COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LAW AND GOVERNMENT - - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, November 10, 2004 10:20 a.m. - - - - BILLS 040769, 040770, 040771, 040772, 040773, 040774. RESOLUTIONS 040817, 040818, 040819. PRESENT: COUNCILMAN DAVID COHEN, Chair COUNCILMAN MICHAEL A. NUTTER COUNCILMAN JAMES KENNEY COUNCILMAN JUAN RAMOS COUNCILMAN FRANK DICICCO COUNCILMAN FRANK RIZZO COUNCILMAN JACK KELLY COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN RICHARD T. MARIANO - - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X WITNESS PAGE Dan McElhatton...................... MARK DAVIES, New York City Conflicts of Interest Board..... 49 LEANN PELHAM, Los Angeles City Ethics Commission............... 107 CARL SINGLEY........................ 138 E. RAY ZIES, Finance Director....... 180 PHILIP GOLDSMITH, Managing Director. 181 WILLIAM GAMBLE, Procurement......... 189 3 11/10/04 - LAW AND GOVERNMENT
The Committee on Law and Government is now in session for the purpose of conducting appropriate hearings on the proposed ethics bills. We're going to ask the Clerk of Committee, Julie Chapman, to read the titles and numbers of the various bills the Committee will be considering today. Ms. Chapman.
This is the Committee on Law and Government, and it will be considering the following bills and resolutions: Bill No. 040769, an ordinance 15 providing for the submission to the qualified electors of the City of Philadelphia of an amendment to the Philadelphia Home Rule Charter relating to the creation, appointment, powers, duties and funding of an independent Board of Ethics as approved by resolution of City Council; fixing the date of a special election for such purpose; prescribing the form of ballot question to be voted on; and authorizing the appropriate officers to publish notice and make arrangements for the 4 11/10/04 - LAW AND GOVERNMENT special election. Ordinance No. 040770, an ordinance 4 repealing Chapter 20-600 of the Philadelphia Code, entitled, "Standards of Conduct and Ethics," and enacting a new Chapter 20-600 of the Philadelphia Code entitled, "Standards of Conduct and Ethics," providing for the powers and duties of the Board of Ethics and the imposition of civil penalties and providing for the compensation of the members of the Board of Ethics, all under certain terms and conditions. Ordinance No. 040771, an ordinance 15 providing for the submission to the qualified electors of the City of Philadelphia of the proposal set forth in a resolution approved by Council proposing amendment of the Philadelphia Home Rule Charter relating to city leases, contracts, concessions and the provision of financial assistance; fixing the date of a special election for such purpose; prescribing the form of ballot question to be voted on; and authorizing the appropriate officers to publish notice and to make 5 11/10/04 - LAW AND GOVERNMENT arrangements for the special election. Ordinance No. 040772, an ordinance 4 amending Title 17 of the Philadelphia Code, entitled, "Contracts and Procurement," by adding provisions regulating the process by which the city awards professional services contracts and other non-competitively bid contracts and prohibiting persons from entering into such contracts or from receiving city financial assistance if they or certain related parties have made certain contributions to elected city officers or candidates for city offices, all under certain terms and conditions. Ordinance No. 040773, an ordinance 17 amending Chapter 20-700 of the Philadelphia Code, entitled, "Defense and Indemnification," by amending the terms and conditions under which the city provides defense and indemnification to its officers and employees in criminal matters including grand jury investigations and by requiring certain reports by the City Solicitor concerning such representation of city officers and employees, 6 11/10/04 - LAW AND GOVERNMENT all under certain terms and conditions. Ordinance No. 040774, an ordinance 4 providing for the submission to the qualified electors of the City of Philadelphia of the proposal set forth in a resolution approved by Council proposing amendment of the Philadelphia Home Rule Charter relating to the date by which the Mayor must submit to Council his operating budget message, proposed operating budget ordinance and proposed capital budget and capital program; and the date by which the Planning Commission must prepare and submit to the Mayor its recommended capital budget and capital program; fixing of the date of a special election for such purpose; prescribing the form of ballot question to be voted on; and authorizing the appropriate officers to publish notice and to make arrangements for the special election. Resolution 040817, a resolution 23 proposing an amendment to the Philadelphia Home Rule Charter to provide for the creation, appointment, powers and duties of an 7 11/10/04 - LAW AND GOVERNMENT independent Board of Ethics; to provide for annual appropriations for the Board of Ethics; and providing for the submission of the amendment to the electors of Philadelphia. Resolution No.
040818, a resolution 7 proposing an amendment to the Philadelphia Home Rule Charter relating to city leases, contracts, concessions and the provision of financial assistance; and providing for the submission of the amendment to the electors of Philadelphia. Resolution 040819, a resolution 14 proposing an amendment to the Philadelphia Home Rule Charter relating to the date by which the Mayor must submit to Council his operating budget message, proposed operating budget ordinance and proposed Capital Budget and capital program; and the date by which the Planning Commission must prepare and submit to the Mayor its recommended capital budget and capital program; and providing for the submission of the amendment to the electors of Philadelphia.
Interest in the 8 11/10/04 - LAW AND GOVERNMENT question of ethics is demonstrated by the audience here today. Just as the word ethics seems to baffle everyone, it also seems to baffle legislative bodies. Whether today will be just another routine day in the history of City Council or whether it will be the day that we begin to take our duties really seriously and begin to learn what ethics means to government and how public confidence depends on the ability of a legislative body and an executive body to govern themselves in a way to set a model for all employees, that will be determined by the action we take. Now, just one bit of housekeeping. I've informed Councilman Nutter, the sponsor of these bills, today that the Committee has to finish or I have to leave here by 1:00. So I hope everybody will be short. We appreciate those coming from far distances to impart to us their experiences and their aid. I'm hoping that when the books are totaled finally we will be a body which finally found the courage to do something so 9 11/10/04 - LAW AND GOVERNMENT that Philadelphians, instead of being ashamed of their government, can really be proud of it. At this point, I'm going to ask Councilman Nutter, who's the author of the bill, to make any statement he wishes to make as an introduction, and then to proceed with the calling of the witnesses.
Mr. Chairman, as usual, you have covered the breadth and width of the territory. I think your opening comments, I can only echo. I appreciate your support and assistance in moving this process forward, and I think all of us will benefit greatly by the comments and testimony by an excellent panel of witnesses. I don't want to delay that process any further. Thank you very much, Mr. Chairman, for all of your assistance in getting this hearing going. The first witness today, Mr. Chairman, is Dan McElhatton, who is a member of the 21st Century Review Forum, the Ethics Committee, as well as now a member of the 10 11/10/04 - LAW AND GOVERNMENT newly constituted Philadelphia Board of Ethics.
This body will always welcome Councilman McElhatton, whose tenure in office was an outstanding one here in City Council. Councilman, proceed.
Good morning, Mr. Chairman, Members of the Committee, Members of Council. Public service is a trust. The highest obligation of every individual in government is to fulfill that trust. Each person who undertakes the public trust assumes two paramount obligations; to serve the public interest and to perform with integrity. These are the commitments implicit in all public service. In addition to the faithful adherence to the ethical principles enjoined upon all honest and decent people, public employees have a duty to discern, understand and meet the needs of their fellow citizens. That is, after all, the definition of a public 11 11/10/04 - LAW AND GOVERNMENT servant. They're not my words. They're the words of Elliott Richardson, who chaired the working Group on Ethics of the Council for Excellence in Government. They do apply today and to Philadelphia. I appear today before the Committee on Law and Government in several capacities. First, as a member of the Board of Ethics appointed by Mayor Street in August of this year; second, as an active participant in the 21st Century Review Forum Committee on Ethics, which issued its report in March; and lastly, as a resident of the City, as an attorney engaged in the life of the City, and as someone who is committed and remains committed to make this city the best place to live, work, and raise our families. Earlier this year, the Board of Ethics was charged by the Mayor to begin the process of establishing a system whereby education and enforcement of ethical issues is enhanced to begin the process. The Ethics Committee of the 21st Century Review Forum, under the leadership of Judge Ida Chen, spent 12 11/10/04 - LAW AND GOVERNMENT several months earlier this year researching, discussing, and recommending a series of specific reforms. I can tell you, Mr. Chairman, and Members of the Committee and Council, that all the participants worked extremely hard in that process. The materials that were presented to us, the materials that were made available to us and the people who were made available to us made the job one that was both daunting and easier in that regard. The legislative package which the Administration prepared and the legislation before this Committee today incorporates many of these recommendations. This entire process is a significant step forward in the right direction. The Board supports the legislative initiatives and recognizes that it's an ongoing process. I personally had hoped that in the hearing process, all of the legislation, the legislation before you today as well as those bills prepared and submitted on behalf of the Administration, would be heard with all the 13 11/10/04 - LAW AND GOVERNMENT witnesses at one time. That would have provided what I believe would be the best opportunity for dialog among all the disparate views on some of these issues. However, that is not my prerogative. It is the prerogative of this Council, which I certainly respect. Since I'll be unavailable when the Administration bills are scheduled before the Committee, which I understand is next week, I would ask Mr. Chairman that my testimony today be incorporated into the record for any future hearings.
All of the legislation is a starting point in the process. The role of this Council as the elected legislative body is to develop and refine details of all public policy. The Board of Ethics recognizes the need for engagement of the general public through hearings and the community interests through active participants. As you, Mr. Chairman, mentioned in your preliminary remarks, this is a difficult 14 11/10/04 - LAW AND GOVERNMENT issue even for those most heavily engaged in public policy discussions, and it is also one that the general citizenry has an active involvement in, but not necessarily knowing the details. Through the process of discussion and refinement, we anticipate the establishment of an enhanced Board of Ethics with support from all citizens, a jointly-created independent board with the political community and business. The Board appointed pursuant to the Mayor's executive order supports that goal. In effect, what that means, Mr. Chairman, Members of Council, is that the Board that currently is constituted probably will not exist a year from now. It will be a new Board composed of however this body and the Administration develops. I anticipated, and the Board anticipated, being active participants in the molding of whatever the final product is. A great deal of work has been done and we and you should build upon that work in a constructive and positive manner. 15 11/10/04 - LAW AND GOVERNMENT There are numerous issues and situations that were debated by both the 21st Century Review Forum and the Ethics Committee, which are now being addressed by the Board. They're difficult issues. Whether the issue is the constitution of the membership of the Board of Ethics or the issue of pay-to-play, there needs to be serious discussions on these matters. The crafting of the final product will necessitate involving judgements as to whether the matter should be legislatively enacted or handled by way of regulations. While this legislative process is ongoing, we the Board of Ethics have begun the process of building a foundation upon which this legislation or whatever legislation you develop and pass, we'll continue to build upon that. We recognize that at some point in the near future there may be a new Board in place. Until that time, we are committed to the process of reform as set forth by the Mayor in his executive order. Our responsibility is to help develop educational methods and review 16 11/10/04 - LAW AND GOVERNMENT specific issues or ethical concerns within the current framework. Frankly, the current framework is not what any of us would recommend for the future. We can discuss that in more detail in a moment. We cannot, however, and should not wait any longer to start the building of the structures needed to do the job. That's what starts here today. Everyone must recognize that we can't establish in 30 days or 6 months what has taken years to formulate in other cities. We can't, however, wait any longer to begin the process. Rest assured, Mr. Chairman and Members of Council, that the Board expects that these collaborative efforts among Council, the Administration, and the Board will result in some entity of which we can all be proud. Our citizens and our City deserve nothing less. I would also add, Mr. Chairman, that one of the most significant issues that we developed in the course of the 21st Century Review Forum was trying to come up with a role 17 11/10/04 - LAW AND GOVERNMENT model with how the new Board of Ethics would be constituted and some of the most important factors in that Board. We were assisted in that process by witnesses who will testify later this morning.
I would just like to mention several of the points to the Committee on Enforcement, Whistle Blowing and Discipline, of which I was the Chair, recommended certain things that were prerequisites to a successful Board of Ethics: Independence, proper staffing and funding, definition of the scope of responsibility of that Board, investigatory power and subpoena power, enforcement through sanctions. All of those things are critical. The Board as constituted now does not have the level of enforcement power, nor does it have the investigatory power. It may have, as we go forward, the staffing that we need to start the process. But certainly this Council and the Administration, I believe, will make a commitment to independence and to full staffing and funding for any Board of Ethics. 18 11/10/04 - LAW AND GOVERNMENT With that, Mr. Chairman, I'll conclude the formal remarks and be available for any questions that members of the panel might have.
Thank you very much, Councilman. Mr. Nutter, do you want to proceed with the questioning? Let me just start -- I hope I don't interfere with anybody's ground -- to indicate that this is, to my knowledge, the first beginning of a collaborative effort. Up until now the Council has been excluded from all participation in the ethics process. As far as I know, Council has never been involved. Council has never been asked by the Mayor for its thoughts with respect to setting up the ethics executive order. The Mayor has never asked City Council for any thoughts on any issues involving ethics. Therefore, let me state my view very briefly. I think there are two levels of ethics questions, and I'm going to be very interested in knowing whether or not you deal 19 11/10/04 - LAW AND GOVERNMENT and these bills deal with what I regard as a major issue. Unlike many things which start from the ground up, I think the ethics questions start from the top and seep down. I think there's a difference between ethics requirements for standard employees of City Council, whether Civil Service or not, and for top officials of city government. I think the rank and file city employee takes his cue or her cue from the tone set by the top, so I think that a real ethics law must take special effort to make certain that the right message is delivered by the top of the government. I think those ethics rules might well be different for the top management than it would be for normal employees. Going around the City, I've never heard anyone express any concern about the level of ethics practiced by the normal employee. We have laws that govern. Inspectors in various departments have found themselves in conflict with the law, and a number of them have gone off to jail when 20 11/10/04 - LAW AND GOVERNMENT their actions traverse the usual standards that we think of as law enforcement and as good ethics and good conduct by employees. But the one crying yawn of people is what's with the government on the major contracts, on the business aspect of government, not the way the employees perform their functions, but on the policy set by the main forces in government. For example, just most recently I cite the example -- and I'm going to be using that pretty much as my standard. I want to know what happens when an allegation like the one made recently -- and I pass no judgment as to the merits of the allegation -- about the Mayor receiving a $10,000 fee at one point from a corporation which later gets the City contract. I believe there's got to be a way to compel. I would have thought the Mayor would have been anxious to immediately answer the question whichever way he felt was warranted. But instead, our Mayor has followed the policy of doing absolutely nothing of vindicating his freedom from any 21 11/10/04 - LAW AND GOVERNMENT controls. It seems to me an ethics law has got to find a way to indicate to that Mayor that that's not the right way to proceed. Therefore, I'm interested in how does the ethics proposals presented by Councilman Nutter and next week presented by the Administration deal with that kind of situation? Because I think that cronyism doesn't ever exist because of actions of lower level employees, but exists because of the tone and quality of government set by the leadership. So with just saying that, I want everybody to know where my bias is in this process. I've got to find an answer that requires openness and gives people in Philadelphia the certainty that the government is clean, everything is above board and everything is open to questions and its questions will be promptly answered. Thank you. Councilman Nutter, the Chair recognizes you for the witness.
Mr. Chairman, I 22 11/10/04 - LAW AND GOVERNMENT appreciate that. Mr. McElhatton may want to respond to some or part of that.
Yes. Mr. Chairman, I concur in your concerns. I also think there is an obligation on the City to make sure that all employees are properly educated about what the guidelines and the requirements are. That's not the fancy part of what the ethics boards do in other jurisdictions, but it's a substantial part of what they do. To make sure that all of the employees know, not what the criminal laws are because these guidelines are not set up to deal with criminals -- criminals should be prosecuted -- but it is for all of the rank and file employees who may have questions about whether, is this a conflict of interest, can I do this, am I permitted to do certain things. We have to be in a position to educate and give guidance, and that's a significant component of what the Board of Ethics and the Conflict of Interest Board, particularly in other jurisdictions, will do. 23 11/10/04 - LAW AND GOVERNMENT I also agree that with regard to issues such as you mentioned, that transparency and immediate disclosure and review of those things is appropriate. If a Board of Ethics is set up and it's independent and it has the authority that I think it should have under a Charter change and legislation by Council, it would have the authority to compel people to answer certain questions under penalty of some sanctions. The Board set up now does not, and it is not the end result of a long process. It's an intermediate step. So I share your concerns about the perceptions that the public would have about things that are in the front page of the paper.
Thank you, Mr. Chairman. Mr. McElhatton, you have through previous service and certainly now with the 21st Century Review Forum and other work that 24 11/10/04 - LAW AND GOVERNMENT you've done -- you've developed a certain expertise and background in these areas. I also know that you are aware of the many models of ethics boards and codes of conduct across the country, and we will hear from some other witnesses who have their own perspectives on these matters. It does not necessarily mean that anyone is right or wrong or better than the other; they're just different. So in that context, I'd like to ask a number of questions based on the variety of models that might be in practice across the country. The first is with regard to the composition of the Board as proposed in the legislation before us today. I'd like your opinion with regard to qualifications of members and whether or not public servants should be members of a Board of Ethics?
I think that public employees should not be. I think that anyone who serves as a member of the Board of Ethics would be a public servant. Telling you how much time I've spent in the past year on this, 25 11/10/04 - LAW AND GOVERNMENT it is a significant commitment of your time and resources. I do not believe that it's appropriate to have public employees. It's unfortunate in that regard. I think the person who is probably much more expert on the area of ethics and all of the permutations of it in this City is Judge Ida Chen. No one worked harder and no one digested more materials than Judge Chen, and she knows it better than, I think, anyone. But she has another job for which she was elected and has sworn an oath. So I don't believe that public employees should be members of the Board. With regard to qualifications, I think that if you mandate that they must be attorneys, we're going to sometimes be tied down in so much minutia that it becomes counter-productive. I think that a broad cross-section of folks is appropriate. I also believe that it is within the prerogative of the Executive or the Legislature to define if there are specific qualifications.
Do you recall 11/10/04 - LAW AND GOVERNMENT any specific recommendation from the 21st Century Review Forum, specifically with regard to composition or this issue of public employees serving?
My recollection is -- and I have reviewed the report. My recollection was that it be either five or seven members appointed by the Mayor. I don't have a specific recollection as to whether it excluded public employees. I know there was discussion about that. And I know that some legislation has it being all Council appointees. Other legislation has it all mayoral appointees. Other legislation has it a mix, the Mayor and Council. I know other jurisdictions have other entities that appoint, and that could be cumbersome and there could be a question of accountability. If you set up the entity to truly be independent with staggered terms, then I think accountability to the appointing authority should not be as significant an issue.
Let me move on to the next. 27 11/10/04 - LAW AND GOVERNMENT Naturally, you have the start of the process, which is appointment. There may come a circumstance or situation where removal may be necessary. You've had an opportunity to look at this particular legislation. Do you have any comment with regard to the removal standards and whether or not they would meet your criteria for the highest possible standards?
