COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE OF THE WHOLE - - - Room 400, City Hall4 Philadelphia, Pennsylvania Tuesday, March 22, 2010, 10:12 a.m.5 - - - BILL 110072 - Amending Section 20-606 of the Philadelphia Code, entitled "Board of Ethics,"7 by further providing for administrative adjudication, under certain terms and8 conditions. BILL 110073 - Amending Chapter 20-1000 of the Philadelphia Code, entitled "Political10 Contributions and Expenditures," by clarifying that no person shall make excess contributions11 to candidates through another political committee, and by revising the form of notice12 that the Board of Ethics shall provide of the contribution limits, all under certain terms13 and conditions. COMMITTEE MEMBERS PRESENT:15 Anna C. Verna, Chair Marian B. Tasco, Co-Chair16 Jannie C. Blackwell Blondell Reynolds-Brown17 Darrell L. Clarke W. Wilson Goode, Jr.18 Bill Green William K. Greenlee19 Curtis Jones, Jr. James F. Kenney20 Donna Reed Miller Frank Rizzo21 Maria Quiñones-Sanchez - - - 2 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
Good2 morning, everyone. This is a public3 hearing of the Committee of the Whole.4 I would ask Mr. McPherson to5 please read the title of Bill No. 110072.6 MR. McPHERSON: Bill No.7 110072, an ordinance amending Section8 20-606 of the Philadelphia Code, entitled9 "Board of Ethics," by further providing10 for administrative adjudication under11 certain terms and conditions.12 COUNCIL PRESIDENT VERNA:13 Mr. Kramer.14 (Witness comes forward.)15
Good morning.18 Good morning, Madam Chair and members of19 the committee. My name is Shane Creamer,20 and I'm the executive director of the21 Philadelphia Board of Ethics. Thank you22 for this opportunity to speak to you on23 the two bills being scheduled for a24 hearing today.25 3 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 The first bill, Bill No.2 110072, would authorize the Ethics Board3 to administratively adjudicate potential4 violations of three provisions of the5 Home Rule Charter: Section 10-102,6 10-105, and 10-107.7 Bill No. 110073 would make two8 changes to the campaign finance law.9 First, it would clarify that no political10 committee shall make excess contributions11 to candidates through another political12 committee; and, second, it would revise13 the form of notice that the Board of14 Ethics is required to provide of the15 contribution limits.16 The Ethics Board asked the17 Administration to request introduction of18 these bills in order to improve the19 administration and enforcement of the20 public integrity laws.21 I will first address Bill No.22 110072. That bill -- excuse me, Section23 4-1100 of the Charter provides that the24 board shall conduct enforcement25 4 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 activities either by bringing enforcement2 actions in the Court of Common Pleas; or,3 if authorized by Council by ordinance,4 administratively adjudicating alleged5 violations and imposing civil penalties6 and other remedies for violations.7 Pursuant to Philadelphia Code8 Section 20-6061-H, Council has authorized9 the board to administratively adjudicate10 potential violations of the Ethics Code,11 the campaign finance law, the soon-to-be-12 effective lobbying law, and the13 disclosure provision in the no-bid14 contract law.15 However, Council has not yet16 authorized the board to administratively17 adjudicate potential violations of Home18 Rule Charter provisions that are within19 the board's jurisdiction: namely, Charter20 Section 10-102 and 10-105 and 10-107.21 This means that an enforcement action for22 alleged violations of those three23 sections of the Charter must be brought24 in court and cannot be administratively25 5 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 adjudicated.2 Not only must these types of3 cases be brought in court, but they must4 be filed in Municipal Court as private5 criminal complaints, because the6 penalties provisions for Article 10 of7 the Charter includes potential8 imprisonment in addition to civil9 penalties.10 Pennsylvania courts have held11 that actions seeking enforcement of a12 municipal ordinance that provides for13 imprisonment upon conviction must be14 filed in the Municipal Court and15 litigated in compliance with the rules of16 criminal procedure even when the17 municipal agency is only seeking civil18 penalties.19 Practically, this makes no20 sense, as virtually no violations of the21 Charter provisions at issue would warrant22 court hearings under the rules of23 criminal procedure. Therefore, we24 respectfully request that Council pass25 6 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 Bill No. 110072 to authorize the board to2 handle potential violations of Charter3 Sections 10-102, 10-105, and 10-107 as4 administrative cases heard before the5 board itself.6 I will now address Bill No.7 110073.8 COUNCIL PRESIDENT VERNA:9 Mr. McPherson hasn't read the title of10 that bill yet.11
