Committee Hearing, May 12, 2010

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE Room 400, City Hall Philadelphia, Pennsylvania Wednesday, May 12, 2010 2:55 p.m. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN COUNCILMAN WILLIAM K. GREENLEE COUNCILMAN CURTIS JONES, JR. COUNCILMAN JACK KELLY COUNCILMAN JAMES KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN MARIA D. QUINONES-SANCHEZ COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO, JR. COUNCILWOMAN MARIAN B. TASCO BILLS 080658, 080659, 080660, 080661, 080662, 080662, 080663, 100112, 100122, 100124, 100125, 100126, 100127 and 100128 - - - 2

Good afternoon. I apologize for the delay. This is a public hearing of the Committee of the Whole. I would like Ms. Ortiz to please read the title of the bills.

Bill No. 080658, an ordinance amending Chapter 20-600 of The Philadelphia Code, entitled "Standards of Conduct and Ethics," by amending provisions prohibiting City officers and employees from soliciting or accepting gifts from certain sources, under certain terms and conditions. Bill No. 080659, an ordinance 17 amending Chapter 20-600 of The Philadelphia Code, entitled "Standards of Conduct and Ethics," to prohibit political committees from soliciting or receiving political contributions on behalf of elected City officials. Bill No. 088660, an ordinance 24 amending Chapter 20-600 of The Philadelphia Code, entitled "Standards of 3 5/12/10 - WHOLE - BILL 080658, etc. Conduct and Ethics," by adding provisions restricting City officers and employees from having certain kinds of outside employment or business interests, under certain terms and conditions, and renumbering. Bill No. 080661, an ordinance 9 amending Title 20 of The Philadelphia Code, entitled "Officers and Employees," by adding a new Chapter entitled, "Lobbying," under certain terms and conditions. Bill No. 080662, an ordinance 15 amending Chapter 20-600 of The Philadelphia Code, entitled "Standards of Conduct and Ethics," by adding anti-nepotism provisions prohibiting City Officers and employees, including all elected City officers, from taking or recommending certain personnel actions affecting family members. Bill No. 080663, an ordinance 24 amending Chapter 20-1000 of The Philadelphia Code, entitled "Political 4 5/12/10 - WHOLE - BILL 080658, etc. Contributions and Expenditures," by amending the limits of campaign contributions made to candidates for City offices. Bill No. 100122, an ordinance 7 amending Chapter 20-1000 of The Philadelphia Code, entitled "Political Contributions and Expenditures," by authorizing the creation of inauguration and transition committees and providing separate limitations on contributions to such committees; by requiring certain disclosures with respect to a candidate's various committees; by limiting contributions that may be made after an election to retire debt; and by otherwise revising provisions of that Chapter. Bill No. 100124, an ordinance 20 amending Chapter 20-1000 of The Philadelphia Code, entitled "Political Contributions and Expenditures," by permitting a candidate for elective office to establish a litigation fund to receive contributions and make 5 5/12/10 - WHOLE - BILL 080658, etc. expenditures for the defense of certain proceedings relating to the candidate's campaign, and further regulating and limiting such contributions and expenditures. Bill No. 100125, an ordinance 8 amending Title 20 of The Philadelphia Code, entitled "Officers and Employees," by revising the penalties for violations of various ethics and ethics-related provisions, including Chapter 20-600 ("Standards of Conduct and Ethics") and Chapter 20-1000 ("Political Contributions and Expenditures"). Bill No. 100126, an ordinance 17 amending Chapter 20-1000 of The Philadelphia Code, entitled "Political Contributions and Expenditures," by providing that expenditures incurred in the printing or distribution of sample ballots shall not be considered a contribution for purposes of the contribution limits of that Chapter, and clarifying that the requirement of a 6 5/12/10 - WHOLE - BILL 080658, etc. single candidate political committee does not prohibit other committees or entities from making expenditures for the printing or distribution of sample ballots listing the names of more than one candidate. Bill No. 100127, an ordinance 8 amending Title 20 of The Philadelphia Code, entitled "Officers and Employees," by adding a new Chapter requiring the registration of lobbyists and their principals, and requiring disclosure of lobbying expenditures. Bill No.

100128, an ordinance 15 amending Chapter 20-600 of The Philadelphia Code, entitled "Standards of Conduct and Ethics," by establishing standards of conduct regarding the political activities of City officers and employees, and providing penalties for violations. Thank you.

Thank you very much. The Chair recognizes 7 5/12/10 - WHOLE - BILL 080658, etc. Councilwoman Tasco.

Thank you, Madam President. Just let the audience know we apologize for keeping them late. We're multi-tasking today. I'd just like to make a few brief remarks about what we're about to do here today. Today, we, as a legislative body, have an opportunity to take another step in bringing additional ethics reform to Philadelphia. A year ago and following the release of the Mayor's Task Force on Ethics and Campaign Finance Reforms' preliminary recommendations, Council developed a drafting committee to address these issues. This committee has been meeting with members of the Task Force, the Mayor's Administration, the Board of Ethics, the Committee of Seventy and Common Cause regarding Council's package of bills. The proposed bills and the amendments that we are discussing today 8 5/12/10 - WHOLE - BILL 080658, etc. are based on the Task Force report, federal Hatch Act, the Pennsylvania's lobbying law and legislation from other jurisdictions. Considering this work to propose legislation provides an excellent opportunity to enhance the standard of governments for our city. Thank you very much, Madam President.

You're welcome. The Chair recognizes Councilman Rizzo.

Thank you, Madam President and colleagues. The time has come to move forward to give our citizens what they want, ethics reform that will inspire trust and faith in City government. For far too long, the public perception is that Philadelphia City government is about pay to play and who you know. The six ethics bills I originally introduced in 2007 and reintroduced on September 8th, 2008 that 9 5/12/10 - WHOLE - BILL 080658, etc. are before the Committee today can change that perception. The list includes a bill to ban nepotism; a bill to ban gifts; a bill prohibiting outside employment that involves even a perceived conflict of interest. With respect to this bill, 080660, in the interest of expediency, I will introduce an amendment to exempt current City Council members. A bill that would require lobbyists and principals to report expenditures and principals to report expenditures; a bill that would limit campaign fundraising to election cycles; and, finally, an anti-war chest bill that would level the campaign playing field by restricting fundraising to an actual candidate for City office. Twenty-first century Philadelphia can no longer afford to be saddled with a 1904 Lincoln Steffens label, "Contempt and Corrupt." This City should be a shining ethical light upon 10 5/12/10 - WHOLE - BILL 080658, etc. the hill, to its own citizens and to other cities throughout the United States. The time has come for City Council to rise to the challenge, to make the difficult decisions and to do what is right for all citizens of Philadelphia, pass serious ethics reform that will inspire trust and faith in our government. Thank you.

Thank you. We will now call our first panel, please.

Clarence Armbrister, Joan Markman, Michael Schwartz. (Witnesses approached witness table.)

Good afternoon. Please identify yourself for the record and proceed with your testimony. 11 5/12/10 - WHOLE - BILL 080658, etc.

Good afternoon, Council President Verna and members of the Committee. I am Clarence Armbrister, Mayor Nutter's Chief of Staff, and I think by prior direction or instruction from the Clerk, that it is my expectation I would read testimony on all of the bills that are before the Committee and then allow my colleague Joan Markman and then Mr. Schwartz to introduce their testimony, if that's acceptable.

That's fine.

Thank you. Good afternoon, Madam Chair and members of the Committee. I am Clarence Armbrister, Chief of Staff to Mayor Nutter. I'm here today to testify on behalf of the Nutter Administration on the various proposals to amend the City's campaign finance laws. Specifically, Bill Nos. 080659, 080663, 100122, 100124 and 100126. 12 5/12/10 - WHOLE - BILL 080658, etc. I'm going to start with Bill 3 No. 100122. Bill No. 100122 would make a variety of changes to the City's campaign finance law. In general, we have been in support of this proposal. The Chief Integrity Officer, Joan Markman, and my staff have worked closely with certain Council staff on making improvements to the bill and very much have appreciated the spirit of cooperation that has been involved. With the exception of one aspect of the bill with which we are still not in full agreement, we generally support the bill as we expect it will be amended. In significant part, the bill 18 contains provisions regulating fundraising for inaugural and transition committees of successful City candidates, which the Administration generally supports. The bill, as we anticipate it will be amended, would incorporate fundraising for inaugural and transition 13 5/12/10 - WHOLE - BILL 080658, etc. activities into the limits for fundraising for campaign activities, but allow an additional round of fundraising inaugural and transition purposes in the period between the general election and assumption of the elected office. Currently, there are no limits to fundraising for inaugural activities. The campaign finance limits do not apply, because by definition, by the time of the inaugural, the candidate has already been elected. Therefore, the inaugural activities are not conducted in support of a candidate's election. The Board of Ethics in Opinion No. 2007-5, however, raised the issue of the potential appearance of improper influence on elected officials by large contributions that might be made to support an elected official's inauguration activities. In late 2007, then Mayor-elect Nutter voluntarily imposed limits on the fundraising of his inaugural committee similar to those contained in the 14 5/12/10 - WHOLE - BILL 080658, etc. campaign finance law. The Task Force in its report suggested such limits would be appropriate. Given the potential for the appearance that large contributions for inaugural activities might have an improper influence on elected officials, we agree that there is value in establishing contribution limits in this area. Similarly, the bill, as it will be amended, contains limits on the fundraising activities related to an elected official's activities regarding transition into elective office. As is the case with inaugural activities, such fundraising currently is not regulated. The Board of Ethics has recommended that such limits would eliminate the appearance of improper influence. As with his inaugural committee, Mayor Nutter voluntarily imposed limits on the fundraising activities of the entity he created to carry out his transition activities in late 2007 and the very 15 5/12/10 - WHOLE - BILL 080658, etc. beginning of 2008. The Task Force has also suggested that legal limits in this area would be appropriate, and we agree. We also appreciate that a provision that would have prohibited fundraising for potential transition type activities of an official reelected to office will be removed from the bill. The bill also contains provisions that would allow individuals after their candidacy has ended an additional opportunity to solicit funds from individuals and political committees who have already provided the maximum contribution in that particular year, for the purpose of retiring campaign debt.

In other words, if the candidate had received the maximum $2,600 yearly contribution from an individual during the year of the election, the candidate could solicit another $2,600 from that same donor in the same calendar year in order to retire debt accumulated during the campaign. 16 5/12/10 - WHOLE - BILL 080658, etc. Currently, the Ethics Board has advised in Opinion No. 2007-03 that it interprets the current provisions of Chapter 20-1000 of The Philadelphia Code to require that debt accumulated during the course of a campaign must be paid by funds raised within the limits established under Chapter 20-1000. The Task Force recommended more explicitly codifying this interpretation in the law. We are not in favor of the manner in which this would be addressed in the bill. Debt amassed during the campaign is no different from expenditures of money on hand during the campaign. We have not heard a compelling reason for adding special rules to allow a special additional round of fundraising for the purpose of satisfying campaign debt. Nonetheless, we do not consider the proposal's limited allowance of special fundraising to retire debt as a fatal flaw in the bill. Lastly, the bill will require 17 5/12/10 - WHOLE - BILL 080658, etc. candidates for City office to provide to the Board of Ethics identifying information about their single campaign committee, upon declaration of candidacy. The Mayor's Task Force on Ethics and Campaign Finance Reform recommended that candidates be required to provide such information, and this makes a lot of sense, to cut down on monitoring legwork the Board must engage in. Turning to Bill No. 100124, this bill would allow candidates for office to establish litigation funds and do fundraising for such funds, separate and apart from fundraising for basic campaign activities. The litigation fund could be used to pay the costs incurred in connection with a legal challenge to the conduct of the candidate's election campaign, including proceedings involving the Board of Ethics or challenges to placement of the candidate on the ballot. The bill would limit fundraising for the litigation fund to amounts parallel to 18 5/12/10 - WHOLE - BILL 080658, etc. the limits set forth in the Code for campaign finance fundraising generally. Permitting separate fundraising for litigation funds was one of the recommendations of the Mayor's Task Force on Ethics and Campaign Finance Reform. Legal matters surrounding elections can be costly, and it makes some sense to allow for separate fundraising to cover such expenses. This bill contains a number of the safeguards suggested by the Task Force in connection with the establishment of litigation funds, such as providing for the return to donors of funds raised for litigation purposes that are not spent for such purposes. Accordingly, we believe this bill would be an appropriate reform and support this measure. Bill 100126 would make changes to the campaign finance law regarding expenditures for the printing and distribution of sample ballots that simply were not addressed in the Ethics 19 5/12/10 - WHOLE - BILL 080658, etc. Task Force's report. We are not in favor of Bill No. 100126 as introduced. We have discussed various possible amendments to the bill with Council staff, again in a highly cooperative spirit. Unfortunately, no version of amendments we have seen would satisfy our concerns regarding the bill. It is our understanding that the origin of this bill is based on the particular facts of how sample ballots and their distribution are often paid for in our local campaign system. Often, candidates pool resources through contributions to ward committees or other types of political committees for the purchase and distribution of sample ballots, which can be costly and significant campaign expenditures.