Councilman, I can't really say that I've studied the removal provisions. I would recommend, however, that if there is removal, that there be almost an immediate or a very short turnaround and almost an automatic triggering position for the appointment of board members, because you would not want to put on to the remaining board members the responsibilities that should be justifiably shared. However that's developed, I think, is within the purview of both the legislators and the executive. If I can go back to one point, and that was I'd like to respond to Councilman Cohen's question regarding communications. 28 11/10/04 - LAW AND GOVERNMENT Mr. Chairman and Members of Council, I'm here as a member of the Board of Ethics, as somebody who was asked to be involved in the process and agreed to. I believe in communicating with both the Administration and with Council on the issues that are before you. Councilman Nutter and I have had some extensive conversations most recently in the last several weeks about these issues. I've reflected on that. I'm not here for the Administration or against the Administration. I'm here as somebody who cares deeply about these issues in the City.
I understand. Just a couple last questions. With regard to one of the provisions, there are some prohibited activities by members of the Board and even certain staff with regard to, again, being a public employee or doing business with the City, making campaign contributions or even running for office. Do you have any view on those kinds of prohibited activities for 29 11/10/04 - LAW AND GOVERNMENT members of a Board of Ethics?
I have mixed views on those. Frankly, if you were to have blanket prohibitions, for example, blanket prohibitions that the business with which someone is affiliated cannot have any business with the City of Philadelphia, could we be excluding people who would really take their public service to heart? For example, if such a blanket absolute prohibition existed and Council were to develop a bill and the Mayor were to ask the chairman of Comcast Corporation to serve as one of the board members or the chairman of Exelon or Blue Cross-Blue Shield, people who have been deeply committed to the future of this City, would we be excluding people who would really do a good job because there's a tangential involvement? I think the way to remedy that is you don't want to exclude too many folks, but have transparency and have all the appointees disclose whatever affiliations there are for business that they or their companies or their 30 11/10/04 - LAW AND GOVERNMENT firms, in the case of lawyers, do with the City of Philadelphia, and then people can make judgments as to whether or not that's a good appointment or whether the appointment by that person is skewed by their background. That's a difficult issue. Blanket prohibitions might start to really limit the number of people who are qualified and willing to serve.
Two last items. Moving out of the Ethics Board Bill. Your views based on your service with 21st Century Review Forum or your personal views on the issue of the what's often been referred to as the food or meal or gift exception. Again, there are many models across the country. Some allow for nothing. Some allow what I think would be considered a di minimus amount. What's your view on that issue?
My personal view is that if a di minimus amount were put in place, that that could be something that's workable. This was an area of significant debate among all of the participants of the 21st Century Review Forum. We reached a consensus to have 31 11/10/04 - LAW AND GOVERNMENT a bright line. I may personally have disagreed with that because I think there are so many situations where we don't want to handicap the City employee. For example, years ago I worked in the Department of Recreation as an assistant recreation leader. If I were then asked to go to the Boys and Girls Club that happened to operate at the recreation center I was working and go to their annual dinner, would that be, quote, a gift to the City or would that be a gift to me? Those kinds of things, when there's the bright line, it makes it really difficult. We as a board now are dealing with some of those issues as they relate to whether something is a gift to the City or whether it's a personal gift. I think we all would recognize that there are certain things that if someone who is trying to get business with the Law Department takes the City Solicitor and tries to take the City Solicitor on a vacation to the Cayman Islands, you know, that's -- well, 32 11/10/04 - LAW AND GOVERNMENT not the Cayman Islands, but it's a week in Atlantic City, and then you go back from that, what's a lunch at the Palm? So there's always various differences of degree, and I think it's a difficult issue. My personal opinion is that some flexibility is needed. Reasonable people have disagreed with me on that, as they have on other things in the past.
You've been known to be reasonable and unreasonable at times. You cover the full gamut.
Your group was talking about this luncheon or things like that is an effort by top management to divert the issues. That's what I believe. I don't think there's any question whatever and ought not occupy anybody's time. If there's a general invitation to the Department of Recreation low level employees, they can take it. Nobody is bribing them. There's nothing they can do about it and it's one way of expressing support for them. To say that that raises 33 11/10/04 - LAW AND GOVERNMENT ethics questions, I think is merely an effort to mislead people and to get them to think that there is an ethics problem on the lower level, leaving undisturbed the real cronyism that may exist and the real problems that set the tone for the City. I think the main and probably really only the sole problem of ethics standards in the City relates to the top policy, which relates to the award of contracts where the City pays heavily. It's the City that makes the campaign contributions, not the business. The business is only name grantor, but it's really the City that pays. Any business to survive has to provide for repayment of all its costs. And its costs include whatever it costs to be on the good graces of those who are going to make the decision. So that the campaign contributions as they exist now are paid, in my judgment, not by businesses, they're really paid by the taxpayers, raising enormously the cost the government. In an effort to hide that, we begin talking ethical questions of low level 34 11/10/04 - LAW AND GOVERNMENT employees. I don't know of any significant problems raised by low level employees. If they have questions, I agree with you, this Board ought to have jurisdiction over it. They ought to be able to answer questions and give guidance. The real problem in Philadelphia is that of cronyism at the top level. Is the atmosphere in Philadelphia created by the low level employee who may accept a questionable lunch? And under the circumstances you mentioned where the offer was made to recreation employees as against the real threat of was the contribution of $185,000 made by a developer three weeks before Mayor Street's election, was that an effort to corrupt the government? Anybody who says, no, it was made because the developer loved the Mayor or thought he deserved reelection has to be living in a different world than the world that citizens of Philadelphia live on. I would like to concentrate the attention of a new ethics board on where I believe the real problem exists, and that is, 35 11/10/04 - LAW AND GOVERNMENT what is the tone and atmosphere and conduct that the top officials are permitted to follow? Why don't we deal with examples they're setting in that fashion for the lower level employees?
Councilman, I don't disagree with you that all of it is through the entire government. I would disagree with what I interpreted to be your belief that my example was to try to divert the attention from --
I can tell you that from the 21st Century Review Forum, our efforts were -- I used that example because I happened to work in Recreation. But the examples that were brought to us at the time we were looking at this issue were not just lower level employees, but they were employees at the commissioner level. For example, if a commissioner of one of the departments was asked to give a presentation on something they had done for 36 11/10/04 - LAW AND GOVERNMENT the department that was innovative, but the presentation was going to be in another City and the company that was handling that presentation was somebody who dealt with the City, is that a gift to the City or is that an improper gratuity to that deputy or that commissioner? There are real issues that I think higher level employees need to have some guidance on. I don't disagree with you that on issues of a contribution by a developer, that's an issue that must be addressed. I believe there are ways to start to address that. Transparency is one of them in terms of immediate reporting of that, immediate reporting of any contracts and having access by Internet to campaign finance reports and the list of who receives the contracts. And then the voters can decide whether elected officials have crossed the line in their own minds.
Any further 37 11/10/04 - LAW AND GOVERNMENT questions?
Thank you, Councilman. Thank you, Councilman McElhatton. Good morning. I'm sorry to hear you won't be here next week.
I would have been, except that I frankly start a homicide trial before Judge Heckler in Bucks County. As much I'd like to be here and not there --
Good luck in that, Councilman. I'm going to ask you a question I would have asked you then. One of the differences between the council bills and the mayoral bills that we'll be working on next week is the prohibition of elected officials, the Mayor and City Council, with holding any other outside jobs. You're in a very good position. You were a Councilman, you're an attorney, and you're on that Ethics Board. I would have asked that 38 11/10/04 - LAW AND GOVERNMENT question next week. There's two attorneys left here in Council. There's two very good attorneys here. How can we work around that? What Councilman Cohen was getting at is a little bit more deep than what I would be getting at. But it does shows some impropriety. For instance, some of the Councilpeople have other jobs that really have nothing to do with the City of Philadelphia. I'm looking at Councilman Rizzo. He's on the radio. Other Councilpeople may do different things and may do work with the City. As long as it's all, as you called it, available and we can see what it is, there shouldn't be a problem. Could you tell me your feelings on that?
The 21st Century Review Forum, we didn't directly address the issue of conflicting employment, but the Ethics Board has talked about that. I'll give you how it came up in the Ethics Board and 39 11/10/04 - LAW AND GOVERNMENT then I'll give you my personal opinion based on practicing law for 30 years, having been a member of this body. The Board of Ethics was presented with some situations from the Inspector General in which the Inspector General talked about potential conflicts of interest of people who were in sensitive positions. Let's say Information Services. I don't think that's what he used. An employee who works for MOIS, if that employee then tries to moonlight to get extra income, and the company they moonlight with has a contract, existing contract or a renewed contract, that could create a conflict where proprietary information is taken outside the proper areas. That was what was discussed by the Board of Ethics, and we believe that should be addressed. Whether it's addressed by legislation or how I believe personally could be some disclosure form and disclosure to the Commissioner, to the Administration, that can handle those kinds of problems. There are a lot of City employees 40 11/10/04 - LAW AND GOVERNMENT who might have really incidental jobs. I know I had this discussion with Councilman Nutter. The City, for example, might have a contract with Staples. If an employee moonlights at night or on the weekends at Staples and they're working in recreation, we shouldn't be concerned about that. We shouldn't have any problem with that. With regard to Commission level or Administration top notch people, top level people, I think when you take that position, you forego any outside employment. I think that's what the Mayor requires. And the mayors, in my knowledge, have always required that. Council is a different animal and it's a different entity, and I don't think personally that Councilmembers should be prohibited from holding outside employment. I don't think they should because if you reduce the scope of folks who might want to serve to those who only do this full time, you might limit the number of people who want the job. You may have for other reasons eliminated 41 11/10/04 - LAW AND GOVERNMENT folks who want the job, but that's a different issue. When I served in Council, I did hold outside employment as counsel to a firm. We never had a conflict. It didn't do any city work. It did do some state work. I know Councilman O'Neill, whenever any matters came before the Council Committees or Council, he would recuse himself. Attorneys have an ethical obligation for such recusal. I think that that same ethical obligation could be imputed to others who do things. Councilman Rizzo, you mentioned, does a radio program. Look, I know as well as anybody outside of the seven of you, how hard all of you work. Whether people believe it or not, I know how hard the job is. And if you do something on the outside, you're not doing it cutting into the time you put into public service. But I don't think you should be prohibited. That's my personal opinion. That's not the opinion of the 21st Century Review Forum, nor the Board of Ethics. 42 11/10/04 - LAW AND GOVERNMENT
When you say it's not their opinion, do you mean they have not arrived at an opinion, or they hold an adverse opinion?
We didn't address it in the 21st Century Review Forum. The Ethics Board talked about the issue and recognized that in the examples that were given to us of high level city employees that might have some other employment, that there should be some policy and procedure in place. I believe the Administration decided that it was their decision, their opinion, it should be legislative. My personal opinion is that it may not have to be legislative. It could be the Commissioner or could be the Mayor who says any employee of the commission level or certain levels can't have outside employment. And anybody else who has employment to a certain degree needs to get an okay. Let's say the second tier City employees, they need 43 11/10/04 - LAW AND GOVERNMENT to get their boss' or their commissioner's approval so that you limit the availability and the opportunity for conflicts that could cause a problem in the future. I think there's something now in the Code that does require some of that. But again, there's so many different things that have been developed over the years, we as a City do not have a consistent and precise pattern, nor do we have any entity that an employee can go to and say, "I need guidance. I'm the Deputy Commissioner for Recreation, and now I want to referee games on the side. Can I do that?"
Well, I've always thought that that existed, in fact, that if you were an employee and had that kind of question, you talk to your supervisor. Your supervisor might feel not prepared, or if he feels prepared he or she could advise you. If not, they would raise it with a higher level. It would ultimately get to the top level, the City Solicitor or the Mayor. I think we have such an informal procedure. I have no 44 11/10/04 - LAW AND GOVERNMENT objection to a formal procedure.
I think you're right; it was informal. And I think formalizing it gives everybody a much greater handle of what they can and can't do.
Yes. But the point I was making before is I have no 9 objection to that. But I don't think that's the problem of cronyism in Philadelphia. I think the problem stems from the very top. The very top sets an atmosphere and employees adapt to that atmosphere. It's true not only in government, but in business. The quality performance is often determined from on top rather than from the bottom leading upwards. That's the reason I think the grand jury probe developed, not from lower level conduct, but from the atmosphere developed by the top Administration over many years. I'm not blaming this particular Mayor. I think Governor Rendell was probably the architect of the tremendous campaign financing scandals that have enveloped the 45 11/10/04 - LAW AND GOVERNMENT City over these years and have created the impression widespread that in Philadelphia you get a contract by buying it. I think that's very unhealthy from every point of view and we ought to clear it up. And I think many people get caught up in a web that they don't want to be caught in. I think an Ethics Board could clear that up quickly by the elements that you've mentioned and that these bills deal with. The element of transparency. The element of responding quickly to things and clearing the situation. I think it ought to be clear the bidder that gets the contract from Philadelphia, whether it's a bid or a no-bid contract, gets it on merit and on the quality of services rendered and the product delivered, not on any contribution made. And I think it would cut the cost of government tremendously at the same time that it would begin the policy of good government in Philadelphia. That's the reason I'm emphasizing legislation that deals with the upper echelon, because I think that's where 46 11/10/04 - LAW AND GOVERNMENT it's needed. Do any Members of the Committee have any questions of Councilman McElhatton? You never lose your title, and the services you rendered while in Council deserve your continuing claim to that title. Councilman Rizzo.
Councilman, I just want to understand. Let's say a police officer wants to work off duty and they want to work in the district that they work in on a Saturday, Sunday evening, off their schedule. And the location that they would be working would be a place that they could possibly have to police or to respond. How would they be affected?
Councilman Rizzo, I appreciate the question. There's no 20 specific provision in this bill or I think any other piece of legislation that deals specifically with that particular police officer. Because first and foremost, I believe the police officers are governed by their own code of conduct within the 47 11/10/04 - LAW AND GOVERNMENT Department and they have to be in compliance with the rules and regulations as laid down by the Police Commissioner. I think, as you well know, presently I think it's still the case, police officers on active duty cannot work in the district in which they live. I believe that's been the rule for some time. In any event, that officer, I think, before doing anything, should probably check with his supervising officer to see what his situation is, his or her situation is. As has been laid out in this testimony back and forth, at a minimum, if we had an active, functioning Board of Ethics, they would be able to go and get advice. But certainly, first, they really want to check probably with their captain.
That's an interesting point because we all know that there's the police reimbursable program where police officers can work off duty --
-- for overtime. 48 11/10/04 - LAW AND GOVERNMENT But I'm not sure that that restricts a police officer that works in the 16th District from working off duty in the 16th District. I'm not sure of that.
That's a policy like you mentioned, that would be internal.
Any other questions of Councilman McElhatton? (No response.)
Thank you very much for being available. We'll try to arrange before ultimate decisions are made to get your views with respect to the choices between various provisions of bills that may exist.
Thank you, Mr. Chairman. I've given my opinions on those things. I'll be glad to share additional opinions. The judgments as to which of the legislations, that's yours and solely within 49 11/10/04 - LAW AND GOVERNMENT your prerogative. I lost that chance to influence that a number of years ago. Thank you, sir.
Thank you. Mr. Chairman, the next witness is Mark Davies.
Mr. Davies, could you please say your name for the record, and if you would also give us a little bit of background information. You're, unfortunately, not as well known as the previous speaker.
Thank you very much. Certainly. Mark Davies. I'm the Executive Director of the New York City Conflicts of Interest Board, which is the Ethics Board of the City of New York. Mr. Chair and Members of the Council, it's an honor to be invited to address you today. It's also an honor to share the spotlight here with LeAnn Pelham, the Executive Director of the Los Angeles City 50 11/10/04 - LAW AND GOVERNMENT Ethics Commission, which is certainly one of the premier ethics boards in the United States, and she is certainly one of the preeminent executive directors in this country.
I've been asked to focus today really on the fundamentals of an effective municipal ethics law and also briefly to comment on the ethics proposals before the Council that have been introduced by Councilmember Nutter. My testimony will be about minutes long. After which, I'll be 16 pleased to respond to any questions that you 17 may have, either today or in the future. I'd 18 also request that my comments be incorporated 19 into the record for the upcoming hearing on 20 the other ethics proposal next week, if I may. 21
Thank you, Mr. Chair. 23 By way of background, I currently 24 serve, as I mentioned, as the Executive 25 Director of New York City's Ethics Board. I 51 11/10/04 - LAW AND GOVERNMENT previously served as Executive Director of the New York State Temporary Commission on Local Government Ethics, which had statewide jurisdiction over local government ethics in New York State. I am testifying, however, not on behalf of the Conflicts of Interest Board, but as an expert in government ethics laws generally, and municipal ethics laws specifically. I spent the majority of my career, however, not in government service, but in the private sector and private practice as an attorney with a brief stint as a full-time law professor. In private practice, I represented for many years a number of towns and villages in New York State. I was also active in local party politics, serving as a district leader in my own town for several years and as a treasurer of town campaigns. I also ran for election as a major party candidate for New York State's Supreme Court, which is New York State's trial court of general jurisdiction. Thus, my approach to ethics laws is not that of a pie in the sky academic or as an 52 11/10/04 - LAW AND GOVERNMENT enforcement zealot, but as someone who has advised clients about these laws and who has been subject to them. I know how a bad ethics law or a good ethics law badly administered can mess up someone's personal and professional life or prevent elected officials from doing the job they were elected to do. Let me make this very clear right up front. A bad ethics law is worse than no 11 ethics law at all. If you're going to do this, you have to do it right. If you do not, as I have seen many times in the past, you'll be hammered in the press, hounded by civic groups, crucified by political opponents and skewered at the ballot box. But a good ethics law is worth all the risk and all the effort. That said, in ethics laws more than in any other remedial legislation, we can never let the perfect be the enemy of the good. We will never enact or even draft a perfect ethics law. We do not need a perfect ethics law. We only need a good ethics law, and a good ethics law is not that hard to do. In fact, the proposals that you have before 53 11/10/04 - LAW AND GOVERNMENT you are pretty darn close. I've distributed a one-page outline that I'll be going down that includes my remarks as well as a booklet that I prepared for Judge Chen's committee on this topic. I also gave the Committee a number of other materials that are available on sample ethics laws and so forth. With all due respect to academics, as I mentioned, I was and still am a law professor myself. Most academic pieces one reads on government ethics display an appalling ignorance of the purpose and bases of government ethics laws, and in particular how these laws play out in practice. This is not some kind of glass bead game. When we enact and enforce these laws, we interfere in people's lives in a very fundamental way, where even a hint by an ethics board that an official may have engaged in improper conduct can throw an election or destroy a career or rob someone of his or her livelihood. Many would agree that when the New York State Commission on Government Integrity issued its 54 11/10/04 - LAW AND GOVERNMENT report on "Playing Ball With City Hall" in 1989, it cost Ed Koch the election. So this is serious business. Moreover, very few public officials and even fewer private citizens, in particular civic groups, understand the purposes and principles underlying these laws. But until we understand why we have ethics laws and understand what they do and what they do not do, we cannot possibly draft, implement, interpret or enforce an effective ethics law. It's not possible. Therefore, let me turn, first of all, to the purpose and principles underlying government ethics laws.