Okay.19 MR. McPHERSON: Bill No.20 110073, an ordinance amending Chapter21 20-1000 of the Philadelphia Code,22 entitled "Political Contributions and23 Expenditures," by clarifying that no24 person shall make excess contributions to25 7 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 candidates through another political2 committee; and by revising the form of3 notice that the Board of Ethics shall4 provide of the contribution limits, all5 under certain terms and conditions.6 COUNCIL PRESIDENT VERNA:7 Mr. Creamer.8
Thank you.9 Bill 110073 would amend two10 provisions of the campaign finance law,11 Section 20-1002, which includes the12 contribution limit rules, and Section13 20-1007, which requires the board to14 publish information about the public15 campaign finance law.16 The limits on contributions to17 candidates for City office are set forth18 in Section 20-1002 of the City Code.19 There are four separate contribution20 limit rules within Section 20-1002. Two21 of those rules set limits on22 contributions to candidates and two set23 new limits on contributions to former24 candidates.25 8 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 Three of the four contribution2 limit rules -- Sections 20-1002, 1, 4,3 and 5 -- have identical provisions4 explicitly governing the use of5 passthroughs, which count contributions6 made by individuals, political7 committees, and certain businesses made8 to or through one or more political9 committees towards the limits that apply10 to the donor in question.11 One of the contribution limit12 rules, Section 20-1002-2, perhaps merely13 due to oversight, does not include the14 same explicit limitation on the use of15 passthroughs. As a result, under Section16 20-1002-2 of the current law, arguably, a17 political committee may make18 contributions to a candidate in excess of19 the contribution limits simply by passing20 them through a second political21 committee.22 Bill No. 110073 would correct23 this inconsistency by conforming the24 language of Section 20-1002-2 to that of25 9 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 Sections 20-1002-1, 4, and 5.2 The proposed change brings3 greater uniformity and fairness to the4 campaign finance law and ensures genuine5 compliance with the contribution limits.6 Section 20-1007 of the Philadelphia Code7 requires the board to publish the8 contribution limits and a plain English9 guide in the three newspapers with the10 largest circulation in the City every six11 months.12 It costs the board13 approximately $8,000 per year to comply14 with Section 20-1007, which is about 115 percent of the board's total budget. In16 addition, the information is printed in17 small type in the legal notices' section,18 which leads the board to question the19 effectiveness of providing the20 information in this manner.21 Bill No. 110073 would amend22 Section 20-1007 by requiring the board to23 publish the contribution limits and the24 plain English guide on its website rather25 10 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 than in newspapers. The board2 respectfully requests that Council pass3 Bill No. 110073 in order to conserve4 scarce resources and because the public5 has greater continuous access to6 information about the contribution limits7 and the plain English guide on the8 board's website.9 The board, therefore,10 respectfully questions that the Committee11 of the Whole report out both bills with a12 favorable recommendation, and we request13 waiver of the rules to allow these bills14 to be considered as expeditiously as15 possible.16 That concludes my testimony,17 and I'd be happy to answer any questions18 that you may have.19
Thank you,25 11 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 Madam Chair. And thank you for your2 testimony.3 I assume -- really, my4 questions are for the second bill. The5 first bill, I assume, is a way to simply6 streamline the process on civil issues7 and also bring down the costs of attorney8 fees and other things because you can do9 it through the Board of Administrative10 Adjudication --11
Okay. On23 the second one, I understand the concept24 and I agree with it. I'm trying to25 12 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 figure out how it's practically dealt2 with. How do you discover that there are3 multiple committees that are washing4 money through --5
It's a good10 question.11 We have seen evidence of12 instances where a PAC makes a13 contribution to a particular candidate,14 for example, and then makes additional15 contributions to other PACs, maybe one,16 two or three our PACs, which, in turn,17 make similar contributions in terms of18 amount that were given by the first PAC19 to the same candidate that was supported20 by the original donor PAC.21
So the22 original donor PAC and that chain of23 contributions is what would indicate to24 you that this activity was going on.25 13 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
All right.3 And do you discover that through your own4 investigation, or do you have to wait for5 a complaint?6