If a candidate whose name appears on a ballot has some measure of control of the activities of the committee through which the sample ballot expenditures are made and that committee 20 5/12/10 - WHOLE - BILL 080658, etc. is not the candidate's single campaign committee, the candidate will run afoul of our Code's requirement that candidates maintain only a single committee through which it makes campaign expenditures. Similarly, if the candidate has asked for participation in the pooling system, a difficult question is raised as to how to measure the campaign contribution made to the candidate by the political committee that obtained and distributed the sample ballots, in part, on behalf of the candidate. If the candidate's campaign is not involved in any way with the activities of the ward or other political committee that pools the candidate's resources, the sample ballot costs would be considered an independent expenditure of the third-party committee. It is our understanding that some individuals involved in campaigns have been concerned that independent expenditures on ballots and ballot distribution by political 21 5/12/10 - WHOLE - BILL 080658, etc. committees, meaning expenses that are not in any way controlled by or coordinated with the campaign of a candidate, might nonetheless be attributed as contributions to the candidate. We would certainly support legislation that made clear that expenditures on printing and distribution of sample ballots containing the name of a candidate are independent expenditures that simply are not governed by the campaign finance law, as long as they are made through political committees that are not in any way controlled by or operated in coordination with the candidate or the candidate's campaign. This would help clarify the distinction between independent expenditures, on the one hand, and expenditures on ballots that constitute contributions to the candidate. We do not support the bill as introduced or the various draft amendments we have seen. However, that 22 5/12/10 - WHOLE - BILL 080658, etc. would make allowances for situations where the candidate in fact has a role in controlling expenditures of the ward or other committee that is pooling resources for the distribution of sample ballots. Such allowances would open up our campaign finance laws to the potential for abuse. Specifically, a candidate could circumvent the campaign contribution limits by having large contributions made to a ward or other committee over which the candidate has control or influence, and then use some or all of those contributions to support his or her own campaign. Such large contributions would undermine the effectiveness of the campaign limits and potentially bring the appearance of improper influence of large campaign contributions back into our system. This is not in any way to suggest that the pooling system has actually been used in an abusive way to date or that we expect most or even many 23 5/12/10 - WHOLE - BILL 080658, etc. of our candidates would utilize committees that pool resources for the purchase and distribution of sample ballots in this way. But, unfortunately, laws such as these must be maintained to prohibit those few who might be tempted to abuse the system to obtain an advantage. Because, together with Council, we staff -- and our staff, we have been unable to construct alternatives that would allow this proposal to work, without being subject to potential abuse, we oppose this measure. Bill 080659 would prohibit any incumbent City officeholder from soliciting any campaign contribution unless that City officeholder is a declared candidate for elective office, whether local, state or federal. The bill would make an exception in cases where the incumbent certified to the Board of Ethics that the official's political committee is in debt based on 24 5/12/10 - WHOLE - BILL 080658, etc. the official's campaign and the contributions will be used to retire that debt.

A complete ban on fundraising by elected officials who have not declared candidacy for an office would seriously hamper City-elected officials who might run for a non-City office relative to their opponents who might be elected officials in state office, federal office or local office in another jurisdiction. Those involved in politics often seek to raise campaign funds for the very purpose of determining whether they are viable candidates for certain offices before they are prepared to announce candidacy for those offices. We do not believe it would be justified to completely prohibit our locally elected officials from engaging in any fundraising whatsoever before the individual has even determined what office he or she might run for. The Task Force on Ethics and 25 5/12/10 - WHOLE - BILL 080658, etc. Campaign Finance Reform did not adopt this proposal as one of its recommendations. To the extent that there is any consideration of imposing fundraising restrictions on incumbents who have not declared candidacy for any office, such restrictions should impose reasonable limits on contributions from individuals and other entities and not a complete ban on fundraising. Bill No. 080663, this bill 13 would, on its face, significantly change the campaign finance rules. In practice, however, it would merely complicate the system unnecessarily. First, the bill would take the basic contribution limits that now apply on an annual basis and separate them into limits applicable, on the one hand, to the three-and-a-half-year period starting with a general election and ending with the primary and, on the other hand, to the six-month period between the primary and the general election on the other. 5/12/10 - WHOLE - BILL 080658, etc. The apparent purpose of this type of change is to reduce the ability of incumbents to raise funds in the first years immediately following an election. This was the rationale stated in support of this type of change in the report of the Task Force on Ethics and Campaign Finance Reform. The bill would not accomplish this goal, however. This is because of a misunderstanding of how our campaign finance rules work. Our law only regulates "candidates" for City office. There is a common misconception that incumbent City-elected officials are at all times "candidates" for City office, as that term is used in the Code. That is simply incorrect. Under our Code, only individuals who have demonstrated or declared that they have in fact thrown their hat in the ring in a particular election contest are "candidates" regulated under the Code's contribution limits. This bill would not change that 27 5/12/10 - WHOLE - BILL 080658, etc. definition in any way. Under the current rules, if an individual does not declare an intent to run for office until the actual election year, which is a very common practice, that individual does not become subject to the direct campaign contribution limits until that year. An important rule governing how the candidate spends money raised in previous years does kick in, however, which limits the value of large contributions received before the declaration of candidacy. Similarly, under the proposal of this bill, if an individual does not declare candidacy until the year of the election, the establishment of limits applicable to a period before such declaration of candidacy will have no effect. Accordingly, creating special limits for the three-and-a-half-year period between a general election and the following primary election will simply have little or no effect, as generally no one will 28 5/12/10 - WHOLE - BILL 080658, etc. have declared candidacy and thus be covered by the limits, for the vast majority of that period. Again, this is not to say that we do not believe that there might be some value to establishing some sort of fundraising limits on incumbents.

If there is an appearance that incumbent officeholders are using the authority of their office to obtain large contributions from individual donors -- and we have not heard any reports that this is going on, so to the extent that there is a problem, it would be one of perception, not reality -- then the City probably should adopt reasonable limits on the fundraising of incumbent City officeholders. But that is not what this bill provides for and, therefore, we oppose the bill in its current form. This concludes my testimony on Bills 080659, 080663, 100122, 100124 and 100126. And with the Chair's permission, I would now read my testimony on the 29 5/12/10 - WHOLE - BILL 080658, etc. political contributions, if that's okay. Thank you. Again, I'm here to testify on behalf of the Nutter Administration on the various proposals to amend the City's campaign finance laws. Specifically, Bill No. 080 -- excuse me. That's the wrong testimony. I'm here to testify on behalf of the Nutter Administration on Bill No. 12 100128. This proposal was introduced as part of a package of ethics reform bills introduced March 4th in the wake of the recommendations the Task Force on Ethics and Campaign Finance Reform made in December of last year. On March 15th, the Committee on Law and Government held a hearing on a Charter change proposal that was included in that package. The Charter change would allow City Council to modify and replace restrictions on the political activities of City officers and employees and modify other related rules 30 5/12/10 - WHOLE - BILL 080658, etc. regarding campaign solicitations and "resign to run" requirements that are currently set forth in the City's Home Rule Charter. As you may recall, I testified at length at that hearing. It is important to consider Bill 100128, which is Council's proposal with respect to how it would exercise its new authority to implement the Charter change, against the backdrop of the proposed Charter change. First, let me say that we commend Council for moving away from the hurried timetable that it would have needed to follow to place a proposed Charter change on the May ballot. These are highly significant issues of policy facing the City and they deserve very careful consideration. Although I testified in support of some of the substantive purposes of that Charter change proposal, particularly in the area of allowing City employees greater freedom to express 31 5/12/10 - WHOLE - BILL 080658, etc. their political views publicly, for the most part, we have opposed and continue to oppose that proposal. There is no compelling justification to broadly allow City workers to engage in partisan political activities. In our view, nothing in the Charter's political activities restriction is fundamentally flawed or broken. We agree that rules, particularly in the area of the expression of political opinions, may have been interpreted too narrowly in certain respects, but the basic prohibition against active participation in partisan politics by City employees and officers is plainly sound as a legal matter. Moreover, as a matter of policy, we are not convinced that there is any compelling justification to change the rules in any broad way. There simply is no need for employees of the Executive and Administrative branch of government, 32 5/12/10 - WHOLE - BILL 080658, etc. particularly those involved in the day-to-day operational decisions of the City that affect the lives of our citizens, but even those whose job duties do not directly affect the citizens on a day-to-day basis, to be actively involved in the affairs of political candidates and political parties. The required separation, which protects both the public and the employees themselves, has served the City well for almost 60 years and we have not heard arguments that convince us the rules should be changed now.

We agree with the view of the Task Force that some reforms in the area of allowing greater political expression by City employees are indeed worthwhile. This can be accomplished fairly easily, however, without a resort to a Charter change by simply reexamining the language of the Charter itself, which on its face does not appear to regulate political expression. It is our understanding that 33 5/12/10 - WHOLE - BILL 080658, etc. the Board of Ethics is in fact in the process of drafting a proposed regulation interpreting Section 10-107 of the Charter, which we hope will result in a significant change in how these rules affect the political expression of City officers and employees. Even more important, however, than our basic policy differences with respect to what the political activities rules should be is our difference in view about the mechanism by which any changes in this area should be made. In our view, whatever changes this body believes should be made to the political activities rules and the other related rules covered by the Charter change, there is no reason to establish those rules outside of the City's Home Rule Charter. Whatever changes to the substance of the political activities rules we may discuss, we should be discussing those changes in the context of changes to the Charter itself. 34 5/12/10 - WHOLE - BILL 080658, etc. The core of our position in this matter is that the voters should retain the final say about the rules governing the political activities of City officers and employees. The rules have been included in the Charter for nearly 60 years for a reason: to require the City's elected officials to return to the voters when they want to change these particular rules. Regardless, the outcome of any debate about the substance of the particular political activities rules, we strongly oppose moving the authority away from the voters to make those kinds of changes. Turning specifically to Bill 18 No. 100128, as I have said, this bill is Council's initial proposal to implement the Charter change proposal that was the subject of the Council hearing several weeks ago. If the Charter change Council as proposed were adopted, Bill 100128, in its current form, would, among other things, broadly allow City officers and 35 5/12/10 - WHOLE - BILL 080658, etc. employees to take an active part in political campaigns of a candidate and serve as committee people or ward leaders in political parties. By adopting Bill 6 100128, Council would be setting forth the substance of the change to the political activities provisions it proposes, if the Charter change were to go into law. It is obviously important to have such rules available for review if the voters were to consider a Charter change granting Council authority to set the rules. We have also reviewed proposed amendments to Bill 100128 that Council has circulated. These amendments would, to some extent, limit the impact of Bill 19 100128 by limiting the scope of the City officers and employees with respect to whom the relaxation of rules governing participation in partisan political activities would apply. Generally, the rules would not be relaxed for certain categories of employees, such as 36 5/12/10 - WHOLE - BILL 080658, etc. uniformed law enforcement and public safety employees. Concerns about participation in partisan political activities may be most acute with respect to these categories of employees. We are not convinced, however, that the rules governing participation in true political activities should be relaxed for any employees of City government, whether or not they are involved in law enforcement or other discretionary activities that substantially impact the lives of our citizens.

Moreover, to the extent any such separation between "more restricted" and "less restricted" employees is made, it is also very important to this Administration that all employees of the Administration exempt from civil service be included in the category of "more restricted" employees. This Administration does not want any appearance that any decision of a Mayoral appointee could be based on an interest 37 5/12/10 - WHOLE - BILL 080658, etc. in the fortunes of a political campaign or those of a political party. Moreover, I must return to the fact that even if we were in full agreement with this Council about the policy choices that will be made in the final form of Bill 100128, we would not be satisfied. This body has often noted instances in which it felt the need to establish rules, not because of any lack of trust with this Administration but because future Administrations might not adhere to the desired policy proposal. Establishment of contribution limits for inaugural and transition committees, as proposed in Bill No. 18 100122, which is also being considered today, is a good example of this. The current Mayor has demonstrated that he will follow self-imposed limits in that regard. Yet, Council is now proposing by law to bind future Mayors and other elected officials to such rules. Therefore, even if we agreed 38 5/12/10 - WHOLE - BILL 080658, etc. with the policy choices made by this Council in connection with Bill 100128, the best protection against choices made by future Councils that might further weaken these important protections is to continue to require that the voters pass upon changes in this area. Removal of the rules from the Charter would allow future Councils to change the rules far too easily without returning to the voters for their agreement. This is our fundamental problem with the path Council has proposed. Turning to other aspects of Bill 100128, another of the Charter-based rules that the Charter change proposal would allow Council to override are rules regarding the campaign fundraising in which City officers and employees may engage. We favor changing in the Charter itself anachronistic rules about the fundraising of elected officials. We do not favor, however, an open-ended authorization to relax the prohibition on 39 5/12/10 - WHOLE - BILL 080658, etc. non-elected City officials soliciting political contributions, potentially from the very same citizens who may come before the official with an important request. Indeed, Bill No. 100128, in its current form, would expressly allow political fundraising by members of all boards and commissions, no matter how much influence those boards might have on the daily lives of our citizens. We oppose such a change, as it could have a devastating impact on the trust of the public if members of the public are solicited for political contributions by the very same board or commission members who may make a decision on the permit application appeal or other similar request made by those members of the public. There are also several provisions of the law in the Charter which, if the Charter change were adopted, Council could override, yet are not addressed in Bill 100128. The first 40 5/12/10 - WHOLE - BILL 080658, etc. are rules that prohibit political solicitations from civil service employees. It is unclear whether Council would intend to propose changes in that rule in the future. The second are rules that require City officials and employees, except for elected officials running for reelection, to resign from their position before running for elective office. As noted in my previous testimony, I've been advised by the Law Department that the proposed grant of authority to Council to repeal the "resign to run" rule runs an actual risk of violating a state law that prohibits seeking a change to the Charter on the same matter considered by the voters in the previous five years. Council has not proposed any substantive change to these rules in Bill 100128.

We are concerned, however, about allowing future changes to this rule so soon after the voters disapproved a proposed change in this area. 41 5/12/10 - WHOLE - BILL 080658, etc. In sum, we recognize there may be flaws in how the Charter has been interpreted with respect to restrictions on political expression and that the Charter contains outdated provisions regarding fundraising by elected officials. Those problems, however, can be fixed without opening up the Charter to wholesale changes regarding the political activities of its employees or changes related to the fundraising by members of boards and commissions. This Administration opposes Bill 100128 because we believe that it simply goes too far. Rather than addressing a limited problem, it takes away from the voters the authority to determine the contours of strong and sound protections against political interference in the workings of government. We urge you to table this proposal and to work with the Administration on narrow, targeted changes to the Charter itself that would 42 5/12/10 - WHOLE - BILL 080658, etc. deal with the problems at hand, without dramatically altering the way the rules are made in this area. Thank you for the opportunity to share the views of the Administration, and as soon as my fellow panel mates conclude their testimony, we'll be happy to answer any questions. Thank you for your indulgence.

