palermo

What has happened with nepotism with my son, okay, is that it's hit a brick wall. Usually you go to someone, you talk, you sit down. At this place, I had nowhere to go to. You go to her, she throws you out. You go here, the lawyer handles it first, and he makes a lot of money from the City, you pay a lot of money for this lawyer. And he sent me a lot of correspondence, as you can see, okay? We had no sitting down, no 19 talking or anything like that. They're allowed to get away with a lot of things, they're not accountable for anything. There's -- I have facts to prove that. There are City people sitting there when a family member wanted to have her not be with her brother, but they were afraid to because Mr. Covone and then there's 33 1/14/02 RULES COMMITTEE - BILL 010743 Miss Estelle Richman and all of these people up in power that you can't go and filter. I have called people, wrote to them and everything. So even though I asked for a state investigation and that's what they're doing for my son -- not for my son, for other people. I usually -- you know, I advocated for them. What has happened, even through the investigation, is that he was able to, and so was she able to, use a force of evicting my son from his home. Now, I know my rights and things like that for him, okay, and it's not like he's running the street, but nevertheless, they're allowed to retaliate and abuse that power, and it goes on and on. And there's no -- you can't go through the brick wall when nepotism is there and cronyism. And that's exactly what happens with all of it. And it's not only me. I'm the voice and I'm talking right here today, okay? But there's other people that it goes on and on. And yet, it might be okay for a family member or something, but the power is unbelievable that they derive from. And the abuse of money and the fraud that goes on with it. 34 1/14/02 RULES COMMITTEE - BILL 010743 And my son now, I have to worry about him they get real ugly when you try to do something or you try to -- I felt responsibility towards reporting certain things, okay? So I came up and did the right thing, and the City officials were afraid to, because they worked with people that were powerful than them.

Councilman Kenney

So you're in favor of the passage of the bill?

Ms. Palermo

I am very much in favor of the passage of the bill. I don't feel it has a place anywhere's at all. It's making it very hard for people like me, people that, you know, have children other places in government, you can't go there, it doesn't have justice. I mean, we're always seeking for justice for something. And there's no accountability and nobody's responsible. And there's a lot of things that are pretty dangerous.

Councilman Kenney

Thank you.

Ms. Palermo

So thank you very much.

Councilman Kenney

Thank you for your testimony. The Chair recognizes Councilman Nutter for 35 1/14/02 RULES COMMITTEE - BILL 010743 the purposes of entering into the record a letter from Mr. Sam Katz.

Councilman Nutter

Thank you, Mr. Chairman. This is a letter that was faxed into the office the other day; I'll read it into the record. It's dated January 14th. "Dear Councilman Nutter: I very much appreciate the invitation for Greater Philadelphia First (GPF) to testify at the January 14th hearing on Council Bill No. 010743. Unfortunately, I will be unable to attend. However, I hope you will accept and enter into the public record this letter of support for adding anti-nepotism provisions to the Philadelphia Code. "GPF is a business and civic leadership organization representing 51 of the region's major companies and nonprofit organizations, many of which are located in the City of Philadelphia. Our mission calls for GPF to play a key role in transforming the Greater Philadelphia region into one of the nation's leading knowledge centers. In order for that transformation to occur, the private and public sectors must work together to persuade 36 1/14/02 RULES COMMITTEE - BILL 010743 knowledge workers and knowledge-based industries that the region is a choice destination to set down roots, both professionally and personally. "Many factors enter into that calculus, such as the tax burden and quality of schools and local crime rates. So too do the integrity of government and the guarantee of a fair and level playing field when doing business with public officials. The role of the public sector and the conduct of the officials who lead that sector are critical factors in the economic success of a city or region..." Mr. Chairman, can I ask that this letter be entered into the record as if it were read?

Councilman Kenney

So ordered. (Mr. Katz's letter is attached hereto.)

Councilman Nutter

It's always a little strange to read to my colleagues.

Councilman Kenney

Although I must say that some of the wording in this letter does lead me back to the discussion that I had with Mr. Voigt about the ten largest cities in the country and the only two that have lost population and jobs seems to 37 1/14/02 RULES COMMITTEE - BILL 010743 be reflective of that view, so...

Councilman Nutter

Right.

Councilman Kenney

Is there anything else? Let me just hold off for one moment, please. - - -

Councilman Kenney

The Chair recognizes Councilman Clarke.

Councilman Clarke

Thank you. Mr. Chairman. I just wanted to make a brief statement to the sponsor of the bill and the committee members and the members present here. First, I'd like to say that I'm supportive conceptually of the bill. I think that there should be some legislation and a more active Ethics Committee, but as I spoke to the sponsor, there is some issues with respects to the existing bill that I have some concerns about, and I've asked that potentially we can hold this bill until they can be worked out. So I just wanted to go on the record of asking the sponsor to hold the bill in the committee until we can work some of these issues out. Thank you, Mr. Chairman. 38 1/14/02 RULES COMMITTEE - BILL 010743

Councilman Nutter

Councilman Clarke, I appreciate your comments, both the general support you offered and, as you well know, I'm always -- notwithstanding Councilman Cohen's vies at times, I'm generally always available to certainly have further discussion on any bill that I might be working on, and I'm certainly in agreement that we should continue to have that discussion, and I look forward to the discussion

Councilman Cohen

(Inaudible) ... opposed to any specific scheduling of this bill again in the near order so that the bill will come up no matter what the result of the discussions are. I believe the bill ought to be recessed but not to any particular date and ought to be scheduled at such time when there seems to be general agreement on the concept and specific provisions of the bill.

Councilman Nutter

Councilman, I --

Councilman Kenney

That request is noted. I have a different opinion in that I think that if we can continue to have it scheduled to a date certain that we will work vigorously to try to come up to some agreement. It doesn't mean that it has to move on the date certain, but having it 39 1/14/02 RULES COMMITTEE - BILL 010743 simply floating out there without a date I don't think is in the best interest of the bill. And I do acknowledge Councilmember's opinion in that regard. Do you have any...

Councilman Nutter

I just -- Councilman, I do appreciate that. But, as I have also learned from you, you know that at times to keep a discussion going, as we did with the public employees benefits and the like, it is a little better to try to have some sense of certainly, I think, as the Councilman says, it doesn't absolutely mean that something is going to happen that day, but I take both yourself and Councilman Clarke very seriously in your desire to have further discussion, and I will certainly keep my word to keep an open mind and to keep that discussion going. I'm hopeful that you and I might be able to reach some meeting of the minds on this, although I do know that you hold a very, very strong and personal view on this issue.

Councilman Kenney

If there are no other comments and there's no one else to testify on this bill, this committee will stand in recess until Wednesday, January 30th, at 10 a.m. in this room, at 40 1/14/02 RULES COMMITTEE - BILL 010743 which time we will hear additional testimony on this bill and other zoning bills that are scheduled for that day. Thank you very much. (Proceeding ends at 11:42 a.m.) - - - 41 CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia's meeting of the Council Committee on Rules of Monday, January 14, 2002, are contained fully and accurately in the stenographic notes taken by me upon, and that this is a true and correct transcript of same. RE: Resolution No. 010743 _______________________________, Josephine Cardillo Registered Professional Reporter and Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)