Committee Hearing, November 16, 2004

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LAW AND GOVERNMENT - - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, November 16, 2004 11:28 a.m. - - - - BILL 040761 - an ordinance repealing Chapter 20-600 of the Philadelphia Code... BILL 040762 - an ordinance providing for the submission to the qualified electors of the Philadelphia of an amendment to the Philadelphia Home Rule Charter creating and empowering a Board of Ethics... RESOLUTION 040792 - resolution proposing an amendment to the Philadelphia Home Rule Charter creating and empowering a new Board of Ethics... PRESENT: COUNCILMAN DAVID COHEN, Chair COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN FRANK DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES KENNEY COUNCILMAN RICHARD T. MARIANO COUNCILMAN FRANK RIZZO - - - - V A R A L L O Incorporated Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 I N D E X WITNESS ED VOIGT............................. DAVID HYMAN.......................... 6 INSPECTOR GENERAL WILLIAM GILL....... 39 JANET PERRY.......................... 58 7 CHARISSE LILLIE...................... 76 JOE GRACE............................ 93 8 JOE QUINONES......................... 144 A.J. THOMPSON........................ 146 9 10 11 3 11/16/04 - LAW AND GOVERNMENT

The Committee on Law and Government is now in session with a quorum continuing from yesterday session at which ever member of the Committee was present. I'm hoping the same will be true today, in which case we will out vote the public because there are seven Members of the Committee, and I see, other than the witnesses -- I'm not sure there's anybody from the public interested enough in the subject. And that itself is going to be a problem. But I wanted the sponsor here, because I wanted to offer her the same opportunity that was given to the sponsor of the other bill, to name the Clerk of the Committee to call the witnesses in the order that they desired to present their case. But since Councilwoman Blackwell is not here and she's the sponsor of the bill, I ask Ellen Berkowitz to act as Clerk of the Committee and to call the witnesses. Ellen, first read the titles of the bills.

Bill No. 040761, an 4 11/16/04 - LAW AND GOVERNMENT ordinance repealing Chapter 20-600 of the Philadelphia Code entitled, "Standard of Conduct and Ethics," and enacting a new Chapter 20-600 of the Philadelphia Code entitled, "Standard of Conduct and Ethics." Bill No. 040762, an ordinance 8 providing for the submission to the qualified electors of the Philadelphia of an amendment to the Philadelphia Home Rule Charter creating and empowering a board of ethics as approved by resolution of the City Council, fixing the date of a special for such purpose proscribing the form of ballot questions to be voted on and authorizing the appropriate officers to publish notice and to make arrangements for the special election. Resolution 040792, resolution 19 proposing an amendment to the Philadelphia Home Rule Charter creating and empowering a new Board Ethics and providing for the submission of the amendment to the electors of Philadelphia.

Thank you, Ms. Berkowitz. The first witness -- I have a list 5 11/16/04 - LAW AND GOVERNMENT of witnesses sent to me last night by the sponsor of the bill, and I will pick them. I don't know whether the order was intended to indicate the order that the Committee wanted or the sponsor wanted or not, but in the absence of their serving as the Committee Clerk, I will call them in the order in which I've known them over the years. The first witness will be Fred Voigt with whom I had battle after battle for maybe 35 or 40 years, but for whom I respect deeply as a member of the Committee of 70 and an advisor, official or otherwise, of the County Commissioners. Fred, it's good to have you here.

It's good to be here.

Now, I'm going to be as impolite as I was as a reporter of the Daily News apparently thought I had no 21 business being. I'm interested -- if anybody is interested in my views on the bills, I'm always interested in knowing how life would have different on the pay-to-play culture if whatever you propose were put in effect, say, 6 11/16/04 - LAW AND GOVERNMENT 10 years, how would it have achieved transparency that we're all looking for. Two examples I've always used are the $10,000 fee that -- fee in quotes because we haven't had it defined officially yet -- money allegedly received by now Mayor and then Council President John Street. If your recommendations had been in effect, how would that have given the public information that it still doesn't have from Mayor Street directly? And the other aspect is how would the existence if your proposals have altered the pay-to-play culture in Philadelphia? So you can either address that or address whatever you want. Mr. Voigt, we're delighted to have you here.

I'd like to break the testimony into three different pieces, because I think it's very important to recognize that the ethics piece is separate from the pay-to-play piece is separate campaign funding reform. In our view -- I served on the 21st 7 11/16/04 - LAW AND GOVERNMENT Century Committee and specifically the Subcommittee that made the recommendations that are embodied in large part in the testimony and the bill that the Administration has proposed. However, I do not see that there is a huge difference between the ethics proposal that the Administration has made and the ethics proposal that Councilman Nutter has made. I think that those two are easily reconciled, and I would urge you to adopt that Charter change language. I think it's probably the only way that you can give any permanence. The problem with the current Ethics Committee is it's all a matter of Executive Order and it ebbs and flows, and it has since it was first started back under Richardson Dillworth. Some mayors have empowered it, some mayors ignored it. So I think the only way to institutionalize it is the way that you're approaching it. That's insofar as ethics is concerned. And again, I'd emphasize one of the things that was made clear to us by the gentleman from New York who testified in front 8 11/16/04 - LAW AND GOVERNMENT of you: Ethics legislation and ethics commissions deal fundamentally with people who want to be ethical. If people want to be criminals, nothing is going to prevent them being from being criminals. In fact, when the head of the Ethics commission from Los Angeles testified -- and they have one of the strong he is commissions there is -- well, there's a US Attorney out there who's going crazy investigating other people who are criminally involved, in part, pay-to-play. Now, let's move to pay-to-play. When we looked at it, we looked at it from the standpoint of how other people have limited pay-to-play, particularly in the securities industry where there's prohibition against contributions, and it's worked pretty well. And we modeled our recommendation after that one. We urge that that be done by executive order. But it can also be done by Charter change. Now, Charter changes are dangerous things because you often run into the law of unintended consequences. And I would have 9 11/16/04 - LAW AND GOVERNMENT caution everyone to make absolutely certain and if you adopt Charter change recommendations they be as broadly and widely disseminated as possible before Election Day. Last November, you may recall, there were a number a ballot questions that caught the voters unprepared, and they very diligently got on their knees and looked at those questions and tried to figure out and it took them a long time to vote. We have to avoid that at all costs, if possible. And that includes making sure that the news media widely disseminates that information, as they didn't do last November. There were one or two stories at most written in advance of that election. Now, I'm troubled a little bit about some of the Procurement language. I think that overly complicates the matter, but I would definitely advocate some prohibitions against pay-to-play that have meant, in answer to your question, well, certainly the ethics piece of it would have illuminated the sources of that money. I have no idea where it came 10 11/16/04 - LAW AND GOVERNMENT from or what it is other than what I've read in the newspapers. Pay-to-play has been around at too many levels of government, not just here in Philadelphia, but municipalities across this United States. And New Jersey has made the most recent efforts, primarily through Execute Orders, to limit that. But I would urge you to consider the language in Councilman Nutter's presentation which I think mirrors what we recommend to done by Executive Order.

On the prohibition?

The prohibition and the language appended to -- the information appended to the contracts.

Thank you.

Any questions? Thank you for your time.

Thank you very much. Any questions of Mr. Voigt before he leaves? (No response.) 11 11/16/04 - LAW AND GOVERNMENT

We thank you very much for being here. David Hyman.

Good morning, Mr. Chairman. Good morning, Members of the Committee. I trust you all received copies of my testimony.

We have it.

My name is David Hyman, and I'm an attorney and serve as managing partner of the law firm of Kleinbard, Bell & Brecker. I also served on Ethics Committee of the 21st Century Review Forum and more specifically on the Subcommittee that worked on issues involving campaign finance, electoral reform and the practice known as pay-to-play. Thank you for the opportunity to address Council today on issues that I believe are essential to maintaining and strengthening public confidence in government and our political system. Those issues are ethics reform and campaign finance reform. I commend City Council for confronting these important 12 11/16/04 - LAW AND GOVERNMENT and complicated issues. Ethics reform presents many sticky issues where reasonable minds can and often do disagree. Such reforms provide significant opportunity to improve the public's perception that government is fair and impartial and that our political system of electing candidates operates with those same ideals in mind. But ethics reform also carries with it a risk of unintended consequences, as noted by Mr. Voigt. I must mention that's a little intimidating for me to testify after someone with his credentials. These reform measures require careful and thoughtful deliberations by City Council, the Mayor and the City's newly appointed Board of Ethics. I believe that vigorous debate on the various ethics proposals pending before City Council wield the best ethics reform possible for the citizens of Philadelphia. In addition to my law practice and service on Ethics Committee under the very 13 11/16/04 - LAW AND GOVERNMENT expressive leadership of Judge Chen, my experience includes having served as an elected Committeeman for years, service on 5 the boards of a number of non-profit 6 organizations and as a staff member to a 7 former City Councilmember. 8 My professional expertise also 9 entails political involvement by myself and my 10 firm in a number of political campaigns. I've mad modest contributions to the campaigns of candidates in whom I believe and so has my firm. Lastly, our law firm has performed legal services for both city and state governments. But today I testify as a concerned citizen of Philadelphia, not as an expert of any kind. And while all of the ethics reform which were considered by this ethics Committee recommended to the Mayor and introduced in Council are important, I am particularly interested and concerned with the issues of campaign finance reform and related issues of play-to-pay. I strongly support reform but believe these issues should be confronted comprehensively on a statewide 14 level and not just here in Philadelphia. One purpose of my testimony is to support the written testimony submitted by Senator Vincent Hughes. I believe that testimony is being offered today and there is an Op Ed piece in the Daily News today which in essence articulately describes what my position is here today. Senator Hughes, as you know, introduced legislation in the General Assembly last week that would place significant restrictions on pay-to-play practices across the entire Commonwealth and would limit the amount of contributions that persons and political committees can make to candidates for every public office in the state. They are substantial and necessary reforms, but they are statewide reforms and I support them for that important reason as well. I believe that the state-wide approach to campaign finance reform is preferable to the local-only approach to such reforms. The purpose of my testimony is to ask City Council to consider deferring such 15 local-only reforms at least until the State Legislature and the Governor have had a reasonable amount of time to consider Senator Hughes legislation and to act on it. There are those who will say that the General Assembly which has not passed any serious campaign finance reform measures in decades will fail to act on Senator Hughes legislation as well. So why should we wait?

If we have a problem here with pay-to-play practices, why should we wait for state-wide reform which may never happen? And I know the Council is considering a bill now that would restrict pay-to-play practices just in Philadelphia. First, let me address the view that Harrisburg, having failed to act in the past will undoubtedly fail to do so again. I think the timing is different. I think that people in Pennsylvania and across the country, for that matter, want change in how the political systems operation. There is clearly much to much money in our elections and much too much influence sought through campaign 16 contributions. More than $1 billion was spent on the presidential election just concluded, another $4 billion on races for the Senate and Congress. As the Mayor pointed out last week when Senator Hughes announced his introduction of his reform bills, the last round of federal election reform produced a so-called 527 Committees which were supposed to be independent groups dedicated solely to such activities as nonpartisan voter registration. Does anyone believe that those 527 groups on either side of the nation elections, were independent and nonpartisan? Was Swift Vote Veterans for Truth independent and nonpartisan? I believe the public wants campaign finance reform. And I believe Senator Hughes, who is a very effective advocate, has picked exactly the right time and right issue to effect change on a state-wide basis. I believe we should give the Senator and the General Assembly a reasonable amount of time to consider his proposed state-wide reforms. 17 Secondly, I want to point out that all of the research which we did as members of the Committee taught us that problems associated to pay-to-play really are state wide problems and actually national problems and they're not just exclusive to Philadelphia. During the course of our work, we learned that a pay-to-play scandal had erupted in Scranton for members and officials of that City's Board of Pensions were coming under federal investigation in connection with an alleged pay-to-play scheme involving pension fund consultants. We learned of other federal investigations and the contracting practices and campaign contributions. My point is that if pay-to-play causes the public to have less faith in the integrity of their government, it's a state-wide problem deserving a state-wide solution in which everyone, contributors, contractors, and candidates play by the same set of rules across the Commonwealth. Lastly, I testify in support of 18 Senator Hughes position that to adopt one set of stricter rules governing contributions and pay-to-play here in Philly but to leave the rest of the state looser rules governing contributions and contracting may have the unintended result of disadvantaging Philadelphia in its political relations and influence with the rest of the State. Unfortunately, in politics, as in many places in life, money has a way of distorting relationships. If Philadelphia enacts city-only reform, we will have partially disarmed ourselves in the battle for influence and resources in Harrisburg. Please keep in mind the anti-Philadelphia bias that exists across the Commonwealth and its effect in our City. In the election just past, the staunch friend of Philadelphia, State Senator Allen Kukovich from Westmoreland County was defeated. An enormous amount of money poured into the campaign of his opponent. That money financed a media campaign against him that was very anti-Philadelphia in our message. Our 19 elected officials here in Philadelphia should be in a position to help such friends with contributions. Like it or not, our City's politics and government are interwoven with those of Harrisburg. We depend and rely upon our state government for significant levels of funding for essential services. And I fear that if we adopt such strict rules on contributions and contracting in Philadelphia that the playing field will be tilted against us.