Thank you very much.

I think I'm up. Good afternoon, Madam Chair and members of the Committee. I'm Joan Markman, the City's Chief Integrity Officer. I'll be testifying about a number of bills today, first concerning Bill Nos. 100127 and 080661. Both of these bills would add a new Chapter to Title 20 of The Philadelphia Code to require the registration of lobbyists and their principals and to require disclosure of lobbying expenditures. 43 5/12/10 - WHOLE - BILL 080658, etc. As you know, one of the central recommendations of the Mayor's Task Force on Ethics and Campaign Finance Reform was the adoption of requirements for the public registration of lobbyists and their principals and disclosure of lobbying expenses. This Administration agrees wholeheartedly with this recommendation, since it furthers our goal of making government decision-making more transparent and accountable to the public that we serve. We commend Councilwoman Tasco and we commend Councilman Rizzo, who introduced legislation on this topic even before the Task Force was convened, for introducing legislation to make this lobbying disclosure happen. As originally drafted, both bills contained some technical and implementation issues about which we were concerned. So the Administration and the Board of Ethics staff have worked closely and, I'm very happy to say, very 44 5/12/10 - WHOLE - BILL 080658, etc. collegially with Council staff to resolve those issues. The results of our collaboration are contained in proposed amendments to Bill No. 100127, which incorporates what we believe are the best features of both Councilwoman Tasco and Councilman Rizzo's two bills, as well as some other useful provisions. We, therefore, strongly support the passage of Bill No. 100127, as we understand the bill will be proposed to be amended by the Committee. That is my testimony on these two bills, 100127 and 080661.

Thank you.

I'm next going to testify, Madam Chair, about Bill 100125. This bill would amend Title 20 of The Philadelphia Code to establish penalties for violations of the campaign finance and ethics provisions in The Philadelphia Code. The Mayor's Task Force on Ethics and Campaign Finance Reform recommended 45 5/12/10 - WHOLE - BILL 080658, etc. that penalties for both ethics and campaign finance-related violations be amended to provide for a sliding scale of potential penalties for consideration of a violator's intent and for a means to encourage timely compliance with deadlines for filing campaign finance information. We believe that any legislation setting forth penalties for violations of the ethics and campaign finance rules should promote the following objectives: First, the legislation should deter violations and encourage compliance with the regulations. Second, it should provide notice of consequences for violations. Third, it should allow for consideration of mitigating or aggravating factors concerning the violation or the violator. And, fourth, the legislation should be fair. The Administration was 46 5/12/10 - WHOLE - BILL 080658, etc. concerned that, although a good start, the original provisions of Bill No. 4 100125 were not fully consistent with these objectives. So over the last several weeks, the Administration has worked closely and, again, very collegially with Council staff and with the Board of Ethics staff on proposed amendments to revise and improve Bill No. 11 100125. The results of this collaboration are contained in the proposed amendments to this bill that we understand the Committee will consider today. To summarize, as recommended by the Task Force on Ethics and Campaign Finance Reform, the bill will contain a sliding scale of penalties that considers appropriate aggravating and mitigating factors. Specifically, the penalty provisions of Bill No. 100125 would treat less harshly violators who made a good-faith effort to comply with the law, who took prompt corrective action for any 47 5/12/10 - WHOLE - BILL 080658, etc. violation or who reported a violation promptly to the Board of Ethics. The penalty provisions will treat more harshly violators who intentionally, rather than inadvertently, engaged in conduct violating the ethics or campaign finance rules, violated those rules repeatedly, obstructed a Board of Ethics investigation into a violation or disregarded a Board of Ethics notice of a violation. The penalty provisions also will now include per diem penalties for late campaign finance reports that encourage prompt compliance and the legislation, as amended, would eliminate the so-called "death penalty" provision requiring that ethics and campaign finance-related violations result in permanent disqualification from City employment. To summarize, we believe that Bill No. 100125, if amended based on the drafted amendments, will simply, clearly 48 5/12/10 - WHOLE - BILL 080658, etc. and fairly promote the goals of deterrence and compliance and notice and fairness, and we, therefore, support passage of an amended version of Bill No. 6 100125. So that's it on 100125. Finally, I'm pleased to testify today, Madam Chair, concerning Bill Nos. 080658, 080600 and 080662 introduced by Councilman Rizzo. These bills address gifts, nepotism and outside employment for City employees. This Administration is committed to ensuring that decision-making by City officials and employees is based solely on what's best for City taxpayers and residents unaffected by conflicting interests. The Mayor's Task Force on Ethics and Campaign Finance Reform addressed these issues in its December report, and we have carefully considered the Task Force's recommendations in our comments on these three bills. 49 5/12/10 - WHOLE - BILL 080658, etc. Bill No. 080658 -- that's the gifts bill -- would implement citywide requirements of the current Executive Order on gifts issued by Mayor Street in 2004.

The bill also establishes procedures for determining and permitting so-called gifts to the City. We have reviewed both this bill and the recommendations of the Mayor's Task Force on Ethics in this area, and the Administration is in the process of finalizing changes to the current gifts Executive Order consistent with those recommendations on some of the provisions of Councilman Rizzo's bill. The Mayor's Executive Order only governs employees of the Executive and Administration branch and does not cover employees of any independent elected officials. We agree with the Mayor's Task Force that all City employees should be subject to a uniform rule concerning gifts and generally support the adoption of Councilman 50 5/12/10 - WHOLE - BILL 080658, etc. Rizzo's bill. Bill No. 080662 -- that's the nepotism bill -- would prohibit City officials and employees from involvement in any personnel action regarding a City-employed close relative or life partner. This issue too was addressed by the Mayor's Task Force on Ethics and Campaign Finance Reform. The Administration supports instituting a rule to ensure that family loyalty does not affect or interfere with City employment decisions. To that end, over the last several months, the City's Managing Director, the Department of Human Relations and the Law Department have met with department and agency heads to determine the extent of familial relationships in their agencies and to determine the extent of -- excuse me; and how a rule prohibiting nepotism would affect their work. We are in the final stages of presentation to the Mayor of a 51 5/12/10 - WHOLE - BILL 080658, etc. draft Executive Order that would, consistent with the Task Force recommendations and also some provisions of Councilman Rizzo's bill, restrict supervisory and subordinate relationships in City departments and agencies between close family members. Again, we agree with the Task Force that all City employees should be subject to a uniform rule concerning nepotism and, therefore, support legislation that would apply rules in this area to more than just employees under the purview of the Mayor in the Executive and Administrative branch, but would apply those rules to independently elected officials and their staffs as well. Finally, Bill 080660 would regulate outside employment by City officers and employees. This bill would prohibit City employees from working for any person or business that does business, seeks to do business with or 52 5/12/10 - WHOLE - BILL 080658, etc. receives funding from the City. The restrictions apply whether the business is for-profit or non-profit and regardless of whether the person is receiving compensation for his or her work. The bill also provides a limited exception to the outside employment ban for teaching positions and authorizes the Ethics Board to grant limited exceptions for service on the boards of non-profits. We share Councilman Rizzo's concern that a conflict of interest could arise where a City employee holds an outside job. We believe, however, that the proposed legislation is overbroad and that the City's current conflict of interest rules are the more appropriate vehicle through which to address these concerns. In addition, Civil Service regulations already contain restrictions on outside employment by City employees within the civil service system. 02 prohibits outside employment which, quote, "is incompatible 53 5/12/10 - WHOLE - BILL 080658, etc. with the proper discharge," end quote, of official duties, which brings disfavor or disrespect upon the employee or the City or which interferes with the employee's effectiveness on his or her City job. The regulation also allows individual departments to create policies and standards governing outside employment by their workers, such as limiting the type of employment, the number of hours worked and requiring pre-approval of the outside position.

Many City employees work second jobs for financial reasons, to provide for their families. Other City employees volunteer off-duty time to worthwhile causes throughout the City, whether it's coaching a local baseball team or volunteering as a tutor or mentor in a City-funded program. Under the proposed legislation, these employees would be prohibited from doing so, not because of an actual conflict of interest but because of the potential for a conflict 54 5/12/10 - WHOLE - BILL 080658, etc. of interest. The occasional conflict issue that may arise does not warrant such a broad proscription of the practice. There are other means to ensure that City employees are not engaging in activity that conflicts with their duties and responsibilities as City employees. For example, we could consider a requirement that all City officials and employees register annually their outside employment with their departments and with the Board of Ethics, or that disclosure of outside employment and reinforcement of conflict of interest rules would be a more measured and appropriate approach to this issue. This view is consistent with the recommendations made by the Mayor's Task Force on Ethics and Campaign Finance Reform. This concludes my testimony on the proposed bills.

Good afternoon, 55 5/12/10 - WHOLE - BILL 080658, etc. President Verna and members of City Council. My name is Michael Schwartz and I serve as the Chair of the Mayor's Task Force on Campaign Finance and Ethics Reform. My complete testimony is being handed out and had previously been made available. I'm going to shorten the testimony somewhat to discuss the two issues that at least I believe are the most significant this afternoon. But before I start, I just want to disclose that since the Task Force report had been issued in December of 2009, I accepted a position on the Board of the Committee of Seventy. I am here to speak as the former Chair of the Task Force and on behalf of the Task Force and I am not here speaking on behalf of the Committee of Seventy. The Task Force report contained 36 separate recommendations in the areas of lobbying, campaign finance, ethics and conflict of interest, and political activities restrictions. Today, I'd like 56 5/12/10 - WHOLE - BILL 080658, etc. to discuss the recommendations on two of the bills that are pending before Council, the lobbying registration and disclosure bill, Bill No. 100127, and the political activity bill, Bill No. 100128. I'd be happy to answer questions about the Task Force's consideration on any of the other issues presented by the other bills. First, I'd like to ask the Task Force's strong support of Bill No. 100127 relating to the registration of lobbyists and disclosure of lobbying expenditures. In our review, one of the most significant gaps the Task Force identified was with respect to the City's lack of control over lobbying. To be clear, the Task Force does not suggest that lobbying be prohibited. Lobbyists often serve an important and lawful role in educating City officials about legislation and administrative decisions. However, the public has a right to know about how those whose financial interests 57 5/12/10 - WHOLE - BILL 080658, etc. are advanced are harmed by government action, whether it be administrative action or legislative action, how they have spent money to influence government decision-makers whose actions may help or hurt them. To make the process of lobbying much more transparent, the Task Force recommends that Council enact Bill 10 No. 100127 as the Philadelphia's lobbying disclosure law. Next, I'd like to raise strong concerns about Bill No. 100128 relating to political activities by City officers and employees. As we all know, Philadelphia's political activity restrictions are designed to separate partisan politics from the functions of City government, and they are contained in the Charter Section 107. These restrictions prohibit, among other things, the use of political influence to secure a civil service position and the solicitation of political contributions by City employees and officers. In 58 5/12/10 - WHOLE - BILL 080658, etc. addition, a non-elected City officer and employee may not hold political party office or take part in managing any political party or political campaign, except to exercise his or her right as a citizen privately to express his opinion and to cast her vote. The goal of keeping politics separate from City governance remains important today. The Task Force learned, however, that some of the Charter provisions have been applied too broadly and enforced inconsistently. For example, the Task Force believes that the Charter Section 107(4) has been interpreted to restrict private political expression that poses little or no danger to effective and honest governance, such as permitting City employees to wear political buttons or display lawn signs off hours at their homes or other places. Additionally, because the Charter only applies to City employees and officers, including some members of boards and 59 5/12/10 - WHOLE - BILL 080658, etc.

commissions, the restrictions in the Charter about political activity do not apply to individuals who work in City offices but are paid by non-City agencies or employed by subcontractors to do City work. While the Task Force supports a broader reading of the Charter to allow personal political expression by City employees, we do not believe that such a broader reading requires any change to the Charter. Moreover, we have significant concerns about removing the political activity restrictions from the Charter and replacing those restrictions with the more permissive political activity which would be permitted by Bill 19 No. 100128. Let me explain the Task Force's beliefs concerning the difference between political expression and political activity. The Task Force believes that allowing personal expression of a City official or employee's political opinion 60 5/12/10 - WHOLE - BILL 080658, etc. on his or her own property or person, unassociated with the workplace or the workday, presents little danger of undue political influence or even the appearance of it in the employee's performance of City duties or services. To the extent that the political activity restrictions also protect City employees from being pressured to work for a particular candidate, allowing personal political expression does not diminish this protection. The Task Force further believes that the current interpretation to the contrary is overbroad and not required by the language of the Charter. The Board of Ethics should be asked to reconsider the interpretation of the Charter to allow off-the-job personal expressions of political support, such as wearing political buttons and displaying bumper stickers or lawn signs outside of the workplace. However, reconsidering restrictions on political activity 61 5/12/10 - WHOLE - BILL 080658, etc. presents a much more complicated question that clearly is not resolved by a new Ethics Board interpretation of the Charter. The Task Force believes that any legislation relating to ethics must be based on the goal to instill honesty, transparency and accountability within City government. When the Supreme Court considered these issues and determined that political activity restrictions on government employees and officials, such as those restrictions in our Charter, were in fact constitutional, the Court recognized that these restrictions furthered compelling and fundamental public policy of promoting government without bias or favoritism for or against any political party or group. The Court stated that forbidding activities like these will reduce the hazards to fair and effective government. The Court also recognized that political activity restrictions ensures that government 62 5/12/10 - WHOLE - BILL 080658, etc. work -- the government workforce is not to be used to build a powerful, invincible and perhaps corrupt political machine, and that employment and advancement in government shall not depend on political performance. Now, the Task Force recognizes that political activity restrictions on federal employees as set forth in the Hatch Act have been amended and that the current Hatch Act allows federal employees varying degrees of political activity in their personal time and outside of the workplace. There is, however, a fundamental difference between federal employees and City workers and how each of these categories of employees can affect the lives of Philadelphians on a daily basis. While federal workers certainly have the power to affect lives, City workers interact with Philadelphians every day and more directly than most federal workers. So, for example, if a Streets Department worker also serves as 63 5/12/10 - WHOLE - BILL 080658, etc. a political party official, Philadelphians may legitimately be concerned that certain businesses who contribute to or support that worker's candidates of choice may receive extra sanitation or snow removal services.

