City Council is poised to regulate lobbyists for the first time while also asking voters to free city workers from political activity restrictions set forth in the 1951 Home Rule Charter.

A Council committee approved a package of six ethics bills on Wednesday. Testimony from the city's leading voices on reform ranged from praise for lobbyist registration to condemnation of the proposal to loosen rules against city employees working on campaigns or running for office.

Council's effort to allow employees greater freedom of political activity is likely to set up a showdown in a November ballot question that asks voters to give Council the power to set the rules on political restrictions. Currently, only the electorate can change those rules with a referendum vote on changing the charter.

Private attorney and former federal prosecutor Michael A. Schwartz, who chaired the Mayor's Task Force on Ethics and Campaign Finance Reform, warned Council that the political activity bill could erode public confidence while exposing city employees to political pressure.

"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 a step backward from the reform measures that recently have been passed by City Council," said Schwartz.

The charter has been interpreted by the Ethics Board to preclude city employees from even wearing campaign buttons or sticking lawn signs in their yard. All agree that this restriction goes against individuals' First Amendment rights and should be changed.

But Council's bills would set up two categories of city workers. Those with decision-making and enforcement powers - from police officers to health inspectors to DHS investigators - would be allowed to express their political opinions or publicly support a candidate but could not work on campaigns or run for office or raise funds.

Those in strictly service roles - about half the workforce, by Council's estimates - would not be restricted from running for committee person or ward leader, or joining a campaign.

Cathy Scott, president of AFSCME District Council 47, generally called the city's "white-collar" union, said all workers should be allowed to participate in the political process.

Schwartz and others offered strong support for the lobbyist bill. He and others - some of whom are Council's most persistent critics - praised the overall effort, though Council's Committee of the Whole left on the table Councilman Frank Rizzo's bills that would outlaw nepotism, restrict outside employment, and ban gifts.

Committee of Seventy president Zack Stalberg applauded Council's lobbyist bill for "bringing Philadelphia in line with almost all major cities." The bill would require lobbyists to register with the city and report expenditures on city-related issues quarterly.

"This is a huge step forward," Stalberg said.

Stalberg was joined by the Nutter administration, the Mayor's Task Force on Ethics and Campaign Finance Reform, and the Board of Ethics in praising the lobbying bill, though Board of Ethics member Nolan Atkinson questioned how the city would pay for the electronic-filing system it would establish.

"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," said Atkinson, who testified at the hearing.

Atkinson, however, also said Council "should be commended for keeping an open mind toward reform strategies and for listening carefully to input from various stakeholders."

The six bills will be eligible for final passage as early as next Thursday.

In addition to the lobbyist registration and political activity bills, the package would limit contributions to candidates' legal defense funds, inaugural committees, and transition committees. Those types of contributions are currently unregulated. The new bills would set the city's standard contribution limits on those areas.

An individual donor could give up to $2,600 total and a committee could give up $10,600 total to a transition committee, inaugural committee, or to help retire debt after the election. Separately, the same donor could give up to the corresponding limit to a legal-defense fund.

Council also worked closely with the Board of Ethics - until now the bodies have had a contentious relationship - to establish criteria for ethics violations fines.

Contact staff writer Jeff Shields at 215-854-4565 or jshields@phillynews.com.