We haven't had a7 complaint. We typically review the8 campaign finance reports very carefully,9 and we've seen this in past election10 cycles by just simply reviewing the11 reports.12 Now, what we have not look for,13 because this is not technically a14 violation of the law yet, we don't think,15 we have not look for evidence where that16 first PAC has directed the other PACs to17 make those contributions.18 In other words, we have19 interpreted this provision, this "to or20 through other political committee"21 language that exists in the other three22 contribution rules in our regulation to23 mean that the donor must direct or24 request or suggest that the money that25 14 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 has been given to the other PAC be given2 to the candidate of their choice.3 So, if we saw in the future PAC4 A give money to a candidate and then more5 money to PAC B, and PAC B gives that6 money to the candidate, then we would7 conduct an investigation to determine8 whether PAC A suggested, requested, or9 directed PAC B to make that donation to10 the candidate.11
And how12 would that investigation be conducted,13 and how would you elicit the information14 from PAC A?15
That's a good16 question. I think it's a difficult proof17 question for all three of the existing18 contribution rules that have this19 provision.20 It would come down to a21 determination of intent and22 communications between the PACs. We'd23 have to prove this through testimony,24 through e-mails, things like that.25 15 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 So it's not an easy proof issue2 but it can be proven.3
Now, does4 your investigation and discussion or5 questioning come prior to the election or6 after the election is over?7
It depends on8 when we discover evidence of this. In9 the past --10
After the11 election's over, obviously, what has been12 attempted has been accomplished.13
And if we have16 time before an election, the board will17 take action, and it has done to so in18 2007 and 2009, in the last two election19 cycles that we have administered the20 campaign finance law.21
And what22 possible sanctions are there pre-election23 and then post-election? If you discover24 and conclude the activity is happening25 16 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 pre-election --2
-- what4 sanctions actions can you take? And if5 you discover it post-election, what6 sanctions and --7
I think if we --8 we can only issue monetary fines, so9 we're limited to issuing monetary fines10 for excess contributions.11 If the combined contributions12 from PAC A and PAC B exceed the13 contribution limits as to PAC A, then14 there would be an excess contribution.15 And under the rules, the fine they --16 Council amended the penalties last year17 for excess contributions.18 It is three times the excess19 portion of the contribution or $2,000,20 whichever is less.21
It's no more than24 $2,000 per excess contribution.25 17 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
And that5 can't be paid for out of PAC funds?6 For example, if you find that7 PAC A funded PAC B, C, and D, and you8 conclude and issue sanctions for fines,9 can PAC A fund the fines for B, C, and D?10
Because the15 contributions to B, C, and D would be16 attributed to PAC A essentially.17
You have to22 identify yourself for the record, please.23
I'm sorry.24 Richard Glazer, chair of the board.25 18 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
In response to4 your question, it would be the same5 penalty, whether it be pre- or6 post-election.7
Okay.8 Thank you.9 Thank you, Madam President.10 COUNCIL PRESIDENT VERNA:11 You're welcome.12 The Chair recognizes Councilman13 Clarke.14
I just want20 to clarify the last answer to Councilman21 Kenney with respects to who the violation22 would be imposed upon. It would be23 imposed upon the PAC that gave the second24 PAC?25 19 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
-- may6 gotten contribution not knowingly, not7 knowing that this earlier -- the two8 earlier PACs had colluded, or whatever,9 to --10
So it sounds19 like, to me, it comes down to things20 similar amounts in terms of your ability21 to --22
That would be a23 red flag. If we saw PAC A give 10,600 to24 a candidate and then another 10,600 to25 20 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 PAC B, and then two days later, you see2 PAC B --3
-- make a6 contribution of 10,600 to the candidate,7 I think that would trigger an8 investigation.9
So are10 there going to be guidelines that are11 clearly established that PAC A would know12 that if you give the same amount -- if13 you give a certain amount to PAC B and14 then the candidate is given that same15 amount within a period of time.16