Allowing political activity by City employees, even off the job, increases the risk of partisan politics influencing government in a way that allowing political expression does not. It also presents monitoring and enforcement challenges to ensure that political activity stays truly off the job. Bill 100128 would significantly loosen the current political activity restrictions. As my fellow Task Force member, Brian McCormick, explained at the March 15th hearing, it is not clear from the wording of the ballot question that's being proposed that the voters of Philadelphia will understand that voting yes to the ballot questions will allow 64 5/12/10 - WHOLE - BILL 080658, etc. the increased risk that partisan politics may influence the action of City workers or perceive to influence those actions. One remedy to that problem would be to offer the voters a clear choice, either amend the Charter directly to explicitly eliminate or modify political activity restrictions or do not seek to amend the Charter and seek only a reinterpretation of the Charter on the issue of permissible personal political expression. In its report, the Task Force urged Council to carefully scrutinize, and now I ask you to reconsider, whether allowing City employees to be active members of political parties and to participate in the management of political parties and campaigns really is an ethics reform measure or instead is a step backwards from the reform measures that recently have been passed by this Council. Thank you for allowing me the 65 5/12/10 - WHOLE - BILL 080658, etc. opportunity to share the views of the Task Force. I am happy to answer any questions.

Thank you very much. The Chair recognizes Councilman Green.

Thank you very much, Madam Chair. I'd just like to give some perspective and history on the history of political restrictions and civil service reform to put what we're talking about here today in a little bit of context. Thomas Jefferson, when he became President, issued an Executive Order that restricted political activity and then put in place a civil service system. In 1939, there had been 3,000 civil service rulings at the federal level, and at that point, at the height of many reform efforts that were happening nationwide, Congress decided to take the bulk of those civil service 66 5/12/10 - WHOLE - BILL 080658, etc. rulings and put them in what became the federal Hatch Act. The City of Philadelphia was not that much different from the federal government in terms of the fear of political activity involved in public officials, and, in fact, the history of what happened at the federal level in many ways mirrors the discussions that we're having today, the arguments being made in 1939 and then that were made again in 1993 when Congress made significant reforms to the Hatch Act are the same arguments that we're hearing here today, that if you allow people freedom of expression, which, in my view, the First Amendment doesn't stop at your ability to give your opinion. The First Amendment gives you the right to support a candidate, to advocate for a candidate and, yes, to even work for a candidate. Labor is no less valuable than someone's money, and the Supreme Court has been extremely clear that money equals speech. 67 5/12/10 - WHOLE - BILL 080658, etc. I would say people who don't have money should not be restricted any more than those with money with respect to their advocacy for a particular candidate. So since the federal Hatch Act, which is basically similar to the legislation that we are proposing -- in fact, I would argue that what City Council has put together is far more restrictive than the federal Hatch Act. In fact, is likely to be the most restriction on political activity in any city in the country, even with what Council is proposing. So since 1993 and the Hatch Act was amended to allow people who are not affecting essentially people's liberty or property to be politically active, the number of Hatch Act complaints since the effective date has gone down. The number of enforcement actions has gone down, and it is far easier, according to all the research we've done in my office, to monitor those who are politically active. 68 5/12/10 - WHOLE - BILL 080658, etc. 5 percent of federal supervised have exercised the additional freedom to participate in politics. Now, the supervisors are in the more restricted category, and they would be under the bill before Council today. I think if you take the arguments against allowing freedom of expression, which includes, in my opinion, the freedom to work on a campaign, to its logical extension, it's preposterous. People have testified that if you allow a sanitation worker to be active in a political campaign, that that might get your streets cleaned sooner. Well, I've known many Mayors of this city and I can tell you that streets get cleaned by Mayors, not sanitation workers, and if 69 5/12/10 - WHOLE - BILL 080658, etc. you take these arguments to their logical extension, you should not be able to contribute to a Mayor, because he's going to decide ultimately who gets the service, who gets the increased trash pickup. You shouldn't be able to contribute to City Council people, because, of course, we influence policy. So I just think that the arguments are really boogeymen, and I just wanted to put it in context and say that since the reform of the federal Hatch Act in 1993, there have been fewer problems than prior to its reform. Because as a practical matter, our current system is not enforceable today, because you have to monitor 23,000 employees. So just to get that on the record. I do have a question for Mr.

Schwartz, which I'd like to understand for the record, and, that is, in the preliminary Task Force report, the Task Force recommended essentially that 70 5/12/10 - WHOLE - BILL 080658, etc. we go to a federal Hatch Act type system, and I understand there was extreme lobbying pressure from people in the City Solicitor's Office and elsewhere to change the mind of the Task Force on that issue, and I wondered if you could on the record give us the history of how and why that change occurred.

Sure. The process of the Task Force, Councilman Green, as we've discussed before, was one of evolution. We broke down the nine members that came from nine separate appointing authorities into subcommittees to deal with the various issues, with the plan that we were going to have public hearings -- we had two of them -- to get input and also meet individually with interested parties, with elected officials. We met with many of you. We've met with state-level officials, and thought that we would have an evolving process where we would be able to initially study the issue on a micro 71 5/12/10 - WHOLE - BILL 080658, etc. level and then discuss it among the whole group, with the hope that we would come to a unanimous consensus, if one could be achieved. With respect to the preliminary recommendations of the Task Force, we had each of the three member subcommittees come up with preliminary recommendations before our public hearing, with the idea that we would issue those preliminary recommendations -- this is before the second public hearing. We had an initial hearing. We then issued those recommendations, had a second public hearing, and then continued our debate as to what did the Task Force as a collective group think was appropriate. And, yes, the preliminary recommendations of the Task Force believed that a Hatch Act-like system was something to be considered, and when we discussed that -- and we had discussions with the Law Department, we had discussions with the Mayor's Office, we had discussions with 72 5/12/10 - WHOLE - BILL 080658, etc. many of you and other elected officials -- the group raised concerns, like the concerns that I've expressed today and some of the concerns expressed by the Administration, and the group came to the unanimous conclusion that we had a difference of view between what is acceptable political expression -- as I've said, we believe that that should be broadened and it has been unduly restricted -- compared to what we believe is appropriate with respect to political activity.

Okay. I mean, they weren't preliminary considerations; they were preliminary recommendations, and I'm glad we -- it sounds to me like there was a lot of arm-twisting and teeth-gnashing going on during that process, I guess similar to the legislative process perhaps, although I had thought the Task Force was going to exercise independent judgment. With respect to the amendment 73 5/12/10 - WHOLE - BILL 080658, etc. of the Charter, just for the record, I'd like people to understand Council's consideration or at least my consideration and I think those of us heavily involved in this with respect to that issue. It is our opinion that we should not limit the ability of Council to tweak the law or tweak changes, as we are making a major sort of change in the regulatory system governing political activity in the City and we want to make sure we got it right. We don't want to limit our ability to make changes, additional changes, four, five years, which, of course, we would be doing by passing a Charter change. This is legislation, and it's not ever going to be perfect, and if we put it in stone like that, we won't be able to make course corrections if we were overly restrictive or overly permissive in any particular category. And it's our sense that the appropriate place to do that is Council. 74 5/12/10 - WHOLE - BILL 080658, etc. I think the Administration is testifying in favor of five bills increasing -- or four bills that are increasing ethical standards in the City of Philadelphia. I believe the Ethics Board is going to testify in favor of five bills that are increasing ethical standards in the City of Philadelphia. And I fundamentally think that issue comes down to a lack of trust of us and our ability to continue to increase ethical standards over time rather than decrease ethical standards over time. The testimony that we heard is, you could do all these other things that you're not currently doing, but we're afraid you might do them in the future that loosen ethical standards if you have it not in the Charter but as part of an ordinance, and that just is a very simple statement. The implication of that is, we just don't trust you to be in charge of ethical standards. And that's certainly a fair position. That 75 5/12/10 - WHOLE - BILL 080658, etc. certainly can be your position, but you just have to remember where you're testifying. I have no more questions. Thank you.

Thank you. I just want to add to Councilman Green's comments about the Hatch Act with regard to Washington, DC, which comes under the federal Hatch Act, and its employees fall into the least restrictive category, meaning its employees can be engaged in various forms of partisan political activities. Even employees like child support workers, DHS, can be engaged in political activity. Have you seen any wholesale corruption, abuse of their position?

Councilwoman Tasco, there has right now been a report of some significant misuse in DC city government relating to both political activity and some of the lack of other ethics issues that we have addressed here 76 5/12/10 - WHOLE - BILL 080658, etc. in Philadelphia. There was just a special counsel investigating both expenditures for a number of departments, and I don't have all the details at my fingertips, but about four weeks ago when I was in DC, they had just appointed Mr. Bennett as a special prosecutor on behalf of the Council to do an independent review. So there have been issues. It's not widespread, but it is really an issue of public confidence in the government workers. The perception that politics will interfere with someone's job performance is a real perception that occurs. And the Charter was originally drafted in the manner of the restrictive nature to address those perceptions, and I think the Supreme Court when they upheld those type of restrictions both in the federal Hatch Act originally and also in Oklahoma State that had the identical restrictive provisions to our Charter, the Supreme Court talked about the public 77 5/12/10 - WHOLE - BILL 080658, etc. policy that is benefited through separating out the political activity of civil service workers from those of elected officials, who, of course, can be lobbied, set policy. There's nothing wrong inherently with the political activity by the elected officials. It's a question of those non-elected officials.

Thank you very much. Any other questions? Councilman Green.

Thank you. With respect to corruption in Washington, DC and corruption here in Pennsylvania and Philadelphia and elsewhere, obviously that's against the law yesterday, today and should our legislation pass, it's against the law tomorrow. I do want to note that all of Washington, DC city employees are in the least restricted category and under the federal Hatch Act, which means they can 78 5/12/10 - WHOLE - BILL 080658, etc. basically do whatever they want politically, and that I would say the vast majority of City employees would be in the most restricted category under the Council proposal. So I understand your point, but it's not really on point, and I just wanted to clarify that for the record. Thank you.

Councilman Rizzo.

Thank you. Mr. Armbrister, you testified that Bill No. 080663 creates two periods of fundraising restrictions, one for six months and the other for three and a half years, but Bill No. 080663 was intended to be read with Bill No. 080659. Together, the three-and-a-half-year period would actually be just several months from the declaration of candidacy or filing of nominating petitions until the prime reelection.

Councilman, 79 5/12/10 - WHOLE - BILL 080658, etc. I'm not sure I understand the intent of your point of reading those together.

Because you indicated that it would be a three-and-a-half-year period.

Well, I think that with respect to the Bill 080663, that was our reading of the bill. I guess what I'm trying to get from you is a clarification of the reading of that together with 080659. I'm not sure I understand the point.

I just wanted to double check that I had it right. They're not eligible until they declare their candidacy. So that wouldn't be three and a half years out.

Well, it appeared that the intent of 080663 was to regulate potential candidates. We understand -- and without a change in the definition of the word "candidate," you're absolutely correct. So the 080663 didn't seem to be attempting to reach its 80 5/12/10 - WHOLE - BILL 080658, etc. stated goal, because they didn't change the definition of the word "candidate."

Okay. Just for the record.

Right. Well, for the record, 080663, without changing the definition of the word "candidate," seems to fail to meet its objective, which it seems its intent was to regulate potential candidates, and so it seems not to meet its objective, and that's one of our concerns.

Thank you.

You're welcome.

Thank you. Are there any other questions or comments? (No response.)

Thank you very much for your testimony.

Panel No. 2, Cathy Scott, Mary Catherine Roper and Brett Wilmot. 81 5/12/10 - WHOLE - BILL 080658, etc. (Witnesses approached witness table.)

Good afternoon. Is Ms. Roper here? (No response.)

Okay. Would you identify yourself and proceed with your testimony, Ms. Scott.