This has been what I've been asked to testify on today and it's primarily the basis as to why we have these laws and what they should be doing. As I mention in the outline, the purpose of government ethics laws is to promote both the reality and the perception of integrity in government by preventing unethical conduct before it occurs. I do not believe, as some politicians are fond of 55 11/10/04 - LAW AND GOVERNMENT saying, that perception is reality. But perception is critically important because regardless of how honest our public officials are, in fact, a democratic system of government cannot function properly if the public believes its public officials are corrupt. Inherent in this purpose are certain axioms, certain first principles against which every government ethics law and every government ethics board must be judged. Indeed it is important to understand not only what ethics laws do, but also what they do not do. If we expect them to do what they're not intended to do, then we'll be very disappointed. First, ethics laws and Ethics Boards focus not on punishment, but on prevention of unethical conduct. Once an ethical violation occurs, the damage is done. I think you've seen that yourselves. It's just one more nail in the coffin of public confidence in the integrity of government. We don't want to punish a violation. We want to stop that violation from ever occurring. Prevention is 56 11/10/04 - LAW AND GOVERNMENT what it's all about. That's why ethics advice and ethics education are so critical. Second, ethics laws are not meant to catch crooks. These are not anti-corruption measures or penal laws. Not really. Indeed, ethics laws assume that the vast majority of government officials are honest and want to do the right thing. And you know what? That assumption is a fact. That's why conduct that is unethical under the law results overwhelmingly from employees' ignorance of what the law is. That's why officials need to know and have a right to know what the rules are. That's why ethics training and education is the single most important responsibility of an ethics agency. These ethics laws, therefore, guide the incorruptible and help deter the corruptible. They have virtually no effect on the corrupt, on the bribe receivers and the kickback takers. For them we have undercover operations and criminal laws and jail time. But that's for district attorneys, not ethics boards. Ethics boards are not in the business 57 11/10/04 - LAW AND GOVERNMENT of catching crooks. And if we expect them to do it, we'll be disappointed. That said, despite the inherent honesty of our public officials, we have massive conflicts of interests violations out there. That's true in New York City. It's true in New York State, Connecticut, New Jersey, Japan, China, Israel, Italy, France, I dare say even in Philadelphia. Indeed, within the past decade, government ethics laws have become a growth industry globally, particularly in emerging democracies and developing nations where the United States International Monetary Fund World Bank often tie financial aid to ethics and anti-corruption efforts. Third, government ethics laws do not regulate morality. We call them ethics laws, but they're really not ethics laws. They're not really about ethics at all in the sense of right and wrong, good and evil, moral and immoral. Rather, they're about the reality and the perception of divided loyalty of conflicts, primarily financial conflicts, between one's private interest and public 58 11/10/04 - LAW AND GOVERNMENT duties. That's why in 1989 our name was changed from the Board of Ethics to the Conflicts of Interests Board; a change I would not recommend since everybody thinks we deal with conflict resolution, but that's the reason it was made. It may be unethical, for example, for the principal of a school to spend $50,000 for a new bathroom for his office when the kids don't even have textbooks.
But even if that's unethical, it's not a violation of conflicts of interest law, nor should it be. And that's why, contrary to what many public officials will often tell us, the Ten Commandments are not enough because we're not dealing with morality here. By the way, this government ethics stuff has been around for a long, long time. In this country it started during the American Civil War. In France it goes back to 1254 when Louis IX promulgated government ethics laws 750 years ago. The fourth principle is that ethics laws are not intended to punish inefficiency, 59 11/10/04 - LAW AND GOVERNMENT yet at the same time these laws do save money, for example, by preventing sweetheart deals with former city employees, or with the business partners of current city officials. These laws protect the public against, for example, a building inspector looking the other way because he works on the outside for the developer he's supposed to inspect. These laws also level the playing field for the private sector, particularly for small businesses, which in the past have traditionally supported these laws, because small businesses cannot afford to give 50 bottles of scotch at holiday time or to hire high-priced former city officials or to send current city officials to Florida in February. So while ethics laws have no announced economic intent, they do have an economic impact. Finally, ethics laws should encourage citizens to participate in government by providing guidance to public officials and reassurance to citizens that their public servants are serving the public 60 11/10/04 - LAW AND GOVERNMENT and not themselves. We must never forget that good government requires good people in government. But when ethics laws become so onerous that good citizens refuse to serve or when ethics laws become so convoluted or so divorced from common sense that government officials unwittingly violate them or knowingly ignore them, then ethics laws promote unethical conduct and foster bad government. And if your ethics law does that, it belongs in the rubbish. With the fundamental purposes of ethics laws and their underlying principles in mind, I'd like to turn to the structure of an effective municipal ethics law. An effective government ethics law rests upon three pillars. If you remove any of these pillars, the entire structure will collapse. The first pillar is a clear and comprehensive code of ethics or conflicts of interest code. The second pillar is sensible disclosure, transactional, applicant and annual disclosure. The third pillar is effective administration, an independent 61 11/10/04 - LAW AND GOVERNMENT ethics board that provides quick answers to ethics questions, trains officials in the ethics law, that regulates disclosure and enforces the code of ethics. An ethics law that does not meet these requirements, for example, that lacks an independent board with the power to impose civil fines is not only a flawed law, it is a bad law. Again, a bad ethics law is worse than no ethics law at all. If I can turn then to these three pillars. The first pillar is the code of ethics, which forms the heart and the soul of an ethics law. The code of ethics must be clear, comprehensive, straightforward, sensible and short. Simple and sensible. Public officials cannot obey an ethics code they do not understand. They will obey only grudgingly, if at all, an ethics code that does not make sense to them. We must remember that the vast majority of municipal employees are laypersons with limited access to attorneys. We should keep in mind the trial lawyers' adage, KIS, Keep It Simple. Something, I regret to say, New York City has 62 11/10/04 - LAW AND GOVERNMENT not done. In New York City we have substantively one of the best ethics laws in the country, but its complexity would sometimes make The Internal Revenue code blush. A few other drafting maxims. Whenever possible, ethics codes should contain bright line rules.
In my experience, public officials, and particularly elected officials, would rather have a no answer than an unclear answer. Definitions, lawyers love definitions. Laypersons hate them. They should be minimized and not included in the code itself. An exception to the ethics code, again, should be clear, not confusing, and should be limited and not in the ethics code itself, in a separate section. Codes of ethics must be tailored to the particular government. You can't just take an ethics code from some other government and put it in place in your own. For example, we've had a lot of 63 11/10/04 - LAW AND GOVERNMENT visitors from foreign countries in New York City's Conflicts of Interests Board. Once we had some high level government officials from the West African country of Senegal. And we discussed our ethics law. Afterwards they commented, that was very interesting, particularly your gifts provision; but that wouldn't work in Senegal because in Senegal it is a custom when a public official does something for you, you give that official a goat. " So you see, the problems are the same all over the world, whether you're in New York or Philadelphia or a small town in the Midwest or Italy or France, in Senegal; it doesn't matter. The way that the ethics code addresses those problems is not the same in every jurisdiction. You have to make sure that your ethics code is crafted to address your particular issues with respect to each of those problems. What we're aiming at is an ethics 64 11/10/04 - LAW AND GOVERNMENT code that contains a simple list of do's and don'ts that the public official without a lawyer can understand, and that a government employee, particularly lower level government employees, can hold up to an outside employer or a vendor or a relative or a supervisor who's putting the squeeze on him and say, "Hey, wait a minute. I can't do that. I'd like to help you out, but I can't do it. Read the ethics code. " A clear and comprehensive code of ethics is a public official's best friend. It's your best friend because it tells you what the rules are and keeps you out of trouble. Finally, the ethics law must place upon the public, that is upon private citizens, vendors, developers and the like, some responsibility for public officials complying with the ethics law. It is utterly unconscionable that a private citizen or firm can with complete impunity induce a public official to violate the ethics code, but that happens every day. That's again another flaw 65 11/10/04 - LAW AND GOVERNMENT that we have in New York. We do not have provisions that address conflicts by the private sector inducing conflicts by the public officials. The second pillar is disclosure. Ethics laws typically include three kinds of disclosure; transactional disclosure, applicant disclosure and annual disclosure. The most important kind of disclosure is transactional disclosure. That is disclosure when a potential conflict actually arises. You're on the Zoning Board of Appeals. I'd like to state for the record that I work for the company who's applying for this zoning variance, so I recuse myself from any discussion or vote on the matter. This is pinpoint disclosure recusal. Rarely does any public official object to that kind of disclosure. But it must be in the code of ethics. The second form of disclosure is applicant disclosure. Basically, that's a check on transactional disclosure that applicants for permits and licenses and 66 11/10/04 - LAW AND GOVERNMENT contracts have to disclose the interest of a public official in that application to the extent they know. The third kind of disclosure is by far the most controversial, most misunderstood and the most abused. That is annual financial disclosure. Too often annual financial disclosure is viewed as a magic bullet that will cure all ethical ills. It will not. Let me make something crystal clear here. Blunder bust annual financial disclosure is a scam. It is a cruel hoax.
It is perpetrated on the public by good government groups in particular, and by politicians who want to make us think they've done something about ethics when they haven't. Forget the code of ethics. We just have disclosure. Disclosure won't do it. And certainly these blunder bust forms are wrong. How many times have we heard reformers say the sunshine is the best disinfectant? Yeah, well that's true. But guess what? Too much sunshine causes cancer. When these blunder bust annual financial disclosure forms were introduced in 67 11/10/04 - LAW AND GOVERNMENT local government in New York State in 1991, over 300 county officials resigned. To this day, some municipal boards cannot find members because of these forms. Indeed these blunder bust forms assume that every public official is a crook. They don't make any sense. They're unintelligible. They put the entire burden on officials and none on private citizens. And they focus on punishment, not prevention. In other words, they violate just about every principle that I've talked about in terms of a good ethics law. When is the last time you saw in a financial disclosure report, "Bribes accepted, $3,000"? It never happens. That's not what their purpose is. But make no mistake about it, sensible annual disclosure that complies with the purposes and principles I've outlined is critical to an effective ethics system because annual disclosure, if it is sensible, focuses the official's attention at least once a year on the ethics law. It alerts the public official, the public, the media, supervisors and vendors of the official's possible 68 11/10/04 - LAW AND GOVERNMENT conflicts, provides a check on transactional disclosure and, bottom line, helps avoid ethics violation. This is the entire purpose of this law, is to avoid the violations to start with. Prevention, that's the name of the game. So applying the purposes and principles of ethics law generally specifically to annual disclosure, what do we come up with? Number one, the annual disclosure form has to be tied to the code of ethics. That is a major problem in New York City because ours is mandated by the state. For example, if it's not a conflict of interest for a City Councilmember to award a contract to IBM when the Councilmember owns only $1,000 in IBM stock, then that stock should not be reported in the annual disclosure form. It can't be a conflict of interest. Why report it? I would only include questions in the financial disclosure form for which a need exists. Creating a financial disclosure form is an exercise in zero based drafting. You 69 11/10/04 - LAW AND GOVERNMENT start with a blank sheet of paper and you only include what are the relevant questions. Nothing else. Do not ask for amounts on a financial disclosure form. Amounts, of course, that's incendiary to many people filling out financial disclosure forms, but they're also irrelevant. If you tie your financial disclosure form to your code of ethics, amounts don't mean anything. A $5,000 conflict or a $50,000 conflict is still a conflict. It's still in violation. The amount is irrelevant from a conflicts of interest perspective. As to who has to file, I would limit the universal filers to those public servants at significant risks for conflicts of interest: Elected officials, agency heads, deputy agency heads, assistant agency heads, members of boards, of commissions, whether paid or unpaid, policymakers, and those persons having discretionary authority with respect to bids, contracts, licenses and permits. Perhaps you want to include candidates for elected city office, as we do 70 11/10/04 - LAW AND GOVERNMENT in New York City, and political party chairs. The reports must be available to the media and the public. The financial disclosure reports must be public, because it is the public, particularly the media, that ferret out conflicts of interest. You need to work toward electronic filing.
We've just started a pilot project on actually the day before yesterday in New York City because only when these reports are full text searchable and can be compared against other databases, for example, vendor lists and no-bid contracts, can you really find conflicts of interest in the forms. Also, you need to provide for late filing fines and significant penalties for failure to file, for failure to report required information or for misstatement of it. Our overall financial disclosure compliance rate in New York City exceeds 98 percent. For current employees, it is 100 percent because, and only because, we impose substantial fines for non-compliance with the financial disclosure law. 71 11/10/04 - LAW AND GOVERNMENT Again, remember to keep the financial disclosure form short and simple. I always think of it like zucchini. More and bigger is not necessarily better. You want to keep them short. New York City's form, because it is mandated by New York State, is a 31abomination. The handout contains a fourform that we're hoping to introduce in the City if we get state approval. It is sufficient for all but a handful of officials, but it's sufficient for the vast majority. The third pillar of an ethics law is effective administration, in particular an independent ethics board that provides quick answers to ethics questions, that trains officials on the law, that regulates disclosure, that enforces the ethics law. Above all, the ethics law must be administered, interpreted, and enforced by an independent ethics board, independent both in reality and in appearance. Without independence, no one will believe an ethics board's actions are fair and impartial, 72 11/10/04 - LAW AND GOVERNMENT particularly when the Ethics Board rules in favor of a public official, which makes the Board useless from a public official's, particularly elected official's, perspective. An ethics board's independence derives from four touchstones. First of all, the quality and independence of ethics board members. They must be appointed for fixed terms and term limited, removable only for cause after a hearing. None of them may hold any other public office. In particular, none of them may be an officer employee of the City. That is critical. Service by insiders will seriously compromise the board's independence and integrity, if not in practice, then certainly in the perception of the public and public servants. Municipal employees will hesitate to seek advice or file 20 complaints, and few will believe that the board's actions are truly objective. Ethics board members also may not lobby or do business with the City or hold or run for public office while on the Board. They must be persons of substance whose 73 11/10/04 - LAW AND GOVERNMENT integrity is beyond reproach. They should receive only minimal compensation, if any, for service on the Ethics Board. They may be appointed by the Mayor, but only with the advice and consent of the Council. Be careful of split appointments. I know they've had them. They worked in Los Angeles. I would recommend against them. They do not work well in most places. For example, you have three members appointed by the Mayor, one each by the majority and minority leaders of the Council. Split appointments can easily lead to pollicitation of the Board. It happens too often. Also, be careful of tying the ethics board membership to some other position, such as the head of a local council of churches or the president of a university. Such a process may take politics out of the appointment process, but at the risk of failing to obtain the best men and women for the job. Being on an ethics board requires a lot of hard work, intelligence, and common sense and, let's face 74 11/10/04 - LAW AND GOVERNMENT it, the ability to take a lot of abuse in silence. The second touchstone to ensure the Board's independence is budget protection. This is a major problem in New York City.
The ethics board's budget must be either guaranteed, for example, as a percentage of the City's total expense budget. That is clearly the best. Or set by the Ethics Board itself and alterable only upon agreement of the Mayor and the Council. Absent such protection, the Ethics Board operates at the budgetary whim of the Mayor or the Council, which seriously compromises the board's independence. That is a major problem for us in New York City. Staff must be hired and fired by and accountably solely to the Ethics Board; no one else. I happen to believe in patronage, but it has no place on the Ethics Board. Fourth. The powers of the Board. The Ethics Board must be the sole City agency authorized to interpret the ethics law, not the Law Department, nobody else. The Ethics 75 11/10/04 - LAW AND GOVERNMENT Board, subject only to court review, and the sole City agency empowered to grant waivers of the ethics law. By the way, the authority of an ethics board to grant waivers of the ethics law is very important, because sometimes an ethics provision just does not make sense in a particular situation. For example, suppose the City wants one of its employees to head up a foster care agency that is having serious problems. The ethics law would prevent it. You need a waiver provision. Waivers, by the way, would take care of this issue between these competing bills. In New York City, for example -- as an aside -- we prohibit any public servant, including elected officials, from having a position with a firm doing business with any agency of the city. However, our Board has the power to grant waivers. Waivers are public. They must be public because we have to ensure, the media has to ensure that in fact all the facts are 76 11/10/04 - LAW AND GOVERNMENT accurate and complete. We grant waivers. We have granted waivers for councilmembers, for example, saying, yes, subject to this and this and this condition, you can have a position with a firm doing business with the City of New York, but you are subject to certain restrictions, recusal, disclosure. You can't earn any money from your firm as to any dealings with the City of New York and so forth. It works very well, waivers. And the Board, of course, must be empowered to investigate possible violations of the ethics law. Let me address briefly the four essential functions of the Ethics Board: Legal advice, ethics training education, regulation of disclosure and enforcement.
Mr. Davies, I'm sorry. It's paining my heart to cut across you, but I'm trying to manage a little bit of time, both with the Chair and other witnesses. Now, let me just ask you one question real quick. Was that testimony a part of what was handed out or do we have 77 11/10/04 - LAW AND GOVERNMENT other handouts?
I could probably -- next week I can revise it. It's not in present form for handing out, but I can revise it.
I just wanted to make sure that if some of my colleagues have any questions, either in the areas that you've already covered or other possible places, that they might do that. And then we've got your colleague from the other side of the country behind you and one other individual. So just help me out through this difficult process. Thank you.
Should I turn just to the comment? I have comments I passed out. 20 I'm not going to go through them. There's a couple that I would highlight.
What I'd like to suggest with that -- because you and I, of course, have talked about many of these points. There are some amendments that will 78 11/10/04 - LAW AND GOVERNMENT be offered as a response to many of the items that you have already outlined and are in this particular document that comments on ethics proposals. Again, as we've discussed, some are significantly higher level than a few of the others. Could you maybe give us the highlights on the comments on ethics proposals on some of the items you feel are particularly --
Sure. Number one, of course, is the guaranteed budget, which you have in there, although I understand there's a typo. But what you have in there, that is ultimately critical. Another point is the powers and duties of the Ethics Board. The powers and the duties of the Ethics Board set forth in Bill 20-603, I find to be outstanding. All of those duties are essential. They cannot be cut.
How do any of 79 11/10/04 - LAW AND GOVERNMENT them affect the situation in Philadelphia? I find your discussion fascinating, but totally not applicable to the City of Philadelphia, where we have a problem of cronyism. How would any of your proposals have affected or changed the behavior of a city government in the case of two simple things that I raised before, the $10,000 legal fee allegedly given to the Mayor when he was President of City Council, to which he's not responded at all; and the question of the $165,000 contribution to the Mayor three weeks before an election, to which the Mayor did not respond in any way? How would the laws or principles that you've talked about have changed the behavior of the Mayor? Would it have said it's wrong? Does the Mayor know it's wrong?
No. The problem is if you don't have a clear code of ethics, you're all hanging in the wind.
How would that affect that? Suppose your New York code of 80 11/10/04 - LAW AND GOVERNMENT ethics were in effect and those two transactions occurred in New York City; what would the Ethics Board have done?