Then the results in funding we need from Harrisburg will also be tilted against us. These are not easy issues to wrestle with. I once again applaud Council for aggressively considering various proposals. As a member of the Ethics Committee, I voted to recommend a new code of ethics. I voted to recommend that a new Board of Ethics with real enforcement powers be impaneled and placed under the protections of the City's Home Rule Charter. I voted to recommend many other reforms to promote openness and transparency in government and to strengthen public faith in government's integrity. You are moving 20 forward with these reforms and you deserve our gratitude. But on those crucial issues of campaign finance, I voted to recommend state-wide solution be pursued to solve these problems. I feel strongly that a comprehensive state-wide reform is the right path. Again, I congratulate you for the time and effort you are devoting to these serious ethics issues. I trust you will make the right decisions for our City. I would respectfully remind you, in closing, ethics reform, yes; but beware of unintended consequences. Thank you very much for the opportunity to testify. I'd be glad to answer any questions you may have.

Thank you for your statement. Are there questions? The Chair recognizes Councilman Goode.

Thank you, Mr. Chair. 21 Good morning, Mr. Hyman. Thank you for your testimony. Can you tell me, in your estimation, how passing the Hughes bill would change any of the bills before City Council? In other words, are there actually components to the bills that conflict?

I don't know of any. My concern is that by passing it --

That was just the first part of the question.

I don't know.

So it's a matter of timing as to when the bills are passed?

Yes, because I believe it increases the Senator's chances of making progress if we wait.

Okay. And would it be fair to characterize your testimony as trying to keep Philadelphia politically competitive?

Yes.

Do you think that's a rallying cry that comes from the 22 citizens or from the politicians?

I don't know what you mean by "rallying cry." I think --

I'm not sure the average citizen in Philadelphia is saying "we want to keep Philadelphia competitive."

I think the average citizens wants to make sure that we get what we need for SEPTA and for PGW and for other important services and maybe it has to be framed in a way that is better than the way that I as an amateur could do so. But I think the bottom line is a rallying cry.

Philadelphia gave John Kerry 400,000 vote margin, elected a democratic governor, but still the House and Senate is still heavily Republican. Is there anything that we're going to do or not do with regard to this legislation is actually going to make us politically competitive?

I think we can improve our status.

We can improve our status in a number of ways, but is it 23 anything we can do or not do related to this legislation the legislation proposed in Harrisburg is actually going to make us politically competitive?

I think that the language -- if the bill is passed in Harrisburg, it will keep us at a level playing field.

Are we at a level playing field now?

No. By level playing field, I meant keep the status quo as opposed to making it worse.

Clearly, we're always going to be at a political disadvantage when it comes to SEPTA unless the State Legislature decides to change the composition of the Board. These bills have nothing to do with creating a political advantage with regard to SEPTA. Waiting on this bill does not allow us to influence SEPTA in any way whatsoever. Would you agree with that?

No. 25

So how would that 24 change the composition of the Board of SEPTA.

Because, in my view, SEPTA board members are appointed by elected officials, and right now --

Are you aware of how many members there are on the Board of SEPTA.

I believe there are 9.

More like 15. Are you aware of how many come from Philadelphia?

Two.

So how considering this legislation locally or the state level change the composition of that Board or our influence on that Board?

On a macro level, my point is, for example when you have a friend like Senator Kukovich. There's more of an opportunity for local elected officials here to be helpful than there would if we had Philadelphia-only legislation passed. And it is certain elected officials in the counties that make SEPTA Board. 25 We disagree. That's okay.

I listened to that for the second time. I don't understand how having that legislation -- those rules here in Philadelphia would stop the person helping Allen Kukovich.

Because in a relative sense, the elected officials in Philadelphia would raise less money if this legislation --

As a matter of fact, if state-wide reform was in effect similar to Philadelphia, we would be less likely to be able to help Senator Kukovich because we couldn't give him as much money as we can give him now.

But others would be in the same position because they would be under the same restrictions.

On the same line, though -- and I know Councilman Nutter has a number of questions. On the same line, though, what do you think the genesis of the anti-Philadelphia sentiment across the state is? Do you think it could have been contributed to from what's going on in this federal investigation and what's been promulgated as a result of pay-to-play stories? Do you think that all the things that have been talked about in the last year or so since the discovery of the bug could have contributed to the anti-Philadelphia sentiment in other parts of the state? Is it conceivable that that increases the anti-Philadelphia sentiment or contributed to it?

I'm not an expert on this. I think it is conceivable that it contributed. But my understanding from people that have been a lot longer than me that that sentiment is long pre-existed.

It's long pre-existed and it probably was enhanced as a result of what their reading because, as you know, Philadelphia media market, Channel 6, for example, can be seen in Harrisburg. So they see this on a regular basis. Don't you think the converse might 27 be true that if we went out on our own to try to clean up our act and clean up our house, that that would also be promulgated throughout the State and maybe some of that anti-Philadelphia bias may begin to erode because all they do is turn and point to us and say, "Why should we send money there because all they're doing is taking their friends, giving them big-time contracts that are no-bid and those guys contribute to the campaign for Mayor." If we change that unilaterally, do you think that would go a long way into changing the negative attitude that Pennsylvanians may have or their elected officials may have about us.

Let me respond to that in a couple ways. Let me be clear, my testimony is based on a balance. I certainly see merits in the proposal, but on balance I feel that waiting for Senator Hughes is an advantage. But I agree with you, there would be some effect. But again, Philadelphia is not the only place with those stories. 28

I understand. Two of the core basis of your testimony was a political disadvantage, which I disagree with and I think Councilman Goode disagrees with, and the image of Philadelphia which I think is bad and can only be improved by unilateral cleansing or attempting to cleanse the process here in Philadelphia. I think it would go a long way to change the attitude of other legislators throughout the state. Look what PAUL Vallas has done in a short period of time in cleaning up the act at the school district and has been able to garner more support, more allies and more money with a forthright approach.

On that point, I think one way that your view and my view come together is if Philadelphians and Philadelphia leadership came together to support Senator Hughes' bill, I think that would have a similar effect in evidencing our sentiments.

Let me tell you, I've been around the Legislature a long time, around the Senate and the House. I don't 29 think that that bill has a snowball's chance in H-E-double-toothpicks. I've just seen it for so many, many years that that kind of stuff isn't going to happen in the State anytime soon. And I do think that us doing it from our perspective unilaterally will be a big help in changing Philadelphia's image. Thanks. I'm sorry.

No problem. Two quick follow-up questions. Thank you, Mr. Chairman Mr. Hyman, have any private citizens with non-political interests advanced this notion that this bill should wait or else it will create a political disadvantage?

I have no idea.

So you're not aware of this being a matter that citizens are asking for, but rather that politicians are asking for?

Honestly, I haven't been speaking to a lot of people on the street about their sentiments about this. I really don't know. I came here to express my 30 personal sentiments.

In terms of legislation before us, do you actually believe that it will actually limit individual citizens from giving money? Or do you believe that it will limit politicians from raising and giving money? And you believe that it will limit citizens' political influence and the City of Philadelphia's influence as a municipality made up of citizens, or do you actually believe it's just going to limit politicians' influence.

I --

And when you talk about the political disadvantage that would be created and the fact that you want to level the playing field, you were in fact talking about leveling the playing field among politics, not among citizenry.

Well, I see the politicians as representing citizenry and acting in that court. For example, if there are were two candidates running for governor and one was very anti-Philadelphia and one was 31 more pro-Philadelphia --

What's to stop the citizens of Philadelphia from giving that candidate as much money as they want?

Absolutely.

Thank you.

Councilman Nutter.

Just a couple questions. Mr. Hyman, I appreciate your testimony. I did get it this morning, I've had a chance to read through it very quickly. First, let me say on the example that was laid out with regard to SEPTA -- and I know that having friends in Harrisburg, as my colleagues have articulated, is critically important and making contributions is important as well. But I would rather suggest that it is individuals like Senator Hughes or Senator Williams or Representative Evans or Representative Taylor or Speaker Perzel or Governor Rendell or Representative Bishop, just to name a few names -- I can go through 32 the whole Philadelphia delegation or our four friendly counties around us that they carry a big part of the weight for us in Harrisburg on things like SEPTA, PGW, and the like. And I am certainly sadden by the loss of Senator Kukovich. I know virtually nothing about that race other than the results in the paper, but I would doubt that anyone's analysis would conclude that more money, less money out of Philadelphia elected officials who may or may not be affected by this possibly would have tipped the balance. It was a local election, a candidate and a stand-up person who appears to have had the tied shift in his locality. And so I don't in any way, shape or form want to diminish the efforts of people like the individuals that I mentioned to do their job in Harrisburg regardless of who's sending what contributions to whom. I think it's helpful, but it does not ultimately, I think, make the difference. I think they all are stand-up people. Second, Bill 040772, if I can say it one more time, this is not a campaign finance 33 reform bill. It is a no-bid professional services contract reform bill that has restrictions on campaign contributions by people who choose to participate in the no-bid contract process. And I think there is an important distinction between those two. If you want to have a discussion about campaign finance reform, I don't have a campaign finance reform bill. I have a contract reform bill that adds some restrictions similar to the discussion whether we're talking about G37 or even what the Committee recommended. So when I go to the recommendations, do you agree or disagree with this particular recommendation of the 21st Century Review Forum: "There should be reforms implemented whether by the City in its own initiative or to state-wide campaign reform or both to limit campaign contributions which individuals or businesses receiving no-bid City contracts are permitted to make to elected officials who have responsibility to award those contracts." Do you agree or disagree with that 34 statement?

I agree.

So we do something?

Right. My request here today is to defer to see if the State will act. That's my request. If they don't, I might take a different tact.

And I guess my response would be -- I tremendously respect Senator Hughes. He is my State Senator. I haven't had a chance to talk to him about this. He's got some session work during the course of this week. But I would also suggest to you that that same argument could be reversed, such that, give us a chance to do what we can do. We have the authority to do this. We don't need the State's authority, we don't need a statute change. And I have a fundamental belief, which I learned from then Mayor, now Governor Rendell. The City of Philadelphia should always do for itself what it can do first before ever going to State to ask for anything. 35 We have the power to do this. We have a contracts problem in this City. We should be man and woman enough to solve that problem locally before going to the State. So what I would suggest, quite honestly, is let us do what we can do here first. And should Senator Hughes' bill go through, the timetable at which none of us sitting here in this room 10 know -- we have a timetable here. We are poised to take action. There is a sense of interest and momentum, at least within the political and governmental community, and I think that we have an obligation to the Citizens to take action. Now, lastly, just a couple --

Can I comment on that point?

Sure.

I appreciate that you will be speaking with Senator Hughes with Senator Hughes on that because I think the two of you will have slight disagreement, but the two of you working together on this is important, and I hope you'll have a chance to 36 see his statement which I think articulates his concern about the level playing field as well.

I understand. I read that. With regard to your mentioning in your testimony about Senator Kukovich, how much money did the Philadelphia elected officials contribute to his campaign?

I know very little about that race, almost nothing more than what I articulated.

But you use that as an example to express the concern?

Right.

How much money do City contractors contribute to City elected officials on an annual basis?

I don't know.

But your testimony would leave any one of us with the impression, which I would believe because I know you well that you would not mean that somehow City elected officials have almost a 37 right to try to get as much money as possible from City contractors who receive no-bid contract work from us?

No. My view is that they have a right to do the same as elected officials in other jurisdictions in the Commonwealth. My concern is that they not be put in a different position than your colleagues in other municipalities.

What does that do about the concern with regard to the main issue at hand which is the perception, at a minimum, which does become the public's reality that the system is broken, that there is in perception if not in fact a revolving door of contracts and contributions and a connection between the two. I mean, why is the concern over the side of what elected officials can do and how mch they can raise, which is all of our personal and individual problems? All you have to do is call more people. Why is the concern over on that side as opposed to the concern of a million and a half people in this City, 5 million or so in 38 the region and the general perception of this town? Why does the concern fall on the side of the elected officials?

I have concerns on both sides that I'm trying to balance. I believe that the issue that you articulated hopefully will be addressed at the state level. But I do believe that if you are disadvantaged in raising money and contributing to certain candidates as opposed to Councilmembers in other cities that may have different philosophy, it does disadvantage me by not having my elected officials here being able to step up and help where others in other municipalities may be. It's a balance. I respect where you come out. I have a slight different view.

As an elected official, I'm prepared to deal with that.

I'm sure.

Thank you. Thank you, Mr. Chairman.

Thank you very much, Mr. Hyman. 39

Thank you.

Is Charisse Lillie here and then Inspector General William Gill? You may both approach at the same time. Is Charisse Lillie here? INSPECTOR GENERAL GILL: Mr. Chairman, I don't belive she's here.