Well, that in and17 of itself would not be sufficient for a18 potential violation of the contribution19 limits, assuming that the money exceeds20 the limits as to PAC A, if it were21 attributed to PAC A.22 Under our regulation, we've23 interpreted the phrase that we seek to24 add to this contribution limit rule "to25 21 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 or through one or more political2 committees" to mean that not only must3 you give the money to the second PAC, but4 you must direct, suggest, or request that5 the money be given to the candidate.6 So if PAC A just makes a7 contribution to PAC B, and there's no8 communication about what PAC B does with9 the money, that money is not -- and then10 PAC B ultimately gives some money,11 whether directly or through an in-kind12 contribution to the candidate, that's not13 a potential violation for PAC A because14 PAC A did not direct, suggest, or request15 that the money given to PAC be given to16 the candidate of PAC A's choice.17
What18 ability and authority do you have to19 investigate this?20
Well, we have21 subpoena power, so we can take22 depositions, we can take statements under23 oath essentially. We can bring the24 treasurer of PAC A in, the treasurer of25 22 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 PAC B in. We get e-mail records,2 correspondence records, and we can3 question them about what communications4 they had about what was supposed to5 happen with the money.6 Now, having said all of that,7 as I said to Councilman Kenney, it's a8 challenging proof issue. I think it can9 be proven, but you'd have to have some10 proof there that there was a11 communication between PAC A and PAC B,12 where PAC A directed, suggested, or13 requested that the money be given to the14 candidate.15
And your16 authority goes beyond the county line, so17 if a PAC from California --18
We -- our19 subpoena power is limited to the County20 of Philadelphia. So if they're outside21 the County of Philadelphia, we could not22 enforce a subpoena. We could try to seek23 their cooperation with us, but we would24 not be able to compel them to comply with25 23 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 an administrative subpoena issued by the2 board.3
All right.4 I just wanted to know how far your power5 goes.6 Democratic City Committee --7 and based on your earlier testimony, this8 probably is not going to fall with under9 the guidelines of this particular10 provision.11 There are a number of people12 who contribute to the Democratic City13 Committee, the Democratic City Committee14 then contributes to the ward leaders and15 various candidates.16
No. My20 understanding of that money and the way21 that works is, the Democratic City22 Committee decides and determines where23 the money goes and in what amounts.24 The candidates or the ward25 24 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 committees are not telling the Democratic2 City Committee what to do with their3 money.4
As a5 24-year ward leader, I found that out,6 that we have limited ability to influence7 the levels of contribution.8 All right. Okay, thank you.9
Thank11 you.12 The Chair recognizes13 Councilwoman Tasco.14
And thank19 you for continuing to work with us to20 clarify the campaign finance laws and the21 ethics laws. I think we've formed a22 working relationship between the two, the23 Council and the Ethics Board.24 Just because we always come25 25 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 back and rely on the record for2 testimony, in your testimony on ,3 you called -- you said "Bill 110073,"4 when it should be -- "110072" would5 correct this inconsistency, and you said6 "73."7
So when I read11 it, I corrected it, but there is a typo12 in my testimony.13
I just17 want to be sure we have the correct18 source. Thank you.19
Thank20 you.21 The Chair recognizes Councilman22 Goode.23
Thank you,24 Madam President.25 26 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 Good morning.2
With regard5 to Bill No. 110073, the whole topic of6 proving collusion, I'm interested on your7 opinion on if the committees have the8 same treasurer, would that mean that they9 would be deemed to be automatic10 collusion, or does that mean that it's11 impossible to prove collusion?12
That's an13 interesting question that I hadn't14 considered.15 There's no automatic rule. It16 would depend on the facts and17 circumstances, but I think it would be18 difficult for a PAC -- two PACs with the19 same treasurer to demonstrate that20 contributions made by one PAC under that21 treasurer's control to the other PAC22 under that treasurer's control and then23 that second PAC makes the contribution,24 that if it were attributed to the first25 27 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 PAC would exceed the contribution limits.2 It could happen.3 Now, that rule currently exists4 for post-candidacy contributions by5 political committees under 20-10025. And6 so, that rule already applies post-7 election. And, again, it would depend on8 the facts.9
I understand10 that it would depend on facts and you're11 not interviewing more than one person and12 a person's not going to have a13 conversation with him about it.14
So seemingly16 the issue is whether the fact that the17 committees have the same treasurer would18 make a difference or not.19
