Phila. law ends flaw on PAC rule

City Council and Mayor Nutter moved quickly Thursday to close a loophole that has allowed the city electricians' union to circumvent Philadelphia's limit on campaign contributions.

Council abandoned plans to study the issue for another two weeks and unanimously passed a bill that bars political action committees, known as PACs, from evading the limit by funneling money through other PACs before it gets to candidates.

Nutter signed the bill at 3:41 p.m., saying it was important to move "as quickly as possible" because "when you're in the middle of a municipal election cycle we should not have any activity that allows folks to do indirectly what we all know you can't do directly." It took effect immediately.

The city contribution limits, in place since 2006, currently bar individuals from donating more than $2,600 a year to any municipal candidate. PACs are prohibited from giving more than $10,600 a year.

But at least two City Council candidates - Councilman-at-large Bill Green and Bobby Henon, a candidate for the Sixth District Council seat now held by Joan Krajewski - have received larger amounts originating with Local 98 of the International Brotherhood of Electrical Workers (IBEW).

Last year, Local 98's main PAC, the Committee on Political Education (COPE), gave $10,000 directly to Green.

In addition, COPE provided the bulk of the money that allowed three lesser-known PACs - the Blarney PAC, Concerned Irish Americans of Philadelphia, and Building a Better Phila - to give Green $10,000 each, an additional $30,000.

The practice continued this year, with Green receiving at least $25,000 from three different PACs funded by Local 98 – Building a Better Phila, the Blarney PAC, and Philadelphia Phuture, whose treasurer, Edward J. McBride, was a Local 98 employee until two weeks ago.

Henon, who is Local 98's political director and former treasurer of its COPE, has received at least $31,800 this year from three PACs tied to the union – $10,600 each from its COPE fund, Philadelphia Phuture and Building a Better Phila, according to reports filed last week with state election officials.

The full scope of Local 98's donations will not be known until sometime after May 6, when municipal candidates are required to file campaign-finance reports with city officials.

When the city contribution limits were first created, Council recognized the possibility that individual donors could get around the new rules by making additional donations through PACs. The ordinance specified that the limits would include "contributions made to or through one or more political committees."

But the same language was not applied to contributions that originated with PACs – an apparent flaw that Local 98 has exploited.

The new legislation specifies that the annual contribution limit for PACs shall include "contributions made to or through one or more political committees. . .."

After signing it, Nutter told reporters that Green and Henon should return any Local 98 money they received in excess of $10,600 a year.

"Whether people knew it or not at the time, I think it's pretty clear now that these excess contributions . . . violated the general spirit of the law," Nutter said. ". . .It seems to me that if you now have that knowledge, you should probably give the money back."

Green did not return a call about Nutter's suggestion. Previously, he told reporters that all his donations have been legal and he intended to raise as much money as possible for his reelection campaign.

"I've scrupulously followed the letter of the law," Green said Wednesday. "I think adherence to legal limits should be praised, not faulted."

Henon did not return calls.

Enforcement of the new ordinance will be up to the City Board of Ethics, which is likely to take several months developing more specific regulations for the new PAC language.

Given the ease with which new PACs can be created and funded, and the difficulty of proving intent when one PAC gives money to another PAC, enforcement may be problematic.

But the executive director of the Ethics Board, Shane Creamer Jr., said the broad language of the new ordinance will help. "We can go a long way to closing this loophole with regulations," he said.