All right, then you go right ahead, sir. This is Inspector General. We're delighted. It's my first experience having you come before City Council, and we welcome you very much. INSPECTOR GENERAL GILL: Thank you, sir. I appreciate that. Good morning. Than you for the opportunity to appear before this committee. My name is William Gill, and I am the Inspector General in this City. I am here to speak in support of the two proposed City Council ordinances regarding the creation of a new ethics board and the adoption of a new code of ethics for City employees. And I will confine my remarks to those two areas. C. I have been in my present position since January of 2003. The principal function of the Office of the Inspector General is addressing issues of fraud, waste, and abuse within city government. We do this by conducting audits and investigations. Many issues addressed by these two proposals are ones that I identified almost immediately after arriving here. These initiatives reflect systems that are fairly standard practices in other large cities, many states, and within the federal government. As one of Mayor Street's representatives to the Ethics Committees of the 21st Century Review Forum, I was privileged to play a small part in some of the these recommendations. The Mayor has also taken the important step of increasing the staff of the Office of the Inspector General. It is now, for the first time, in compliance with the 41 original Executive Order issued by Mayor Goode creating the office. We have the capability of following our investigative reports with audits to show management how improper activity occurred and make to recommendations so it's not allowed to occur again. One of the most important responsibilities proposed for the new ethics board is its mandate to educate and train employees on the new ethics rules. This concept of centralized training which should be conducted on a continuous basis will serve to strengthen the integrity of the entire workforce. My office currently conducts on a very limited basis integrity training through presentation to all police recruit classes and through periodic meetings with the City's integrity officers. Although that's an important effort, this is not sufficient to meet the needs of city employees. We simply do not have the staff to address all employees. The materials must be standardized. The effort must be 42 institutionalized, and training should be given to all employees on a recurring basis. The creation of the new code of ethics addresses one of the most difficult problems faced by employees and their managers while they try to do the right thing. Currently, there are no less than five separate and distinct sources of regulations governing employees behaviors. Some are conflicting and none are well-publicized. This has created a system wherein each appointing authority is left to apply his or her interpretation of a particular regulation. The adoption of this code is crucial to good, open and fair and effective government. A large percentage of the investigative work of my office involves resolving allegations of unauthorized outside employment. In many of these cases, the employment resulted in a conflict of interest situation and misuse of CITY equipment, especially CITY vehicles. I'd like to provide you with some examples of the practical effects of the 43 current situation of vague regulations, a remedy for which is contained in Section 4 20-606 of the proposed ethics code. The policies on outside employment within the City range from silence in some appointing authorities to fairly clear and comprehensive in others. This lack of a city-wide policy has lead to numerous investigations of unauthorized outside employments. We have recent conducted two separate investigations of City employees engaging in dual full-time employment in other governmental functions. This is a prohibited activity.

However, neither employee sought permission to engage in outside employment, and, therefore, management had no idea it was occurring. We have investigated a serious conflict of issue involving misuse of a position and failure to properly file 23 financial disclosure forms including providing false information on those forms. This arose from an unauthorized, undocumented outside 44 employment wherein a manager was selling equipment to groups under his general supervision for use in city-sponsored activities. This person was using an assigned city vehicle to facilitate this activity. In another case we investigated an employee who was licensed real estate broker. The official duties of this person involved city real estate transactions and for an entire career this person was active in a private real estate business. There was no 13 evidence of ever obtaining permission to engage in this outside activity, which on its face is a clear conflict of interest. Finally, we investigated an employee that was conducting a psychological consulting business without obtaining the necessary business permits from the City. This person had failed to advise management of the outside activity and, again, was using a city vehicle to conduct this business. In the public service, the perception of unethical behavior is almost as serious as the unethical behavior itself. 45 Once the public's confident is lost, it is very difficult to gain. Our employees deserve our best efforts to write understandable rules. And after that, we must communicate them clearly, effectively and repeatedly. These two proposals do that. It is my sincere hope that you report these bills favorably out of Committee today. And thank you for your time. I'll be happy to entertain any questions.

Thank you very much. Any questions from members of the Committee? Councilman Nutter.

Thank you. Mr. Gill, thank you very much for your testimony. Just two quick questions. One, when you find these -- you characterized -- one of these as clear conflict of interest, what do you do? INSPECTOR GENERAL GILL: Well, we conducted the investigation. In this particular instance, the individual had 46 already filed retirement papers. We sought opinions from the District Attorney's Office. There was no criminal violations involved that the evidence could substantiate. But in general, in answer to your question --

Was it a conflict of interest or not in accordance with the current Philadelphia Code? INSPECTOR GENERAL GILL: Yes, it was.

So I'm going to ask you again. What did you do about it? INSPECTOR GENERAL GILL: We referred it to the District Attorney's Office and there was a declination of prosecution.

That's on the criminal side. What did you do in accordance with the Philadelphia Code? It provides for penalties for violation of the conflict of interest. INSPECTOR GENERAL GILL: My office does not have the authority to assess any penalties. We refer the entire situation management after it was declined for criminal 47 prosecution.

And then what happened? INSPECTOR GENERAL GILL: Well, this individual had retired during the course of the investigation.

So that's what, no harm, no foul? INSPECTOR GENERAL GILL: Well, again, we are a fact-finding agency; we do not adjudicate cases.

Are you familiar with any of the Civil Service regulations around the issue of outside employment? INSPECTOR GENERAL GILL: Yes, sir. Some of them.

You said, "Yes, some." INSPECTOR GENERAL GILL: Well, I'm not an expert in --

I understand that. Well, there's 33.02 and there's 33.02(1). Are you familiar with those? 48 INSPECTOR GENERAL GILL: Not by number.

Okay. 33.02 is "Outside employment. Any employee performing outside work by working for an employer other than the City engaging in private or self-employment or rendering service for private interest may do so only in accordance with the following provisions: 33.02(1), conflict of interest. No employee shall perform outside work which is incompatible with the proper discharge of its official duties." Does that cover all the public employees? INSPECTOR GENERAL GILL: That covers all employees in the Civil Service, that's correct.

So in your testimony when you said that it goes from silent to -- I forget your exact language. INSPECTOR GENERAL GILL: Fairly well documented clear procedures.

Right. Is there 49 a reason why there's not fairly documented procedures for all the departments? INSPECTOR GENERAL GILL: All I can say is that there are departments that have not addressed these issues with appropriate administrative regulations requiring employees to provide information.

Why is that? INSPECTOR GENERAL GILL: Well, I think part of is the lack of consistency generally across all appointing authorities. There is no city-wide --

Well, has a directive been sent out to all of the departments or the heads of the departments telling them to develop policies that are in accordance with this particular Civil Service regulation, 33.02(6) is departmental policies concerning outside employment. "A department may adopt an enforce with its jurisdiction more detail policies governing outside employment which may include the requirements, conditions and necessary approval for outside jobs or self-employment. Such policies must 50 be consistent with these Civil Service regulations and be made known to all employees covered. Failure on the part of the employee to comply with such departmental policies may result in disciplinary or recovery of payment action." INSPECTOR GENERAL GILL: My office developed a unified application form that could be used by every appointing authority within the City to standardize the practices, and we provided it to the Managing Director's office. My office does not have the authority to implement such a regulation.

Do you know if a directive was sent out to all of the agency heads, departments, boards and commissions to develop such comprehensive policy? INSPECTOR GENERAL GILL: I do not believe so.

Well, you would know it, right, if one went out? INSPECTOR GENERAL GILL: I would hope so.

Do you know if 51 one's gone out? INSPECTOR GENERAL GILL: No. 4

Thank you. Thank you, Mr. Chairman.

I'm going to come back to my favorite problem. What you have testified to is a need for a review and change in ordinary practices. I thought what we were dealing with was an emergency situation in which Philadelphia had again retained the title of content and corrupted city, maybe the worst in country, and that it created emergency dangerous conditions for the City of Philadelphia that need correction. I don't disagree with any of your recommendations, but I would view them as being proper and appropriate in normal times when we would be discussing orderly changes in government, as we always do. We're always looking for ways of making government better. But it does not seem to me to deal with the particular problems that face Philadelphia today and which it cost loss of reputation and caused so many people to be unhappy by 52 actions. I see nothing that we call transparency that was testified to at the previous hearing with respect to the big people in government who do things and set the culture of the city. To me, ethical problems stem from the top, not from the bottom, because from the bottom it's always easy to develop proper procedures. But tell me how any proposal you have supported today would have avoided the problem Philadelphia, having a Mayor who received $10,000. Some people say it's a fee. As a matter of fact, one of his political opponents seem to make clear it's a fee and it was an appropriate fee that he got at the time. Yet the Mayor keeps quiet about it. No one seeks to explain the priority of having very large contributions. The one I emphasize is one that occurred by a builder. I think the a developer by the name of Goldenberger, who contributed 165 or 185,000 to Mayor Street three or four weeks before the election and subsequently has been involved in seeking many millions of dollars for 53 development purposes. How would those situations been the kind that -- let me change that. How would you recommend at least on the issue of transparency? It seems to me clear that government is going to be suspect when these things happen and the people involved do not feel it's necessary to come forward with an explanation. Tell me how a contribution of the magnitude of that proposal by Mr. Goldenberg and repeated by many others, maybe a slightly lesser amount or large amount, how that's affected by your proposals. It seems to me your proposals are very much in order as a continuing process of improving government. But I don't see that the problems that you're addressing relating to the reputation of the City and the image of the City and the bad taste in the mouth of Philadelphians who believe that legislation to get past in Philadelphia you have to make very substantial contribution. People don't know how much to make, is it 5,000, 10,000, 54 100,000, maybe close to $200,000 so you're considered for the contract. And at a time when the City has its financial problems to face, the fact is that a businessman has to recover his cost. And if the cost of business in Philadelphia involves access and you've got to pay heavily for access, it means the taxpayers in fact make that contribution. And it seems to me to be bad government from every point of view. How do any of your thoughts relate to those two questions? How would your proposals require the Mayor, if it's the Mayor or any other top official involved, how would it require them to come forward and give us the facts? No one imputes dishonesty to any of them. My strong belief is that the Mayor has acted probably very properly in these regards if he gives the people the facts so they understand them. But if he doesn't, it seems as if there's something to hide. And you stated in your testimony one fact that I think everybody agrees. In public service there's 55 hardly any difference between the image of an item and the actual facts in an item. And if the image looks suspicious, people tend to view the entire transaction suspiciously.

I'd like to have your thoughts on that. INSPECTOR GENERAL GILL: Well, sir, first of all, the code of ethics in and of itself is an extremely important step in the evolution of this City. Currently, there is no standard by which all employees' activities can be judged. The codifying of what is expected of employees in terms of behavior is critical. It sets a tone. However, the second half of that truly lies with City Council because the code of ethics or any of the current regulations only apply to the Civil Service. My jurisdiction only stems from the Mayor to the Civil Service. I do not have investigative jurisdiction over elected officials or anyone outside the Mayor's supervisory chain of command. So I can't really address the issue that you've raised other than to say this: Appearance is 56 critical. And currently the City of Philadelphia is in desperate need of a unified code of ethics, one that applies to all employees that are on the public payroll. The citizens has a right to demand it and we should be delivering it. I don't hold the view that the City of Philadelphia is more corrupt than any other city. Corruption exits everywhere, in hospitals, in corporations, and everywhere else. It's the organizations that effectively try to ferret out those few individuals who try to steal the taxpayers' money; that's what makes the difference. I'm not sure if I answered all your issues.

To your knowledge, is there anybody, any agency of government or any agent of government that have the authority to send the a letter to the Mayor saying simply "Dear Mayor, there have been allegations that you received such-and-such a payment and you did certain things. Please respond to this because your public response to this allegation is required 57 by city policy or city law"? That probably would clear up many of the things and people would know that they're entitled to know the facts. That's all the people are asking for. Because until the facts are given, then that's the breeding ground for suspension when there's quiet and silence and no answers given. INSPECTOR GENERAL GILL: My view, in direct answer to your question is that if this code of ethics is adopted, I believe it should apply to all people within the City of Philadelphia, elected officials and city employees. And I think that may address your issue, because currently as elected officials, you're accountable to the electoral. I do not have the authority to demand anything of you. And unless there is a clear violation of law, no law enforcement agency has the right or the authority to demand anything of you.

Thank you. Any other questions? If not, thank you very much for your appearance. 58 The Chair would like to take about a three-minute recess, and it will be the intention of the Chair to do that approximately every hour or hour and a half or hour two hours so everybody can get up and stretch a little bit and relax or tend to bodies' needs and other fashions. (Brief recess.)

The Committee on Law and Government is now back in session. The first witness will be Janet Perry. And if Joe Grace would join her, he can follow at the conclusion of Janet Perry's testimony. Ms. Perry, welcome to the City Council.

Thank you very much. Thank you for asking me to testify. My name is Janet Perry. I am currently Special Counsel and Director of Professionalism at the law firm of Pepper Hamilton. Earlier this year, I served on the Ethics Committee of the Philadelphia 21st 59 Century Review Forum at the request on Judge Ida Chen who is here today and who chaired the Committee. I was chosen for the Committee because of my experience in the area of ethics, education, and guidance. And I am here today to discuss the need for ethics training and guidance systems as the City of Philadelphia enacts new ethics codes. Inspector General Gill mentioned that in his testimony as well. In my position at Pepper, I am an ethics advisor to the law firm and to our clients. I provide ethics training to our lawyers and to others, and I'm a member of the firm's Professional Responsibility Committee. Before coming to Pepper, I spent about 10 years at the University of Pennsylvania Law School teaching legal ethics and serving as the Program Director of the law school's Center on Professionalism. At that center, we developed, produced, and published legal ethics case studies, primarily videotape case study method, on professional 60 responsibility and legal and judicial ethics. We went all over the country teaching these programs to law firms, law students, and judicial conferences. In addition, I have served as a member of a hearing committee of the Disciplinary Board of the Supreme Court of Pennsylvania, have taught at Villanova and have served a judicial clerkship with the Honorable Edmund B. Spate. Inspector General Gill talked a little bit about ethics training and more about investigation and enforcement. My focus on the Committee was entirely on the prevention of unethical conduct through effective education and guidance mechanisms. We began on the Committee with the premise that the vast majority of City officials and City employees intend to perform their public service in an ethical and effective manner. And to support them in that endeavor, the City of Philadelphia needs to maintain a strong ethical culture and give them the tools to operate ethically. 61 Obviously, the first step is a clear and comprehensive ethics code, and Mayor Street and Councilman Nutter have both offered such codes. Putting a code on the books, however, is not enough. Ethics codes are necessarily written in general terms, but people need to know how to apply those general principals to the situations they actually face in their work. The Committee looked at three primary tools to help city employees and officials put ethics into practice: An ethics handbook, a practical and universal training program and an accessible guidance system. We drafted a preliminary prototype of an ethics handbook. We used as our model a pamphlet of the Rules of Professional Conduct that the Pennsylvania Supreme Court publishes for lawyers. I'll give you both of these booklets. At our law firm, every lawyer receives a rule book on his or her first day of work. We would propose the same for Philadelphia. And we would recommend handbooks for City contractors as well. 62 Our ethics handbook -- and you'll see it's just a draft of something that we did as a suggestion. It sets forth an ethical rule, for example, about conflicts of interest. It gives the reasons for the rule and it gives examples of situations where such a problem might arise. It tells the reader that if they can't figure out how to solve the problem by themselves, there is a place they can go, and it tells them where to go. Inserted in the handbook is an acknowledgment page that all employees would be required to sign and return that they have read the handbook and intend to comply with its provisions. The second tool for creating an ethical culture is a system of practical and universal training program, such as Inspector General Gill talked about.