I don't think20 that that in and of itself would21 necessarily make a difference. I think22 the treasurer could have communications23 with others who influence the decisions24 of the PAC.25 28 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
And so, those3 communications would be important to us4 under those circumstances.5
Thank you,8 Madam Chair.9 COUNCILMAN CLARKE:10 (Inaudible; off-mic.)11 COUNCIL PRESIDENT VERNA:12 Councilman Clarke, do you want to be13 recognized again?14
Thank you.18 The intent I understand; I'm a19 little concerned about the enforcement20 side and what the guidelines are, 'cause21 as I listen to you today, it sounds like22 you're kind of making this up as you go.23 I'm serious.24
Well, I25 29 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 appreciate that --2
And I'm a3 little concerned about -- I mean, will4 there be, like, very specific guidelines5 attached to the bill so people don't make6 mistakes, people understand what the7 procedures are, what your capabilities8 are and your authority? I'm just...9
Yes. We have a10 regulation which interprets this same11 language that already exists in the law.12
For13 individuals?14 (Indiscernible; parties talking15 over each other.)16
So as I -- it's17 in subpart B of regulation number 1, and18 it's Rule 1.3, which says, "A19 contribution by an individual is made" --20 and we have a similar provision for PACs21 and businesses for post-election.22 "A contribution by an23 individual is made through a political24 committee, for the purposes of paragraph25 30 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 1.2, if the individual makes a2 contribution to a political committee and3 then directs, suggests, or requests that4 the political committee use the5 contributed money to make a contribution6 to a specific candidate."7 So that's the guideline that8 we have -- the guidance that we have9 offered through our regulation for the10 other three instances where this rule11 appears.12
And in your13 interpretation of the direction or14 suggestion of the PAC, it would be based15 on written documents, e-mails, or --16
And verbal17 communications between the PACs that18 would be --19 (Indiscernible; parties talking20 over each other.)21
I mean, his25 31 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 would be based on your ability to2 subpoena the person and ask them, Did3 they say this?4
That's right.8 But before we even get to an9 investigation under our regulation number10 2, which regulates investigations and11 enforcement proceedings, we would have to12 first have a determination of whether13 there's probable cause to -- that a14 potential violation occurred and to15 initiate an investigation.16 So we'd have to have more than17 simply circumstances where PAC A gives18 money to PAC B and they both give to a19 candidate. There just has to be more20 evidence just to start an investigation.21 And then, once we start an22 investigation, it would depend upon the23 communications that we discover between24 the two PACs to determine whether PAC A25 32 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 directed, suggested, or requested that2 its money be given to the candidate of3 its choice.4 So right now, this rule already5 exists for an individual. So if an6 individual gave $2600 to a candidate and7 then gave $10,000 to a PAC and said,8 "Please give this to this candidate" --9
Thank17 you.18 The Chair recognizes19 Councilwoman Sanchez.20
Thank21 you, Madam President.22 I too wanted to echo23 Councilwoman Tasco's comments about the24 participation and the discussions that25 33 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 have been going back between Council's2 staff and the Board of Ethics. I think3 it's been enlightening for us to have4 staff participate at some of your5 hearings, as I'm assuming you guys have6 been enlightened about the discussion7 around some of the practicality of this.8 I wanted to ask for the record,9 in terms of this year, we have a lot of10 candidates. For many of these11 candidates, this would be the first time12 these rules apply. What are some of the13 preventive and educational pieces we're14 doing with those candidates?15 And specifically, just 'cause I16 was unaware about the fact that even17 though we're running for reelection, we18 needed to reregister and inform the Board19 of Ethics that we were running; that was20 the previous e-mail that went out.21 Are those being given to people22 at different trigger points? Like, when23 they file a petition, they have to24 register with the Board of Ethics? What25 34 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 are we doing to make sure of that?2