Yes. Good afternoon, Councilwoman Tasco and other members of City Council. My name is Catherine Scott and I am President of AFSCME District Council 47. I welcome the opportunity to testify today on the proposed amendment to Bill No. " AFSCME District Council 47 has three local unions with approximately 4,000 members affected by this proposed legislation. I would like to commend City Council for analyzing and acting on 82 5/12/10 - WHOLE - BILL 080658, etc. the recommendations of the Mayor's Task Force on Ethics and Campaign Finance Reform. I do have some concerns about the approach in the bill which classifies some employees as "less restricted" and some employees as "more restricted" in their ability to engage in off-work political activity. I think it bears repeating that the members of AFSCME District Council 47 in Locals 2186 and 2187 are Civil Service employees who pass competitive Civil Service examinations and finish high enough on the Civil Service list to be hired. They successfully complete six-month probation periods. Many of them are members of professional associations in their career choice, such as the National Association of Social Workers. They hold certifications, such as Certified Public Accountants or Social Workers or are licensed to practice in their profession, such as physicians, registered nurses and physician assistants, to name a few. Our 83 5/12/10 - WHOLE - BILL 080658, etc. union objects to including any of our members under Section 1(4)(d). There is no credible reason why employees who investigate reports of child abuse and neglect should be restricted as in (4)(d) Subsection (iii). They follow both federal and state mandates, which include very strict criteria for conducting safety assessments in those investigations, which are then reviewed and approved at multiple levels of management before action is taken. In those instances where there is imminent danger to a child, before a child can be removed, the social worker must obtain the prior approval of DHS management and the City Law Department, which writes and files the petition, which is then acted upon by a judge. Protective service workers throughout the country follow these mandates and are not precluded from political activity. Sections (4)(d)(iv), (v), (vi), 84 5/12/10 - WHOLE - BILL 080658, etc. (vii), (viii) and (ix) refer to employees with authority to act in some way. " Let's review No. " Our members, real property evaluators, review the mass assessments using sales trends and other objective criteria such as permits and other property renovations to recommend assessment changes, which are then reviewed and decided by administrators or the Chief Assessor. Our Union would argue that our members do not have the authority to assess the value. In (4)(d)(v) and (4)(d)(vi), if our members in the Water Department who, as an example, oversee issuing bills which include a legally pre-determined penalty for a late payment or a legally required fee such as a permit application fee, we do not believe their political activity should be restricted. 85 5/12/10 - WHOLE - BILL 080658, etc. Is the Sanitarian inspecting a restaurant who find violations to the Health Code as laid out by law and regulation restricted, especially when that violation is reviewed by multiple levels of management in the Health Department and possibly the Law Department and may or may not be acted upon? In (4)(d)(vii), is the Procurement Technician who oversees the announcement of contract bids and the transparent and public process of reviewing bids, which must conform to very specific requests for proposals, restricted, especially when they have no authority to ultimately grant or deny those bids? Number (viii) is written so broadly, it is difficult, if not impossible, to understand the scope of, quote, "any other permission or request impacting property rights or interests," end quote.

Does this include the Surveyor who oversees street layouts, the Traffic Engineer who does street signage 86 5/12/10 - WHOLE - BILL 080658, etc. and traffic lights, or the Civil Engineer who oversees bridge construction contracts? Our members' jobs is to provide essential City and County services and enforce City codes, regulations and laws. These restrictions appear to be written to keep the City's professional employees and first-level supervisors from engaging in political activity. Our Union believes that this approach is unconstitutional. In addition, we believe that Section 1(4)(a)(viii) should include the ability to circulate nominating petitions in addition to signing nominating petitions. For many citizens, circulating a nominating petition is a very basic way to engage in the political process and a way to express their opinion about a candidate. If a potential candidate cannot obtain a sufficient number of signatures on nominating petitions, he or she never 87 5/12/10 - WHOLE - BILL 080658, etc. becomes a candidate. I would suggest that No. " This legislation would codify that inconsistency. If the work performed by tax analysts in the Law Department or tax and revenue conferees in the Revenue Department could be covered as activities listed in the subsection of (4)(d) such as No. (viii), how does the City propose 88 5/12/10 - WHOLE - BILL 080658, etc. to address what appears to be obvious inconsistency of contracting out this work? I believe that in order to address this issue, a few questions need to be answered. One, has the Administration provided City Council with a list of all contracts it presently has with private companies and agencies which perform the work and activities listed in the subsections of (4)(d)(v) through (xi)? Two, has the Administration explained why employees who work for private companies or agencies which are not subject to the Charter should be permitted the unfettered ability to engage in political activity, especially if there is far less public accountability and transparency over the work they are performing than the work that Civil Service public employees are performing, while City employees performing that work would have their political activity restricted? 89 5/12/10 - WHOLE - BILL 080658, etc. Our Union believes that restricting the political activity of Civil Service City employees engaged in activities listed in (4)(d) but contracting that work out to private agencies or companies whose firm and employees can engage in political activity is arbitrary and capricious. The City should have a consistent policy that all of those who perform this work listed in (4)(d) should be restricted from engaging in political activity and, therefore, can only be done by City employees, or that none of the work listed in (4)(d) should have political restrictions. Unless the legislation addresses this issue, it is fatally flawed. The framers of the Charter believed that City Civil Service employees should perform the vast majority of City work, with limited exceptions. The philosophy of the City Administrations of the past two decades 90 5/12/10 - WHOLE - BILL 080658, etc. has carved out numerous exceptions to Civil Service employees exclusively performing the work, and the budget allocation in Class 200 category demonstrates that reality. There must be provisions in this legislation to address this reality. I would also like to add that the Union objects to the restrictions in Bill No. 080660. We support the Task Force recommendation on to maintain the status quo. Except for the teaching provision in Section 2, many of our members would be forced to leave their outside employment. I don't need to repeat Ms. Markman's comments on outside employment, with which we agree, except to emphasize that this proposed bill is overly broad. For this reason, we do not support the bill.

Thank you.

Thank you for the opportunity to testify. 91 5/12/10 - WHOLE - BILL 080658, etc.

Thank you. If you would remain at the table, please. Mr. Wilmot.

Good afternoon.

Good afternoon.

My name is Brett Wilmot. I am the Associate Director of the Ethics Program at Villanova University. Members of the City Council, thank you for the opportunity to speak at this hearing regarding the ethics bills under consideration. I have been invited today to speak in my capacity as an ethicist. D. My purpose today is not to provide detailed commentary on the proposals before you. Others here are more expert than I on the technical issues that must be considered when evaluating such changes as those 92 5/12/10 - WHOLE - BILL 080658, etc. proposed here today. I will offer some brief thoughts about the general focus of these proposals, but my more pointed comments will be directed at the idea of ethics reform in general, particularly through administrative or legislative actions. While I find much to admire in the specifics of these bills and in the motivations behind them, I think it's important to note that creating an ethical culture for those working in City government requires going beyond a standard of legal compliance. The law is a teacher, and good laws and policies make a significant contribution to how those guided by them form and exercise their judgment as moral agents. The items before you attempt to provide additional guidance to City officers and employees, particularly with respect to activities where perceived or actual corruption can have significant negative effects on the operations of 93 5/12/10 - WHOLE - BILL 080658, etc. City government and the perception of that government by its citizens. Specifically, the limits on gifts that might be perceived to influence City officers and employees in Item 080658, the anti-nepotism provisions of Item 080662 and the limitations on solicitation of political contributions in Item 080659 all seem like worthy proposals. Each target specific areas of concern where even the appearance of corruption can undermine the faith of citizens in their government and hinder that government's effectiveness. In highlighting these items, I don't mean to suggest that the provisions in the other items are less worthy or problematic in any way. The limits on campaign contributions in Item 080663 and restrictions on employment in Item 080660 are potentially more complicated matters, and while I respect the motivations behind them, I'll leave it to those with 94 5/12/10 - WHOLE - BILL 080658, etc. greater technical expertise in these matters to render judgment as to their benefits and practicality. I'm confident that the proposed changes, if implemented, will have a beneficial effect on how City government is perceived. This is no small matter, as respect for government these days is a too scarce commodity, but one that is nonetheless essential for effective governance in the long run. There is a risk, however, of mistaking changes in administrative policies and law for a change in the culture, or ethos, within which City business occurs. This is no 17 specific criticism of Philadelphia's City government, but merely the recognition that the creation of an ethical culture and the inculcation of moral virtues in its participants require something more than clarifying policies and amending existing laws. The risk is that we come to equate compliance with policy and law, a bare minimum that excludes abuse of 95 5/12/10 - WHOLE - BILL 080658, etc. authority and criminality, with our highest ethical standards. That would be a mistake. That one is not subject to administrative rebuke or criminal prosecution is not the same as being exemplary in terms of one's behavior. And I would offer the opinion that our citizens deserve exemplary behavior on the part of those entrusted with guarding and promoting the commonweal.

Whether these or other proposals or amended proposals are ultimately passed by this Council, I would encourage our City officers to continue pursuing the creation of an ethical culture for City government, one in which the appearance of corruption, much less its presence, simply is not tolerated, and compliance to law and policy is recognized as our minimum standard, a standard that is consistently exceeded by our City officers and employees. Toward that end, I encourage the Council to give serious consideration 96 5/12/10 - WHOLE - BILL 080658, etc. to these proposals, but also to exploring additional strategies for creating an ethical culture in Philadelphia City government that is second to none. Thank you for your time and for this opportunity to contribute to the deliberations of this Committee.

Thank you very much. Are there any questions from members of the Committee? (No response.)

Seeing none, thank you very much.

Panel No. 3, Nolan Atkinson, James Browning and Zack Stalberg. (Witnesses approached witness table.)

Good afternoon.

Good afternoon. I'm Nolan Atkinson, a member of the Philadelphia Board of Ethics, here to 97 5/12/10 - WHOLE - BILL 080658, etc. give testimony before the Committee of the Whole on Bills 080658, 080659, 080660, 080661, 080662, 080663, 100122, 100124, 100125, 100126, 100127 and 100128. Good afternoon, members of this Committee. I am a member of the Philadelphia Board of Ethics, and thank you for the opportunity to speak on the bills scheduled to be heard today by 12 the Committee of the Whole. Before I begin my testimony, I should disclose that I was a member of the Mayor's Task Force on Ethics and Campaign Finance Reform, which issued its final report in December 2009. However, I am testifying today on behalf of the Ethics Board and not on behalf of the Task Force. Two of the bills being considered today would establish a new lobbying registration and reporting law that the Ethics Board would administer and enforce. Five of the bills would 98 5/12/10 - WHOLE - BILL 080658, etc. amend the campaign finance law, and four would amend the Ethics Code. Finally, the twelfth bill, which is a companion to Bill 100121 and Resolution 100139 that received a hearing on March 15th, contains a Code provision that would supersede and replace the restrictions on partisan political activities that are in Code Section 10-107 of the Home Rule Charter, if voters approve the ballot question contained in Bill 100121 on November 18th. Because the Ethics Board has jurisdiction over the laws that these bills would amend and would have jurisdiction over either lobbying proposal, the Board has a significant interest in the proposed legislation being considered today. In addition, the Board has a mandate to make recommendations to the Mayor and City Council, including any legislative changes which strengthen or clarify the standards of conduct and ethics. I am 99 5/12/10 - WHOLE - BILL 080658, etc. here to present the Board's position on the proposed legislation pursuant to this mandate. The Board would like to acknowledge Councilman Rizzo for being among those at the forefront of the push for further ethics reform. The Board thanks Councilman Rizzo for introducing a package of ethics and campaign finance bills two years ago, even before the formation of the Mayor's Advisory Task Force on Ethics and Campaign Finance Reform. At our last Board meeting on April 21st, the Board discussed the pending legislation that is the subject of today's hearing. Unfortunately, the information we had at that time was that the 2008 bills on ethics and campaign finance reform were not on the agenda for this hearing. Accordingly, the Board did not discuss the 2008 bills, and I cannot express the Board's position on these bills today. 100 5/12/10 - WHOLE - BILL 080658, etc. However, as a general concept, the Board believes that public confidence in government can be enhanced when the rules are strengthened to decrease the potential for government decision-making to be influenced by gifts, family relationships or personal financial interests. It has been the practice of the Board to support additional controls in these areas that would encourage the impartial administration of government services. Again, I regret that I am not in position to offer more detailed testimony on the 2008 bills today. That said, I believe these topics - gifts, nepotism and outside employment - do deserve the attention of all of us and warrant further consideration. The Board is willing to participate in a continued discussion on how to best improve and enhance the rules in these areas. Six of the bills being considered today were introduced on March 101 5/12/10 - WHOLE - BILL 080658, etc. 4th. Since then, there have been considerable discussions between Council staff and Ethics Board staff. These discussions, including several meetings, enabled Ethics Board staff to provide comment on the proposals to Council staff in a constructive manner.

We appreciate having the opportunity to provide input on the legislation prior to today's hearing and note that Council has both shared draft amendments and welcomed the Board's comments. I should also note that Councilman Bill Green and the staff of several Councilmembers attended the Board's last public meeting on April 21st, which gave them an opportunity to both listen to the Board's discussion of the recently introduced bills and respond to the Board at the meeting. We believe that the proposed legislation has been improved by the dialogue that has occurred since the bills were introduced on March 4th. 102 5/12/10 - WHOLE - BILL 080658, etc. We understand that Council has prepared significant amendments to the bills introduced on March 4th. Many of these changes demonstrate that Council has been receptive to alternative approaches and ideas on how to improve the City's public integrity laws, and the Board now supports many of the amended proposals. Although the Board may not support each and every proposed change, Council should be commended for keeping an open mind towards reform strategies and for listening carefully to input from various stakeholders. I will now address the proposed bills by category in the following order: lobbying, campaign finance, ethics and political activity. Lobbying: The Mayor's Advisory Task Force on Ethics and Campaign Finance Reform identified the absence of a lobbying law in Philadelphia as a, quote, "significant gap" and called for the Board of Ethics oversight of lobbying 103 5/12/10 - WHOLE - BILL 080658, etc. registration and reporting. The Task Force said that it was unacceptable that Philadelphia is the largest municipal government in the United States without any lobbyist registration and oversight, and called for public disclosure by those who have, quote, "spent money to influence Philadelphia governmental decision-makers," unquote. At its meeting on April 21st, the Board of Ethics expressed its support for the Task Force conclusion that there is a vital need for a lobbying law in Philadelphia. While there are some differences, both lobbying bills on your agenda today, amended Bill 100127 and Bill 080661, would meet this need. Regardless of the desirability of a lobbying law in Philadelphia, I cannot stress strongly enough that the two bills share the same major fault. Neither lobbying bill provides an appropriation or an ongoing source of funds to support the expansive additional 104 5/12/10 - WHOLE - BILL 080658, etc. lobbying responsibilities that would be assigned to the Board of Ethics. The Board's existing staff of seven cannot absorb the breadth of the proposed lobbying legislation. Without sufficient additional funding, each lobbying bill 8 would radically dilute the Board's ability to carry out its already heavy mandates. Each bill imposes an annual registration fee on lobbyists and principals. However, all fees so imposed are payable to the City of Philadelphia and go into the General Fund, not to the Board of Ethics. Under the Home Rule Charter, the Board may not spend money that has not been appropriated to it. As a result, each of the two lobbying bills creates an expansive, unfunded mandate for the Board. Even if the registration fees were paid directly to the Board, they would not provide sufficient funding to administer lobbyist registration and disclosure. 105 5/12/10 - WHOLE - BILL 080658, etc. Specifically, Bill No. 100127 requires electronic filing of registrations and quarterly reports, and that significant lobbying data and information be made publicly available, including a searchable database of registration and quarterly report information. The reporting requirements of Bill No. 100127 were modeled upon and are essentially identical to the Pennsylvania lobbying law.