Well, first of all, under our code of ethics, they would probably have been prohibited because we have a prohibition on using your office for private gain.
Well, that's because you need an ethics board to interpret it and tell you that.
In our case, for example, in all likelihood, given our current Mayor, he would have, before doing it, called us and asked us, can I do this. And our response would have been, no, you can't do that. That would have been the end and it wouldn't have happened. That's what you want to do, is prevent it before. If, however, the Mayor did it 81 11/10/04 - LAW AND GOVERNMENT without consulting with us, which Mayor Bloomberg would never do, but if he had, then if we saw it in the paper, we would have initiated a complaint process, an enforcement process and we would have looked into it.
First of all, knowing no additional information other than what I've read in the newspaper with regard to the $10,000 check issue, which I believe news accounts report that it was not at the time that current Mayor Street was Mayor of the City, but was City Council President, the already existing provision in the Philadelphia Code does not allow for the acceptance of an honorarium in excess of $100. So if it was an honorarium -- and I don't know whether it was an honorarium or not, because I didn't know about it until I read about it in the newspaper. But if it were an honorarium, it would not be allowed. It's illegal. If it was for services, then it should be reported 82 11/10/04 - LAW AND GOVERNMENT on your financial disclosure form as a source of outside income or employment. I mean, it's one or the other. I don't know. But the Code presently is very clear. And I think there's also a state ethics statute as well on the issue of honorarium. But our present Code does not allow you to accept more than $100 for an honorarium. With regard to the $165,000 or $185,000 --
That doesn't answer that question, because he could answer that he included it in his legal income. He was then associated with a law firm. I mean, he could have just noted he got income. The state form does not require disclosure of the clients who pay your fee. It just says --
I understand that. Councilman, I'm not trying to answer for the Mayor. I'm trying to be responsive to the question. If it was income, then it's income. It should go on the financial disclosure form.
How do we find 83 11/10/04 - LAW AND GOVERNMENT that out?
You look at the financial disclosure form. It's either there or it's not.
Well, as the gentleman responded then, that's a matter for a functioning Board of Ethics. I don't think there's any dispute that in 1998, with every respect to anyone who may have been on the Board, if it was functional or people were appointed -- I think it's pretty clear that it wasn't functioning -- but if we had one, then they'd have something to do. That's the only response that I can give you
Thank you, Mr. Chairman. Mr. Davies, you are a legal professor?
In your 84 11/10/04 - LAW AND GOVERNMENT presentation, you make a distinction between ethics law and anti-corruption or criminal law. Can you elaborate upon that distinction?
Yes. That distinction, by the way, is only made, I think, in this country. I think the idea is that these conflicts of interest laws really focus upon this conflict between your private interests and your public duties. And the idea is to prevent these from ever occurring. Prevention is the focus. The anti-corruption would be your undercover operations, your bribery statutes, your criminal bribery statutes, that kind of thing. It's usually found in the criminal code as opposed to a conflicts of interest law.
Is it too simplistic to suggest that pay-to-play is already against the law?
Well, pay-to-play is usually not in the code of ethics as such.
That's not necessarily my question, Mr. Davies. My 85 11/10/04 - LAW AND GOVERNMENT original question was for you to elaborate upon the distinction between ethics law and anti-corruption and criminal law. And then my second question was, having made that distinction, is it too simplistic to suggest that pay-to-play is already against the law?
I'm not asking in the context of ethics law. I'm asking whether pay-to-play, as you would describe it from your experience, is already against the law?
In New York City, it could be a violation of the conflict of interests laws. And, of course, in certain circumstances it could be a violation, I suppose, of criminal law because you're essentially shaking down someone. If it's bribery, then it's a violation of criminal law.
But you don't hold that pay-to-play is against the law in the United States and probably in every legal 86 11/10/04 - LAW AND GOVERNMENT jurisdiction?
Again, the phrase "pay-to-play" I find to be too vague to answer the question. It depends on the particular facts and circumstances. It can be. It can be a violation of the particular. If someone, without any request of any kind whatsoever, someone makes a donation to a Councilmember's campaign two weeks before the bill or incident comes before the Council, I suppose that you could say that's pay-to-play, but I don't think that that would be considered a violation of any law that I'm aware of.
Your suggestion earlier in your testimony is that each city or state should determine what pay-to-play is and what is against the law?
And as a matter of ethics, not necessarily as a matter of criminal law?
Well, again, it may be criminal law if it's a real shake down, a 87 11/10/04 - LAW AND GOVERNMENT bribery or whatever. But certainly, one provision when I was with the state we proposed that really addresses this --
As a matter of criminal law, pay-to-play is already defined?
Mr. Davies, as far as your Ethics Board, are they full-time or part-time?
Absolutely part-time. They have $250 per diem, which we work out to be about $3,500 a year. However, they all waive their per diem, so we don't pay our Ethics Board Committee anything.
How many City 88 11/10/04 - LAW AND GOVERNMENT employees are there in New York City?
And this is just what you would consider a part-time position on the Ethics Board?
Could you give me an idea how many hours that they put into this? With that many employees, I would think that this is going to be a time-consuming position for them.
The Chair, who is a partner, Paul Wise, one of the large New York City firms, probably puts on the average, I'd say, about seven hours a week. It's part of his pro bono activities. The other board members probably put on the average about an hour and a half a week, I would say. Remember that 95 percent or 98 percent of the work is done by staff, not by the Board. I think that's very important to 89 11/10/04 - LAW AND GOVERNMENT understand the distinction. I think that's true in most places, including, for example, Los Angeles. Staff is the one that do the vast majority of the work. The only thing that goes to the Board is the determination if there's a violation or an advice matter where you can't determine on the basis of past law, based as a precedent, whether or not this is permitted or not permitted.
In other words, a staff member would do the preliminary investigation and whatnot and then bring it up to the Board?
Or the staff member might be making the decision? It would seem to me he would have to be if he's going to operate in such a few number of hours.
Well, if there's absolutely clearly no violation, we never take it to the Board, of course. But if it's a possible violation, then we take it to the Board. 90 11/10/04 - LAW AND GOVERNMENT For example, we receive about 550 written requests for advice a year. Of those 550, probably about or percent go to the 5 Board. All the rest are decided by staff. 6
You know we have approximately a tenth of the number of employees.
On the flip side of that outline I have, I have possible suggested staff. I mean, it's like anything else. You can't just say, well, we only have 10 percent of the employees. We only need 10 percent of the staff. It doesn't work that way. You have to have a minimum staff in order to function. Without financial disclosure, you would probably need about five staff members. 91 11/10/04 - LAW AND GOVERNMENT With financial disclosure then -- financial disclosure is very labor intensive, I have to tell you, even with short forms
Mr. Davies, is it true that as director you are in the process of trying to increase both the size of your staff and your budget?
Absolutely. Absolutely. Mayor Bloomberg is a big supporter. But, of course, when push comes to shove on the budget, you get cut. And we've been cut severely. So, yes, we are far too small. We should probably be a staff of probably about 30.
Mr. Davies, can New York City Councilpeople have outside income? Can they hold other jobs?
The restriction is they cannot have a position with a firm doing business with any agency of the City of New York without the Board's approval.
That was my next question. Let's say Councilman Nutter and I owned a firm and we wanted to do 92 11/10/04 - LAW AND GOVERNMENT business with the City of Philadelphia, and we were actively seeking work for this firm. The firm qualifies and does some business -- we're talking about the City of New York. Do we have to ask? We have to say, "This is what we want to try to do; is it all right for us to do it?"
You would come to us. You have to get a waiver from us. And we would say, "You can keep your partnership in that firm, you can work for that firm but, number one, you cannot communicate with any city agency on behalf of the firm; number two, you cannot receive any draw, any partnership cut, any salary that results from any City business. That is our typical ruling.
I don't think Congress people are allowed to have any outside income. Do you know if that's a true statement?
What I'm getting at is, with that imaginary company 93 11/10/04 - LAW AND GOVERNMENT that the Councilman and I have, how do we avoid talking to a procurement commissioner or L&I? We just don't talk about that issue that our imaginary company would deal with? It's all preventive. It's up to someone to report that if we violated that part of the code, which would be the commissioner or something?
It happens. In the handout there I have a list of 40 or so cases.
So if we deal with a company that does business with the City -- these people sitting here on my right go over those forms like it's a Bible, probably the day we file them. So if there's a problem, they sort of police us, correct?
I personally think that having some kind of prohibition on outside employment with a firm that does business with the City is a good idea, at least for higher level officials. Philadelphia fire fighters and so forth, it doesn't make any sense. Who cares? They should not have a position with a firm that's doing business with the Fire Department, they're selling goods to the Fire 94 11/10/04 - LAW AND GOVERNMENT Department, obviously. But who cares if they deal with, you know, sanitation.
Let me make it a little more personal. I'm still a member of the International Brotherhood of Electrical Workers, which is Local 98. Most of the people in Philadelphia have heard of that union. I am working for the union specifically. I'm working for the business manager or the business agent. Say I became the president of that union. I'm still a member and I run for president. I'm the president of that union. Now, our members work for companies that can do electrical work in this business. Would I be prohibited under New York City's code in that scenario? Because I'm not working for the company; I'm working for the union that supplies manpower. But you can see that there's a conflict there.
The company itself is doing business with the City, but the individual members are not doing business with the City, probably it would not be prohibited, except there's going to be an issue because if 95 11/10/04 - LAW AND GOVERNMENT -- the union does not as a union deal with the City?
It probably would not be an issue in New York City. It would be an issue, of course, if the union was a public employee.
Obviously. It's the building trades union. Thank you.
It just seems to me that this hearing is not going in the proper direction. I think it's important to have a sound ethics law that could have been done many years ago and should have been done, but none of this relates to the present problem. I don't know how setting up an ethics board that's mainly going to give advice to lower echelon employees is going to have any effect on changing the reputation of the City of Philadelphia. Historically, over many years and over many Administrations, Republican as well as Democratic, Philadelphia has been known as a place that's very complacent about 96 11/10/04 - LAW AND GOVERNMENT corruption. It alternates. When things are quiet for a while, everybody is happy. Then the stories develop again. It doesn't matter which Administration. Philadelphians as a group of citizens seem complacent. And right now we're at the point of not being complacent, and that happens too. But, you know, the graph goes up and down. The problem we have in Philadelphia today is a grand jury investigating, not the lower level employees. There's no basic problem there. Maybe our laws are not perfect, but you indicate they'll never be, whether it's an ethics board or criminal things, and we can do a much better job with the Ethics Board in helping the lower level employee. But that's not the concern of Philadelphians. The concern of Philadelphians is about a comfortable attitude in which the Mayor of Philadelphia and the Mayor before him said, "This is the way it is in Philadelphia. All businesses contribute to our campaigns, therefore, you can't say it's wrong. No one 97 11/10/04 - LAW AND GOVERNMENT is being favored because you make everybody contribute." It is true that if they don't contribute they won't be considered for a contract. Now, I'm interested in dealing with the present burning problem because it is burning. There's no reason why Philadelphia should not be a respected City or why we have to be content with cronyism.
Councilman, if can interject. A couple items. One of the reasons I asked Mr. Davies and Ms. Pelham to come, they run conflict of interest or ethics boards in two different cities on two different coasts. They primarily deal with conflicts issues and they can go into the other areas. One of the concerns you have mentioned on a number of occasions is about contracts and no-bid contracts and the like and who gets them and how it happens. There is a bill to deal with that. That is not their particular area of expertise. They work for boards and they help people with ethics 98 11/10/04 - LAW AND GOVERNMENT issues. There is a bill that requires a much more extensive process on advertising no-bid contracts, the restrictions proposed for contributions for people who would seek to get those contracts or during the time that they have them. With regard to when people make contributions or in what amounts; one, you know that Councilman Goode put forward a bill 12 on campaign finance restrictions. Whether you think it has gone far enough or stops certain things from happening, you know, could be an item of another conversation. But none of these things are particularly secrets. We all have to disclose our campaign contributions. There are more filing requirements during the campaign year. People know about these things, and the public ultimately makes its judgment. Lastly, we are all elected officials, and I think we are accountable in a very public way to the citizens of this City, and they will make certain demands on us or 99 11/10/04 - LAW AND GOVERNMENT they won't make certain demands on us. And then inherently, each person has to regulate their own conduct in the way they best see fit. Some of the corruption stuff that's being investigated was already illegal. It was already illegal. People choose sometimes apparently to break the law. So there is no 10 law, I think, that will ever be constructed that some person will not figure out a way to violate. If you want to take money from an outside business and not report it, and if there's no functioning board around, no one looking at reports, or if you choose not to put on your financial disclosure form, "Received $3,000 in cash for outside business activities," you'll choose not to do that. Quite honestly, I don't know what happens to the financial disclosure forms when we file them anyway. They go to the Department of Records and they probably sit in a box somewhere. I don't know that anybody does anything with them. Councilman Mariano makes reference 100 11/10/04 - LAW AND GOVERNMENT to the press looking at them. And they look at them and you put down what you put down. That's it. I've been in this City Council for years. I've never had a conversation with 6 anyone on the Board of Ethics. There is no 7 ethics training that I know of, at least for 8 us or any other public official. We've had 9 nothing going on for probably 20-plus years. 10 We're trying to rectify. 11 I don't know that this will be the 12 be all and end all. We'll probably continue 13 to have to do some things from time to time. If people want to accept the kind of garbage that's going on, then what are we to do?
I'm trying to find out whether all we're doing is diverting attention from the problem again.
I'm not trying to divert attention away from anything. I'm trying to put some attention on where the problem is. The problem was not people going to lunch. The problem was people getting contracts in an underground environment that no one knows anything about, and whether 101 11/10/04 - LAW AND GOVERNMENT they're paying to play or not paying to play or making contributions or whatever, no one seems to know how that process functions. And that's what the one bill is designed and geared toward. Other than what the Mayor just proposed this past summer, there has been no 9 Board of Ethics, no one has paid attention to this particular area, and we're trying to get to it. I believe, for instance, that you don't need a complete prohibition on meals and lunches and all this other kind of stuff. You're not going to find that in a 150indictment that was issued last summer. They are not talking about that. They're talking about big money and things that have gone on in the course of the government. So I trust the public employees, the overwhelming majority of them, that they can figure out the difference between doing their job or possibly selling out the government for a $25 lunch. I trust them to make those kinds of judgments. Most of the concern, you are 102 11/10/04 - LAW AND GOVERNMENT absolutely right, does go to the top. But at least under this particular provision, all of us would have to have ethics training on an annual basis. The goal here is not to try to catch people doing something wrong. You want to instill in them the concept that these things are wrong. You should know what the signs are and keep yourself out of trouble. That's what I believe we're trying to get done here.
It seems to me these bills are aimed at putting the matter on the ballot next year.
If you're going to have an independent Ethics Board, you've got to put the matter on the ballot under the Home Rule Charter.
It seems to me that Charter changes should be done only when there's no other way of doing it.
There's no other way of creating an independent Ethics Board in the City of Philadelphia other than the provision of under the Home Rule Charter you 103 11/10/04 - LAW AND GOVERNMENT have to amend the Charter and create it, just like the other seven independent boards or commissions in that particular section of the Charter. That gets you independence. That allows the Board to do whatever it needs to do.
All right. I certainly would like to see something relating to the present problem of Philadelphia. I'd like to see cronyism eliminated in government. It would just take the Mayor one minute to make an announcement that all campaign contributions are going to be refused from people who do business with the City. In that one statement, he would eliminate many of the financial problems of the City because he'd cut the cost of operation immediately and very substantially.
You could be absolutely right. I work on the fourth floor. I'm not on the second floor. I'm a legislator. The Mayor can make whatever announcements he wants to make or doesn't want to make. But I can't do anything about that. 104 11/10/04 - LAW AND GOVERNMENT The only thing I can do as a Member of City Council is put in bills and resolutions and try to get them passed and make sure that they're enforced. I cannot control some other individual.
Well, I'm hoping that through the witnesses from New York and Los Angeles and former Councilman McElhatton that we're going to find a way to deal directly with what the situation in the City of Philadelphia is.
Absolutely. We have Mr. Davies from New York and Ms. Pelham from Los Angeles and we have a former Dean of the Temple Law School, Mr. Singley. I think that we should get their information.
If I could just add, I guess, one final point. I think actually, with all due respect, you would find that if you outlined cronyism or whether you have your pay-to-play legislation -- and pay-to-play legislation is significant -- it's a separate 105 11/10/04 - LAW AND GOVERNMENT bill that's been talked about. The fact is if you still have that without an independent Ethics Board, you're just not going to have the kind of respect for your public officials that you want. It's just not going to happen. I think in New York City we've seen a huge change in the attitude and the view of public servants. Our reporters in New York City are barracudas. They're unbelievable. We've got all these newspapers in New York City. Despite that, though, you simply do not see the articles that you used to see about there being all this corruption in government and all the rest of it. That's partly, I think, because the ethics system in place.
I like their term, "Play Ball with City Hall." Is that what they use in New York?
I'll be quiet for a while. I'm looking at a way to get rid of cronyism once and for all.
Because I believe 106 11/10/04 - LAW AND GOVERNMENT the proposal of the Mayor based upon building on state law is intended to divert attention away from the City of Philadelphia. He knows we all know that getting a law passed in Pennsylvania on this will be a hundred times, maybe a thousand times more difficult than getting a law passed even in Philadelphia. So he says the answer is not Philadelphia law, but go to Pennsylvania. Now, that, to me, is a clear diversion of attention. I'm trying to bring attention back to, let's solve it here in Philadelphia.
I agree with you. Mr. Davies, are you able to stay for a few minutes?
I changed my train. I can stay. Do you have any other questions?
Any other questions from Members of the Committee? (No response.)
Seeing none. 107 11/10/04 - LAW AND GOVERNMENT Thank you very much for being here. We would appreciate if you could stay longer because questions may come up.
Ms. Leann Pelham. Ms. Pelham, please identify yourself for the record and give us a little bit of your background.
Thank you. Good afternoon, Councilmembers. My name is Leann Pelham, and I'm the Executive Director of the Los Angeles City Ethics Commission. Just by way of brief background, I have been fortunate enough to serve in the City of Los Angeles with the Ethics Commission now for 13 years. I've been there since its inception, and so I'm fascinated by the discussions that you're engaged in today and will be continuing to engage in over the coming weeks. This is a very, very important area, 108 11/10/04 - LAW AND GOVERNMENT and it's not easy, I know, from the history and from those in our city who have been engaged in these kinds of discussions. But the outcomes are critical, and I applaud you all for engaging in these discussions. I guess to sort of cut to the chase about my perspective, I approach these kinds of issues having had the experience of being at an agency at its inception and trying to make these laws work in practice. Prior to being at the Ethics Commission in the City of Los Angeles, I spent some time working at the national level on campaign finance reform and open government issues, and in the State of California auditing and working on program evaluations to make sure that state programs were effective and efficient. That was quite a challenging opportunity. I bring all of that to the table today to share with you just observations from my experience about what it takes to have an effective ethics agency and an ethics law. By way of a bit of additional background, to provide some context for the 109 11/10/04 - LAW AND GOVERNMENT work that we do, the City of Los Angeles Ethics Commission is actually somewhat of a misnomer. Our ethics commission is charged with not just administering and enforcing the city's ethics laws, but we also administer and enforce the city's lobbying ordinance for public disclosure of those activities, as well as a comprehensive campaign finance reform.