That's an3 excellent question.4 We're doing everything we can.5 The hard part and the reason why Council6 added the notification requirement as7 soon as you become a candidate or within8 three days, you have to notify the board9 of basic information about your campaign,10 your bank accounts, your treasurer so11 that we can communicate better with you12 and monitor compliance.13 And so, what we have done is,14 we've done several things. We have sent15 letters to all candidates since the16 petition filing, petition deadline. Once17 everybody had their petitions in, we knew18 who was a candidate. And so, we got19 copies of those petitions.20 And those petitions list the21 home addresses of the candidates, so we22 sent a letter to all of the candidates23 reminding them -- well, first telling24 them that they are subject to the City's25 35 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 campaign finance law, that we administer2 it and enforce it, advising them of the3 notification requirement, enclosing a4 copy of regulation number one, which5 gives a comprehensive interpretation of6 the campaign finance law, and invites7 them to campaign finance training.8 We've held six trainings so9 far. We have three more scheduled,10 including one today -- tomorrow, at 111 o'clock. We've trained 75 people so far12 in our communications to candidate13 campaigns and treasurers. We urge them14 to send at least one representative to15 attend campaign finance training, which16 is really the best way to get a handle on17 the requirements of the law.18
We have also19 provided information packets at the20 Records Department and the City21 Commissioners, so we've tried to touch22 every possible base.23
Are they24 giving them out?25 36 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
My understanding2 is, Tim Dowling is giving information3 packets to the City Commissioner's Office4 on Delaware Avenue.5
Okay,6 thank you.7 Thank you, Madam Chair.8 COUNCIL PRESIDENT VERNA:9 You're welcome.10 The Chair recognizes Councilman11 Kenney.12
Thank you,13 Madam Chair.14 Going back to Councilman15 Clarke's line of questioning relative to16 kind of red flags that may come up as a17 result of the passage of this law.18 I mean, I've been around19 campaign financing and campaigns for20 thirty years and in the time prior to21 when we passed all of this ethics and22 campaign finance changes.23 I mean, there are other signs24 too, other red flags that you could look25 37 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 to, and that is that one -- PAC A is the2 sole provider of funds to PAC B, C, and3 D, or that on the same day that a $10,0004 check goes from PAC A to PAC B, it goes5 out the door in the same amount. I mean,6 there are lots of red flags.7 I think you're going to have8 trouble finding anyone to admit that9 they've done it. But, I mean, if you go10 through and look at, you know, the clear11 nexus between the PACs and their12 activities, I think it'd be better served13 looking at those red flags as opposed to14 waiting for someone to admit that they've15 colluded and --16
Oh, we would17 definitely look for those red flags, and18 we have seen things along the lines19 you've suggested.20
The same21 day or the next day is usually a pretty22 good red flag.23
Okay, thank25 38 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 you.2
Actually,9 my question was more pretty much along10 the same lines as Councilwoman Sanchez.11 I just wanted to make sure that12 candidates knew, and there was going to13 be a whole good process of educating14 people around these laws and reaching out15 to them and training. So I am glad to16 hear that you do -- that you're on top of17 that.18 And if packets are in the City19 Commissioner's office and the records20 room, are they telling people they're21 there? Shouldn't have to hunt for22 this -- shouldn't have to search for23 this.24
Okay. We've been25 39 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 told me by Tim Dowling that he2 automatically gives our packet to any3 City candidate who files with him.4
Okay.5 And also, I did see that you have on your6 website something in plain language. I7 don't have that --8
That's right.9 The plain English version of the law that10 we're required to publish that's the11 subject of Bill No. 110073, it is on our12 website currently. And then the13 amendment to the law would require us to14 maintain that on the website.15
Okay, all16 right, 'cause I kind of thought before17 that you thought automatically, people18 knew to go on your website and you really19 kind of knew -- and I don't think most20 people even knew you existed.21 So I didn't want you to22 automatically think that people23 understood your role and these laws,24 'cause I think that's where a lot of the25 40 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 confusion came in before.2
And we're doing3 our best to try to eliminate that4 confusion and increase awareness and5 understanding and also to be more6 accessible to requests for guidance and7 advice on the law as well.8
Thank14 you.15 The Chair recognizes Councilman16 Jones.17
Just two22 quick questions for the record.23 This process, by way of24 adjudication, does not eliminate an25 41 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 individual's right to go to court and opt2 to seek redress if they don't agree with3 things.4
