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The admission came as part of a settlement agreement with the city Board of Ethics in which the Local 98 PAC was fined $10,000. Local 98 is led by former state Senate candidate John J. Dougherty.
The $10,000 penalty, for eight separate campaign-finance violations, was the largest issued since the board was established in 2006.
Struck early yesterday afternoon, the settlement marked a sudden end to a nine-month investigation in which the union's PAC - the Committee on Public Education of Local 98 - had refused, until recently, to give the board expense vouchers detailing how it spent $2.5 million in 2007.
"Perhaps Local 98 has finally gotten religion," Richard Glazer, chairman of the Ethics Board, said after the penalty was announced. "The message will go out loud and clear that in future elections, these things will be dealt with."
Each of the eight violations stemmed from Local 98's failure to disclose certain spending in its 2007 campaign-finance reports, including a $4,500 in-kind contribution to businessman Tom Knox, whom the local backed in the five-way mayoral primary.
In a statement, Dougherty blamed the violations on a "widespread misunderstanding" of the city's campaign-finance law.
"With the exception of this handful of violations, and given our significant political expenditures in 2007, we believe our ledgers were well-kept and well-documented. The book is closed on this issue," the statement said.
No mention was made of the flyers, and a union spokesman declined to comment specifically on them.
There were two sets of anonymous flyers. One depicted a 1970s photograph of six men suspected of being Black Panthers being strip-searched by police. Text beneath it read: "A vote for Nutter is a vote for racial profiling" - a reference to Nutter's proposal to let police stop and frisk people suspected of carrying illegal firearms.
About 125,000 copies were distributed in North and West Philadelphia, according to the Ethics Board.
The second batch accused Nutter of leaving the Catholic Church for political reasons. It was distributed at churches on Mother's Day, two days before the primary.
"Remember that Democrat Tom Knox is a practicing Catholic," the flyer read. "Michael Nutter? He was Catholic when it was convenient for him, so he could get a quality Catholic education. Now? He quietly left the Catholic Church to become a Baptist, probably because his polls told him it would be a smart move."
Nutter declined to comment about Local 98's role in generating the flyers, which at the time led him to brand Knox "a scumbag." Yesterday, he said only, "The Ethics Board did their job. The matter is settled."
The PAC said it funded the flyers through payments to two longtime Local 98 consultants, Tommie St. Hill and Ed Kirlin.
Both men were involved in a series of court depositions, subpoenas and lawsuits amounting to $100,000 worth of legal work that was provided to the Ethics Board free by the Dechert law firm.
Also according to the settlement, the PAC was fined for not disclosing a $6,207 payment for a fund-raising event as an in-kind contribution to City Council candidate Bill Green, and a $2,200 payment for T-shirts as an in-kind contribution to City Council candidate Curtis Jones Jr.
In addition, the PAC exceeded the city's $10,000 contribution limit to former City Councilman Juan F. Ramos by $2,500, and to Green by $6,207.
At the time of all the payments, Dougherty served as treasurer of the PAC. But because he does not still hold that title, the current treasurer, Robert Henon, signed the settlement agreement.
Under its terms, the $10,000 must be paid within two weeks.
Noting Local 98's "full cooperation" in the last month, Ethics Board executive director Shane Creamer said: "Going forward, candidates and committees are on notice that they must fully and accurately disclose all of their expenditures and contributions."
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