Philadelphia's Board of Ethics concluded this week that Philadelphians for a Fair Future, a nonprofit that raised more than $2 million to help the Kenney Administration gain support for its controversial soda tax, violated the city's Lobbying Law, though the organization characterized its errors as unintentional mistakes.
Back in 2016, when Mayor Jim Kenney first floated the sugary beverage tax as a revenue generator in his inaugural year, PFF – a 501c4 – registered with the Ethics Board as a lobbying principal and filed its first quarterly report on July 29, 2016. Despite early declarations that it was committed to transparency, that first report contained multiple omissions, the Ethics Board said Thursday.
It's the latest in a series of ethical questions that arose regarding PFF and its support of the mayor's soda tax policy.
The Board's investigation was prompted by a complaint filed with the city's Board of Ethics in January 2017 that alleged Philadelphians for a Fair Future (PFF) "failed to disclose all of its lobbying activities" and may have violated Lobbying Law.
PFF compensated Peak Strategic Solutions, Bellevue Strategies, Bellevue Communications Group and Andrew Dalzell, as well as a hired consultant for Bellevue, Rodney Muhammad, at least $2,500 in that quarter but failed to list them in paperwork – as required by Lobbying Law. (An October 2017 Inquirer report raised other questions about Muhammad, also known as Rodney Carpenter, since the NAACP leader became a consultant to the mayor following his support of the sugary drinks tax and work with PFF.)
The law says any individual or organization must register with the Board if compensated $2,500 or more by the principal, in this case PFF, to perform lobbying activities. None of the firms nor individuals registered as lobbyists at that time, representing another violation by PFF.
Another issue the Board uncovered related to a portion of the $2,185,944.62 in expenditures noted in PFF's first quarterly expense report, which law says must include a breakdown on the amount of money used for direct or indirect communications, as well as the cost of gifts, lodging or other spending on city officials.
Indirect communications were not spelled out as they should be, the Board said, since letters to the editor and organizing other partners' communications with City Council were not listed methods. And of the over $2 million PFF had to spend, $3,750 were used for direct communications but the July 2016 quarterly report "did not disclose any direct communications."
"We have been in discussions with the Board of Ethics for nearly a year concerning the issues addressed in the settlement. From its inception in 2016, PFF has been committed to transparency in its operations, which is why we consistently disclosed the identity of all our donors as well as the amounts donated to this effort," PFF said in a statement.
"At no time was PFF or its consultants engaged in any effort to hide or obscure its objectives or its strategies for achieving them. In our discussions with the city’s Ethics Board, we were informed that PFF and its consultants failed to register as lobbyists for our work in 2016. This omission was inadvertent, and we have corrected it."
The tone of the organization's response, however, did not sit well with David Thornburg, CEO of good-government group Committee of Seventy.
"Here’s the thing," he told the Business Journal, "it strikes me as sloppy that you are spending that kind of money and you cant take the time to comply with the Ethics reporting."
Yet Kenney, according to statements made by a mayoral spokesman, is still "happy to have them on board" and work to sway public opinion on his policies.
"These are simple filing errors that appear to be inadvertent, and PFF fully cooperated with the Board," said Mike Dunn, who said the Administration first learned of the violations with the Board's announcement. "We take the City’s filing and disclosure requirements seriously and thank Board of Ethics for ensuring all groups file properly. To be clear, nothing in the settlement agreement indicates an intent to violate the City’s lobbying law, all entities filed amended expense reports and lobbyist registrations, and all entities fully cooperated with the Ethics Board and have agreed to the monetary penalties. In light of all that, we are confident the matter has been resolved properly."
While Kenney may be confident, government watchdogs may not be. Aside from these violations and the Muhammad controversy, a member of the PICA board, which votes to approve the city's budget and five-year fiscal plan, reportedly donated $25,000 to PFF in 2016.
At the time Thornburg said it prompts concerns that PICA is serving as the "independent voice" that it's supposed to be.
"If there were a record of repeated violations and settlements and a clear sense of skirting the requirements of the law, then absolutely [the mayor] should be done with them," Thornburg said Thursday.
As part of the settlement with the Board of Ethics, PFF will pay $8,000 in civil monetary penalties and $400 in fees to register Bellevue and the other groups for their lobbying activities.