Because of ethical problems often come up unexpectedly, employees must be taught to recognize problems and they must be given concrete ways to some of them. We looked at training programs that are already n existence in the City of 63 Philadelphia in various departments and we also did a study of programs in other cities, Chicago, Los Angeles, Miami, Oakland, San Antonio, San Francisco, and Seattle. I also have a copy of study that we did on that which you may also have. We found many creative ways to educate employees and officials, including classroom and field training, problem solving exercises, on-line programs, media-based instruction and dramatizations. We found that a lot of cities have Web sites, as does the City of Philadelphia, but many cities have an ethics portion on their website that helps employees identify and solve ethics problems. So I will give you that study as well for your use. Our third recommended tool is an accessible guidance system. The guidance system would have two parts. One would be an easy mechanism for seeking immediate informal and non-judgmental problem solving advice when an employee has a problem. The other would be a procedure for getting more formal guidance 64 on recurring problems. As an analogy, the Pennsylvania and Philadelphia Bar Associations have ethics hotlines where people can call and get on-the-spot help in solving a problem, but when that type of problem occurs regularly, the ethics committees write formal opinions to guide a larger number of people. The City Solicitor's Offices already does some of this, but we recommend a more comprehensive system for people to be able to get guidance. In order to have these three tools, of course, provisions need to be made for appropriate funding and staffing to support curriculum designers, trainers and personnel to answer ethical inquiries. But in the long run, the prevention of unethical conduct is much less expensive for the City of Philadelphia than the costs both to the public fist and to the public trust of dealing with ethical misdeeds. Thank you very much. And if you'd like to have someone come and get this, I will give this to you as well.

Thank you, Ms. 65 Perry. Let me ask you a question. You're obviously very knowledgeable about Philadelphia and its current events that occur in government. What would your answer be if I asked you to state in whatever order you chose and as you thought about them the ethical problems that we face in Philadelphia currently? What are the ethical problems that, for example, that you see that are calling for some kind of answer?

Every government and every institution has many types of ethical problems. One of most common is the problem of conflicts of interest. That's a problem that lawyers face in law firms as well. So that is one of the problems that needs to be addressed. Another problem that obviously has been discussed here a great deal is the type of contracts, no-bid contracts, when those should be given and to whom. We had a problem here in the city and other places with the types of gifts that city employees and other 66 people can accept. There's a whole list of difficulties that need to be addressed. I know that you're concerned about very current events that are going on now. But we are also concerned with addressing the entire culture. You need to create an entire ethical culture that goes beyond the immediate problems.

Did you include in your statement any questions about any of the campaign contributions that the Mayor has received or any of the top officials of the city has received?

No. My role on the Committee was to deal with educational programs and with ethics guidance systems. That is where my background is, although I was on the Committee and did vote for those provisions.

I just find it so difficult. I thought we were here because many more people than have exhibited themselves to our attention here at this hearing were concerned about ethical problems. 67 I'm trying to find out what ethical problems are we concerned about. For example, the low level employee, the inspectors -- I think a whole batch of plumbing inspectors at one point went off to jail for taking kickbacks. Now, that seemed like a kind of easy case, people understood it. You don't have to be much of ethicist or even a criminal lawyer to understand that it's wrong to take a kickback. Now, they're crimes more than ethical things. But what I hear is about a pay-to-play culture in which people in order to be considered for government business of the City of Philadelphia have to have been part of a group that make contributions of sizable nature and they compete with each other apparently because the sizable contributions that occur in a mayoralty contest bewilder me after 39 years in political life in Philadelphia. I've never seen anything like it. And so either we have suddenly developed in the business community a bunch of just do-gooders like myself who are only acting in the best business of the City and therefore think it's 68 worthwhile to give hundreds of thousands of dollars to various candidates for various offices because they think it's good for the City of Philadelphia to have good officials. That's one interpretation as to why they're giving money. Another interpretation might be that they want to be sure they're going to be considered when juicy contracts are handed out. And what makes them juicy is we have to find out how a city as beleaguered as Philadelphia is financially that's contemplating layoffs currently, how we can have any juicy contracts at all. It puzzles me a great deal. Now, are they not problems? Because if not, this Committee is wasting its hearing time. I didn't think we were dealing with day-to-day business. I thought we were dealing with what many citizens and many business groups and many people in the community felt were crises situation.

I think you need to deal with both of them. And I agree with you that ethical behavior needs to be modeled at the 69 top by the top elected officials. I was also a member of the Committee who voted to institute some sort of reforms in campaign contributions and pay-to-play. But I think it's also very important to establish a comprehensive ethical culture throughout the City for every official and every employee.

Well then, how do you propose to do that if you don't deal with the top level problems in the City? That's what puzzles me. Everybody seems to travel around as if they're afraid that if they utter any words critical about top officials in the City, something awful will happen. Well, nothing awful yet has happened to me. Maybe it will tomorrow. Maybe I'll get struck by something or other. But why do people testify in a way which never mentions the problems that we have in the City? We didn't come together to decide what to do about plumbing inspectors or other kinds of inspectors that do wrong. We didn't come together -- I've never heard of a crisis situation because of outside employment. I 70 occasionally hear about police officers who get into trouble with police offices because of outside employment. Occasionally there are others that do where it's very clear that wrongdoing occurred and the law seem and the ethical procedure seem to be adequate because I never hear anybody saying the City let's people get away with murder. I hear to the contrary often, the City gets touchy, you'd better be honest when you work for the City or you'll get into tight jam. But at a certain level of bureaucracy, that criticism stops. People do strange things that causes the citizens to talk and wonder about it, but nobody feels obliged to answer and no one seems to be in a position to compel answers. I think probably most officials are honest in the City. They do questionable things and they're fearful of speaking for fear of adding more attention to it and so they don't volunteer to speak, but somebody's got to speak. And I'm living through a period where apparently if you are summoned by the Grand Jury and they investigate you and 71 reports of that leak out to the press, then you have extra reason to remain silent because then you say, "Well, this is a subject that the Grand Jury is investigating and therefore I don't have to talk about it and I'm not going to talk about it. So the investigative process itself is used as a further justification for creating the very situation which caused the investigation to take place in the first place. I mean, we're not living in a world of reality. It seems to me when allegations are raised, people are entitled to get the answers from the officials. If you're going to swim in public life, then you've got to take the unpleasant with the pleasant. There are certain rules of satisfaction that apply to public service and there are certain rules that make all of us cringe. None of us like our families ever to be involved, yet they get involved. And we do things, maybe unthinkingly sometimes or sometimes we get annoyed that people raise the issues that we think re personal, but you learn quickly in 72 public life that almost nothing is personal. And that's it if you want to serve your people, you've got to do things that if they cause suspension you've got to be ready to answer them quickly or it gets worse because then people have an additional thing to think about. " So why don't we talk about transparency? I think that was a beautiful word. I never understood it to mean be open, but apparently that's what it means. I think transparency by the top officials. Am I wrong? And if so, I'd like somebody to point it out. I don't have all the answers, but it seems to me that the culture that produces questionable ethic actions starts on top, not at the bottom. Some things start at the bottom and work themselves up. To me, the parade is set. If the Mayor took a clear and decisive position that, "It's wrong, I'm sorry I have to do it, but all other public employees are going to have do it too. " If it needs research, let's do the research and come up with the answer instead of just hiding behind the fact that the US Attorney is engaged in an investigation. Nobody knows what he really is investigating. Leaks occur, but we don't know whether leaks are going to be true or not.

We don't know what allegation that appear in the press are true. But it seems to me we've got to get to some system that begins at the top and the top sets the example and says this is the way I behave and this is the way everybody in my Administration is going to behave.

And I thing the City Council is also at the top the city government and has the opportunity right now to enact a very comprehensive ethics code and training programs and guidance systems to go with it.

I have no 24 objection at all to that, but why are we spending all of our time just on the bottom 74 level that you're discussing and staying far away from the top element? I think what we're discussing should always be part of the agenda. We're always are seeking to improve the way the system works. And certainly having a proper code of ethics and making sure it works properly is true, but I don't think that's in crisis. It can always stand improvement. But what's in crisis is apparently top officials in Philadelphia -- take the airport. It doesn't have to be the Mayor, about all Ron White's activities. Those of us who know Ron White, and I was one of them, had a great deal of admiration for him. He's a very bright guy. We don't know that he did anything wrong. But I wonder -- I was one of those who worked hard, very hard for set aside legislation but I thought we were helping people who were denied their rights to get rights. But at the airport, apparently it seems from the way in which contracts were awarded different standards were used than most of us expect it to be used to help minority contractors. Why 75 didn't somebody discuss why did Ron White -- what position did he have during his lifetime that authorized him to make the decisions or didn't he make the decisions? Why don't people come forward and tell us what's going on?

Well, I didn't know Ron White and I don't know Mayor Street, but --

And how do the ethics principles apply to that?

The ethics principles that are in Councilman Nutter's bill and in Mayor Street's bill apply to everyone in city government. My expertise is in the area of ethics education, and I'm afraid I can't answer your questions. But I do agree with you that ethical behavior must be modeled at the top. Thank you.

Any other questions? (No response.)

Seeing none, thank you very much Ms. Perry. I'm looking for answers and I think 76 Philadelphians are. Joe Grace, we're delighted to see you here. We see you here all the time unofficially. So it's good to have you make an official appearance here.

Mr. Chairman, thank you. As a point of courtesy, I just want to note that the Chair of Board of Ethics is here, Charisse Lillie. She may have a time constraint this afternoon. I wanted to bring that to the Chair's attention if the Chair wanted to have Ms. Lillie testify before me.

We'll do that. It's a very good suggestion. Ms. Lillie, would you come forward? We're always glad to see you.

Thank you, Councilman. It's wonderful to be here. It's wonderful to be back.

We called you earlier, but business apparently kept you away.

Yes, I'm sorry, Councilman. I was in meetings with a client 77 and I was trying very hard to get here. I apologize for being late.

You can proceed with your statement.

Thank you. Good afternoon, Chairman Cohen and Members of the Committee and other Councilmembers who are in attendance today. My name is Charisse Lillie and I'm an attorney with the Law Firm of Ballard, Spahr, Andrews & Ingersoll, LLP. My public service includes serving as City Solicitor of Philadelphia, as a Deputy Director of Community Legal Services, and as a trial attorney in the Civil Rights Division of the US Department of Justice. I served last winter on the Ethics Committee of the 21st Century Review Forum under our Committee Chair Judge Ida Chen of the Philadelphia Common Pleas Court. I also served as Chair of the Sub-Committee that analyzed the City's existing ethics rules. We compared them to ethics laws in states and cities around the United States. Eventually based on that research, we drafted an omnibus 78 code of ethics for the Mayor's consideration. That draft ethics code served as the template for the proposed code of ethics in the bills that are the subject of this hearing today. I am currently serving as Chair of the newly appointed City Board of Ethics as a result of an Executive Order issued by Mayor Street in August of 2004. The placement of that board of ethics under the protections of the Home Rule Charter and creation of a new vigorous and extensive process of ethics, education, and enforcement in Philadelphia is what is proposed in Resolution No. 040792 and the bills that are pending today. The other members of the City Ethics Board are Daniel P. McElhatton, an attorney and former member of this body; Judge Phyllis Beck of the Pennsylvania Superior Court; Reverend James Allen, Pastor of Vine Memorial Baptist church; and Pedro A. Ramos who is our City Solicitor. While I am not here today to speak exclusively for the Board, you have already heard from Mr. McElhatton in testimony last 79 week. I do believe that I can speak to a consensus on the Board on several fundamental points. One, we believe that the goal of the legislative process should be the achievement of the best ethics reforms that are possible for the citizens of Philadelphia. We fervently hope that nonpartisanship and good government will be your guides and that you will put partisanship aside in your efforts to achieve lasting ethics reform. We also believe that a fundamental change in how ethics is taught and enforced in Philadelphia will take time. These problems did not occur overnight and they will not be fixed overnight either. Before I address these points, I would like to detail the work of the Ethics Committee from last winter that eventually helped produce legislative proposals that you are considering today. Under judge Chen's distinguished leadership, our Committee did a prodigious amount of work in a very short period of time, approximately two months. 80 Subcommittee Chair Dan McElhatton researched how different ethics boards around the country enforced various ethics rules and how they meted out penalties or punishment where appropriate. Dan consulted with experts like Ms. LeAnn Pelham, Director of Los Angeles Ethics Commission who testified to this panel last week. The Subcommittee assigned to the difficult issues of campaign finance and pay-to-play was led by Attorney Gregory Harvey. That Committee studied campaign finance reforms around the country and helped us as a Committee to fashion recommended reforms concerning those issues. A subcommittee assigned to contracting and procurement issues headed by Kendra Heel (ph), another former City Solicitor, studied those issues and recommended various ways to improve those important processes in city government and to open them up to more public disclosure and transparency. The Ethics Committee as a whole consulted with a number of state and national 81 experts on government ethics code. We heard from the Chair and Executive Director of the Pennsylvania Ethics Commission, esteemed Attorney Louis Fryman and Mr. John Contino.