Information from the Pennsylvania Department of State, which administers electronic filing for state lobbyists, indicates that it costs approximately $1 million to design and implement the state's lobbying software which includes searchable database features. As a further comparison, it costs approximately $500,000 to design and implement the City's campaign finance electronic filing software. The Board, therefore, believes that it is reasonable to project that the cost to implement 106 5/12/10 - WHOLE - BILL 080658, etc. electronic filing for lobbyists in Philadelphia could be as much as $500,000 and possibly more. There is also no 5 provision in Bill 100127 for the continuing cost in future years to maintain and improve the complex software and the searchable database. Lobbying registration and reporting cannot be implemented by the Board without new funding for additional staff. The Board estimates that it will cost $250,000 per year to implement and maintain a citywide lobbying program. Additional staff must be hired to conduct training for filers, provide advice, respond to "help desk" to electronic filing issues, investigate potential violations and conduct enforcement, and continually update lobbying information on the Board's website. It makes no sense to create a lobbying requirement and then make it impossible for the Board of Ethics to implement and enforce the new law. 107 5/12/10 - WHOLE - BILL 080658, etc. Timing is also critical. A complex lobbying program cannot be designed and implemented overnight. Funding for staff and electronic filing must be provided well in advance of the start date for lobbying registration and reporting. It will take at least six months to design and test electronic filing software and to hire and train staff. Therefore, if funding becomes available July 1, 2011, FY12, it may be possible to accept lobbying registrations beginning July 1 -- January 1, 2012 and first quarterly reports in April 2012. To be realistic, the effective date of the law must reflect this schedule. A significant difference between the bills is that Bill 100127 provides for mandatory electronic filing while Bill 080661 does not. The Board believes that mandatory electronic filing is essential to an effective lobbying program, as it provides superior public access to lobbyist information and 108 5/12/10 - WHOLE - BILL 080658, etc. conserves staff time and resources. The Board urges Council to adopt a much-needed lobbying law in Philadelphia with sufficient funding to make its implementation possible. Both of the bills before you today would open lobbying activity to public scrutiny and permit Philadelphia's citizens to understand the process that shapes legislative and administrative decisions. The Board believes that enactment of lobbying legislation would bring necessary transparency to the day-to-day operations of City government. Campaign finance, post-candidacy contributions, Bill 18 100122: Currently, fundraising for inaugural events and transition activities are unregulated and not subject to contribution limits or disclosure requirements. This creates the potential opportunity for donors to attempt to influence elected officials with large donations for these 109 5/12/10 - WHOLE - BILL 080658, etc. activities. Both the Task Force and the Ethics Board have recommended the application of contribution limits to transition and inauguration fundraising. Amended Bill 100122 would regulate transition and inauguration fundraising by requiring elected officials to raise money for these activities through their single candidate committees and by applying contribution limits. The bill 13 would provide public disclosure for these fundraising activities while preserving the integrity of the campaign finance law's single committee rule.

Bill 100122 also provides explicit language supporting the Board's interpretation that the contribution limits apply to contributions solicited or made after an election for the purpose of retiring campaign debt. The Board fully supports application of the contribution limitations and reporting requirements to debt retirement and 110 5/12/10 - WHOLE - BILL 080658, etc. transition and inauguration activities as set forth in Bill 100122. The Board commends Council for amending the bill in a way that provides efficient regulation for inaugural and transition fundraising without unnecessarily complicating the existing law. The Board would also like to acknowledge the fact that Council staff and Board staff have been able to work closely together in order to come up with practical solutions that improved this important extension of the City's campaign finance law. Sample ballots, Bill 100126: Bill 100126, as amended, would exempt expenditures by a political committee for the printing and distribution of sample ballots from being counted as a contribution to a candidate for the purpose of calculating the contribution limits when that candidate or a supporter of that candidate makes a payment in order to be included on the political 111 5/12/10 - WHOLE - BILL 080658, etc. committee's sample ballot. This approach is consistent with how the Board has interpreted and enforced the City's campaign finance law. Bill 100126, as amended, would also establish an exception to the single committee rule so that a candidate who is a ward leader can use his or her ward committee to make expenditures for sample ballot printing and distribution without violating the single committee rule. The Board has concerns about the fairness of an exception to the single committee rule that benefits some, but not all candidates. However, the Board recognizes that the benefit those candidates will receive from the exception may not be significant, given the advantage they already enjoy as members of party leadership. Under the circumstances, the Board does not oppose Bill 100126. Litigation fund, Bill 100124: The Board supports amendment of the 112 5/12/10 - WHOLE - BILL 080658, etc. City's campaign finance law to permit candidates to create legal defense funds. Contributions to such funds would be subject to contribution limits. This concept was recommended by the Task Force. Bill 100124, however, would allow candidates to form such litigation funds upon a declaration of candidacy regardless of whether the candidate is facing a legal challenge. Although unused money in a litigation fund must be returned, there is the potential that contributors may seek to influence candidates through contributions to litigation funds. The Board believes that it would be preferable if litigation funds could only be established when a candidate has a specific, imminent legal challenge. For example, a litigation fund would be authorized when a candidate receives notice of a probable legal challenge, such as a petition challenge, or is otherwise able to demonstrate a 113 5/12/10 - WHOLE - BILL 080658, etc. real likelihood that an identifiable need for a legal defense is imminent. Requiring a specific legal challenge for litigation fund formation is the approach taken by the San Diego law that the Task Force cited as a model that Philadelphia should follow on this subject. A specific legal challenge requirement would allow candidates the litigation defense funds they need, while also helping limit the potential opportunity for donors to seek influence with a second donation. Penalties: Bill 100125 creates a sliding scale approach to the imposition of penalties for violations of the City Ethics Code and campaign finance law. This approach allows the Board or a court to assess the appropriate penalties for violations by taking into consideration aggravating and mitigating factors.

We believe that this approach is better than a fixed penalty schedule, where every violation of the same rule is 114 5/12/10 - WHOLE - BILL 080658, etc. treated the same regardless of the circumstances. The Board is pleased that its staff and Council staff worked closely together to improve upon the original bill. The Board recommends a sliding scale approach in part because it is consistent with the Board's past practices in enforcement matters. I note that all enforcement matters to date by the Board of Ethics have been resolved with settlement agreements where the parties mutually agree on the terms of the resolution. Because we have been able to settle all enforcement cases so far, the Board has not yet imposed a penalty through an administrative adjudication. Based on the Board's experience enforcing the City's public integrity laws over the past three years, the Board believes that not all violations of the same rule should be treated exactly the same. Some violations of a particular 115 5/12/10 - WHOLE - BILL 080658, etc. rule are more egregious than others. For example, some violations are intentional or are compounded by an attempt to obstruct the Board's investigation. By contrast, other violations of the same rule may involve simple mistakes or are promptly corrected. This bill would allow the Board or a court to assess greater penalties for more egregious violations and lesser penalties for less egregious violations -- if I have to say that word one more time, I'm going to blow it completely. Excuse me, Madam Chair -- and the Board believes this result is appropriate. The Board supports Bill No. 18 100125's implementation of the Mayor's Advisory Task Force recommendations of the sliding scale approach and a per diem penalty for failure to file timely campaign finance disclosure reports. The Board believes a per diem penalty will enforce prompt filing, which in turn will provide the public timely notice of 116 5/12/10 - WHOLE - BILL 080658, etc. campaign contributions and expenditures. Political activity: Bill No. 4 100128 is the companion bill to Resolution 100139 and Bill 100121, which received a separate hearing before Council's Law and Government Committee on March 15th. Resolution 100139 would allow Council to supersede by ordinance 10 Charter restrictions on political fundraising, partisan political activity, the "resign to run" rule and the penalty provisions. Bill 100128 contains a proposed Code provision that would replace Sections 10-107(3) and 10-107(4) of the Charter. As a threshold matter, the Board is concerned with the language of the proposed ballot question in 100121, which asks, quote, "Shall the Philadelphia Home Rule Charter be amended to authorize the creation by ordinance of standards of ethical conduct with respect to the political activities of City officers and employees, and to provide 117 5/12/10 - WHOLE - BILL 080658, etc. " As explained in Chairman Richard Glazer's March 26th letter to Council, the Board is concerned that voters would not be given sufficient notice of what they are being asked to approve with this proposed question. Asking voters to authorize the creation of standards of conduct regarding political activities and to provide for penalties suggests that such standards and penalties do not yet exist in Philadelphia, which is not the case. It would be more accurate to ask voters to authorize Council to supersede, change or eliminate the existing Charter restrictions on political activities and existing penalties without any further approval by voters. The Board believes that voters should be given clear notice of what they are being asked to approve by ballot question, so that they can make an intelligent decision when casting their 118 5/12/10 - WHOLE - BILL 080658, etc. votes. The proposed question in Bill 3 100121 does not provide voters with clear notice that voters deserve. The Board urges Council to consider alternative language for the proposed ballot question.

Beyond the Board's concerns with the proposed ballot question in Bill 10 100121, the Board has a substantive concern with the proposed replacement of the current restrictions on political activities in Bill 100128. The restrictions on partisan political activities exist to separate politics from the operation of the City and to prevent the perception or reality that official decisions and actions are inappropriately influenced by political interests. As the United States Supreme Court and Pennsylvania State Courts have held, restrictions on partisan political activity serve the compelling interest of protecting the integrity, efficiency and impartiality of the administration of 119 5/12/10 - WHOLE - BILL 080658, etc. public service. We must distinguish restrictions on partisan political activity from those on private political expression. This distinction was explained by the Task Force in its final report. Although Charter Section 9 10-107(4) permits the private expression of political opinion, the Civil Service Commission narrowly interpreted 10-107(4) in Civil Service Regulation 29 decades ago. The prohibitions on wearing political buttons, displaying political lawn signs and submitting letters supporting political candidates are all in Civil Service Regulation 29. No such restrictions on political expression exist in 10-107(4) of the Charter itself. The Ethics Board has the authority to reinterpret 10-107(4) by the regulation, which would supersede and replace the interpretation in Civil Service Regulation 29. Earlier this year, the Board began discussing possible 120 5/12/10 - WHOLE - BILL 080658, etc. regulations that would identify permissible political expression. We hope to begin work on those regulations in the coming months. On a practical level, the Board is concerned that the approach set forth in Bill 100128 would be unworkable. The bill would create two classes of employees. One class would be permitted to engage in partisan political activity off duty, while the other class of employees would be prohibited from engaging in partisan political activity at any time. As an initial matter, partisan political activity is conduct that is difficult to turn off once inside City Hall. For example, it is difficult to imagine how someone could be elected to be a ward leader for a four-year term but not be the ward leader during certain hours of the day or while being in a City building. Additionally, Bill 100128 121 5/12/10 - WHOLE - BILL 080658, etc. attempts to distinguish between the two categories of employees based on job duties and would require the Board of Ethics to sort of all of the City's approximately 23,000 employees into two categories based on their job descriptions. It will be very difficult to determine which employees are subject to heightened restrictions based on the duties identified in Bill 100128. Finally, Bill 100128 would also create the potential for different rules for people who work side by side. By comparison, the Task Force recommended that the rules apply equally to all City employees. The Board believes that the City needs rules that set clear, enforceable boundaries. Such rules are easier to understand and to enforce without claims of unfairness. Creating a system of different rules for employees who work side by side would not set clear, enforceable boundaries that we can agree are fair. 122 5/12/10 - WHOLE - BILL 080658, etc. I thank you for allowing the Board to engage in this process, and I think that exchange has been helpful to where we are at this time. Thank you, Madam Chair.

Thank you very much. Who is next? Mr. Browning?

Thank you very much. I'm James Browning, Director for Development for Common Cause Pennsylvania. Thank you for the opportunity to testify today. I'd like to address specifically the bills introduced covering lobbyist registration and campaign finance reform. I'd like to frame my remarks about transparency in the context of a study we released yesterday on campaign contributions. It was a study of money coming in from the national gas industry and it was put together by looking through data we got from the Pennsylvania Department of State. Now, obviously the 123 5/12/10 - WHOLE - BILL 080658, etc. issue of building a more fully searchable and accessible database for Philadelphia is something that the Task Force took a hard look at and recommended, and we wish that were part of the package that has been introduced. Just to give you probably the most striking example that came out of that experience of looking at the state data was, we found one donor who by herself had given almost a million dollars, but because she gave under two different names and because those names were either misspelled or entered in various formats, it was impossible to see the big picture. And there aren't a lot of people who give a million dollars, but the same problem is repeated throughout the City's database, throughout the State's database, and so we just urge that in looking at the campaign finance database or creating a new system for tracking lobbyist expenditures, that we make it a priority to come up with a good 124 5/12/10 - WHOLE - BILL 080658, etc. tracking system up front. So as we get more and more data over time, citizens can have access to what's happened in the past, to what's happening now and to the big picture. I would like to commend Council --

We were asked to pass legislation. Nobody ever talked about how much it was going to cost. We had that discussion. Proceed.