May I interrupt you just for a moment? Councilman Goode has a question.
I do have written comments, and I will leave them with you. They're mostly on the specifics of the package that's pending before you. I wanted to, in the interest of time, just focus comments on some of the larger issues that you've been addressing this morning. But, yes, I do have written comments to submit for the record, and they may be added to the record for any additional hearings that you have. That would be helpful as well. 110 11/10/04 - LAW AND GOVERNMENT
Again, in terms of the work that we do, just to get back to that for a moment, our office is really fairly unique. To the extent that Mark Davies suggested that we were effective, that we're doing things right in Los Angeles, it's only because we have people like Mark Davies around the country whose expertise and knowledge we can rely on over the years. But our focus is really broader than just the term "ethics" would indicate. We, as many jurisdictions around the country, grew out of controversy. Back in 1989 then Mayor Tom Bradley was involved in some controversy about conflicts of interests allegations and about the use of city commissioners and city time for political campaign purposes. To his lasting legacy and credit he, in response to that, established a blue ribbon citizen's commission called the Calan (ph) Commission, that spent over a year meeting with citizens, community groups, members of a 111 11/10/04 - LAW AND GOVERNMENT variety of communities around Los Angeles, and putting together a package of proposed reforms that dealt with the areas of ethics law and campaign financing and brought that, working with the City Council in Los Angeles, developed a package of ethics and campaign finance laws that were to take effect if the voters approved a ballot measure to create an independent ethics commission. In June of 1990, 57 percent of Los Angeles voters approved Proposition H, and by doing so created a semi-independent ethics commission with membership of five members, each appointed by a different elected official in our City, and created an agency whose responsibility is specifically to administer the laws, to advise people about the laws and ensure they have information that they need to audit campaign statements and to develop policies to make sure that laws stay strong and workable. Importantly, they also vested in the ethics commission authority to enforce the laws, and so I'll touch on that for a moment. 112 11/10/04 - LAW AND GOVERNMENT The Chairman asked earlier about how does an ethics commission affect the tone and the atmosphere and the conduct of City officials, city government. I think in short, if it's done right, it can accomplish three things. First, I think it can in fact blunt the effective sort of status quo attitude about business as usual. It reinvigorates, I think, people's sense that there's trust that they can have in government, about what's possible with government. Secondly, I think it also demonstrates a commitment to reenergizing the voters, an active and informed citizenry. We've seen that with agencies as they work on their public information and education activities. Very importantly, I think speaking to your point about the contracting issues and these so-called pay-to-play issues, I think for people whose work requires them to interact with city government, I think having an independent Ethics Board to help ensure 113 11/10/04 - LAW AND GOVERNMENT that the rules are fair and are fairly enforced, it can create and reinvigorate a sense that the government is worth doing business with. Those three things can be accomplished. The question is how. We had the opportunity to work with Mark at the national professional organization, the Council on Governmental Ethics Laws, in recent years on their steering Committee. Recently we heard an expert on ethics speak to the organization, a gentleman named Stuart Gelman (ph), with the Ethics Resource Center in Washington, DC. He's had experience dealing with business and government ethics over the last number of years. And as I think the discussion this morning indicates, he also echoed that bottom line, ethics proposals and ethics programs are complicated. He noted that they not only require codes of conduct, policing, commitment and the comportment with the law, but they also require effective implementation. That requires structures.
It requires programs, resources, communications strategies, program 114 11/10/04 - LAW AND GOVERNMENT evaluation and training. Well, in short, my analysis of these issues is that to be effective, there are three key components that are needed. One is that you obviously need good law. Having good, strong laws is the first step towards an effective program. First is, of course, having a good, strong law to make sure that issues that are causing concern are being addressed and being addressed effectively. The second key element, though, as I think Mark's comments also indicated, is that there needs to be the resources to do the job. Whatever function you decide is appropriate for the City, you need to fund it and staff it and resource it sufficiently. And third is I think the key element, which is the creation of an independent body that is different from elected officials, City employees and other civic leaders to do this work. I want to spend a minute talking about that. That question is I think often asked --
Go ahead. I'm 115 11/10/04 - LAW AND GOVERNMENT going to recess. I'm sorry for the interruption.
That's quite all right. Thank you. The key issue that I wanted to focus on with you this morning is the role of an independent commission and what role it plays, that it is different from the leadership that elected officials play and obviously create in preserving the public's trust. It's also different from the role that City employees play on an ongoing basis. I think the notion that keeps it different is that it is an agency that is separate and apart from those processes. We've talked about qualifications for people who serve on an Ethics Board. Los Angeles does have appointments from a variety of elected officials. In our jurisdiction, that has seemed to work over time. It has not created the kinds of dynamics that Mark referred to. But again, those are things that I think are shaped by the specific political cultures of the jurisdictions trying to come 116 11/10/04 - LAW AND GOVERNMENT up with laws that work for them. That's the approach that's worked for us. It may not work in all places. Having a Board whose job it is to focus specifically on the mandate that the voters have expressed, I think is critical. Having ethics commission members or Ethics Board members who are not engaged in outside political activities while they're regulating or overseeing those activities is also important. In the City Los Angeles, for example, our board members as well as the executive director of the Ethics Commission cannot participate in any City election campaign, whether to endorse, whether to contribute, whether to get out to vote. We simply can't engage in those activities. We have to have an arm's distance so that there is objectivity that comes with overseeing that political process. It's also important I think because when there is an enforcement role to play, the objectivity and the perception that that 117 11/10/04 - LAW AND GOVERNMENT process will be fair and impartial and objective is critical to ensuring that the public trusts the process. You spoke a few moments ago about the distinction between criminal activities and these other kinds of violations that can come from violating ethics laws. One of the things that the founders for our commission noted some years ago in this discussion was the following example: You might have a city attorney, for example, or perhaps an elected district attorney who has authority to bring cases to charge people with violations, misdemeanors or felonies for violations of these same laws. However, there have been instances over time where a decision to not proceed with the prosecution may be perceived to be a political decision simply because that person is an elected official. When we're talking about these kinds of violations of trying to ensure that these sorts of traffic ticket violations, if you will, are in fact enforced, I think it's really critical that there is an 118 11/10/04 - LAW AND GOVERNMENT independent body who can make those distinctions without any sense that they're being made because of political considerations. And so having an agency whose job it is to do that is important. I think of the analogy of if you were, for example, watching a basketball game. We don't talk football in Los Angeles since we have no football team. But basketball, we had a team and I understand at one time it was a good team. But if you imagine people watching a basketball game and there is no referee there to call the fouls. But having an official there who is going to call the foul as he sees them and hold the player accountable for that activity, that's important. Now, imagine a game where the game is played and there is no referee and there is no foul called and a team wins. The team may have played the game with fouls left and right. And if they win, they win, and people kind of say, hey, what a joke of the game. We know that these guys won because they had all 119 11/10/04 - LAW AND GOVERNMENT these fouls and they didn't play well. That's clear that that breeds cynicism.
But I would suggest there's another type of cynicism that can arise as well. If you have a situation where the referee is not in the game, and the game is played and the game is played flawlessly, the team who wins had no foul, but because there's no referee, I think people might still have the notion that they may have won, but we don't really know if they won fairly, so maybe we just won't go to the game next time. I think people become disaffected. People become disenfranchised because they fundamentally don't trust that the process is one that's fair for everybody. And so I think that also is a role that an independent, semi-autonomous or autonomous Ethics Board can play in the process, which is particularly important growing from controversy, as we have seen in many, many cases. These agencies arise, these laws arise because there's been some controversy that sparked them. Rightly or wrongly, I think the issues compel 120 11/10/04 - LAW AND GOVERNMENT jurisdictions and governments to think about how we can do something differently than what we've been doing. For us, in terms of the three key functions that can be served by an ethics commission or by an ethics body, I would say it's three things. It's education, it's information, and it's better accountability through enforcement. The information component I think is critical. Councilman Nutter earlier noted that there are often financial disclosure forms or lobbying forms or campaign finance statements that, for example, may be filed with public agencies, and yet they seem to be sitting in dusty file cabinets. That's not meaningful public disclosure. That makes a mockery of those disclosure laws, in my view, because they're simply requiring people to jump through hoops without having real attention or understanding of what the hoops are and why they're important, and what we learn from them, jumping from those hoops. What you see in other places is aggressive ways to 121 11/10/04 - LAW AND GOVERNMENT consolidate that information, make it available to the public, particularly in the campaign financing area. Our office has an on-line database that's searchable. People can go in to see who gave to city candidates, how much, when and who they are employed by. We are also applying that technology to lobbying disclosure reports so that people can see what the influences are that are shaping or attempting to shape city decisions. Having information available for the public is critical. It's also important to have information for the city officials and employees who are subject to these laws. I have some materials I'll leave with you just for the record. An example is a copy of our newsletter, the Public Trust. It's a quarterly newsletter. One of the things that we do is to try and in most understandable terms translate a 32-page ethics ordinance 24 into a four or six-page newsletter on a quarterly basis, reminding city officials and 122 11/10/04 - LAW AND GOVERNMENT employees about the do's and don'ts, reminding them about conflicts of interest and how to avoid them. These are some samples of materials that we produce and circulate widely to make sure people are aware of the laws and that they comply with them more easily.
I don't know of any objection to the foundation of an Ethics Board by any Member of this Committee or any Member of City Council. Maybe they exist. I haven't heard any opposition. I was merely trying to say that it seems to me we are dealing not with the problem that Philadelphia has. The problem Philadelphia has it seems to me is not the absence of an Ethics Board. I see nothing wrong. I think you're right and the other witness, Mr. Davies of New York, is right. An Ethics Board would be certainly far better than doing nothing, which we've done in Philadelphia. But I'm also looking for an answer to an approach that we can have to our present 123 11/10/04 - LAW AND GOVERNMENT situation in which pay-to-play is recognized as being officially proper, and in which the leader of the City says, this is how it's going to be. Because if we don't have a state law, nothing can happen except that outsiders can take over government. They will produce all the financing and the regular political parties will have no money. He's not going to tolerate that. Since all businesses feel they have to give money or do give money to the City, therefore there's nothing wrong, how can it discriminate against anyone if all of them do the same thing? Now, to me that's merely accepting the notion that you have to pay to play. And since it's my theory that a businessman, in order to stay in business, has to recoup his investments and earn money on them, the campaign finance contributions are really made by the taxpayer. I think that's bad for the cost to the City. And I think it gives the City a reputation that everything is for sale. I think it doesn't help the City. I think it hurts the City badly. 124 11/10/04 - LAW AND GOVERNMENT All I'm looking for is an indication as to how this, in addition to having all of the fine purposes of offering advice and assistance to regular employees, how it's going to change the culture of the City. How is it going to make the top brass of the City conform to normal ethical standards? I don't think it's ethical or professional or in the best interests of the City or economically to have a pay-to-play system. I think the only thing that ought to determine the awarded contracts are basic principles, such as basic costs and biddable contracts or the assistance given to minority businesses. I think that's what money ought to be spent for. We ought not to compel the businesses to make huge campaign contributions through the guise that's going now, that everybody has to pay in order to be considered for business. Because it's the taxpayer paying the money. I grant you, it's fine. I see nothing wrong in having an Ethics Board, and I 125 11/10/04 - LAW AND GOVERNMENT see much to be gained by diverting from doing nothing. So I don't need think we conviction, because I think you and Mr. Davies have both done a yeoman's work in explaining the basic goals and achievements of an Ethics Board. But I'm still looking for how this would avoid the present problem that Philadelphia has.
If I might respond or attempt to respond to that briefly, Councilman. A couple of points. One is I think part of the function of an Ethics Board is by design to ensure that the laws it administers and enforces are strong and make sense and are workable. In our jurisdiction at least, they can be vested with authority, and are vested with authority in our case, to make recommendation to the Council about laws to do just that. We've been dealing with these so-called pay-to-play issues in Los Angeles ourselves. There have been a number of controversies in the last year. And because of the nature of the commission and the independence that its established itself with 126 11/10/04 - LAW AND GOVERNMENT over the last decade, as these issues came to the forefront, the mayor brought forward some proposals, but the mayor didn't go straight to the Council. The mayor came to the Ethics Commission and said, I'd like these issues to be vetted, discussed, thought out. You people are the ones responsible for administering these laws and enforcing these laws. Let's make sure we have a package here that works and that is not simply put forward as an apparent solution to a problem, but one that takes the time and invests the energy and effort to really think through the ramifications of the proposals, their workability and their effectiveness. I guess I'm saying that it is a related issue because when there is an agency whose job it is to ensure that laws do work at the local level, that does help elevate the types of laws I think that can be in place, and it also, by educating and enforcing about those laws, raises the bar. It raises expectations in terms of standards for behavior. And when inadvertently or not those 127 11/10/04 - LAW AND GOVERNMENT lines are crossed, it provides for hopefully swift enforcement to correct when those problems exist. So I do think that that is a related topic. There are a number of issues I know you may all have questions about. I would just like to close very briefly by saying that, again, I think there are a number of jurisdictions around the country who are very heartened by the fact that a City like Philadelphia is grappling with these issues. It is not easy. As I said, the outcome is critical. But I think the leadership of this City is something that will go noticed, not just by other major cities, but the cities around the country. I'm very pleased that we had the opportunity to be a part of that, both in talking with Judge Chen's group last fall, and talking with Councilmember Nutter on these proposals pending before you. I would say that in terms of the contracting issues, I think some of the proposals that are pending in the package that 128 11/10/04 - LAW AND GOVERNMENT Councilman Nutter mentioned earlier, I think they do go a step in the right direction of making sure that there is transparency about the contracting process, when non-competitive bids or professional service contracts are at issue. I think that transparency in those processes is a key and a fundamental step to ensuring the public's trust that those processes are handled fairly. Again, I just want to say thank you for your time and for your interest in hearing from us. I'm more than happy to answer any questions that you might have about our experience in Los Angeles, if that's useful to you.
Thank you for visiting Philadelphia. How do you deal with an issue where a person -- Play Ball With City Hall, pay-to-play, whatever you refer to it in Los Angeles. When you have an organization or a principal does want to get politically involved, does want to support someone that 129 11/10/04 - LAW AND GOVERNMENT they believe in and could do a good job, and they legitimately get business with the City because their firm, A, is good and they provide a very important service, should the principal of the company just say, well, I'm just going to stay out of it? I'm not going to give anybody anything. Obviously, that's not how the process works. To be a player, you have to be involved in the political process. And part of being that, if you're not naive, is to pick the guy that's going to win or the lady that's going to and get involved financially with that candidate. How do you deal with the other side of the coin, trying to say that a major law firm, that the principal's partner is going to be involved in the political process should automatically not be able to be included in doing business with the City? It's difficult, at least for me personally, to try to understand that. Is there a legitimate way for a person to contribute and also do business with the City at the same time?
I think those are very 130 11/10/04 - LAW AND GOVERNMENT important questions and can be difficult ones. There's a range of solutions, and I think that this speaks again to the political culture and the issues that a jurisdiction is facing. In Los Angeles, for example, we do have contribution limits. We are a Charter city, so we have contribution limits. Our voters enacted them. I'm not a lawyer. Full disclosure, I'm not a lawyer. I let the lawyers debate issues about things like preemption and whether it applies and whether it doesn't. But we in Los Angeles are not preempted. We have contribution limits and have had them since 1985. That said, we still see concerns come up about the role of people who do business in significant ways with the City. Some call it pay-to-play. Call it what you will. But the issue is whether somebody should be prevented from giving a contribution in the first instance, or perhaps they should be banned from fundraising for somebody in city government. Will that help sever any perceived link between money and governmental 131 11/10/04 - LAW AND GOVERNMENT decisions, campaign money and governmental decisions? Because that's really the thrust of all of these approaches. We currently have a law that requires people who do business with the city, when they submit a bid, to disclose any contributions that they have given to elected officials in the City. The mayor has proposed it, and now it's a proposal that will be pending before our council shortly, to prohibit fundraising by those individuals, and also to prohibit them from making contributions. I argued -- I argued unsuccessfully, but I argued that contribution limits serve a purpose, since anybody, regardless of their professional title or background or position, should be able to give up to the limits, and that's what they're there for. The issue of fundraising is a larger question, particularly when that fundraising happens around the time of the contracting decision. We've also taken steps in the city to look at whether the activities of those who 132 11/10/04 - LAW AND GOVERNMENT are appointed by the mayor to serve as city commissioners, what kinds of roles they should have in the contracting decision process when it's behind closed doors and not in a full public session. So there's a range of options you can look at to try to sever the link, either real or perceived, between campaign money and government decision making. Again, it depends on sort of the specific issues that might be at play, but I think the goal of trying to sever that link is critical. One of things I find fascinating is that much of the involvement, when we talk about people's involvement in politics, in campaigns right now, it is always coming down to a question of financially being involved, being a financial supporter. And yet there are many other ways that people can support candidates, either through endorsements, getting out to vote activities, other things of that nature. So it's not just about money. I think the question is when it is political -- when political contributions are the only tool people use to express their support, the 133 11/10/04 - LAW AND GOVERNMENT question is if it's an expression of support that people feel they need to give in order to get city business. That's where the problem comes in. I think that's what these proposals try to address.
Good afternoon, Mr. Pelham. Your counterpart in New York talked about promoting both the perception and reality of integrity, and said that often politicians just talk about promoting the perception and don't deal with the reality. Can you speak to what you view as a reality of integrity, if there is such a thing? I hear you when you talk about pay-to-play. You used the term, so-called pay-to-play. I hear you talk about other possible infractions, talk about real or perceived. So describe the reality of the 134 11/10/04 - LAW AND GOVERNMENT situation to me and whether what each jurisdiction actually is dealing with is the perception of corruption in their own locality.
Well, I think this speaks to a question or comment you made earlier, is pay-to-play currently prohibited by criminal law. I would answer that bribery is currently a problem under criminal statutes. Extortion is a violation of the law. What's different in this realm is a system that people who participate in that system believe requires them to make contributions in order to be heard, or requires them to give gifts in order to have access. When there is a belief that operates in the system -- and this speaks to the perception question -- if people have a collective belief for whatever reason, whether it's because bribery actually happens and extortion actually happens, or just that there's some sense that maybe I don't get the 135 11/10/04 - LAW AND GOVERNMENT phone call returned as quickly until and unless I give the good gift or contribution --
I'm actually not asking you to speak for what happens in terms of perception. But this notion of reality, in terms of integrity. Your counterpart in New York, Mr. Davies, says that their ethics code is set up to promote both the perception and reality of integrity. But throughout your testimony, you've used the term, real or perceived as opposed to, and. And I want you to just talk to, what is reality in terms of integrity, if such a thing exists.