They also offered expert advice on how an existing vigorous ethics agency conducts its business. The Committee also brought in a pro bono consultant, Professor Mark Davies. Mr. Davies also came here last week to testify on ethics bills that are before you. Professor Davies, the Executive Director of the New York City Conflicts of Interest Board, was extremely generous with his expertise and helped our Committee on drafting the ominous code of ethics for the Mayor's consideration. We also employed a pro bono services of a team of young attornies from two law firms, my firm Ballard Spahr and also the Pepper Hamilton firm. These hard-working young lawyers conducted voluminous research into ethics code and best practices in cities and states across the country. The sum of all their work product is before you today in the 82 bells 040761 and 040762 along with Resolution 3 No. 040792. I am detailing the work of the background of the Ethics Committee because I want to make sure that the Council understands the level of serious scholarship that went into the research that led to the drafting of the ethics bills that are before you today. These are serious substantive proposals, and I'm certain that you will consider them in that light. Back to the fundamental points on which our Board of Ethics have consist about these proposed reforms. First, the goal of the legislative process is the achievement of the best ethics reforms possible for the citizens of Philadelphia. By setting an overall the goal, the achievement of best reforms possible, the Board means that it does not intend to take sides in the legislative debate in this Council. That is not our role. " 83 The Board of Ethics has reviewed the ethics legislation proposed, both the bills introduced by Councilman Nutter and Kenney, as well as the ethics bills transmitted to Council by the Mayor and introduced by Councilwoman Blackwell. We have issued a public statement on the Board indicating that our strongest desire is to see the process of ethics reform move forward and the Council and the Mayor will hopefully find common ground on the best ethics reform possible for the citizens of our City. There are issues of disagreement among these bills. One bill seems stronger on restrictions on outside employment than the other. For example, one bill would regulate pay-to-play locally while the other ethics package envisions state-wide pay-to-play reform. Only Council and the Mayor can resolve those policy differences, and the Board urges them to do so after careful deliberation and debate. It is also worth noting that the vast majority of these bills contain very 84 similar provisions. Fundamentally, they wind up with the same result, a new code of ethics for all city employees as well as individuals and organizations doing business or seeking business from City Hall and a new board of ethics with expanded duties and responsibilities under the Home Rule Charter. Ethics reform is happening. We need Council and the Mayor to find the right common ground to make ethics reform a reality in Philadelphia. Our second fundamental point is closely related to the first. If non-partisanship and good government are our guides, our efforts to achieve lasting ethics reform will be successful. I say this for a reason based in history which we learned during our last winter. Often times we learn cities with would undertake the banner of ethics reform, draft substantive proposals, but then those reforms get derailed in the end by politics. It happened in New York State sometime ago when our very own expert Professor Davies headed up a statewide 85 commission on local government ethics reform. The commission worked for several years, made sweeping recommended changes in ethics law all over New York State. The proposals were heralded by reformers of some of the best yet drafted in the country.

But the proposal died in the vine in the State Legislature, victims of in-fighting among opposing parties and factions in New York. Our hope is that we will not let that happen here. Working together, we should be able to achieve legislative agreement and compromise on the best ethics reform possible to benefit the City. Third, fundamental changes in how ethics is taught and enforced in Philadelphia will take time. These problems did not occur overnight and they will not be fixed overnight. One of the many things that we learned during our research last winter was that lasting ethics reform where the entire culture or environment promoting government ethics takes time. The Los Angeles Ethics Board Director, Ms. Pelham told our Committee 86 in fact that it took years for the structural process of ethics reform in Los Angeles to really take root. Professor Davies, probably the most noted authority on government ethics in the country, cautioned us not to rush forward with reforms before they were ready and before we had carefully considered all of their ramifications for the City. We believe that the vast majority of City employees in Philadelphia are honest. They want to do the right thing, but they need to know what the rules are. For too long our ethics rules have been vague, archaic, all over the map. The ethics Committee under the ultimate direction of the Mayor began the process of clarifying the rules proposing new ethics laws and making the process of ethics reform an important priority for everyone. I know that this City Council considers ethics reform to be a priority and s Chair as the Board of Ethics as well as a citizen of Philadelphia first, I am confident that City Council will do the right thing. I urge this Committee to vote these bills to be 87 reported out of Committee so that an appropriate compromise can be reached. Thank you very much for the opportunity to testify, and I'll be happy to answer any questions that you have.

Ms. Lillie?

Yes, sir.

Your firm is regarded, if not at the very top it's certainly among the very top firms in the City. And to that end, I want to direct some questions. Does your firm engage in any representation of any of the people that are appearing before the Grand Jury?

I'm sorry.

Is your firm involved at all in representing cases of individuals?

Well, I think that I should answer yes, but I can't answer you with regard to any specific names.

Do you know whether the representation was made by the 88 City of Philadelphia, the employment was arranged by the government City of Philadelphia or was it arranged by whoever you're representing?

Councilman, I don't have that kind of detail.

Do you have any thought as to the propriety of using either method? Would it be proper for the City of Philadelphia to arrange for the employment of a COUNSEL for a person that is subpoenaed to appear before the Grand Jury.

Yes, I think it is.

You think it's proper?

Yes, it is. I know it's been done in the past, Councilman.

Would it be proper for the City to arrange for the employment of other attorneys for other defendants?

Yes, I think that that is the policy of the City, and I think that's 89 proper.

You think that's proper?

I think so, yes.

When a City employee -- well, do you know how it worked. Did the City make the recommendation of your firm or did the employee choose the firm and then the City says "We'll pay the bill"?

Councilman, I do not have that kind of detail; I don't. And I don't know if I'd be able to say that to you if I did.

Would it be relevant as to whether or not the City chose the attorney or whether or not the attorney was chosen by the employee with the City merely paying for the bill? I raise it because I've never heard before of a government arranging or being involved so quickly and with so many defendants, and I wonder how it was that we got so involved in the propriety of it. Does it itself raise an ethical question? Why 90 would the City with apparently no knowledge of anything take the position that because somebody is called by subpoena before the Grand Jury -- and I believe it's at that stage. Maybe it occurs in another stage. If the person is a city employee we are going to furnish counsel either by naming the counsel or by authorizing the individual to find counsel and we'll pay the bill, because no 11 information given so we can all speculate why the City at a time of great financial need is investing almost $2 million already in legal responsibility for cases of individuals called that have been called before the Grand Jury. How does the City know enough about the cases to know whether or not it's like somebody engaged in an unlawful conflict of interest or whether the person is being charged while doing the appropriate thing with inappropriate conduct, with criminal conduct? I mean, I'm amazed by that. I'm wondering if the City's arrangement of legal counsel is itself not appropriate. And shouldn't the Mayor have a 91 responsibility to tell people who is being paid for, whose defense is being paid for? See, it all comes back to lack of transparency. And I think that in many ways we're committing, even as we say we want to cleanse ourselves, we're committing brand-new improprieties. I mean, feel free to give whatever answer you deem is appropriate.

Councilman, because I don't know the details, I am not inclined to speculate. I don't know how these engagements were arranged. And I think that that is probably a question that can be answered better by somebody from the Administration.

All right. I'm just very puzzled. Any questions of Ms. Lillie by any Members of the Committee? (No response.)

Thank you very much.

Councilman, could I please be excused? I'd be very grateful. 92

What's that?

Is it possible for me to be excused now, after my testimony, now that my testimony is complete?

Yes.

Thank you very much.

Mr. Grace.

Thank you, Mr. Chairman. Good afternoon.

Maybe you can be helpful in some of the areas I raise.

Would you like me to just begin with my testimony?

You know, I think, Mr. Grace, forgive me. We're not holding you or any individual responsible, but it seems to me that if we're talking ethics, we've got to probe the whole field. I am concerned as to how at this time it was so easy to find the million 8, which I think is already been committed in retainer fees, and what are the other features of the contract with the lawyers. Do the lawyers report back to anyone? Or are they given the full rights 93 of individual lawyers with no one in the Administration having access to the lawyers? Who picked the lawyers in the first place? Those kinds of questions bewilder me. And I think the people of Philadelphia who've raised the issue in various ways at various times are entitled to know why government money is being used at this stage of game. But go ahead. You go in your own direction, Mr. Grace.

Well, I appreciate your direction, Councilman, Mr. Chairman. I'm not prepared to go in that direction. I think that's probably more the purview of the City Solicitor than myself. Good afternoon, Mr. Chairman and Members of the Committee. Thank you for the opportunity to be here. My name is Joe Grace and I'm the Deputy Secretary of External Affairs for Mayor Street. I also want to thank Councilwoman Blackwell, the sponsor of Bills NO. 040761 and 040762 and Resolution 24 040792, for inviting me to prepare testimony and come before you today. 94 Earlier this year, I served as Staff Coordinator of the Ethics Committee of the 21st Century Review Forum. I will not go through a lot of the work that the Ethics Committee did leading us to today. I think that the former Subcommittee Chair of the Ethics Committee, now the current Chair of the Philadelphia Board of Ethics, Ms. Lillie, just went through all of that scholarship and work rather well. And I'm also cognizant of our time. The point of going through all the work of the Ethics Committee was just to testify to this body on the voluminous amount of scholarship and work, experts that were brought in, codes that were studied all over the country before Bills NO. 040761, 040762 and the accompanying resolution were drafted and transmitted up here by Mayor Street. That's the point of going over all the work of the Ethics Committee, which I think Charisse Lillie did very well. Once the Mayor directed his Administration to review all of the Ethics Committee's recommendation and work back in 95 March, last summer at the end of the summer the Mayor acted on several of the Committee's recommended reforms when he signed Executive Orders 001, 2004 and 002 '04, which impaneled a new Board of Ethics with new responsibilities and strengthened the Administration's prohibition for Administration employees of employees accepting gifts and meals. In September, the Mayor acted on more of the Ethics Committee's recommendations when he transmitted the bills that are before us today, 761, 762 and 792 where they were introduced by Councilwoman Blackwell. The bills and resolution that are before Council today are part of a broader package of ethics reform legislation that is supported by the Street Administration. As you heard earlier, State Senator Vincent Hughes produced legislation in the General Assembly last week, Senate Bills 1271 and 1272, which would regulate pay-to-play practices on a state-wide basis and also impose campaign contribution limits which individuals and political 96 committees could give to any candidate for elected office anywhere in the Commonwealth. Senator Hughes worked with the Street Administration on the drafting of his bills. If enacted, Senator Hughes' bills would represent the most comprehensive campaign finance reform in Pennsylvania in decades and among the most sweeping pay-to-play reforms yet enacted anywhere in the country. The Mayor's support for Senator Hughes' bills is in keeping with his policy position that campaign finance reform should be done on a comprehensive state-wide basis and not just in Philadelphia, to avoid lessening Philadelphia's political influence in Harrisburg. Now, to the bills themselves. Bill 19 040761 is a new code of ethics for every city employee. It would apply to every employee of every city government agency, executive branch, Council, row offices, all appointed boards and commissions. It does not apply to the court system, state-created authority such as the RDA or the parking authority for the 97 register of wills which is part of the courts. It brings together ethics rules from the Philadelphia Code and for many other sources, the Home Rule Charter. We heard some testimony earlier about civil service regulations and it codifies them in one comprehensive code, strengthening ethics rules in a number of significant ways. To the specifics, gifts in meals.

Bill 040761 would strengthen the existing city restrictions against acceptance of gifts or meals from individuals doing or seeking to do business with the City. By incorporating Executive Order 002 '04 into to Code making it applicable to every employee. The language on gifts in meals in this bill prohibits city employees from accepting any gift or meal from anyone doing business with or seeking to do business with any City agency. This is a signature reform. Honoraria. The bill would prohibit the acceptance of any honoraria for speaking or appearing ing at any event. This reform follows a similar ban in the state's Ethics 98 Act. It has one exception. Fees are permitted for teaching at an education institution. This exception follows rulings with the state ethics act. The administration believes the honoraria issue was important enough to make it explicit in our proposed city law. Conflict of interest. The bill 10 would prohibit employees from taking any action or possible result of that action with any financial benefit to the employee personally, their family or any business with which the employee is a affiliated or has been affiliated within the past 12 months. Affiliated is defined as being any business in which the employee or family member is a director, an officer or an employee or has a financial interest of more than 5 percent of the company. The language in this section 21 follows the State Ethics Act. Post employment representation. The bill would add a prohibition on former city employees doing business with any city government agency for one year after leaving 99 city service, a provision from the State Ethics Act. Attorneys are not governed by this section of the Code. They're governed by the Rules of professional responsibility for lawyers in keeping with State Supreme Court decisions on this point. Outside employment. A new provision recommended by the Ethics Committee which would bar any City employee from having another job besides their government job with any other business if that other business does work for the City or seeks business from the City. This ban on outside employment includes an exception for employees who teach at educational institutions. This provision which is really a conflict of interest provision was recommended to the Ethics Committee by such ethics experts as Mark Davies. I would point out in just a slight departure from my written testimony that a similar provision exists in other municipalities and states across the country, including Alabama, Seattle, Anne Arundel 100 County in Maryland, New York City. And I would point out that in New York City there is a waiver process in place in which if an elected official seeks outside employment, a disclosure is made to the New York Conflicts of Interest Board which considers the matter and has the authority to issue a waiver if that waiver is deemed appropriate and not in any way adverse to the interest of the City. So there are various ways to do outside employment provisions around the country. Increasing penalties for violating the Code of Ethics. This provision in the bill would require state legislation which if approved would increase the penalties for violating any part of the Ethics Code from $300 up to a maximum of $2300. That state enabling legislation has been introduced through the State House through a State Senate Committee and is before the full Senate right now. Another new penalty for violation of the Code under this bill would be to debar any vendor from participating in city contracts. It's important to know at this point that Bill 101 040761 would cover vendors and potential vendors as well as city employees. As Ethics Committee Chair Judge Chen constantly reminded the Ethics Committee last winter, ethics is everyone's job. Nepotism. The bill would prohibit City officials from hiring or advocating for the hiring of relatives.