I would like to commend Council on the lobbyist registration bill that is emerging, and many of the provisions in the draft that's been introduced in 100127 would really make it a model bill. Specifically, the ban on lobbying for contingent compensation, the ban on introducing legislation for the purpose of opposing it, and the prohibitions on making false statements or misstatements. And I also very much appreciate Council's 125 5/12/10 - WHOLE - BILL 080658, etc. openness and willingness to consider further measures that could make this an even better bill, and I'd just like to specifically talk about a few of those. The issue came up before of having dedicated funding for doing some of the new work that would be demanded of the Board of Ethics. Certainly the same is true for funding for creating a database of the new lobbyist registration information. Tightening up the reporting requirement on issues that a lobbyist is working on, including also bill numbers, I think would be a big improvement. I mentioned already the issue of having an electronic and fully searchable database. An amendment to have Board of Ethics training for people who register as lobbyists is really key in instilling -- helping to instill a culture of accountability. Penalties for late filing or failure to file. And, finally, having not only lobbyists but principals 126 5/12/10 - WHOLE - BILL 080658, etc. register with the City as well. These are issues I've already had the chance to talk to some members of Council and staff about. I appreciate your openness about these issues, and I believe that all of these things would be excellent additions to the bill. Thank you.

Thank you very much. Mr. Stalberg.

I'm Zack Stalberg, President of the Committee of Seventy. I'm accompanied by Ellen Mattleman Kaplan, who is Vice-President for Policy and has been permitted to work closely with members of Council and the Council staff in terms of making these bills as best as they possibly can. I particularly want to thank you for your role, Councilwoman Tasco, in getting us to this point. We have submitted detailed testimony and a detailed attachment on 127 5/12/10 - WHOLE - BILL 080658, etc. how to make some of the bills even better. So for the sake of time, I don't -- I'll trust that everyone will read those, and I don't want to get into terribly specific comments here. I would ask that you move very deliberately. This is -- obviously we are talking about a dozen bills here that are extremely complex. I ask that you move very deliberately in altering them and moving them forward. And, as you know, we are, as the Board of Ethics is, concerned about the Charter change itself that would allow future Councils to perhaps change the political activity rules in particular with not enough care. The amended bills represent several steps forward. We particularly favor the lobbyist registration and disclosure bill and support the Board of Ethics' call for increased funding in order to monitor the lobbyists as well. There are several other positive steps in this - the movement to 128 5/12/10 - WHOLE - BILL 080658, etc. give City employees much greater political expression, the implementation of a sliding scale and some increased penalties for campaign violations. And we should just recognize as we move these bills forward, that we are permitting larger annual contributions than were originally envisioned under Councilman Goode's campaign finance law. So with the creation of a debt fund and the creation of a litigation fund, there is the likelihood that donors will be asked to give more money. We have several concerns, too. The largest one -- and I'm trying not to repeat a great deal of what has already been said. The largest concern deals with the political activity rule or legislation. I really appreciate all the work that's gone into trying to make that better and all the thinking that went behind the two-tiered system. However, given the one that we seem to be talking about at the moment, the bill that we 129 5/12/10 - WHOLE - BILL 080658, etc. seem to be talking about at the moment, we're still concerned that it would be dangerous to have, even in a less restricted category, some City workers who are also serving as elected committee men and women and elected ward leaders. There's no question that there would be temptation on the part of those people to abuse their authority or the information to which they had access, and there's no 12 question, in our minds at least, that the current system, which I'm proud to say the Committee of Seventy helped to write into the current Home Rule Charter, the current system has served us well and has helped protect workers, City workers, from political pressure. The bottom line for us is that we think people need to have a trust in government and that the bright line represented by the current rule really does that better than anything else. Very quickly, some other concerns. We would have preferred it if 130 5/12/10 - WHOLE - BILL 080658, etc. the issue of the definition of "candidate" was addressed. We would have preferred it if the issue of the election cycle was addressed. The current arrangement clearly benefits the incumbents. Ignored at least in this stage of examination of the Task Force recommendations are issues involving whistle blowers, fraternization, disclosure of connection between politicians and the non-profits that they might be involved in, and some other key issues. And, finally, I'm concerned that the so-called Rizzo bills, which probably deserve some improvement but have been sitting around for a long time without attention, may be ignored by this Council at this cycle.

We're strongly in favor of uniform rules that deal with gifts, nepotism and outside employment. Thanks very much for the opportunity to testify. 131 5/12/10 - WHOLE - BILL 080658, etc.

Thank you very much. The Chair recognizes Councilman Green.

Thank you, Madam Chair. They're not here today, but I just wanted to remind us and those testifying for the record that when the professor from Penn Law, Seth Kreimer, was here -- he's also on the ACLU Board. ACLU person was not able to make it today, although she was originally scheduled to testify. I think this is not a direct quote, but it's pretty close: If City Council doesn't change 10-107 of the Charter, the courts surely will. And I think that is something that certainly I believe. As I've said, I see no distinction between freedom of expression and the ability to exercise that expression through action. So with that said, I have no 25 questions for this panel. 132 5/12/10 - WHOLE - BILL 080658, etc.

If I might just add, we certainly believe that there should be changes in the laws as it relates to freedom of expression, support the Council on this, and agree that the courts would eventually have a position on at least that aspect.

Councilman.

Thank you. I would be remiss if I did not say to all three people up there testifying that these measures, most of which you agree with, five measures in the case of the Board of Ethics and four in the case of the City and most of them in the case of the Committee of Seventy, really were improved through a continuing dialogue between ourselves and our excellent staffs, and so I thank you for participating in a process which has resulted in a bunch of bills that I'm very proud of and you mostly support. Thank you. 133 5/12/10 - WHOLE - BILL 080658, etc.

I'll just add to that while I have the mike open. I think the process has been one of collaboration, and thanks to Sophie of Councilman Green's staff and Derek of my staff and Councilwoman Sanchez's staff worked very hard to try to have a collaborative effort on this so that -- and certainly part of it was an educational process. I think that has been helpful to members of the Ethics Board also. And so it worked well. At one point, we invited the entire Council to meet with the Ethics Board staff and had a very excellent exchange of information. And so we were always involved -- wanted to be involved in creating an open process, and we wanted the rules to be helpful and not punitive. And that was my basic concern, that we try and look at all of this in a way that people will feel that they're going to be treated fairly and that the law is fair, and I think we've done a fairly decent 134 5/12/10 - WHOLE - BILL 080658, etc. job. We may not agree on all of it, and we'll probably never agree on all of it. I just want to make one comment. The gentleman, Mr. Schwartz, testified about DC, and I quickly asked my staff to Google. We may have missed something, but the charges brought in DC were basically around Councilpeople and not civil service. But there may be -- we will continue to Google to do our research to make sure, but it has nothing to do with the civil servants. It had to do with the Mayor and Council. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam Chair. Kind of a question and a statement at the same time. Would you happen to know if any of the cost to implement any of the legislation that we're talking about here is in this year's budget?

As far as 135 5/12/10 - WHOLE - BILL 080658, etc. we know now, no. Particularly around the whole issue of the technology that's needed. We did talk to the gentleman from Common Cause about that, Mr. Browning, but we had -- COUNCILMAN DiCICCO: Because the one item that jumps out at me -- and I did have a sidebar with Councilwoman Sanchez -- when we look at the Bill 11 100127, the cost of the electronic software filing, the additional staff, filing -- the electronic filing software will cost 500,000, if not more, $250,000 a year to implement and maintain. We're probably looking at a million dollars maybe in the first year, and if you take the 250 over the five years, you got another million dollars over the Five Year Plan. So if it's not in there, I was just wondering when we would be putting that in, or is that an appropriations change? And I find it interesting -- and no disrespect. There are a lot of people 136 5/12/10 - WHOLE - BILL 080658, etc. who put a lot of time into this, but I know that some of the sponsors and/or co-sponsors of this legislation have already publicly said they were not for any tax increases. So I wonder how they expect to fund this if they're not going to be voting for a budget in whatever shape or form it eventually comes to us for approval. That's my statement, obviously.

Madam Chair? COUNCILMAN DiCICCO: Thank you.

Councilman Green.

Thank you, Madam Chair. The effective date of the legislation for lobbying is 2011, July 1st. So it is in the next fiscal year for exactly these reasons, we need to find a funding mechanism for it. And we are hoping to work with Common Cause, with some of our charitable foundations and others to try to get an effective 137 5/12/10 - WHOLE - BILL 080658, etc. system in place. Also, we have modeled this legislation specifically on the State law, and the State law has electronic filing, and I believe that the cost estimates are extraordinarily high compared to what it will actually cost, and I happen to know a little bit something about the implementation of technology. And, finally, I have a five percent property tax increase bill before Council at this moment, and I'm willing to -- COUNCILMAN DiCICCO: Point of information.

Excuse me, Councilman. I did not interrupt you. COUNCILMAN DiCICCO: We still have --

I have a five percent bill before City Council to increase the property taxes, and I'm willing to support that bill and ask 138 5/12/10 - WHOLE - BILL 080658, etc. Councilman DiCicco to please also support that bill. I do note that he withdrew his property tax increase bill. COUNCILMAN DiCICCO: Because I didn't have any support for the 12.10 percent. But my comment and my statement, Councilman Green, was not directed to you, because I know that you are in support of a tax increase. It may not be the tax increase that I and other members of this body will eventually endorse. So it wasn't meant for you, but there are other sponsors of this legislation who have repeatedly said they are not for any tax increases. So they kind of want it both ways. Thank you.

Madam Chair?

Yes.

I've just been informed that it's my understanding that the Board of Ethics cannot spend any 139 5/12/10 - WHOLE - BILL 080658, etc. funds which have not been appropriated by this Council.

We understand that. Well, you see, the Task Force made recommendations, and we were charged to take action quickly. We took action quickly, and then we were moving too fast. So we'd be damned if we do and be damned if we don't. So now here we are, with all of the legislation, and no money to pass it. But as always in a legislative body in government, we'll figure it all out as we go along. Now, Councilwoman Sanchez.

Thank you.

Brown. I'm sorry. Councilwoman Sanchez.

Thank you. You probably captured the spirit of what I was going to say. I 140 5/12/10 - WHOLE - BILL 080658, etc. just wanted to add for the record that what you were saying in terms of the work that's been done. I'm a good government person, and I think that we have put forth what we believe to be a very thoughtful process, I believe a historic process in terms of ensuring that all of the different departments that have been created in the last two years around transparency, around compliance -- and I'll stress compliance versus enforcement -- compliance, this Council has supported and found a way to support the increases in the Inspector General's Office, the increases in the Controller's Office. We're trying to figure out how we increase the funding in the DA's Office. We have time and time again found a way to support those policies that we put forth and make sense and make for better government. I agree with Councilman Green. I think this number could be revisited and we can come up to some compliance. 141 5/12/10 - WHOLE - BILL 080658, etc. When you talk about potentially a million dollars for 50 lobbyists that may end up registering in this, I mean, I think the number is exorbitant and sends the wrong message that we can't make this happen. So I just wanted to thank all of the folks who have been involved in this process and my Council colleagues, the Board of Ethics, the Administration staff. This is just the beginning, and as you stated, Madam Chair, we are always under public pressure to act, and I found it very ironic that then folks are asking us not only to slow down but even consider letting some of this stuff be done by Executive Order. So talk about having it both ways, some people want to have it all three different ways. So I just want to thank everybody and remind everybody that we are moving forward in a very positive way, and we will continue to consider the rest of the recommendations of the Task Force. And as some of the discussion 142 5/12/10 - WHOLE - BILL 080658, etc. that happened with the Board of Ethics and others is, really look at a full alignment of all of the entities, both independent and within the Executive structure, who review and have oversight to make sure that we don't have duplicity, so that we don't have to worry about financing this, but that the roles and responsibilities about who is responsible for looking at what parts of the law and enforcing them are clear. I think as it stands now, there is some repetition, and I think that what we learned in this process is that there's still a lot more work to be done so that we can be more efficient in giving people the good government that they deserve. So I want to thank everybody for their participation. Thank you.

Thank you. I'd just like to make one other comment before we go to -- go ahead. Let me -- while we're in this context. When 143 5/12/10 - WHOLE - BILL 080658, etc. we were meeting with the staff of the Board of Ethics, we had some really very lively discussions around some of the issues, and so at one point, they said, Well, you can legislate. I said, Yes, we might be, but we want you to come up with a solution. And I want to say that I appreciate your doing that. The two young lawyers who worked on this legislation with the staff, they did come up with solutions that we could all agree with. So it was a good collaboration. It's not perfect, but this is the legislative process. You could change it next week, next year. It's fluid. So if something is not working, we work to make it better. It's not the end all here today. Yes. Councilman Kenney.

Thank you, Madam Chair. While I do appreciate the new spirit of cooperation and involvement on both sides, I sit here sometimes and I 144 5/12/10 - WHOLE - BILL 080658, etc. wonder how the Board of Ethics and campaign finance legislation got passed in the first place. Do you know how it happened?

We did.

Yeah, we did it. And sometimes I sit here and I either read the paper or I listen to people making testimony, and I sit here and say, Did we do that or did someone else do that for us? And I think that of any other Council in history, that Council broke more ground and continues to break ground in this particular term on all of these issues. So it gets frustrating sometimes when the public at large and the press in certain respects or the editorial boards in certain respects or the watch dog groups in certain respects kind of forget what we went through to pass this stuff in the first place to create all these agencies, and I just think it's a shame that -- I guess people 145 5/12/10 - WHOLE - BILL 080658, etc. just don't like politicians, but we're the ones who actually changed all these laws. We are the ones who put ourselves under campaign finance reform. And it wasn't easy when we first went through the first election with that. It was difficult for our staff, difficult for all of us to understand it. But I sit here and marvel sometimes at the fact that we seem to be just -- it happened like by magic. So I just want the record to be clear that the last Council did it, this Council is improving it, and I'd like to get a little bit of credit for it every now and then. Thanks.

Thank you. The Chair recognizes Councilwoman Brown.