I think ethics codes are not about creating moral standards. I agree with Mark's comments on that. It's not about making people better people with any more integrity because of their parents or their rabbis or priests or ministers. It's about creating standards that everybody in that city or state agrees, these are the standards that we believe are important to make sure that in fact our process is fair and 136 11/10/04 - LAW AND GOVERNMENT that decisions are made only on their merits. We don't want people making decisions based on some financial gain that they might get from that, if they've got a financial interest in that type of enterprise. So having those kinds of laws in place in fact create systems that themselves have integrity because it ensures the people do not make decisions based on their financial interests or based on a contribution, for example.
And to pose Councilman Cohen's question a different way, should ethics laws be crafted to deal with specific perceived problems within a jurisdiction? Is that what happened in Los Angeles and is that what should happen in Philadelphia? Should we be drafting laws to deal with the perception of what has happened here?
I think it's both that. I think it's both recognition if there is a perception that government is for sale -- I'm not suggesting that is the case in Philadelphia or any other city or jurisdiction 137 11/10/04 - LAW AND GOVERNMENT -- but I think when there is repeated attention to a concern that expresses a lack of trust that the process is open for everybody and that it's fair for everybody, then that's the time for people to say, it's time to create some changes because we need to do everything we can to stop and to stem that kind of perception. The issue about when things are in fact happening, when there's corruption, when there are violations of the law, that speaks to having a body around who has the resources to ferret those out, to respond to allegations of violations, as well as to initiate investigations when the facts warrant that. So I think it's important to deal both with the perception as well as to deal with the real problems that have been identified when there are actual violations that have occurred. I'm not sure that the two are inseparable. I think they work closely together.
Any other 138 11/10/04 - LAW AND GOVERNMENT questions from Members of the Committee? (No response.)
If not, thank you very much. If you could stay a while longer, it will be helpful.
She's a captive of the City for the next day or so. Thank you, Ms. Pelham. Mr. Carl Singley.
Good afternoon. As I was listening to the testimony of my distinguished colleagues, it became apparent to me that my purpose in this hearing was perhaps to be a fact witness, as opposed to a process witness. And by that I mean that as a lawyer, you generally get people in the courtroom, Councilman Cohen, as you know, who can talk about process and who can be an expert witness on how process and procedures operate. And then sometimes you have a witness who can actually talk about the particulars of the facts in the case. 139 11/10/04 - LAW AND GOVERNMENT So I think my role today is probably going to be a little bit of both of those. That is to say, I heard a question relating to a $10,000 check that I'm sure was coincidental, but I happen to know something about that check. I don't have any documents to hand out. I did spend some time looking at the Ethics Commission's laws in about a dozen cities, including New York, as well as Los Angeles, Atlanta, Chicago, Dallas and several other places, and I can assure you that the two witnesses that have testified previously, the agencies and the cities that they represent clearly represent the best practices that I've been able to see as far as these ethics acts are concerned. You have in Mr. Davies as well as in Ms. Pelham probably two of the best people in the business. And so to the extent that you're trying to get it right from a technical and from a state-of-the-art perspective in terms of what's out there and what progressive cities are doing in terms of grappling with 140 11/10/04 - LAW AND GOVERNMENT this problem, clearly what they have proposed to you folks is a superior product. I thought what I'd do, though, is dwell a little bit on why I think you ought to listen to me or try to understand why Councilman Nutter invited me to come here and testify. Let me tell you a little bit about some of my qualifications that you may not know about. I was former First Deputy City Solicitor during the Green Administration. I've been a law professor for 30 years. During the course of that time, I've taught courses in criminal law, legal process, state and local government law, public finance, public administration and, last but not least, in legal ethics. I guess my real qualification is that as a practicing lawyer and a political fundraiser. I had been both a beneficiary of and a participant in the process in the system that you're seeking to reform by this legislation. I guess you might describe me as a reformed pay-to-player. So in that regard, 141 11/10/04 - LAW AND GOVERNMENT I know firsthand the potential that the system that is currently in place has to corrupt. Lord Acton said that power corrupts, and absolute power corrupts absolutely. So that I sort of come here then as an observer in the events over the last years, but also 8 as a participant, and I do underscore as a 9 beneficiary. " In that respect I think the game 12 determines who the players are. So it's not a 13 choice about hating the players. The decision 14 is to reform the game and reform the players. 15 The type of game, the process, whether you 16 call it "Play Ball With City Hall" or 17 "pay-to-play," it's clear that it is up to you 18 folks, the Members of the Council, to change 19 this system. The expectation is that you will 20 change it. Councilman Goode, I heard your question about this notion of pay-to-play. I don't think it's a legal concept. What it is is a continuum. What it means is that on one extreme you have people who are actually 142 11/10/04 - LAW AND GOVERNMENT paying money in order to get contracts and get business and get access. That is clearly criminal conduct. There is no doubt about it. And I think there are, in the District Attorney's Office and certainly the US Attorney's Office, institutions in government that have as their responsibility ferreting out and prosecuting criminal conduct.
What is also included in this concept of pay-to-play is the idea that in order to do something or to have access or to get your phone calls returned, you have to have juice, you have to have access, and normally that comes by way of political contributions. So that is the gray area that you folks have to try to regulate. I have some thoughts on how you address that. More specifically, let me just tell you that I appreciate this opportunity to talk. You should not underestimate as a Council the sort of contemporary and historical importance of the difficult task that you folks have in front of you right now. Politics and personalities aside, this is 143 11/10/04 - LAW AND GOVERNMENT vitally important and very difficult work. Abe Lincoln said that politicians think of the next election, but statesmen think of the next generation. The next generation, future generations in this town will judge you folks. They will judge how at this moment and at this time of crisis -- and it is that, Councilman Cohen. It is a crisis in public confidence and it is a crisis in public trust, and it is up to you folks to do something about it. History and future generations will judge you folks based on whether or not you had the heart and determination and the will to do something about it. There is one of these little success quotations that I like. " Now, that could be an argument for the status quo or it could be an argument for change. " With regard to the notion of ethics in Philadelphia, if you do what you've always done, you'll get what you've always gotten. It's been said that we sort of deserve the political leadership that we get, and I continue to believe that that's true. The flip side of that quote, that if you do what you've always done, you'll get what you've always gotten, can be sort of an argument for change. That if you want to change things and get something different, you have to do something differently. I don't think maintaining the status quo is an option for you folks at this point in time. " And it also tries the souls of women as well. I'm not going to make an effort to do the very detailed and thorough analysis. I looked at the work that Mr. Davies and Ms. Pelham did. I commend you. I mean, there's 145 11/10/04 - LAW AND GOVERNMENT nothing left to be said. They've said it all. It is as detailed, as thorough, as critical, as superb an analysis of the legislation pending before you that I can obviously imagine. But I do want to underscore a couple of points. The first point that I want to underscore is this idea of independence. I do like the Los Angeles model in which you combine several of the functions, Councilman Nutter, that we now have two or three bills pending to cover. I do like very much the idea that in Los Angeles the issue of disclosure, the issue of ethics, conflicts of interests, campaign contributions are all the responsibility of a single body. I would just emphasize that I think we need to have that responsibility concentrated in a single body that is clearly independent. I like the idea that this body would be nominated and appointed by the Mayor, but with the advice and consent of Council. That underscores this sort of historical checks and balances that the framers of this 146 11/10/04 - LAW AND GOVERNMENT Charter had in mind, and it also gives both of you all, both the legislative as well as the executive branch of government, a role and a responsibility to play in this process. I think the Charter amendment proposal to get it done so that you get the independence is really important because it does something else. It gives the people, the voters, the taxpayers an opportunity to be heard on this issue. The only time that they normally get to be heard is when they get to vote in elections every four years. But there is a ground swell of public concern and outrage over this so-called public pay-to-play.
What the Charter amendment does, is it gives them an opportunity to speak in very clear tones about the notion that they, the people, have the right to be fully informed about the affairs of their government. Because after all, it is their money. So I like the idea of the Charter provision. The second general observation that I would make is on the question of full public 147 11/10/04 - LAW AND GOVERNMENT disclosure. And you know, as simple an idea as it is, that's exactly what the goal ought to be, full and complete public disclosure. Sort of as a participant and a reformed pay-to-player, let me tell you a story that is personal to me. Two, in fact. You know, when I used to make money off of bond deals, which I used to do until a few years ago, the newspapers would report how much I made. " And I meant it. That is to say, if you choose to do business with the government, which is to say, get paid taxpayers' dollars, then you have no 19 expectation of privacy with regard to your financial dealings with the City of Philadelphia or any government. It's real simple. If you make money off of the government, then the public ought to know what you're making and the circumstances under which you make the money. 148 11/10/04 - LAW AND GOVERNMENT So the option, if I didn't want my business reported in the papers, I could choose not to do business with the government. And I believe that to my soul and to the bottom of my heart. I think that is one of the cores of the problems. The notion that there is somehow some right of privacy with regard to the affairs of government. The same is true of City officials. At every level in government, if you're making your living doing the public's business, being paid, then nothing you do that bears on your responsibility as a public employee ought to be private. You ought to fully disclose everything. My second story has to do with campaign contributions at a time when you represent a company -- and I've represented many, many companies that wanted to offer goods and services to the City of Philadelphia. Very often when people come into a town like this and a climate that is known to exist as is in the case of Philadelphia, they think that it's not enough 149 11/10/04 - LAW AND GOVERNMENT that the service that you offer may be the best service that the company offers, or that the price that they offer is a competitive price. They think that they need to do something else to get what it is to give them an edge. So it's not unusual for them to say, "I want to make a campaign contribution to somebody" while they have a matter pending. I've had them to say, "What kind of contribution would I need to make? " My point is, what kind of statement are you trying to make? If your product is good, if your service is superb, and if your price is competitive, that statement ought to speak for itself. " Now, the clear implication of that statement was that a part of that goes to my fee and the other part goes to whoever I need to pay off in order to make this happen 150 11/10/04 - LAW AND GOVERNMENT in the government. I suspect that what has happened over the last couple of decades in this City is that there is a widespread expectation that in order to be competitive in this town, you must find a certain person who has a certain relationship who can get things done and have access. That is to say, who can make a statement. So in my mind, I think what it is that you folks are doing at this point in time, in this moment in our history, is critically important. I firmly believe in full public disclosure. Without getting into the complicated details of the contracting provision for non-competitive contracts -- and I must concede, Councilman Nutter, that it was rather complicated. I think we can probably simplify it so it is accessible and understandable to everybody to whom it ought to apply, but I think the spirit of it is clearly right on the mark.
Just to repeat, full and complete 151 11/10/04 - LAW AND GOVERNMENT disclosure available to any member of the public about people who do business, seek to do business with government, what are your financial and business relationships, how much money did you give to whom and when. And if you're unwilling to make all of that information available, maybe you ought to do business strictly in the private sector. I think there's an expectation on the part of the public as a whole that you folks are going to give us what we need, that we just can't continue to do what we've always done. Just briefly on the membership of the Commission or the Board of Ethics, there is no specification of qualifications. There's no residency requirement. Some cities have a residency requirement for board members. I'm not recommending that.
We do. You have to be a resident in Philadelphia and a registered voter.
Okay. Well, that resolves one of the questions. I believe it 152 11/10/04 - LAW AND GOVERNMENT was Ms. Pelham's testimony -- or maybe it was Mr. Davies testimony -- Atlanta has a system in which a dozen different entities in the government have an opportunity to appoint a member to the commission. I don't think that's a good idea. I think probably the model that's used in Los Angeles or in New York is probably a preferable idea. I like the restrictions on political and financial activities of members of the Board of Ethics. They absolutely have to be politically independent and they have to be financially independent and have no stake whatsoever. Now, that necessarily limits the universe of people that you're going to choose from, but I think at this point in time you need to pay that price, if it is a price that you have to pay. I like the idea of staggered terms so that you get an opportunity to bring in a new infusion of ideas and approaches. I like the notion that you can't remove these members except for cause. All of these things, I think, are really critical to the notion of 153 11/10/04 - LAW AND GOVERNMENT independence. The powers that you are proposing for the commission are, again, best practices, state-of-the-art. All the way from the education component and training to the regulation, to the investigations, all of those things I think are essential to the success. I would just add that I think you might want to give the commission, if you haven't thought about or it didn't do it, subpoena powers to compel people to come in and cooperate. This is very important. Last, but not least, I agree with Mr. Davies. He described the $300 fine as laughable. I wouldn't go that far. Those were his words, not mine. I believe he said in his testimony, that New York's fine could be as much as $10,000, because you want that fine, like the question to me from my corporate clients, you want to make a statement. And I think the fine makes a statement. You ought to also consider, as some cities have done, making that conduct a 154 11/10/04 - LAW AND GOVERNMENT criminal act as well. If it is willful, you make it a criminal act, perhaps a misdemeanor. That sends the message to folks that business will not continue as usual. Those are my comments. I'd be willing to talk about any questions that you might have.
Let me just respond very quickly, just on two items that you mentioned. With regard to subpoenas, the Board of Ethics will have or would have subpoena power. That's laid out in Section 4-1000. I absolutely agree with you. With regard to the fine issue, as you know, state statute that was passed, possibly when many of us were in grade school or beyond, has limited Philadelphia for all fines to $300. I am in absolute agreement and have had some conversations with members of the General Assembly that specifically for a Board of Ethics or code of conduct violations, the fine should be a minimum of $10,000. I believe New York is at 10 and is seeking to go 155 11/10/04 - LAW AND GOVERNMENT to 25. I believe the City should always do everything that it can do within its power first. If there are things we cannot do because of state statute, then we go to the state. And this is clearly a matter that we would need state relief to accomplish. But I'm in absolute agreement with that. Thank you.
Thank you, Mr. Chairman. Thank you, Mr. Singley, for your testimony. One of the important issues for me relative to the appearance of impropriety, the appearance of corruption is the issue of no-bid contracts. There seems to really be the large area of subjectivity that elected officials and people in power can apply when it comes to the award of those contracts. And you hear from the Administration and from past Administrations that professional services are not the type of services that we would what to bid out because it somehow hamstrings the 156 11/10/04 - LAW AND GOVERNMENT government. I can run down a list of the major law firms in this City, whether it's Wolf Block or Dilworth or Ballard. You know the list. Of all of those firms that do bond work, for example, or do legal work in the City, even though each of them have their own little specialties within their office, they're pretty much all the same high caliber firm, wouldn't you agree? As far as the output of work and the quality of work, despite your personal preferences, perhaps that work is all the same high level quality; is that a fair statement?
In general we have pretty good law firms that do pretty good work and they're all at a pretty level playing field, I would think for the most part, with the exception of certain specialties.
If you want to stay with that profession, let me finish my question. The Administration argues that we can't hamstring the government because we can't pick these people based on a bid process. See, I feel the opposite. I feel considering the high caliber of all these firms, that the real benefit to the taxpayer is, in fact, competitive pricing. And that whoever we select based on a competitive bid will still put out the same high-quality work if it was given in a no-bid fashion. Could you comment?
I think that's right. In fact, I'm fairly convinced that that's correct. In fact, the State of New Jersey on bond deals has gone to that process and went 158 11/10/04 - LAW AND GOVERNMENT there several years ago as a result of some corruption in the state at the state level with regard to that issue. I mean, certainly those of us at these major law firms or smaller law firms that get to do this work and compete for it would prefer that it not be that way. We would make the argument that it somehow does, in fact, denigrate the sort of quality of the special judgments we make. I just think given where we are at this point in time -- and this is a statement against my financial interests in terms of the firm -- that I think we need to take those measures that we included that are critical to restoring the public's confidence in terms of how decisions like that get made. If it turns out to not work, the worst that happens is you could go back to the old system. I think we've got to try something.
It may not be in the best financial interest of a particular firm, but you would agree it's probably in the best financial interest of the taxpayer? 159 11/10/04 - LAW AND GOVERNMENT
I would suspect that that same theory would apply to professional services like accounting or like banking or the other areas that we sometimes fall into problems of perception or perhaps actual corruption when it comes to the ability to award a no-bid contract. We don't have this kind of problem in city government when it comes to the lowest responsible bidder to sell us cars or to sell us furniture or to sell us paper. We don't hear of the stories of large campaign contributions and other things in that arena because it's the lowest responsible price and the lowest responsible bidder. I just wanted to say for the record that that's, I think, an area that if we eliminate it, at least attempted to eliminate it, we could go a long way in changing the attitude of the citizenry towards the way in which we contract with vendors.
Let me just say that while I'm not convinced that the actual total 160 11/10/04 - LAW AND GOVERNMENT elimination is advisable, certainly that is an area that bears the type of examination that you're talking about. I wanted to make reference to a practice that I believe former Mayor Goode on the issue of bond deals attempted to implement, and I can assure you that law firms and others screamed to high heaven about it. It was a system in which firms were, in effect, pre-qualified to do the business, which is what you have to do anyway. Essentially, there was a rotation system that when the deals came up, all of the law firms that were pre-qualified were on a list in particular skills area. And as deals came up, they rotated. Well, needless to say, the law firms that had raised more money than other law firms weren't too happy about the idea that somebody had a place on the list that was in front of them or that in a sense leveled the playing field. But that was an effort fairly recently in the City's history to deal with that issue. 161 11/10/04 - LAW AND GOVERNMENT
There's also the waiver procedure that I think Mr. Davies referred to. If there were very special circumstances in which, say, the Administration felt a particular firm had particular capabilities, it could seek a waiver. The determination of a waiver ought to be very limited.
As long as it's done by entities or there's oversight to ensure that the ultimate judgment was made clearly on the merits.
Thank you for being here today. There's something that we do in the City of Philadelphia that, in my opinion, is questionable. Well, I think it's more than questionable. It's where we do put something out to bid, and there's an award, and then 162 11/10/04 - LAW AND GOVERNMENT there's some fine print that says that, well, we can extend that for the second year, we can extend it a third year. I know that there is a lot of effort by these companies that have that first year deal to stay in favor to automatically get the second and third year extension. I know cases where the deal for the first year was a very expensive deal. The price of this particular product came down in the second and the third year, but it was extended at the high price without it ever going back out to bid. In my opinion, that could lead to a problem based on that vendor working the people, the users, to make sure that they extend that without it going out for rebid. Could you comment on that?
Yes. I do understand in one of the pieces of legislation that is pending, an effort is being made to address that issue of contracts with several option years to extend. As I understand the legislation, that would give to this body an opportunity as you normally would do with 163 11/10/04 - LAW AND GOVERNMENT contracts in excess of one year to in effect approve that. I think some approach like that on those contracts with options to renew could have the effect of making sure that the kind of public scrutiny -- and I think that's what you're talking about -- that these low visibility decisions of that sort that have financial implications that could very well have been motivated by political considerations, essentially escape public scrutiny. So I do understand that one of the bills pending attempts to address that, and I think that does needs to be addressed.