Relatives are defined broadly in the Code and there are many definitions here in my testimony that I'll skip over. " Political activity takes the ban on political activity by city employees which is in the Home Rule Charter and incorporates it into this bill. The mandate of the Ethics Committee was survey all of the ethics rules scattered in various sources in the City and 102 codify them in one place so that employees and vendors alike know what and where the Rules are. This reform helps accomplish that. Bill 040761, if enacted by this Council, would represent the first significant ethics reform in city government in four decades. Bill 040762 and the companion resolution propose a Home Rule Charter amendment that would create and empower a new Board of Ethics and submit the amendment to voters as a ballot question. Bill 040762 has the precise wording of the ballot question along with a proposed date for the ballot, May 17, 2005, the primary election next year. This resolution and ordinance follow recommendations of the Ethics Committee which recommended to the Mayor that a Charter amendment be submitted to the voters to impanel an Ethics Board in the Charter and to create new powers and responsibilities for this Board. An ethics process with enforcement investigative and education powers and responsibilities, as you heard Janet Perry 103 testify. This ethics process would apply to all employees of all city agencies, the same as with the Code of Ethics. The resolution lays out five major responsibilities for the Board: Education of the City worker on the new roles, prevention of ethics violations by employees, investigating suspected ethics violations issuing advisory opinions to employees on ethical problems, and enforcing the new Code of Ethics. It would expand the size of the Board of Ethics from its current five members to seven members, four appointed by the Mayor, two by Council, and one as the City Solicitor serving ex officio. It would give the Board enforcement powers and duties to enforce this Ethics Code in the Court of Common Pleas. The Board may request the Law Department to bring enforcement actions on the Board's behalf. And if the Law Department declines, the Board may retain Counsel on its own to bring the case. In the days and weeks ahead, Council 104 will cast votes on the series of ethics reform bills that are currently before it. There are important and substantive provisions, significant reform in many of these bills. Both Bills 040761, 040762, transmitted to Council by the Mayor and in the ethics bills introduced by Councilman Nutter. As a representative of the Street Administration who worked on the development of these two bills and the resolution, I obviously support our bills. They represent important ethics reform for this City. But as the New York City expert Mark Davies said in a critique of these various bills, all of the bills, a critique that was e-mailed around to some staff and I received a copy yesterday, in his judgment the best reform for the City would be a melding together of some of the proposals from the ethics bills introduced by Councilman Nutter and some of the proposals in the bills introduced Mayor Street and Councilwoman Blackwell. We don't envy Council its task as it sorts through of these bills, but we're 105 confident Council will do the right thing. As Mayor Street said in January when he took the oath of office for a second term, he wanted to be clear that under no circumstances will this government improperly reward political supporters or condone any culture that does not protect the interest of the people. Thank you for allowing the opportunity to testify. I'd be happy to answer any questions that you might have.

Are there any questions of Mr. Grace?

I'm not a member of the Committee, Mr. Chairman, but I'd like to ask a question.

You will be called at the appropriate time later on. Everybody who wishes to will have an opportunity to heard. Any members have any questions of Mr. Grace? If not, thank you very much for stating your position.

Thank you very much for the opportunity. 106 Mr. Chairman, if I may.

Yes.

There is written testimony from State Senator Vincent Hughes. We provided it to the Clerk. It was going to come before Mr. Hyman's testimony this morning, but inadvertently it was not entered into the record. May I just simply enter into the record written testimony from State Senator Vincent Hughes on his official letterhead?

It will be so ordered.

Thank you.

Councilman DiCicco, you have a question for Mr. Grace?

Thank you, Mr. Chairman. I appreciate the opportunity to be able to ask a question although I'm not a Member of the Committee. Mr. Grace, Councilman Cohen was asking questions of Ms. Lillie earlier about the law firms and who decided on those particular law firms. Do you know anything 107 about that process? Are you familiar with that? And let me finish my entire thought and maybe it might be easier for you to answer. Are you familiar with the process as to who is allowed representation? Is it all city employees? Is it certain city employees where the City of Philadelphia would pay to have that individual represented in a court proceeding?

Councilman, I won't be as helpful as perhaps I wish I could be for you. I am not firsthand involved or familiar with the process by which the selection of Council occurs to represent employees in investigations or such matters. I do know from many conversations with our Solicitor that the judgments -- and I hesitate to not speak for the solicitor. But I do know that the decisions that get made on whether or not legal defense will be provided, largely eventually go to whether or not in the Solicitor's judgment employees were acting 108 outside the scope of the employment. If they were outside of the scope of their employment, the Solicitor has discretion not to provide legal defense at the City's expense. Now, I hesitate to go much further because I think that's within the purview of the Solicitor, but I wanted to be as forthcoming for you as I possibly could.

Now, I may not be correct, but I seem to think that in the past an elected official, a member of a mayor's cabinet, whether this Mayor or any other mayor, people who are in cabinet positions, if I'm not mistaken, normally are provided legal counsel representation at the taxpayers' expense. However, if an employee of the Department of Licenses of Inspections, a lower level employee, not the Commissioner not the Deputy, is accused any wrong doing, taking a bribe, receiving a gift for passing an inspection or whatever, I believe I'm correct in that generally the practice is that that that individual would have to seek representation and pay for legal 109 representation at his or her own expense. And this is not an indictment on this Administration because this has been past practice. I find that unusual that only certain people appear to be or seem to get the ability to have legal representation at no 8 cost to them but to the taxpayers but other people who are government employees -- because I consider myself a government employee. I'm elected but I'm paid by the taxpayers and I kind of get special treatment in the area of legal representation. And I think that that's something -- and I don't know if it's addressed anywhere in here. I think that's something that should be part of the overall -- when we look at reforming the Ethics Code, we should look at those kinds of things as well. So again, I'm curious as to -- what I really find awkward, and it goes to the questions that Councilman Cohen raised earlier, is not knowing how the process of selecting a law firm to represent people in government who are indicted or under probe and 110 need legal representation. The irony of it for me is in most cases the law firm that gets selected -- and I'm not sure how that happens, but generally the law firms that get selected are the same law firms that were major contributors to the people who were subsequently indicted and in need of legal counsel. So, to me, it's very ironic that they're getting it on both ends. They're make contributions to individuals and they actually wind out getting the fees for representing those same folks that they helped get elected to office. So there's got to be some way of separating the two out. I'm not suggesting that people get in trouble so they can create fees for the law firm. But they're getting the fees and they're part of the pay-to-play, if you will. I'm not condemning anyone or indicting any particular law firms for that, but they're part of play-to-play which is the heart of what this is all about is you reward law firms with bond work and other kinds of things because they're major contributors and then in some cases they wind up collecting 111 fees for representing the individuals for getting themselves in a jam.

As I stated, I am not familiar or firsthand involved in the process by which the selection of counsel occurs. I'm sorry that I can't be more helpful to you on that.

Maybe someone on the Board, Councilman Nutter or somebody knows. I think there's a clear distinction as to who is entitled to legal representation and I think it stops somewhere on the chain from the elected officials, appointed officials, and then you get to the lower level employees it kind of drops off, if I'm not mistaken.

I think what Councilman DiCicco raises is very important, but there are also other questionable factors about it. Usually you depend on the person who is represented to know whether or not he's getting the services he paid for. Now, does the City make those inquiries instead of the person? And if the City is asking questions of the counsel, it leads to other questionable 112 practices. How is the case going? What's hot, that kind of thing. So that it would be preferable, I believe, except in highly unusual cases for the employee to have to accept his own attorney. It's along the line that Council DiCicco is representing. But I was amazed at the speed with which all of this happened too and the lack of explanation to the people of Philadelphia. And the Ballard firm, which is Charisse Lillie is a member of, I believed is one of the companies that was favored very much by the City in getting business and maybe they were right in being favored, maybe they do have unusual qualifications but maybe not; I don't know. I would wonder how they happened to get also into the question of representation of clients before the Grand Jury. And then I raised the question further, under those circumstances where she admitted they did have a client, what is the propriety of her coming here and testifying on this question generally. So once you open a Pandora's box, you get all kinds of questions. But I think if we're to 113 have a meaningful thing, it's important to get it right. And let's have a full, open discussion on ethics. In all the years I've been in City Council, straight years now 6 and over three years before, there's never 7 been a meeting of an ethics committee. So I 8 think it's about time we had it and we ought 9 to do it right. And, to me, doing it right is 10 the most important thing rather than doing it 11 fast. I don't want to waist any time, but I 12 don't want in the guise of the urgency of the 13 situation to do something which we do wrong. 14 When you talk about amending a 15 Charter, it's a very serious proposal. The 16 Charter is much harder to change later on if 17 we make a mistake than just pass legislation. 18

Councilman, if I may. I 19 support you on getting right and not rushing 20 to it. Everyone wants ethics reform. And I 21 would point out at the risk of repeating 22 myself that an objective observer is the 23 expert from New York City, Mark Davies, who 24 critiqued our bills and circulated it 25 yesterday to some staff and indicated that he 114 had some problems with the Mayor's bills and supported some elements of the Mayor's bills. He thought that Councilman Nutter's bills were very strong in part and he supported the Mayor's bills -- Councilwoman Blackwell's bills, forgive me, in other parts. And that the best ethics reform for the City would be a melding together of these bills into one bill. And that comes from a fairly objective expert who looked at all these bills. And I think that we can get there. So I support your views on getting it right and not just rushing to reform.

I'm getting concerned about the lack of public interest. Why is the public so -- is the public convinced that we're going to do nothing about this? Is the public convinced that we can't change our ways? Is that why they're staying away? The Law and Government Committee, according to the Rules of City Council is charged with a special responsibility for dealing with matters involving the Home Rule 115 Charter. And I regard amendment of the Home Rule Charter something that should only occur if it has to occur when the regular legislative process is not available to it. I know how difficult it would be normally to change a Home Rule Charter, but in Philadelphia's recent history we've begun amending the Charter so frequently that it's lost much of its meaning and I think that's not a healthy condition. Secondly, I don't believe that this is merely a contest between -- forgive me both of you -- between Councilman Nutter's bills and Councilwoman Blackwell's bills. I think we've got to deal with ethics. Therefore, I am not convinced that those two presentations are all that's needed. I'd like to know why there's such apathy by the public citizenry. The papers have been full of stories about this ethics, yet I look around and except for the two witnesses that are going to be testifying shortly, I don't see any of the public here. Why is it? Don't they believe us at all? If so, we in Council have a 116 serious image problem and I want to get something going to hear from the people of Philadelphia, what do they think ought to be done. Now, that's the reason why at the end of this hearing I'm going to be recessing this hearing. I want to know what's going on. I want to know why we don't hear from the public and look for ways to spread this debate broader. It isn't a satisfactory answer to me to say the time is now.

Point of order.

Councilman Goode.

I have a question about the comment you just made. How do we actually change the Charter without the public?

That's after the event.

No, that is the event. The public gets a chance to vote. That is the event.

The public has the right to assume that if it's on the voting 117 list that Council has given it thorough consideration and taken into account every point of view. We haven't heard from the public.

But we can't, in fact, change the Charter without the public; is that true?

Either we're dealing with the wrong issue here or the public just believes it's fruitless to try to deal with City Council.

Mr. Chairman, unlike any other legislative action this Council takes, Charter change legislation definitely requires the public's vote. We can pass anything in the Council can be decided by 18 people, 17 Members of Council and the Mayor, but on Charter change legislation it absolutely requires the public. Is that is not true?

Yes.

Mr. Chair, I just wanted to point out that there are members of the public. 118

I'm convinced by Councilman Nutter's statement is what we're doing is deciding a new way of life for many years ago.

Mr. Chairman, it's a way of life that has been in place for some time and it hasn't been enforced. I don't know why a lot of members of the public are not here. You've indicated that there have been newspaper stories. There were a lot of people here yesterday. The public cares about what it cares about but then it also expects us to take certain action whether they show up or not. That's what we get paid for, is to take action whether there is a throng of people or whether there are two people. It's the same responsibility. We all took the same oath. We've read through the material. Everybody knows what the story is on these issues. And as I said, whether two people show up or 200 people show up, that does not take away or obviate our responsibility to take action. Sometimes the public is looking for leadership. That's what they expect. 119 They have a right to expect that that's what they pay us for. And we don't always have to take action when the Chamber is full. This is not the circus; who gets to perform depends on who gets the most applause. This is not this kind of environment. We received a report from credible people outside of us. They've made some recommendations. We're following those recommendations. To the extent that there may be any difference of policy opinion on no more than, I would estimate, five areas either of which would take us light years beyond where we are today, I don't know what it is that we're waiting for or who else we need to hear from.

The public. We need to hear from the public.