That is correct.5 What this would do is, it would permit us6 to administratively adjudicate these7 potential violations of these Charter8 sections the same way we would9 administratively adjudicate violations of10 the Ethics Code, the campaign finance11 law, or the lobbying law.12 And once you have an13 administrative adjudication, if a14 respondent is not pleased with the15 outcome, they have the right to challenge16 that ruling in the Court of Common Pleas17 so that they would have the opportunity18 to have a court review the matter for19 certain issues.20
And then the21 second question: In that adjudication22 process, it is still open, transparent to23 the public?24
Correct. The25 42 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 administrative adjudications under2 regulation number two are public3 hearings. You have a right of4 representation, you have a right to5 respond to the board's allegations before6 the hearing, and you have a chance to7 present your case at that hearing.8
Thank you.12 (Councilwoman Tasco assumes13 chairmanship of hearing.)14
I apologize21 for my lateness; I had a Criminal Justice22 Advisory Board meeting this morning, so23 I'm sorry I missed your testimony.24 I have a couple of questions25 43 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 about the two bills.2 The first relates to the3 administrative adjudication. And having4 missed your testimony but just having5 heard your conversation with Councilman6 Jones, this would give you the authority7 to administratively adjudicate Charter8 violations?9
Yes, of the three10 Charter provisions identified in the11 bill.12
Okay.13 Recently, in amending the Ethics Code and14 other provisions of the code, we15 eliminated references to the Charter that16 had what I'll call "the death penalty,"17 for lack of a better term, which18 basically said you could be removed from19 office or not allowed to -- for sort of20 minor violations, and that's what the law21 currently is.22 Does the Charter still have --23 I mean, explain to me -- I cannot recall24 if the death penalty provision is in the25 44 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 Charter and the Charter has not been2 amended. And by now giving you3 administrative authority over these4 Charter provisions, we're essentially5 giving you back the death penalty, which6 we just took away.7
Good question.8 There are two things at work.9 There's what you're referring to as "the10 death penalty," which we refer to as the11 "disqualification provision," which12 existed in various code provisions, and13 that was taken out of the penalty14 provision of the Ethics Code last year,15 and we supported that effort.16 Separately, there were17 provisions throughout the code and in the18 Charter which called for imprisonment of19 up to 90 days for violations. There was20 a 1990 or '91 Commonwealth case, the21 Penrose case, involving the City of22 Philadelphia. The City of Philadelphia23 was trying to recovery wage taxes that24 were owed to it by a Luzerne County-based25 45 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 firm.2 And the code provision3 contained an imprisonment penalty, and4 although the City was not seeking an5 imprisonment penalty, the Commonwealth6 Court affirmed the trial court's7 dismissal of the action, saying the rules8 of criminal procedure apply, you filed9 this in civil court, it belongs in10 criminal court, and the rules of criminal11 procedure apply.12 So after the Penrose case, the13 Law Department stripped out the14 imprisonment provisions wherever they15 could in the Charter to avoid this16 problem in the future because they were17 only seeking civil enforcement; they18 weren't seeking criminal penalties.19 However, there's a provision in20 Article 10 of the Charter, 10-109, which21 is the penalty provision for that entire22 article, and that includes -- the penalty23 says that violations are subject to a24 $300 monetary fine, and violations shall25 46 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 be a misdemeanor subject to imprisonment2 of not more than 90 days, I think it3 says. And in addition, if a violator is4 an employee of the City, they are subject5 to immediate dismissal and are ineligible6 for one year.7 So that's still in the Charter.8 It would take -- as you know, it would9 take a ballot question and voter approval10 to remove that provision. It's not as11 easy to get the imprisonment out the of12 the Charter as it is out of the code. So13 that's why it's still in there.14 And that's why it's a problem15 for us, because, right now, we can only16 go to court to enforce these provisions,17 including 10-107. And we discovered last18 year, in the course of an enforcement19 action that we were investigating, that20 we were going to have to go to Municipal21 Court, file a private criminal complaint,22 and if the rules of criminal procedure23 would apply to the proceedings.24 And so, to avoid that only25 47 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 option that we have, we're seeking to2 administratively adjudicate these3 matters, and the law limits us to civil4 penalties.5