Mr. Singley, I think you anticipated the question I was going to ask you, your familiarity with bond rotations, the bond work rotation system during the Goode Administration. You gave your memory of what other law firms or other people may have thought about that rotation system. Can you give me your personal evaluation on that rotation system, whether 164 11/10/04 - LAW AND GOVERNMENT that's something that should be revisited?
In the context of why we're here today, in the context of legislation and in the context of what we need to reform, what do you think about pre-qualifying bond counsel and going back to a rotation system?
Well, I think the rotation system, as I understood it then, was a reaction to the previous Administration, in which a single law firm --
-- a single law firm was bond counsel in virtually all of the bond deals that the City of Philadelphia did during this Mayor's tenure as Mayor. So that sort of represented one extreme. I haven't really thought about and do not know how effective the sort of rotation system was, and I'm not here to advocate it. But rather than simply having no controls on how that's done -- and I think that was essentially the issue that was raised -- we 165 11/10/04 - LAW AND GOVERNMENT ought to examine different ways of making sure that people have an equal opportunity to participate in City contracting opportunities at a price that's competitive. So whatever it takes at this point in the City's history to kind of help to restore the public's confidence that what business you get and how often is a function of campaign contributions, rather than qualifications is a measure that the Council ought to take.
But isn't a rotation system as transparent as you can get?
It could be. I'm not saying it's not a good system. I use it as an example of a way to experiment with some other ways of awarding the contracts. I think the New Jersey system has its strengths and weaknesses as well, in which they do it the way they do all other competitively bidded contracts. That probably merits some examination as well.
Mr. Singley, when you started you said you were going to be a 166 11/10/04 - LAW AND GOVERNMENT fact witness. Have you completed your intent to be that kind of witness?
Well, I'm more than happy to, because as it turns out, I can speak specifically about the $10,000 check because I arranged that check. I personally arranged the legal fee, and I can assure you that that's exactly what the check was for, notwithstanding what you might have read in newspapers or that anybody else might have had to say. I would add that one of the reasons -- and that relates directly to why we're here today. One of the reasons that we identified that company that at the time was located in Boston, was specifically with the expectation that they did not expect to do business with the City of Philadelphia. And there was not at the time, and nor do I believe is there now, a prohibition on Councilmembers having outside business interests of one kind or 167 11/10/04 - LAW AND GOVERNMENT another, so long as those businesses didn't involve their representing people before City agencies, boards and commissions. In fact, in that particular $10,000 check situation, there was a retainer letter written, and the retainer letter on its face explicitly excluded any representation by the Mayor, who was then the Council President, of that agency with regard to any activities having to do with the City of Philadelphia. I can tell you that I did that, not because I thought it was legally required, but that I was concerned, as Councilman Goode spoke about, not only about the reality of impropriety, but the appearance of impropriety. As Councilman Nutter pointed out, it's clear it was never intended to be an honorarium. That was never discussed. It was perfectly legal under the law as it existed at the time, and designed to exclude any expectation on the behalf of that company that that check would curry any favor with City of Philadelphia officials or in any way 168 11/10/04 - LAW AND GOVERNMENT compromise the Mayor or the Council President in the performance of his public duties.
Councilman Cohen, it's been a while since I've been privy to his thoughts.
I've always felt that there had to be an explanation, and I couldn't understand why he was just saying he's not going to explain. If it was a legal retainer, a legal retainer doesn't even mean that you've done anything. It means you've been available to do something.
All right. Well, maybe that will dispose of that question. Councilman Kelly.
Yes. Thank you, Mr. Singley. I appreciate your coming in here and I appreciate your testimony and your honesty. I want to go back to the rotation 169 11/10/04 - LAW AND GOVERNMENT system. How long was that in effect, do you remember?
I was going to say too long. For those of us who -- what I call us bottom feeders -- who make our living in the light and shadow of government, I'm not certain. Maybe Councilman Goode remembers. I do know that law firms squawked and complained about that to high heaven. I don't know whether or not it existed in the second term or not.
They were all pre-qualified as far as doing the job that they were supposed to do?
I just want to go back and ask you, what are your recommendations? Did that system work, as far as benefiting the taxpayers of Philadelphia and the citizens of Philadelphia? 170 11/10/04 - LAW AND GOVERNMENT
I think so. What was missing, perhaps, was when it was your turn to come around and do a bond deal, it doesn't follow that because you were in the right rotation, that the price that you were offering for the service was necessarily competitive. Which is really what you want to do. You want to get the best service for the least amount of money. I'm not sure that just a simple rotation in and of itself handled the issue of whether or not you were getting the best price.
That's my point. Just being on the rotation system just means that you're the next law firm to get the contract. But there again, is that open to competitive bids or is it just to get it at your price?
I don't believe that it was the case. I don't want to suggest that law firms charge whatever they wanted to charge when it was their turn, because there really is sort of a going rate now. Increasingly, people who hire lawyers and 171 11/10/04 - LAW AND GOVERNMENT other professionals to do things have a sense of how complicated and how involved the task is and the level of professional expertise that is required. Increasingly, I know in the City of Philadelphia through each of the generations you've normally had a Finance Director who was pretty good, he or she, at driving a pretty hard deal in negotiating what the fees were. But it was pretty much often up to the discretion of who happened to be in that office at a given point in time. So I don't want to suggest, Councilman Kelly, that lawyers charge whatever they wanted to charge and get paid. But by the same token, the fee was not competitive, other than in comparative terms to what other lawyers had paid for the same work previously.
Didn't the City usually establish going rates? Like currently, the fee is the same pay to any firm, with the top limit? Maybe some firms get less if they have less experience, but the City now has established top rates, I 172 11/10/04 - LAW AND GOVERNMENT understand, for representation.
Generally, the bond deals, Councilman Cohen, are based on a flat fee for the particular role that a lawyer plays in those deals. I wasn't aware that the City had gone to an hourly rate basis.
They capped the criminal investigation, the legal fees for that.
I'm not certain. But you've helped in understanding it. Thank you. Did that complete your factual presentation?
Mr. Singley, thank you for coming. It was interesting. Let me ask you something that I'm sure you know a lot more about than I do. By 173 11/10/04 - LAW AND GOVERNMENT putting our professional service contracts to bid -- which I think is a great idea -- would it somehow keep young upstart firms like minority firms, women-owned firms from getting into that network, or do you think in your opinion it would help them get a leg up and get in there?
I think the City has had and hopefully will continue to have a commitment to the utilization of minority and women-owned businesses. And I think that process, like any other process, you've really got to work with it to make sure that it doesn't have a disparate effect on groups like that that the City seeks to utilize. There have been and will continue to be fine, small and minority and women-owned firms that can be fairly competitive. There are ways to partner firms with the larger firms to make sure that you don't have the undesired effect of excluding those firms.
Some may choose not to be with Ballard or your firm. Three young guys and a lady may want to be out on 174 11/10/04 - LAW AND GOVERNMENT their own.
Absolutely. And it should probably help them. The pre-qualification could help, yes.
Thank you. All right. Thank you very much, Mr. Singley. Councilman DiCicco.
Thank you, Mr. Chairman. I'm not a Member of this Committee, but I'm a co-sponsor on a number of these bills. Thank you, Mr. Singley, for your testimony, and as Councilman Kelly said, for your honesty. There's a whole host of things when we talk about ethics and we talk about contracts being awarded to companies, corporations, law firms, what have you, in return for political contributions. But in my opinion, it all comes under the same title of campaign contributions. Campaign finance reform, I think, is just as important and it should be linked to this somehow, because I 175 11/10/04 - LAW AND GOVERNMENT don't think you can separate the two. I'll use myself as an example. I represent a district which has a huge amount of development that's been going on for a decade or so and continues to go. It's a good thing. I'm one who is very uncomfortable -- and I mean this sincerely -- in having to go raise money to run a political campaign, but it is a necessary evil at this particular time. As one who has signed on Councilman Kenney's campaign finance reform bill and others, I don't get a contract where I'm not helping a company, corporation or law firm to secure a contract, but often times I am approached by a developer or developers who come to me with a plan to develop either a housing or an industrial or commercial property within my district. Much of what they need to do, they really don't even need me for. But there are times when there may be a zoning matter. There may be issues that need to be dealt with in a community with the community 176 11/10/04 - LAW AND GOVERNMENT organizations, which I have a pretty good relationship in most cases. And at the end of the day, the deal gets done. The deal meaning the developer is able to move on, zoning is in place if zoning was required. Street closures or directional street issues that come through me as the District Councilperson, I would then introduce that legislation on their behalf. And I do it because I think it's the right thing to do, I think that development is a good thing for the community, a good thing for the City. Most of those people, without any solicitation in many cases, decide to send me a check to my campaign account. And one could perceive that -- you know, the perception is reality -- that the reality is the only reason that that development moved forward and the zoning was passed or introduced and the community was wooed into accepting that development is because of the influence of the Councilperson. I'm putting myself in that position because I've been in that position. I'm for this, obviously. I'm a 177 11/10/04 - LAW AND GOVERNMENT co-sponsor. But I'd just like your thoughts on what you think the role of campaign finance reform should be, could be? Is there some linkage here? Because you never get away from that. It is impossible, especially as a District Councilperson who has a district which probably has the most amount of economic development going on and has had for a number years even before I came here and since I've came here, and it's going to continue. Again, it's a good thing. I don't think anyone would take exception to the fact that we're going to build a high-rise residential unit at Eighth and Walnut or we're going to do something along Penns Landing. " I would wish I could do it another way, but without those contributions, I have a 178 11/10/04 - LAW AND GOVERNMENT very difficult time, as the rest of us do, in running a campaign, unless my name is either Goode or Rizzo, then I wouldn't have to raise any money. But my dad was a number writer and those things are gone, so... I don't how I can raise money. Not making light of it, but it is a serious thing for me and has been. I had a fundraiser a couple of weeks ago that some people put together, and a large part of that group were people who do business in my district, who are either business owners or developers.
They've come to me in the past and I know they're going to come to me in the future. Again, it's for a good cause. I'd just like your thoughts as someone who -- and I will end with this -- who at the onset spoke about, you were part of the process. You had been benefited by the process, and you were honest about that and I appreciate it. What are your thoughts?
I absolutely think you need a limit on campaign contributions. There's just no question in my mind. Because 179 11/10/04 - LAW AND GOVERNMENT at the local government level, most folks are not going to give a candidate for City Council or to Mayor or to any other local government position a check for $25,000 unless they expect something. It's just that simple. I don't want to be completely cynical. There are people who contribute to candidates because they believe in them. But for the most part --
Or they're not people who have done business in Philadelphia.
I think the corrupting influence of huge amounts of money -- it is very difficult to believe somebody who raises a contribution of 10, 15, $20,000 to a candidate that they don't expect some favor, they don't expect a phone call, they don't expect to set up meetings and have access. I can't believe it. They want an outcome. They want an end result. All of us who raise money over the years had somebody contribute to a candidate 180 11/10/04 - LAW AND GOVERNMENT and subsequently didn't get that elected official or didn't get a contract they thought they should have gotten. It's not unusual for someone to call you up and say, "I gave all that money to that guy and I didn't get that contract." I think the limit has to be -- I don't know what the magic number is.
Thank you very much for your testimony. Councilman Nutter, do you want to call anyone else?
Mr. Chairman, I believe we have testimony from Mr. Ray Zies, the acting Finance Director, who indicated an interest in testifying. Mr. Zies, please identify yourself for the record.
Good afternoon. My name is Ray Zies, and I'm the acting Director of Finance for the City of Philadelphia. I'm here to testify on Bill Nos. 040771, 040772, and 040818. 181 11/10/04 - LAW AND GOVERNMENT
Thank you. The testimony, I believe, has been circulated. Mr. Zies, do you have some highlights or low-lights?
I think all of us up here have been duly qualified as being able to read. No, not necessarily.
Very well. Mr. Goldsmith, we're delighted to have you here. Would you introduce yourself for the record, Mr. Goldsmith?
Phil Goldsmith, 182 11/10/04 - LAW AND GOVERNMENT Managing Director, City of Philadelphia.
Let me just, if I may, say a few preliminary remarks and then Mr. Zies will testify to the particular legislation. I might like the opportunity to talk to you about what I think some of the pragmatic concerns are from what I see from the Managing Director's position.
Mr. Managing Director, let me just make sure that we're clear on the record. It's clear from the cover page of the testimony, are your comments concerning Bills 040771, 040772 and 040818; would that be correct?
For the most part, yes. I'd just like to, if I may, just say that I appreciate the opportunity to be here and be reminded of the work that this Committee is doing, this Council is doing, along with the Administration, the Mayor, in terms of ethics. 183 11/10/04 - LAW AND GOVERNMENT I have a quote that Oliver Windell Holmes said many years ago. He said, "Great cases, like hard cases, make bad law." I think the work that this Council and this Administration want to do is great work, because I think that there's no question about it, that the body politic out there is looking for an ethical environment within our halls of government. It's also hard work -- not to quote our President, but it's hard work because there's no simple issues. I think as you probably recognize from your own practical experiences and some of the give-and-take that we just had here between Councilman DiCicco and Mr. Singley, that there's so many gray areas. I just hope that in the course of laying out the legislation, Councilman, that you have sponsored and the legislation that the Administration proffered, that we see that there's far more similarities than differences and that we can really end up with a great piece of work and avoid what I'll call bad law happening. And also to avoid that great 184 11/10/04 - LAW AND GOVERNMENT school that we all live with, which is the school of unintended consequences. It's really the unintended consequences that I'm particularly concerned about in the legislation now that we're going to testify because I do believe that it will have a practical impact and perhaps a negative impact on the wheels of government and how quickly we can do certain things. Having said that, I'll give you Mr. Zies to offer the technical discussion.
Good afternoon. The Administration opposes these bills due to the potentially paralyzing impact they would have on how the City contracts for goods and services that are integral to the operation of our government and critical to the human service needs of our citizens. The Home Rule Charter was adopted in 1951 following a comprehensive and thorough study of a reform-minded Charter Commission that removed line item budget authority from the City Council and specified a division of powers between the executive and legislative 185 11/10/04 - LAW AND GOVERNMENT branches that was intended to promote efficient and fair government. The voters amended but once in a span of two years. But in recent years it has been increasingly amended by piecemeal initiatives, not through comprehensive and thorough study. The proposed Charter amendment and the supporting bills would alter the division of authority between the executive and legislative branches and materially harm the efficiency of city government while providing no clear benefit. The bills would usurp the right and responsibility of the executive branch to provide services in a timely, efficient and effective manner by giving the legislative branch the authority to delay or disapprove the majority of over 2,200 City contracts that are awarded each year. These bills would collectively require that City Council consider and pass an additional 1,600 ordinances each year, where presently City Council only enacts roughly 250 ordinances per year. This works out to roughly 43 additional ordinances enacted per 186 11/10/04 - LAW AND GOVERNMENT week that Council is in session. These bills would extend the time toward each of these 1,600 contracts through ordinance by at least days in the best case, when the departments 6 and vendors alike already consider the 7 existing time for award to be too long. 8 The bills would also impose an 9 intractable problem for our Department in that 10 the award of contracts and encumbrances for 11 those contracts concentrated at the turn of 12 the fiscal year in June, July and August, when 13 City Council is out of session for a 14 significant period. 15 City Council was recessed for the first 77 days of this fiscal year. That recess, plus the 28 days that it would take for a contract bill to pass City Council, creates a period of 105 days at the beginning of the fiscal year, one-third of the entire year that no contracts could be approved, while over one-fifth of the supply services and equipment contracts are awarded in July and August in a typical year, while 28 percent of professional services contracts reach the 187 11/10/04 - LAW AND GOVERNMENT encumbrance verification stage in July and August. This would create an unacceptable and unreasonable delay in awarding contracts and providing services at the very time the City has the highest demand to process contracts. Although there are peak periods, such as the beginning of the fiscal year, the many departments involved in City contracts, including Procurement, Finance Law and the Controller's Office and for professional services with all departments in the City are organized to process a regular flow of contracts. There would also be obvious ramifications for emergency services contracts in cases where the City needs unplanned immediate service through contracts. The City would have no option but to hope that City Council is in session and then wait over 21 days for contract approval. One recent example of emergency services contract is boiler and HVAC repairs at City buildings. Our union work rules entitle workers to leave their workstations if 188 11/10/04 - LAW AND GOVERNMENT conditions deviate from certain defined temperatures and standards. Under these bills, if the boiler at One Parkway broke down and the temperature dropped to unacceptable levels, the City would have no choice but to evacuate the building until receiving Council approval for a repair contract.
Mr. Zies. I'm sorry. I don't mean to interrupt. But what happened in that particular situation? I mean, other than what happened, the boiler went out?
It was probably Public Property. 189 11/10/04 - LAW AND GOVERNMENT
I'm not sure. I don't know the details. I have to get you the details.
Would they just call one company or would they have an emergency bid?
It depends. I don't know. It depends on the circumstances. Is someone here from Procurement.
Mr. Gamble. Mr. Gamble, identify yourself for the record. COMMISSIONER GAMBLE: Good afternoon. My name is William Gamble, the Procurement Commissioner.
Are you familiar with the situation? COMMISSIONER GAMBLE: Well, I'm not familiar with this situation in particular. But what happens in an emergency situation, we'll give them the permission to solicit from vendors who have done this work in the past 190 11/10/04 - LAW AND GOVERNMENT and to give us three quotes. In this particular case, probably what we did is that we have a vendor that's working for the building. They would actually give us the quote and do the work itself.
They're already under contract? COMMISSIONER GAMBLE: Already under contract, yes.
So it would seem that the example as laid out may not lead to the cataclysmic consequences that were just relayed to us since you already have someone under contract? COMMISSIONER GAMBLE: Well, if we have someone under contract, yes. But if we don't have one under contract, we would have to go through a different process.
You'd go through a bid process, right? COMMISSIONER GAMBLE: We'd go through a bid, but what we do is that we suspend the vendor or suspend quite a few things. What we do is that we receive quotes 191 11/10/04 - LAW AND GOVERNMENT from them immediately, and then they immediately actually begin work once we receive the quotes.
That would be competitive bid, right? COMMISSIONER GAMBLE: Yes, it's a competitive bid.
That's not covered by this legislation. It's a competitive bid. COMMISSIONER GAMBLE: I don't know.
I'm telling you. A competitive bid is not covered by this.
Yes. That's what happens in the emergencies. You get quotes. It's called a bid. And once it goes to competitive bidding, it's not covered by this legislation. So you can have all the emergency contracts you want. COMMISSIONER GAMBLE: Thank you.
You're welcome. 192 11/10/04 - LAW AND GOVERNMENT Good to see you, Mr. Gamble.
My recollection on that particular incident, I think it was determined that the boiler couldn't be repaired and the sensible thing to do is to let people go, knowing that the boiler is not going to repaired. I don't think it was a lack of having a vendor available to make the repair, because if we don't have a vendor in line ready to respond if a boiler goes out, somebody is mismanaging. I can't imagine being without somebody poised to respond to a repair of a boiler that would break down. It doesn't sound like a person's managing the shop very well if that weren't in place. Thank you, Mr. Chairman.