Yes, and they will vote at an election. But they elected us last year to take action on matters that are important to the City. And if any one of us doesn't know by now that the public is tired of the system that's in place, then that's that person's business. But they are tired of 120 it. You hear about it, I hear about it, all the Members hear about it. That's our job, that's our responsibility whether two people show up or 200 people show up. We have many hearings when there aren't a lot of people here. There were a lot of people here yesterday because they cared about that issue. So it's not just about how many people show up. We have an obligation. We took an oath. We have information from experts in this area --

We are not under an obligation to act when the information is incomplete.

That's your opinion. You're entitled to your opinion.

Mr. Chairman, I have a question for Mr. Grace.

All right. Councilman Goode, go ahead.

Good afternoon, Mr. Grace.

Good afternoon, Councilman. 121

My questions are simply centered around your entering testimony on behalf of Senator Hughes. Can you tell me why you did so?

The Senator wanted to submit written testimony. He was unable to be here today so he submitted the written testimony to the Administration and simply asked us to hand it up into record.

So did you review the testimony?

Briefly, yes, sir.

Is the Administration in agreement with the testimony?

Mayor Street stood next to Senator Hughes when he introduced this legislation that's the subject of the written statement last week and supported the legislation.

I want to direct your attention to the second page of the testimony.

Forgive me, Councilman, 122 I may have handed up my copy.

The second page, second paragraph, the first sentence, it says, "Mayor Street has been a regular and very generous big ticket supporter of both the House and Senate Democratic Campaign Committees." Can you explain that comment, whether the Administration is in agreement with it?

Senator Hughes and -- more Senator Hughes than the Mayor spoke about that at the press conference last week when Senator Hughes introduced or announced the introduction of his legislation. And he indicated that the Mayor has been a regular supporter of the House and Senate Democratic Campaign Committees. I think the reasoning for the remark -- and this comes from the press conference, Councilman, not so much from this prepared statement, was that Senator Hughes --

I'm asking about the testimony that you had entered. I'm asking whether the Administration is in 123 agreement with the second page, second paragraph, first sentence.

If it's a factual statement, I would agree with it from what I heard at press conference last week.

Can you tell my how it relates to any of legislation before us?

That's what I was trying to get to, Councilman. What the Senator was trying to say is that Mayor Street has been a supporter of state-wide candidates to maintain Philadelphia's influence on a state-wide basis. That's what he was trying to get at when he made that --

Which bill or resolution before us today does that statement relate to?

Well, my point in my testimony --

I'm asking about the testimony that you just had entered into the record. I'm asking specifically right now about the first sentence in the second 124 paragraph on the second page of testimony you had entered into the record.

What it goes to is our support for state-wide campaign finance reform and pay-to-play reform as opposed to at this point in time local only pay-to-play reform. That's why I was referring back to my testimony.

Let me move to the second sentence. "This allows for legislators from across Pennsylvania to pay attention to the needs of Philadelphia whether they like it or not." Can you explain to me what that means, and why those legislators wouldn't automatically have to pay attention to the needs of Philadelphia anyway?

Councilman, I'm just reviewing it. As I said, I didn't write this statement and it's not my testimony.

But you had it entered into the record.

As I said, Senator Hughes asked us to entered it into the record. 125 I think it relates back to the first sentence, again, that Mayor Street not only is supporting the concept of the state-wide legislation but actually has supported candidates across the state to make sure that they pay attention to the needs of Philadelphia.

And so he pays legislators to have them pay attention to the needs of Philadelphia?

Councilman, I don't know that it says that.

What did you just say? Can you just recount what statement you made?

As I understand what I'm reading here in this paragraph, and again I'm referring back to what I heard in the press conference last week, is that --

I'm asking you to refer to the testimony you had entered into the record.

That Mayor Street supports state-wide candidates for office 126 which helps him make his case for lawmakers to be paying attention to the needs of Philadelphia.

Otherwise, they would not pay attention?

I don't know that, Councilman.

Let's move to the third sentence. "If the city passes laws that limit our political big guns from raising and spending money, if he has a smaller account to draw from, it limits his ability to get our city's point across when it comes to necessary legislation and budget requests." What does that mean?

Councilman, and I say this respectfully, it's hard for me defend each point in this testimony that the Administration did not draft.

So you entered the testimony just as a matter of courtesy?

Absolutely as a matter courtesy. The Senator asked that it be introduced into the record. 127

But you don't stand behind his testimony?

Well we do support the overall point of the testimony.

But I asked you questions related to three sentences, only three sentences within a two-page testimony.

I'll do my best to answer the third one.

What does it mean that we should not pass laws that limit our guns from getting our point across? Political big guns. I'm sorry. Big guns.

I think, again, overall it's the point that the Mayor would prefer and believes that campaign finance reform should be done on state-wide basis and not just locally.

Aside from being on a state-wide basis where everyone falls under the same rules, we would still have political big guns even though everyone falls under the same rules.

I'm sure that's correct. 128

And why are we protecting the power of the political big guns?

Councilman, I apologize. I'm not sure I follow.

I'm referring to the third sentence in the second paragraph of the second page of the testimony you just had entered into the record. I'm asking about the political big guns. You said the purpose of state-wide reform is to level the playing field, but after leveling the playing field, we still have to protect the political big guns.

I'm not sure where it says anything about protecting political big guns.

It says, "The city passes laws that limit our political big guns from raising and spending money. If he has a smaller account draw from, it limits his ability to get our city's point across when it comes to necessary legislation budget requests." 129 So did you just entered testimony as a courtesy, or does the Administration stand behind the testimony?

We entered this testimony as a courtesy to Senator Hughes. And on an overall point, the Mayor stood up --

Do you agree with those three sentences we just reviewed several times?

The overall point of the testimony we agree with. The overall --

I'm asking about those three sentences.

Councilman, it's a difficult position --

You put a lot of work into this, Joe. I mean, you were part of the 21st Century Review Forum, you've been involved in legislation. I consider you to be almost an expert on these things. I mean, you can't comment on three sentences in a testimony you just had entered into the record?

I'm doing my very best 130 to comment on it even though we did not prepare it. We support overall the concept that campaign finance reform be best done on a comprehensive state-wide basis as opposed to locally.

Isn't campaign finance reform about getting rid of the political big guns?

The campaign finance reform legislation --

Isn't campaign finance reform, in general, about getting rid of the political big guns? Isn't it about one person, one vote rather than big money.

I would agree that it is to lessen the influence of money on the political process.

So do you still stand behind this testimony that says that we need to support the political big guns.

I think perhaps the best thing we should do is say that we introduce this testimony as a legislative courtesy or a political curtesy to Senator Hughes and we 131 support the concept of state-wide campaign finance reform.

Thank you, Mr. Grace.

Councilman Kenney.

I don't want to belabor this political issue, but I want to raise something and you can comment or not. That colloquy you had with Councilman Goode about Senator Hughes' legislation, I understand it's difficult because Senator Hughes' comments is not your comments or the Mayor's. But I want to throw something out there because during the discussion it occurred to me that the paragraph, "Mayor Street has been a regular very generous big ticket supporter of both the House and Senate Democratic Campaign Committees and this allows for legislators from across Pennsylvania to pay attention to the needs of Philadelphia whether they like it or not." The converse of that, what affect do you think it has on the City's ability to get 132 the resources it needs when the Speaker of the House is a Republican from Philadelphia and the Senate President is a Republican when both Houses are controlled by the Republican party when we have Republican -- I'm a democrat and I'm not defaming the Republicans, but when we have Republican State House members like John Taylor and others who really go to bat for the City on a regular basis to tout the fact that this money is being used to defeat them certainly wouldn't put us in their corner or them in our corner. Don't you think it's problematic that part of the problem we have with our relationship with the Legislature is, in fact, that whole issue? I mean, the Speaker of the House is probably one of most powerful people in Pennsylvania is from Philadelphia and we're talking about raising big ticket money for big guns to take them out. How does that help us?

Again, I appreciate, Councilman, recognizing that it's difficult to go through every line of testimony that we did not prepare. The overall remark last week -- 133 I do keep going back the press conference because I heard the Senator and the Mayor discuss it. And the Mayor in response to reporters' questions was letting the media know he has supported state-wide candidates and he has supported state-wide campaigns. He wasn't just saying that he wanted state-wide reform because he thought that would strengthen Philadelphia's influence.

See, I think part of the problem with the whole premise of the argument is one -- and I think is where Councilman Goode was at -- is one of insider political argument as opposed to what's good public policy, what's good for the city, what's good for the state, and what's good for the city's relationship with the state government. This insider rationale for not doing either local campaign finance reform or local pay-to-play, fixing that problem, I think is fraught with peril in that we wind up in an insider political argument which we get the short end of stick on. I mean, we have a 134 Governor from Philadelphia who's doing his best to help our schools and to help our taxes and other things. He has to work with, and so the Mayor, whoever the Mayor is, has to work with the power structure in Harrisburg on the other side of the aisle. I can't see justifying not doing something here in Philadelphia because it's going to mess up our political strategy. I think the political strategy is somewhat flawed in the fact that we don't have great working relationships with the people who run both Houses of the Legislature. I think that's worse political peril than getting rid of our ability to continue to fund Democratic candidates. I think it's important that both sides in a partisan way fund their candidates and fund their party. But to make a policy decision or to recommend a policy decision based on our ability to fight with the Republicans, I don't think we should necessarily be fighting with the Republicans all the time. Perhaps a little more cooperation would have kept us from losing the Parking Authority, would get 135 us more money for the schools, would help in some other areas. And I think that it's one of the problems that we have in getting what we need out of Harrisburg is that we're making a contentious argument as opposed to trying to figure out a way to work with the other side of the aisle. It's just a comment.

And I appreciate that, Councilman. The only think I would add in closing is that I don't think it's part of our -- I respect your remarks. I don't think it's part of our policy position to fight the Republicans as part of this overall --

But, Joe, with all due respect, part of the Administration's position on why we should not be ding Councilman Nutter's bills is the argument that somehow we're going to lose inside political clout. And my argument is I think that's a wrong way of looking at it because that inside political clout of raising big money from big ticket supporters and big guns and all the big stuff is putting us at odds with the very people we need to help us. 136 We just had a recent cooperative effort with George Kenney and Speaker Perzel on school safety zones, raising the speed limits and raising the points. That's a bipartisan cooperative effort. They pushed that bill through the House to get us the help we need. Why do we want to make an argument that we need to raise money to get rid of them? Every six months there's an election and the Democrats fight the Republicans and it's fair game, we all understand and we're all big guys and big girls in this business. But to make an argument of not doing a public policy recommendation of Councilman Nutter based on the fact that we need to raise big money to take them out, I don't think puts us in great position to get cooperative effort.

I just have a comment to make on that. It couldn't have been better said, Councilman Kenney. I think that absolutely is true. I think I have a problem with this, and I'm sure my colleague Councilman Rizzo also has a problem with it 137 because I think, as Councilman Kenney has said, despite being called a measly Republican by some of my colleagues in here, we do try to help the City in a bipartisan way. I just don't like the way this letter is written and I would have a problem of passing any legislation which would accept this as part of the package. I just want to get my two cents in if I could. But I know it's not you, Joe, and this isn't coming from you. But I think I have real strong reservations about the wordage used in this letter.

Councilman, the phrase may have been unartfully written, and I just want to conclude by saying that the reason we're up here is that we believe that ethics reform is bipartisan good government reform, and that includes working with every member of this body. And I neglected to do what other witnesses had done, which is to respectfully ask this body to report Bills 040761 and 762 and Resolution 040792 favorably out of Committee at the appropriate time. 138

The fact that there's this dispute raging is self-indicative of the fact that much more discussion is needed. When the Speaker of the House issues a letter and apparently directs the Chief Executive of the school system to direct that all the children in a certain legislative district take home a letter from the Chief executive of the school system three days before an election stating how wonderful the Speaker of the House is who is in a contested race, I don't like that. And I don't consider that an advance for the school system, and I was stunned to learn that the director of the school system permitted himself to be used in that ugly fashion which the Daily News calls sleazy, I think, in yesterday's Daily News item. But one thing is clear. When there are these kinds debates going on, more time is needed. And I think that what we have to do is have much more discussion. For the first time, we are having serious discussion on ethics, and I don't think it ought to be 139 rushed. I view it as my duty to see that when a matter is presented to this Committee it is fully researched and fully discussed and every effort made to achieve consensus to the degree possible. And that's the reason why I think this would be premature at this time to bring the question to a vote. I don't think it's ready to for the vote. I think there are too many questions that yet have to be answered.

Councilman, if I might, Mr. Chairman.

Yes, Councilman Nutter.

What are the questions? What are the questions?

About what? The question is, in my mind, this issue has too many unanswered questions. I want to know why it is the Mayor does not issue a clear statement following Carl Singley's statement yesterday or two days ago or last week with respect to a $10,000 item.

That has nothing to do with the legislative matter, Mr. 140 Chairman. You're not going to get a response from legislation on that.

It has to do with the issue of transparency.

Why don't you call the Mayor up and ask him the question?

Well, you can do that if you want to.

I don't want to. You care what the answer is. You care about it.

I have my own method of finding out.

I don't care about it.

Well, you don't, but I do.

I understand that, and you have your right to that. It has nothing to do with a piece of legislation.

We have differences of opinion. And it happens, Councilman Nutter, that because you believe something doesn't make it the only way to do 141 something.

And the converse is true, with every respect to Chair. You want to know what the Mayor is doing or what he's not doing or what's on his mind. You have a number of methods to get an answer to that question. That has nothing to do with the matters in front of us. I don't care what his answer is.

