(This story ran in today's Philadelphia Daliy News. It wa co-authored by IOM's Ben Waxman and DN staff writer Bob Warner.)
A MAJOR contractor with the Philadelphia Sheriff's Office placed $30,000 worth of campaign ads to help re-elect Sheriff John D. Green in 2007 and has not been repaid in nearly four years, possibly violating the city's campaign-finance and contracting laws.
Reach Communications Specialists Inc., which reportedly has received millions of dollars from the sheriff's office for work related to real estate sales, has been listed on Green's campaign-finance reports since mid-2007 as a $30,000 creditor.
As of year-end 2010, Green had made no payments to reduce the debt and his campaign committee had only $98 left in its bank accounts, according to recent filings with city election officials.
Green abruptly gave up his city office and retired Dec. 31, amid a maelstrom of financial record-keeping problems that led City Controller Alan Butkovitz to order a forensic accounting by a private firm.
A week after Green's resignation, his successor, Acting Sheriff Barbara Deeley, announced that she had suspended all dealings with Reach Communications, for reasons that were not disclosed.
The transactions between Green's 2007 campaign and Reach Communications raise additional questions because of limits on campaign contributions to city officials and restrictions on no-bid city contracts.
During the 2007 campaign, individual donors were allowed to give no more than $2,500 to any candidate, unincorporated businesses no more than $10,000. Corporations are barred by state law from making contributions.
A separate city ordinance prohibits no-bid city contracts worth $25,000 or more from going to businesses whose employees contribute more than $10,000 to a candidate for city office.
On paper, the $30,000 that John Green's campaign owes to Reach Commmunications is a debt, not a contribution.
But Shane Creamer, executive director of the city's Board of Ethics, said unpaid debts that remain on a campaign's books for an extended period could be interpreted as a violation of contribution limits.
"There could be a potential issue with campaign debt that is not paid back on a reasonable commercial schedule," said Creamer.
"At some point, it may be considered an in-kind contribution. If the amount of that debt exceeded the contribution limits, then there is a potential excess-contribution issue."
Citing confidentiality issues, Creamer declined to comment on the specific arrangements between the sheriff's re-election committee - Philadelphians for Green - and the Reach firm.
Efforts to reach Green for comment were unsuccessful. Officials at the sheriff's office said he was in Florida, but did not leave a forwarding number.
James Davis, owner and president of Reach Communications and an affiliated company, RCS Searchers, did not respond to recent calls from the Daily News about the sheriff's unpaid debt to his firm.
But in an interview last month, Davis defended the firm's involvement in the sheriff's campaign.
"We did provide the services, and it was all displayed in public," said Davis. "It was all in the campaign-finance reports. That's what is required. If he's going to have someone do campaign work, we know him best, we've worked with him for years."
Zack Stalberg, head of the reform group Committee of Seventy, said that any political ties between Reach and former sheriff Green were improper.
"It raises a very big red flag," said Stalberg. "It's wrong because it's so easy for the tasks and the bills to get mixed up. It could be perceived that taxpayers are underwriting the campaign. It's bad on appearances and it would be extremely tempting to cut the sheriff's campaign a break on the bill to keep getting city business."
The Committee of Seventy has called for abolition of the sheriff's office, transferring its functions to the courts and city agencies.
Neil Oxman, president of the Campaign Group, the city's top political-advertising firm, said his organization typically requires its candidates to pay cash up front for campaign spots, to avoid any problems with unpaid bills.
"If I buy a million dollars worth of newspaper advertising for a candidate and then the campaign doesn't pay, that can be construed as a corporate contribution from the Campaign Group, and in Pennsylvania that's illegal," Oxman said.
He said his firm also avoids doing work for government agencies, to avoid any inference that it's getting favors from past clients.
Davis said that Reach Communications had separate staff members doing government and campaign work and that the arrangements were proper.
"The requirements are that you list everything," said Davis. "Everything is there for you to look at and the public to review. We only provided professional services, on both ends. Anyone you talk to, anything we billed for, we provided those services."
Reach Communications was incorporated by Davis and the late James Cassell in 1986, the year before Green was elected sheriff, according to state corporation records.
In an interview last month with the Inquirer, Davis estimated that before Deeley suspended the firm, 70 percent of the company's revenue came from business with the sheriff's office, between $1.5 million and $2 million annually.
When the Daily News asked Davis about Green's $30,000 campaign debt on Jan. 25, Davis laughed.
"Well, now that we're no longer working with the sheriff's office, there is obviously more urgency to collect that money," he said.