No. That was a quite an important factor. Mr. Zies was dead in the middle of the testimony. I deeply 193 11/10/04 - LAW AND GOVERNMENT apologize for cutting across you. Please continue.
Implementation of these bills will not require additional staff time for the reporting requirements and the additional administrative step of routing all contracts and approvals through City Council, but the new advertising requirements of Bill 11 No. 040722 are projected to cost the City over $430,000 per year. This projected cost is based on our current advertising costs per bid for Procurement contracts, multiplied by the 1,500 professional service contracts per year that would have to be advertised twice; one to solicit responses and once more to report on the results of the contracts selection process. In 2001 the Street Administration examined the contracting process and made a policy decision to add additional programmatic and budgetary oversight. The first step in adding additional layers of review was the development of an oversight committee, the 194 11/10/04 - LAW AND GOVERNMENT Contract Review Committee, charged with reviewing all Procurement and professional service contracts. The CRC consists of the Finance Director, Budget Director, Procurement Commissioner, City Solicitor, the Mayor's Deputy Chief of Staff, the director of MBEC and the Managing Director. The CRC reviews most RFPs and contracts City-wide, with the exception of elected and independent officials. Additional review steps include the Information Technology Governing Board, the ITGB, which reviews all IT contracts over $100,000. The ITGB consists of the Mayor's Chief of Staff, the CIO of MOIS, the Finance Director and the Managing Director. All contracts processed through the City's automated contract information system must follow each system workflow step, including department head Commissioner approval, the Office of Budget and Program Evaluation Budget Analysis approval, law draft review, internal negotiations, external negotiations, encumbrance verification from the accounting 195 11/10/04 - LAW AND GOVERNMENT bureau and then approval as to form, initial certification, the department's sign off and conformance. The Administration agrees that the City's process for awarding professional service contracts can be improved. In fact, the Finance Department has been working with the Law Department to develop an executive order to accomplish a more consistent and systematic approach to this process, one that would build in further safeguards and the encouragement of minority participation. My office will continue to work with the Law Department to revise and issue this process administratively. Finally, it is my understanding that the ballot question may not be legally correct because it has too many separate issues and amendments in one question. This concludes my testimony. We will be happy to answer any questions that you may have.
Thank you, Mr. 196 11/10/04 - LAW AND GOVERNMENT Chairman. And having said that, you'd also like to comment on my hairstyle too. First of all, I really do respect you a great deal and admire your work and your service. And you get the continued benefit of the good blessings of the Janice Davis treatment. But don't wear it out.
I just have two things. On you talk about the awarding of professional services contracts can be improved. I'm not going to ask you to answer that question, but I would like you to forward an answer to the Chair or a response to the Chair from your perspective of how the awarding of professional contracts can be improved based on your statement and the testimony. Second, I've noticed -- and maybe some of my colleagues have as well -- there seems to be a particular flurry here recently of executive orders being issued for a variety of issues. Now you're working with the Law Department to develop a new executive order to 197 11/10/04 - LAW AND GOVERNMENT accomplish a more consistent and systemic approach to this process, one that would build in further safeguards and encouragement of minority participation. Why don't you send us a bill? Why are you doing another executive order?
Because we wanted to do it administratively through the executive branch.
That is an example of, I assume, the Mayor's cooperation with the City Council.
That would be correct, Councilman Cohen. Lastly, Mr. Zies, I know that I could ask you at a moment's notice for the debt service on any amount of money over any period of time, and in about two minutes you could give me an answer. But your last comment -- I'm not aware -- but you can share with us on the record that you have not only an excellent financial background and expertise, but you've also been moonlighting on the side in the law? 198 11/10/04 - LAW AND GOVERNMENT
That was a comment that was forwarded to me by the Law Department.
What I took from your testimony -- you don't even really have to respond because the other Michael Nutter showed up today for this part of the hearing. What I took out of the 10 pages of the testimony is, the bottom line is, this measure would take too much time to actually do contracts, there's too much advertising, there's too much work for City Council and there's too much involvement by City Council; does that fairly well sum up?
Lastly, I was struck by through 10 pages of testimony, there 199 11/10/04 - LAW AND GOVERNMENT was no comment whatsoever on the other provision in the bill regarding the campaign contribution limits on no-bid contracts. Why do you have no comment on that?
I'll have some other questions for you subsequent to this hearing based on the testimony, but we don't have to torture each other. At the moment I'm just not up for it today.
Councilman, if I can, a couple points. Campaign contribution is an important issue, and I think the Mayor's position has been well known. He thinks it should be done statewide, and I think Senator Hughes, today as a matter of fact, with some other sponsors is introducing legislation in Harrisburg. 200 11/10/04 - LAW AND GOVERNMENT
I understand that, Mr. Goldsmith. But this is not about the regulation of across the board campaign contributions. This is about regulations related to a process that this City is in complete total control of, which is our no-bid contracting process or the issuing of professional services contracts. With every respect to the legislature or the Governor, I would suggest that we don't need Harrisburg to do anything about this particular issue. You can pursue statewide campaign finance reform all day long and all night long, but that has nothing to do with this particular issue. It's governed by the City. It's controlled by the City. I do find it slightly interesting that in an environment where from time to time there are great howls in these halls about the interference by the Commonwealth in the City's business, why we would not take all the steps that we can to control our affairs at the level that we can. If we want to pursue other loftier goals, that's certainly fine, but we 201 11/10/04 - LAW AND GOVERNMENT should always do for ourselves what we can and only ask the other bodies to do for us those things we cannot do for ourselves.
I understand that. A couple points I'd like to make, if I may. Some of the executive orders that I'm familiar with, one was creating a codifying behavioral health services, which we think is an important step for the City and we brought in a national person to run that. We are also -- I think it's been announced, but we haven't finished it yet -- a drug and alcohol policy for those employees that under the executive branch we would obviously be delighted if Council would pass one that included all non-unionized employees. We're negotiating. We got that with 47. We're doing that with 33 hopefully. We think what's good for the goose should be good for the gander. Nothing would makes us happier than to have that will all employees, not just executive employees. I want to go back to the emergency provisions here because the tenure of my 202 11/10/04 - LAW AND GOVERNMENT comments is that we be careful what we do. I always get nervous. While I'm a lawyer, I don't practice because I don't have malpractice insurance. But I get nervous when we try to do too much in the City Charter, because the City Charter can be rigid over time. While we think it's a good document, when something is first done, it doesn't give us flexibility. I think the challenge with your Committee is to allow us to get at the issues you're striving to get at while giving us the flexibility to run government in an effective manner and make it more effective.
I understand that. Let me try to address that point. The provisions that you're talking about and that I'm sure you're mostly concerned with come from Bill No. 040772. That's an ordinance. The Charter change merely allows us to have the authority to then proscribe in these areas. So I would suggest to you that you're not locked into whatever you might perceive to be onerous or the potential consequences of mass destruction or 203 11/10/04 - LAW AND GOVERNMENT unintended consequences.
I was a Charter member of that institution. So I think that you've got Charter changes that allow us to legislate in a particular area. And then you have a bill 10 that over time, if we find that we have problems or issues that arise, i think this legislative body, notwithstanding the concern that we are barely around or can't respond to issues as they arise, you know, we're here on a pretty regular basis.
Again, I just caution that whatever we do recognizes what we as a City have to deal with from time to time. I'm looking at Councilman Cohen and I remember Ogontz and Olney. We had to do some emergency work there. I can't tell you whether we got bids on that or so forth. We can find that out. But I know that wasn't something we were going to sit back and wait on. 204 11/10/04 - LAW AND GOVERNMENT There's frequent times where we have to get cots for the homeless because we have cold spell and we don't have cots. Last year we had to get a specialized part fleet management on some of our snow plow equipment. We could not go with our existing contract. Last year we had an issue with one of our salt vendors who went out of business. And we had a pretty tough year. We had to get an emergency contract out of New York. So these are just the day-to-day things, including the abatement of dangerous properties. We've done emergency repairs. All I'm saying is that we be cautious about what we craft, how we craft it and make sure that we don't get into the unintended consequences. I might say that the private sector is going sort of the opposite of what we are, which is just in time inventory and things like that. I think that in some cases, even though we have an existing contract, if we go above a certain amount, we would have to come 205 11/10/04 - LAW AND GOVERNMENT back to Council. That vitiates some of the competitive bidding process. Again, I just would be cautious of what we're doing.
I appreciate your concern and I want to assure you that I took this matter very seriously. It's my understanding the Law Department has issued guidelines to our departments, specifically dealing with emergency contract situations. There are a variety of steps that can be waived under emergency circumstances. More directly, I have no interest at all affirmatively or by mistake in interfering with the government's ability to respond to emergency situations. On the other hand, as the testimony lays out, whether it's 2,200 total contracts or 1,600 ordinances that might have to come to this body, I would have to believe that the overwhelming majority of those contracts are probably not in an emergency category. Children will not go without services or food or other disastrous situations that would arise as a result of any these contracts being 206 11/10/04 - LAW AND GOVERNMENT looked at or examined by the legislative body of this City that has a budgetary responsibility, that has an obligation to the taxpayers to see what's going on. Quite honestly, I don't see anything wrong with advertising these contracts. I understand there might be a view that doesn't bring you additional people. But it opens the process. People know what's going on. And in this environment, as we've discussed earlier, I think that's what needed under these circumstances and gets to the heart of many of the issues that my colleague and the Chair of this Committee has expressed a great deal of concern about.
I understand that. And as I said when I began, I hope that we can come up with a package that makes sense.
How can we when the Mayor explicitly excludes City Council? He says plainly in the letter that he's going to pay attention only to his views and the Law Department's views. He's going to craft them together. 207 11/10/04 - LAW AND GOVERNMENT
Councilman, I think that we have submitted our own legislation. I think one of the concerns I had was that they're being dealt with separately because it creates an us versus them. Looking at Councilman Kenney, we had a great hearing the other day on public safety. We came and said what we're doing is a major issue. Ethics in this City is a major issue. These things should be looked at and how we weave them together that make the best sense as opposed to one that's --
Then why doesn't he put in his letter, of course we will be willing to work with City Council and we're arranging a meeting between the three departments? Why does he make it clear that he wants us to butt out of the case?
Well, it has nothing to do with me and that Mayor. Please read that statement, about how he's going to continue to craft. Would you read that, sir? 208 11/10/04 - LAW AND GOVERNMENT The part of your letter which stated the Mayor's intention as to how he's going to deal with it. He said he will continue to work with a department.
"The Administration agrees that the City's process for awarding professional services contracts can be improved. In fact, the Finance Department has been working with the Law Department to develop an executive order to accomplish a more consistent and systematic approach to this process."
"One that will build in further safeguards and encouragement of minority participation. My office will continue to work with the Law Department to revise this process administratively."
Not a word about working with City Council. Completely excluding City Council. There's no merit to any of the Mayor's suggestions.
I just think these issues are so important that they shouldn't -- 209 11/10/04 - LAW AND GOVERNMENT
I think ethics in the City of Philadelphia is an important issue. I commend the Committee for doing it. I just don't think it should be done in a, you know, we got this set over here and this set over here. I think we're so close it would be a shame.
Mr. Goldsmith, I do have to speak up on that particular issue. I introduced two bills which are now not before us because I revised them on March 18, 2004. It was a board of ethics and a code of ethics. From that day to September 23, 2004, when I introduced two new bills on a board of ethics and a code of ethics, and then another bill on contracts on which you're speaking and a couple of other bills, from March 18th to September 23rd to now, November 9th, there has been not one word of conversation, discussion, collaboration, working together or anything from the Administration. What I've received is reports 210 11/10/04 - LAW AND GOVERNMENT of every possible effort up to and including through today to undermine, be deceptive, turn things around, pit people against each other and engage in a game. This is not game. It's very serious business. I take this very seriously. I try not to take myself to seriously, but I take the work seriously. Ethics are very important. We've had a good hearing here. We've had good witnesses here. A lot of people have done a lot of research and taken a lot of time. So I appreciate your views about collaboration. It takes two. I'm here every day, ready to work, ready to talk under any set of circumstances. That has not happened.
I just want to make sure that both sides of that discussion are clear.
The Committee will stand in recess until Tuesday morning --
Wait a minute, Mr. Chairman, respectfully. 211 11/10/04 - LAW AND GOVERNMENT
It's the last witness. I've got some amendments. We're in the middle a discussion.
I don't think there's any point in continuing this. I can't call it a conversation because it isn't one.
Well, I understand that. I'm not interested in a back and forth with Mr. Goldsmith. I'm finished with that, but I want to complete the process that got started this morning. I do have some amendments to a variety of these bills based on the testimony and suggestions that were made by a number of individuals. That's one. Two, other than Councilman Mariano, who I think his jacket is still here, Members have sat, they've asked questions. They've been fully participatory in this process. Now, you and I have had some discussion about this, and I don't know all of the details, but I'm trying to understand why we can't complete our business on these particular bills today 212 11/10/04 - LAW AND GOVERNMENT as I had asked. Members on the Committee, I believe, many, some, are prepared to take some form of action.
Because I pledge not to take action today because the opposition also has a right to be heard and to have their bills considered before there's a vote.
There's a hearing on Tuesday, Councilman, in front of the same Committee and in front of the same Members.
The Chairman of the Committee determines when a Committee is ready to meet and vote on an issue. In my judgment we're not ready to meet until we listen to the Mayor's proposals. He's introduced contrary proposals. After the two proposals before us, there will be an opportunity to discuss those things.
I understand that, and I appreciate that. And I know there's a hearing on Tuesday. But I would only respectfully suggest, Councilman, that, 213 11/10/04 - LAW AND GOVERNMENT putting myself aside -- obviously I have a vested interest -- but I would at least ask if the Chair would give some amount of consideration -- and I don't want to say respect, so I'll leave it at consideration -- to any of the other Members on the Committee who have listened to all of the same testimony, who on their own are able to read any other piece of legislation that may be pending before this Committee.
All right. Then are you going to introduce the bills or am I going to recess the Committee? Do you want to introduce your amendments?
I do want to introduce my amendments and I'd like to get them voted on.
Well, then introduce them. This is the time, or the hearing will be recessed.
Mr. Chairman, I would respectfully suggest that in order to deal with the amendments we would need to go into the public meeting portion. There are 214 11/10/04 - LAW AND GOVERNMENT four amendments, four different amendments. Mr. Chairman, I was only suggesting that we are in the public hearing. I'd like to move into the public meeting in order to more formally put forward these amendments.
Mr. Chairman, there is one page that's being circulated with regard to Resolution No. 040817. There was, unfortunately, a typo upon its introduction. It's on , letter E. The sentence presently reads, "an amount at least equal to 1 percent." The sentence should read, "an amount at least equal to one-tenth of 1 percent," in that section. And based on the testimony earlier, Mr. Chairman, I made a note to myself. Unfortunately it is not in a written form, but I can read it to you. It is from , Letter E. "Prohibited activities in the same bill." The end of that paragraph that starts, "where no person while serving as a member of 215 11/10/04 - LAW AND GOVERNMENT the board of ethics," at the end it should say, "or participate in any election for City office or make financial contributions to any candidate for any City office or to any incumbent City official." In Paragraph G, "Executive Director, Council, and staff." The sentence that reads, "the authority of the Council shall be defined in writing by the Board provided that neither," insert, "the Executive Director," and continue with, "The Council." Last amendment is continuing in that same sentence, where it reads, "shall be authorized the issue advisory opinions, promulgate rules, issue subpoenas, issue final determinations of ethics violations or make binding recommendations of or impose civil penalties." Insert, comma, "unless specifically authorized by the Board." Those are the three amendments, Mr. Chairman, for Resolution No. 040817.
No, Mr. 216 11/10/04 - LAW AND GOVERNMENT Chairman. That is just for that particular resolution.
Yes. Right. After these amendments are read, I'm going to be recessing the hearing until Tuesday, this coming Tuesday at 11:00 a.m.
Mr. Chairman, the next set of amendments, which have been circulated, is to Bill No. 040770. I will not torture us with the reading of these amendments. There's one on , adding a new definition for administerial. There's one on again, adding a word in the personnel action definition. There's one on in Section 24 20-6042A and B. There's one on , amending 217 11/10/04 - LAW AND GOVERNMENT Paragraph 7, "non-disclosure of confidential information." There's one on , amending Paragraph C. There's one on , delete Section 3 in its entirety and replace it with a new Section 3 to read as follows. And a deletion of item number 38. Those are the amendments to Bill No. 040770. There's a proposed amendment to Resolution No. 040818. There's a technical amendment and a changing of a word from the execution to taking effect, which goes throughout this particular document. Then on at the end of that paragraph, at the top, continuation of a sentence, comma, "which regulations may require Council approval by ordinance of certain or all such contracts." Those are all the amendments to Resolution No. 040818.
Does that complete all of the amendments on all the bills? 218 11/10/04 - LAW AND GOVERNMENT
One more, Mr. Chairman. There's an amendment to Bill No. 4 040772. This is a conformance amendment. One part of this section read one way, and the second part of the section read a different way. The two sections will be conformed to require the same amount of financial disclosure information for individuals receiving no-bid contracts. Those are all the amendments, Mr. Chairman.
Thank you. The Law and Government Committee will stand in recess until Tuesday, November 16th, at 11:00.
We'll go into the public meeting first thing Tuesday, November 16th.
The public hearing will be recessed until Tuesday, November 16th. - - - -
The Law and Government Committee will now have an open meeting for the purpose solely of acting on the amendments prepared and read to us by Councilman Nutter. They have all been distributed to Members of the Committee. The Chair recognizes Councilman Nutter.
Thank you, Mr. Chairman. I move that the amendment as read in the public hearing to Resolution No. 040817 be adopted as they were read into the record earlier. (Duly seconded.)
All in favor please say aye. 220 11/10/04 - LAW AND GOVERNMENT (Aye.)
Mr. Chairman, I spoke with Councilman Nutter earlier. I may have some amendments at a future date before this is done, but him and I need to talk about it. Just so the Committee and you are aware, there may be other amendments. I don't want to do them yet.
Mr. Chairman, I also will have probably another amendment.
Mr. Chairman, I move that the amendments as circulated to Bill 25 No. 040770 be adopted. 221 11/10/04 - LAW AND GOVERNMENT (Duly seconded.)
Mr. Chairman, I move that the amendments as circulated for the record to Resolution No. 040818 be adopted. (Duly seconded.)
The amendment is seconded. Any discussion? (No response.)
The ayes have it 222 11/10/04 - LAW AND GOVERNMENT and it is so ordered.
Mr. Chairman, I move that the amendment as circulated to Bill 5 No. 040772 be adopted. (Duly seconded.)
The ayes have it and it is so ordered. Does that complete the amendments?
The hearing of the Law and Government Committee stands recessed. The open meeting is also terminated. The next hearing will be this Tuesday, November 16th, at 11:00 a.m. (Council adjourned at 2:15 p.m.) 223 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, November 10, 2004, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON LAW AND GOVERNMENT _________________________ Lisa C. Bradley, RPR