I believe it has a lot to do with the matters in front of us. I believe I've got to find out why it is the public chooses to participate by a total policy of non-participation. And I find that the wrong way to legislation --

What does this.

The wrong way to legislation is to take advantage of the public's ignorance about a subject and not find a way to interest the public so we can learn about the public.

And what would you suggest, Councilman?

I don't believe 142 in doing legislation apart from the public.

What would you suggest we do.

I don't have to tell you what I suggest.

Councilman, now wait a minute. That statement would suggest that we didn't go through a normal process that we do on every bill and every resolution. It was duly advertised, it went through the normal process, and people show up for what they care about it. Now, you know it and I know it

Well, that's your interpretation. I say it shows that --

Did it go through the normal, Councilman? Did it go through the normal process of the Home Rule Charter and our Rules?

Of course did it did. It proves that the process that you describe as normal was not successful and, therefore, we've got to find out why.

That's your 143 opinion as to whether or not it was successful. There were witnesses here. There was a Committee put together by the Mayor.

There wasn't anybody in significant number from the public at all here.

They issued a report back on March 18th. Have you gotten many calls about?

No. No, I haven't gotten any calls about it. That's what troubles.

Right. You haven't gotten calls about it because people expect us to do something about it.

No, that's not why; it's because they don't understand the importance of it and they believe maybe that we're not going to really do anything and maybe they believe that we're so crooked that they can't rely on us. I don't know what it is.

That's just a burning question in the hearts and minds of 144 people today as they sit at they jobs, they're wondering what's going on with the ethics code in Philadelphia.

All right, Mr. grace, you are excused unless you wish to say anything.

No, Mr. Chairman, other than that there are two members of the public who have patiently waited and at your discretion would like to testify.

Well, here they are. They're at-large members of the public. They represent the rest of the citizens of this city.

Will the Clerk call the remaining witnesses.

Mr. Thompson and Mr. Quinones, please.

Will the first named speaker identify himself for the record and then proceed?

My name is Quinones.

Go ahead, sir.

Again, my name is Joe 145 Quinones. Unlike many of the people here today, I did not come with a written statement. I come to you simply as a small businessman and concerned member of the community to basically say that I am not here for Mayor Street, I am not here for Councilwoman Blackwell or Councilman Nutter. I am here for the Philadelphia community. And I support any legislation that could possibly level the playing field when it comes to the issues that I think that the code of ethics and the proposed ethics board could address. If Councilman Nutter's bill can level the level the playing field relative to contracts and how contracts are awarded in this City, then I think that that's something good for the community. If Councilwoman Blackwell's bill can facilitate the creation of a code of ethics and an ethics board that will, again, ensure that government functions well and in the best interest of the community, then that's something that I support. Councilman Cohen, we first met 14 146 years ago when I was a concerned student at Temple University seeking justice because some students were brutally beat by police officers in unjust way. You were one of only two Councilpersons that felt that that issue was worth listening to. I hope today that you will also listen to me years later as I've 9 grown and matured from being a freshman at 10 Temple University to a small real estate 11 developer and help enable us to get past the 12 politics that divide these two bills from 13 being blended together and reach a compromise 14 that will get this bill out of Committee and before the floor. Thank you very much.

Thank you. Any questions of the witness? (No response.)

If not, thank you very much for coming today and serving as a reminder of good old days.

Yes, sir.

The next witness.

J. Thompson and I'm an attorney and I guess I'm a 147 community activities and I'm an Idealist at heart. I believe what we're doing today is putting this to you. I sat in the Chambers today and, Councilman Cohen, you've raised the issue as to why the public doesn't participate and I submit to you your last exchange with Councilman Nutter would be a good example of why no one shows up, because rather than really get to what we're thinking, you're bickering about something that I think is in the only province of Council and you guys here today. But I liken your experience here and what's going on here to what, as a Phillies fan, I have frustration with, because I know that the people who make the decisions for the Phillies are a small group of people. And everybody knows that Phillies need a center fielder and a left fielder. And everybody who sits in the stands and buys the season ticket knows that we need these things. We all know it. God knows, Marlon Byrd hit 220 last year and we couldn't find a guy to play in the 148 middle, you couldn't have a pitcher that did well. But it's only up to you to do it. It's up to you to put this us. If it were put up to a vote, I'm sure the City of Philadelphia and all the Phillies fans would vote for somebody to spend money to get the best center fielder we could get and the best left-handed starter, the right-handed starter. But we can't get in that room. You have the power to put this to a vote. And regardless of what bill we support -- and I think, judging what I've read and what I've seen, I believe Councilwoman Blackwell's bills are I guess a little bit better, but they're not any different what Councilman Nutter and Kenney and Goode and DiCicco put forth. But I think what your concern is that there hasn't been enough public voice today. And what I think is there has been enough public voice, and there's been public voice since this building was built. Since Philadelphia was founded, we've had to deal with -- I wasn't when it was, but we've 149 had to deal with sweetheart deals and it's just a part of the way things are. And today you want to extend what I believe is a chance to vote this out of Committee, put in front of the City, put in from of the City Council, and then put it in front of people like me. We're going to go to the polls and say, you know what, we do want common sense reform in the City. And I think what Councilwoman Blackwell and Mayor and even Councilman DiCicco and Kenney and Goode and Nutter have come up with are the starting points for something. And to allow this to drag on and on and pray that somebody comes in here, a member of the public and cheers and screams about ethic reform, I don't think that's going to happen. I think if you look at the situation, like I said, you're a small group here who are going to make a decision that's going to affect the next hundred years. And I just had a baby on Saturday. My little daughter is going to grow up in Philadelphia which today maybe the day -- she was born on Saturday -- has a chance to have education reform but also ethics reform; 150 something it's never had, something that we in the public have to deal with sort of every day at the jobs. We have to abide by ethic reform. We have to do that. " We all do. It's a situation just like I said with the Phillies. We all want these things, but the people who are going to make the decision are just a few people and we can't influence them because it's their team. Well, it's your team now. If you put this to a vote, I'm sure hopefully it will get voted out of Council today and it will get voted at some point and when it gets put on the ballot, it will happen. It will be a first step. That's all I have to add.

Any questions for the witness? (No response.) 151

Thank you for your statement and your patience. Councilman Nutter.

I just want to say thank you for your comment and statement. I appreciate. Thank you.

Thank you.

I would like to point out Councilman DiCicco's questioning of hiring of certain firms to represent people who were involved in Grand Jury indictment. I think this is a point of clarification. I think that those firms were appointed based on the fact -- and I think that everybody would agree in America, everybody's deemed innocent prior to being found guilty. And with the wide scope of the net that was thrown around not only the Administration but people involved in it, those City officials who may have been tangentially involved in these deals, for th City to provide representation to those people when their guilt or innocence was certainly in question and their innocence was assumed under our Rules, I think that choosing the firms 152 that did it -- and I looked at the list -- believe me, if anybody on the speaker there were in any of the same kind of trouble would want people like that Ballard Spahr and Wolf Block and Dan McElhatton representing them regardless of whether they donated to the campaign. That's all I have to say.

Thank you. The Committee will stand in recess until Tuesday, November 30th at 11:00 a.m..

Councilman, we had a conversation. I mentioned to you that I had amendments that I wish to put forward.

We'll undo the recess for the purpose of hearing amendments. There will be no action taken today. There will be no meeting. Anybody who has an amendment to offer may do so now to give information to the Members for consideration.

Are we in the meeting, Mr. Chairman?

No, we're at a hearing. The amendments will only be announced at the hearing. No action will be 153 taken on the amendments.

Councilman, I'd like to have my bills amended. I'd like to have them amended in a form that they are ready.

Right now we're at hearing, and no action will be taken during a hearing. If not, I recess the hearing until November 30th at o'clock. 11

Councilman, I'm asking you, can I have my bills in a form that is proper and amended so that they can be fully discussed?

The Chair has ruled. You're either going to put the amendment in for informational purpose at a hearing or the Committee will stand in recess.

Point of order.

Point of order.

Mr. Chair, why are we recessing until November 30th?

Because the Chair believes time is needed to consider the bills.

To consider which 154 bills?

The bills are not in condition to be voted on.

Well, the bills will not be in condition to be voted on unless they're allowed to be amended.

The Chair doesn't have to explain its position. I've explained it many times. You accept it or not. The hearing is in recess until Tuesday, November 30th.

Mr. Chair, you can choose not to answer this question, but I still have a question for you.

The stenographer, you're released.

Mr. Chairman --

The meeting over. (Council adjourned at 2:25 p.m.) - - - -

I will reopen this hearing today on November the 16th for the sole purpose of hearing the amendments to be offered by Councilman Nutter or any other 155 member to enter the amendments he or she chooses for hearing purposes and informational purposes. Go ahead, you're free now to put them in.

Thank you. It's okay now?

Well, if you're going to keep your word, it's okay, sure.

Well, I don't appreciate you questioning whether I'm going to keep my word, but I won't argue that point since I've said it now four times that I was in agreement with what you said. In Bill No. 040770 on under Letter C, Advisory Opinions -- and some of these, unfortunately, Mr. Chairman, apparently didn't make it into the record at the last hearing so some of these will be redundant.

Okay.

No. 4, the Board shall develop procedures for all city officers and employees to obtain informal guidance and assistance in understanding and maintaining 156 compliance with the provision of this chapter. On Page No. 7, letter J, under 20-603, title, Ethics Training and Education for businesses. The Board shall develop in conjunction with the Procurement Commissioner a code of business ethics manual and conduct educational and training programs for use by all businesses who may conduct business with the city. 20-6707, Penalties. The provision currently reads, "No. " Strike the period, insert a comma, or if so authorized by the General assembly a fine of up to $25,000 for each violation. There are amendments to Bill 040772, which is the contracts and procurement bill. There are number of technical amendments. In Chapter 17-1202 under No. " New word, the. Strike the A. " Strike that language. A search on the city's office Web site a notice of -- continue the sentence. " All of this language is dealing with the advertising concerns that were raised in the hearing the other day. , add to small letter iii, add to the end of the sentence, on file with the Department of Records and the Procurement Department small letter C, after the agency have selected the applicant with which it intends to contract, the city agency shall publish a notice of the city's official Web site. Further in that paragraph, striking the advertising requirement, replacing it with appear on the Web site for at least one week 158 contract is executed no later than the date, strike "of publication," the notice first appears on the city's Web site. On , every noncompetitive bid contract shall be approved in writing by the, insert "the Procurement Commissioner" continue the Finance Director, the City Solicitor and the Mayor prior to execution. New letter H, no noncompetitively bid contract shall be amended to increase the amount to be paid under the contract by more than twenty percent (20 percent) unless such amendment is approved in writing by the Procurement Commissioner, the Finance Director, the City Solicitor, the Mayor prior to execution. The City agency seeking to amend the contract shall publish it on the city's official Web site a notice of identifying the contract and explaining the need for the amendment. Such a notice shall appear on the City's web site for at least one week prior to execution of the amendment and no later than the day the notice first appears on the city's Web site. The city agency shall 159 send a copy of the notice to the President and Chief Clerk of Council and to the Department of Records. On , 17-1203, No. 2, on the first working day of each month, strike "the Mayor shall" a report, signed by the Procurement Commissioner, the Finance Director and the Mayor shall be filed by the Mayor, continue with the sentence. On , new No. 3, by August 1 of each year, the Mayor shall file with the President and Chief Clerk of Council with a copy to the Department of Records an annual report summarizing the award of noncompetitively bid contracts during the fiscal year. Such report signed be signed by the Procurement Commission, the Finance Director and Mayor and shall list for each city agency the number of contracts awarded by type of contracts, the dollar amount of such contract and the total payments made up under such contract. The report shall also include the Procurement Commissioner's analysis of the city's experience with the requirements of 160 this chapter during previous fiscal year and the Procurement Commissioner's recommendations, if any, to amend the requirements of this chapter or otherwise to improve the procurement process to ensure efficiency, economy and productivity, including the use of innovative means of procurement will be competitive and in the best interest of the city. Strike No. 3, make it No. 4. Those are all the amendments to Bill 13 No. 040772. There are amendments to Bill No. 15 040818. They are brief.

under No. 2, strike the entire paragraph. Note that begins with no 18 leases or contract or other agreement of any kind. Renumber letter 3 to be No. 2. " Those are all the amendments to Resolution 040818. And there is one last amendment to Resolution No. 040817, which is increasing the number of members of the Board of Ethics from five to seven. In Section 3-806, that would also require an increase in the number of people with terms. " That should be changed to two. And it also reads, "One member shall serve for a term of two years," that should be changed to two as well. These amendments were made the other day. It's my understanding they were not included as a part of the amendments that had already been approved by this Committee. " 162 The new proposed amendments for today go to Letter G because of the change in the composition of number of members, the quorum numbers must be changed. In Letter G you have three members of the board required to vote. Those numbers should both be changed to four. In the meeting section under I where it reads "Three members of the board shall constitute a quorum," that must be changed to four. In letter G, "Provided that neither the Executive Director, the Council," insert the executive director. " Those are all the amendments, Mr. Chairman, some of which were approved in last Wednesday's session but they somehow did not make it over to the Chief Clerk's Office. Those are all the amendments.

Thank you. 163 Councilwoman Blackwell, are there any amendments you wish to offer on your bills?

Not at this time. Thank you, Mr. Chairman.

The Committee will stand in recess until Tuesday, November 30tj at 11:00 a.m. thank you. (Council adjourned at 2:37 p.m.) - - - - 164 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 Tuesday, November 16, 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