Thank you, Madam Chair. Councilman Jim Kenney actually provides the backdrop of my opening 146 5/12/10 - WHOLE - BILL 080658, etc. statement and then a couple of questions. Yes, people do forget that we did this, but, more importantly, folks forget why we even got in this business. We decided to run for elected office to make a better difference. And so my only friendly amendment to Councilwoman Sanchez's opening remarks is that we're all for good government, and in some ways it's regrettable that we've had to take this amount of time to what some believe right some wrongs. So let me say thank you also for the enormous amount of time and intellect that has gone into these important issues. I want to direct my questions to Mr. Zack Stalberg, and my questions for sure are a lot more narrow, because my interest in all of this is narrow. First state for the record again the role and the purpose of your organization.

It's a non-partisan, non-profit group that works 147 5/12/10 - WHOLE - BILL 080658, etc. for better and more efficient government and clean elections.

Are you familiar with City Council's continued interest, always vigilance around the issue of inclusion?

Yes.

And what is the standard operating procedure for the Committee of Seventy when it comes to ballot questions?

You mean how are the decisions made?

Yes.

They're made by a committee of Board members of the Committee of Seventy and then obviously posted. If you're getting to the question of Ballot Question --

I am.

-- we got some important information earlier in this hearing from Councilman Goode and we'll go back and review our position on Ballot 148 5/12/10 - WHOLE - BILL 080658, etc. Question 1, because I think we were under a misimpression about that ballot question.

So state again for me what is the standard operating procedure for the Committee of Seventy when it comes to review of ballot questions.

A subcommittee of the Board reviews the ballot question. It happens to be made up of several lawyers, who in this case may have missed an important fact. But so a subcommittee of the Board reviews the ballot questions and decides whether to take a position or not.

So the segue for that is this: I need to thank you for responding to the letter where I asked a series of questions around the composition of your Board.

Right.

Because it is my personal view that organizations 149 5/12/10 - WHOLE - BILL 080658, etc. that do not look like Philadelphia, in my view, should have less to say about what we do and what we don't do. To the extent that an organization looks like Philly, that being men and women of all stripes, from all walks of life, have, I believe, a greater say because they are living what we are living every single day. So now what is the composition of your Board specifically as it relates to Philadelphia residents?

I don't have those numbers, although I can get them for you. I would say that because of our conversation about this --

Some time ago.

-- during the BRT hearing, I think it was, that we've accelerated our efforts to diversify the Board and change the way we recruit members and so forth. So in time, I believe that we'll reach the goal you're 150 5/12/10 - WHOLE - BILL 080658, etc. talking about. I think there's a legitimate argument about whether Philadelphia should be the measure or whether geography should be the measure or some other measure should be the measure. So that's a conversation I'd love to have with you off to the side. But we're definitely committed to the goals that you were talking about back at that BRT hearing.

The record should reflect that I did respond to your request and submitted in writing a number of prospective candidates of all stripes and women.

Right.

And today we learned that Mr. Michael A. Schwartz is a new member. So the opportunity with a pipeline for additional members going forward is what?

Essentially there's also a subcommittee of the Board that works on recruiting new members, and 151 5/12/10 - WHOLE - BILL 080658, etc. we've approached more than one, I think, of the names that you suggested and are trying to convince them to join the Board.

Well, we look forward to the Board's reaction, comment or recommendation around Ballot Question No. 1, which deals with an issue that is really warranted and worthy of the same level of look-see that ethics has had over the past many years. Let me thank you all for your testimony.

Sure. And I really want to -- if I failed to do this, I want to thank Councilman Goode for bringing this up, approaching us on this, because without that piece of information, I don't think we would have been aware of the problem.

Okay. Thank you very much.

Sure.

Thank you, 152 5/12/10 - WHOLE - BILL 080658, etc. Madam Chair.

Thank you very much. Is there anyone else here to testify on this bill? Would you come forward, please. Thank you, panel, very much. I appreciate your testimony and your time. Councilwoman Miller.

I just want to say for the record that I thought that many of the discussions around the creation of these amendments was really good, because it helped -- I felt it helped people in their various roles, whether they were on the Ethics Board or Ethics staff, to increase their understanding and awareness of the roles and responsibilities of various political figures and titles, their responsibilities, their resources. Because sometimes when I hear people talk, you would think that ward leaders are these great big powerful people, and 153 5/12/10 - WHOLE - BILL 080658, etc. I think that when we had our meetings over there at the Ethics Board, it really gave people a chance that are not involved in the political process on a daily basis to understand what the various titles mean, the roles and responsibilities of those titles, rather than to just have their own personal perception of what it is. So I think that that's really played an important part in coming up with these amendments and the support of many of the amendments, which I think is good and valuable, because a lot of times what we read is distorted regarding what people actually do and the reality of what they do. I just wanted to say that.

Thank you very much, Councilwoman. Thank you. (Witness approached witness table.)

Yes. 154 5/12/10 - WHOLE - BILL 080658, etc. Would you identify yourself for the record, please.

Yes. Good afternoon, Majority Leader Tasco and members of Council. Thank you very much for allowing me to give my perspective today, and thank you for having this hearing on this important topic. My name is Kevin Scott. I'm a Philadelphia homeowner and business owner, and I serve on my ward committee, as well as democratic state committee. Some of you I have had the pleasure of meeting and speaking with individually and -- by the way, for the record, even before Councilman Kenney's comments, which I'm quite sympathetic to, I was planning on giving a little recognition here today. So if you'll allow me, I just want to mention that the last -- by the way, the last time I addressed this body, it was on the topic of recycling, and I'd just like to note that since then, the City has taken steps 155 5/12/10 - WHOLE - BILL 080658, etc. to dramatically improve our recycling program. So I'd like to thank all of you for your part in that, and it shows what can happen when citizens and elected officials work together. So thank you. I'm going to keep my remarks brief. As someone who is active in politics, I spend a lot of time, especially this time of year, educating voters about issues and candidates, and unfortunately, I do encounter a lot of skepticism. A lot of people are skeptical about politics and about politicians, and I want to be able to assure them that their elected officials are doing the right thing. We've made a lot of progress on ethics -- on the ethics front in Philadelphia, but we do still have a ways to go. A few years ago this body showed real leadership when it enacted a landmark package of ethics reforms, including the anti-pay-to-play law and our first ever campaign contribution 156 5/12/10 - WHOLE - BILL 080658, etc. limits. This is something for which many of you here today deserve tremendous credit. In particular, the contribution limits law has taken us out of the dark ages. However, since its passage, a serious flaw in this law has been discovered that causes it to fail to create a level playing field for candidates, as I'm sure it was intended. Fortunately, there is a simple and straightforward fix for this that has no 14 cost and no downside. This is to modify the law so as to apply the limits per election, meaning once for the primary and once for the general, as recommended by the Task Force's final report and as is done at the federal level and elsewhere. So we now know that this fix is needed. Clearly, it's one of the essential recommendations in the Task Force's report, and must be included in any group of bills if that package is to 157 5/12/10 - WHOLE - BILL 080658, etc. have credibility. Now, this is a complex set of bills, and obviously the devil is in the details, but in the end, everyone is going to know whether you did a good job or not at reducing both the appearance and the reality of conflicts of interest and improving the ethical climate of our City. In summary, if you're going to pass a set of bills, I respectfully urge you to make them a set of bills that will make Philadelphians proud of our government. Thank you very much.

Thank you. Any questions on behalf of this witness? (No response.)

Thank you very much for your testimony. Is there anyone else here to testify on this bill? (No response.) 158 5/12/10 - WHOLE - BILL 080658, etc.

There being none, this hearing is adjourned. We will go into our public meeting. The Chair recognizes Councilwoman Sanchez for an amendment on Bill 100122.

Thank you, Madam Chair. I move that Bill No. 10 100122 --

Offer the amendment first, please.

I move the proposed amendment to Bill 100122 be adopted. (Duly seconded.)

It has been moved and properly seconded that the amendment to Bill 100122 be accepted. All in favor will say aye. (Aye.)

Is there any opposition? (No response.)

There 159 5/12/10 - WHOLE - BILL 080658, etc. being none, I call on Councilwoman Sanchez to move Bill 100122.

I move for the amendment of Bill No. 1001 --

No. 7 Report the bill out of Committee as amended.

I'm sorry. I move that Bill 100122 be moved out of Committee with a favorable recommendation, as amended, and that the rules of Council be suspended to allow first reading at our next public session. (Duly seconded.)

It has been moved and seconded that Bill 100122, as amended, be reported out of Committee with a favorable recommendation and the rules of Council be suspended so as to have first reading of this bill at Council's next session. All in favor will say aye. (Aye.)

Any 160 5/12/10 - WHOLE - BILL 080658, etc. opposition? (No response.)

Thank you. The Chair recognizes Councilwoman Sanchez for an amendment to Bill 100124.

I propose an amendment as circulated to Bill 100124. (Duly seconded.)

It has been moved and seconded that we adopt the amendment to 100124. All in favor? (Aye.)

Any opposition? (No response.)

There being none, it is passed. The Chair recognizes Councilwoman Sanchez.

I move that Bill 100124, as amended, be moved 161 5/12/10 - WHOLE - BILL 080658, etc. out of Committee with a favorable recommendation and that the rules of Council be suspended to allow first reading at our next Council session. (Duly seconded.)

It has been moved and seconded that Bill 100124, as amended, be reported out of Committee with a favorable recommendation and that the rules of Council be suspended so this bill can be heard at Council's next session. All in favor will say aye. (Aye.)

Is there any opposition? (No response.)

There being none, the motion is carried. The Chair recognizes Councilwoman Sanchez for an amendment to Bill 100125.

I propose an amendment to Bill 100125. 162 5/12/10 - WHOLE - BILL 080658, etc. (Duly seconded.)

It has been moved and seconded that we adopt an amendment to 100125. All in favor? (Aye.)

Is there any opposition? (No response.)

There being none, the motion is carried. The Chair recognizes Councilwoman Sanchez.

I move that Bill 100125 be moved out of Committee, as amended, with a favorable recommendation and that the rules of Council be suspended to allow first reading at our next session. (Duly seconded.)

It has been moved and seconded that Bill 100125, as amended, be reported out of Committee with a favorable recommendation and that 163 5/12/10 - WHOLE - BILL 080658, etc. the rules of Council be suspended so this bill can be heard at Council's next session. All in favor will say aye. (Aye.)

Is there any opposition? (No response.)

There being none, the motion is carried. The Chair recognizes Councilwoman Sanchez for an amendment to Bill 100126.

I move for the proposed amendment to Bill 17 100126. (Duly seconded.)

It has been moved that we adopt the amendment to Bill 100126. All in favor will say aye. (Aye.)

Is there any opposition? 164 5/12/10 - WHOLE - BILL 080658, etc. (No response.)

There being none, the motion is carried. The Chair recognizes Councilwoman Sanchez.

I move for the favorable recommendation of Bill 9 100126, as amended, be moved out of Committee with a favorable recommendation and that the rules of Council be suspended to allow first reading. (Duly seconded.)

It has been moved and seconded that Bill 100126, as amended, be reported out of Committee with a favorable recommendation and a recommendation that the rules of Council be suspended so as to have first reading of this bill at Council's next session. All in favor will say aye. (Aye.)

Is there any opposition? (No response.) 165 5/12/10 - WHOLE - BILL 080658, etc.

There being none, the motion is carried. The Chair recognizes Councilwoman Sanchez.

I move for the proposed amendment to Bill 8 100127. (Duly seconded.)

It has been moved that we adopt the amendment to 100127. Can I get a second? (Duly seconded.)

It has been moved and seconded that Bill 100127, as amended, be reported out of Committee with a favorable recommendation and that the rules of Council be suspended so that this bill can be heard --

No, no, no. We just did the amendment.

I'm sorry. You did the amendment. I move for the adoption of the 166 5/12/10 - WHOLE - BILL 080658, etc. amendment. (Duly seconded.)

All in favor will say aye. (Aye.)

Any opposition? (No response.)

Thank you. Back to Councilwoman Sanchez.

Yes. I move that Bill 100127, as amended, be moved out of Committee with a favorable recommendation and that the rules of Council be suspended to allow first reading at our next public session. (Duly seconded.)

It has been moved and seconded that Bill 100127 be reported out of Committee with a favorable recommendation and that the rules of Council be suspended so as to have first reading of this bill at Council's next session. 167 5/12/10 - WHOLE - BILL 080658, etc. All in favor will say aye. (Aye.)

Any opposition? (No response.)

There being none, the motion is carried. The Chair recognizes Councilwoman Sanchez for an amendment to Bill 100128.

I move that the proposed amendment to Bill 14 100128 be adopted.

It has been moved that we adopt the amendment to 100128. Can I get a second? (Duly seconded.)

It has been moved and seconded we adopt the amendment to Bill 100128. All in favor will say aye. (Aye.)

The Chair recognizes Councilwoman Sanchez. 168 5/12/10 - WHOLE - BILL 080658, etc.

I move that Bill 100128, as amended, be moved out of Committee and that the rules of Council be suspended to allow first reading at our next public session. (Duly seconded.)

It has been moved to report Bill 100128, as amended, out of Committee. All in favor of the amendment will say aye. (Aye.)

Any opposition? (No response.)

There being none, the motion is carried. Now we'll recognize Councilwoman Sanchez.

I move that Bill 100128, as amended, be moved out of Committee with a favorable recommendation and that the rules of Council be suspended to allow first 169 5/12/10 - WHOLE - BILL 080658, etc. reading at our next public session. (Duly seconded.)

It has been moved and seconded that we amend Bill 100128 -- I'm sorry. I'm distracted here for a minute. It has been moved and seconded that Bill 100128 be reported out of Committee, as amended, and the suspension of the rules to have this bill read at Council's next session. All in favor? (Aye.)

Any opposition? (No response.)

Thank you. The motion is carried. Thank you very much. This Committee will stand in recess to the call of the Chair. (Committee of the Whole concluded at 5:45 p.m.) - - - 170 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on May 12, 2010, and that this is a true and correct transcript of same. -------------------- MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)