And civil6 penalties do not include dismissal as an7 employee? Or removal from office? Or8 they do?9
Civil12 penalties do not include removal from13 office or dismissal as an employee, or14 they do?15
That's correct.16 The bill would only authorize us to17 impose civil monetary fines.18 However, a person who would be19 found in violation of those Charter20 provisions may be subject to removal from21 office anyway.22
By their24 supervisor.25 48 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731
Okay. But2 that has nothing to do with your3 authority.4
The board does8 not have equitable powers to compel9 someone to leave office. So the board10 would be limited to finding a violation11 of a Charter provision and then imposing12 monetary fines.13 And then the Charter says that14 a person found in violation of this15 chapter shall be subject to dismissal.16 So that would be an issue that would be17 dealt with outside or after the18 administrative hearing by the board.19
So said20 another way, by giving you the authority21 to adjudicate whether or not a Charter22 provision has been violated, assuming you23 agree that it had, a third party or an24 individual citizen or your supervisor or25 49 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 others could then bring an action to have2 somebody dismissed?3
I think any6 citizen right now can enforce a Charter7 provision under the terms of the Charter;8 is that not correct?9
I'm not sure10 about that. I'd have to -- I'd want to11 check with the Law Department. You may12 be right.13
Does the14 lawyer to your right know the answer to15 that question?16
My name is Michael17 Cooke. I'm the director of enforcement18 for the Board of Ethics.19 I do not know whether the20 Charter gives individual citizens a right21 to bring an action to enforce a Charter22 provision. It may well be that even if23 the Charter doesn't, and the individual24 could bring a mandamus action in court to25 50 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 compel an appointing authority to comply2 with the requirement of the Charter of3 removal.4 But I do think the key point5 from the board's perspective is, the6 board cannot order removal of an employee7 for a result of a Charter violation; all8 it can do is impose a fine. And in9 addition, the removal is only available10 for Charter violations.11 The bill doesn't reinstate that12 disqualification provision for any13 violation of 2600 or 21000.14
Okay. I15 just -- I'm not opposed to this. I just16 want it to be clear to everybody exactly17 what it is that, you know, the authority18 that you're being given can lead to a19 result from a third party, not the Ethics20 Board at any rate, that is sort of21 draconian as a result of the ruling you22 make.23
Now, if that25 51 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 ruling is appealed and overturned,2 obviously, that would have no impact; is3 that --4
Yes? Okay.9 My other question relates to10 political contributions and expenditures,11 and my question there is: Doesn't State12 law already say this?13
It does in part.14 It says -- State law has what is commonly15 referred to as "an anti-conduit16 provision," and that basically says that17 no person shall give money to another18 person for the purpose of making a19 political contribution.20 "Person" is not defined under21 the State law. It probably does not22 apply to PACs because -- again, because23 "person" is not defined under the law.24 I'm not aware of any interpretation of25 52 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 that --2
I am aware3 of interpretations at the State level4 that that applies to PACs. You can't,5 you know, give from one PAC to another6 PAC for the purpose of having that PAC7 give to another person. And it's my8 understanding that State law applies to9 Philadelphia as well.10
That's correct.11 It's a little bit different because what12 this rule would do, it would attribute13 that contribution to the first PAC for14 purposes of the contribution limits.15 So whether they can do it at16 all under State law is a slightly17 different question. If it is done, then18 that the contribution counts towards the19 limits for that first PAC. That's what20 this change would do.21
It doesn't23 prohibit -- so, in other words, PAC A,24 under our law, PAC A could not make a25 53 3.23.11 COMM. OF THE WHOLE, BILLS 11072, 731 contribution at all to the candidate,2 give $10,000 to PAC B, and PAC B makes3 the contribution to the candidate at the4 direction of the first PAC, and that5 would not violate the contribution6 limits, because they've only made a7 $10,000 contribution through another PAC.8 Now, whether they can do that9 under State law is a different question.10
Right, but11 I'm trying to understand. So who -- when12 you say "directs," I mean, what standards13 do you apply to determine -- what do you14 mean by "direct"?15 I just want the record to be16 clear and the legislative history to be17 clear.18