Posted on 10/26/2003 4:35:14 AM PST by randita
Posted on Sun, Oct. 26, 2003
'Pay to play' entrenched in the city
Experts in campaign finance say the give-and-get game in Phila. is as brazen as it gets.
By Ken Dilanian, Cynthia Burton and Rose Ciotta Inquirer Staff Writers
Three decades ago, Mayor Frank L. Rizzo had a stock answer when asked why he doled out city contracts to his political supporters.
"I have to give them to somebody," he said. "You don't expect me to give them to my enemies, do you?"
On this subject, the late Rizzo and Mayor Street are kindred spirits, as Street has made clear. And they are not alone: Elected officials across the country and throughout history have bestowed favors on those who ponied up at election time.
As Street told The Inquirer Editorial Board on Wednesday: "I didn't make these rules."
But if the nexus between giving and getting is a fixture of American politics, the "pay-to-play" game as practiced in Philadelphia and Harrisburg these days is without equals among major cities and large states across the country in its scope and brazenness, campaign finance experts say.
The campaign reports filed Friday show that even a highly publicized federal investigation into the process has not slowed it down: After the FBI bug was discovered in Mayor Street's office on Oct. 7, his campaign banked checks from 744 contributors - many of them city contractors - worth $1.7 million.
"There's always going to be 'pay to play' in politics," said Fred Siegel, an urban affairs expert at the Cooper Union in New York City who has studied Philadelphia. "The question is how blatant it is. Philadelphia, it seems to me, crosses the line regularly... . If you're coming there to do business, beware; the process is so convoluted and expensive that only somebody who has invested politically already is going to want to enter the game."
The mayor has denied any wrongdoing, and even some of his most ardent critics say they cannot imagine his crossing the line that separates "pay to play" - rewarding donors with contracts or other plums - from the crimes of bribery or extortion, which require an explicit "quid pro quo" agreement to sell a government decision.
Nevertheless, when held up to the modern standards of post-Watergate ethics reforms, the fund-raising system in Philadelphia and Pennsylvania dwells in the political Dark Ages.
After Watergate, Congress placed $1,000 limits on how much individuals could give to federal campaigns (the cap is now $2,000) on the theory that big sums from single donors could be more corrupting.
Loopholes developed, to be sure, but the caps by and large have forced federal candidates to reach out to a broader base of donors than they otherwise would have had to. Most states, including New Jersey, have followed suit in limiting contributions - but not Pennsylvania.
Among the 10 largest cities, Philadelphia is the only one that does not restrict the size of individual campaign donations. Combine that laissez-faire approach with this being the fourth-largest media market in the country, and you've got a situation where multimillion-dollar campaigns are funded by a tiny clique of donors writing five- and six-figure checks.
For example, The Inquirer reported last year that 93 of Street's top 100 career donors had won city contracts, subsidies or appointments since he became mayor, or had benefited from his administration's regulatory decisions.
Together, those donors - unions, law firms, developers, finance companies - gave nearly half the $16 million Street had raised since he first ran for City Council president in 1991.
The trend has continued: Of the $5 million Street has raised since June, $2.7 million has come from 122 contributors who each gave $10,000 and above, records show. (His Republican opponent, Sam Katz, raised $3 million, including $1.1 million from 36 donations of $10,000 and above.)
The current federal probe has spotlighted one extraordinarily successful Street money-raiser: African American lawyer Ronald A. White, whose Center City offices were raided this month by the FBI.
But as Street allies point out, the seven-figure fees that White's firm has earned from City Hall are dwarfed by the tens of millions paid over decades to a handful of law firms, all run by white men, all well-practiced at bankrolling mayoral campaigns.
"The city is not run for the 1.4 million people who live here," said veteran political consultant Neil Oxman, a Democrat who helped run the Katz campaign in 1999 but is sitting out the current race. "It's run for... 200 to 300 people, and in their interests."
In most cases, Street's mega-donors - like those of mayors past - have gotten something valuable from the government, often something worth far more than the money they invested in the candidate.
Take Ken Goldenberg.
Goldenberg, a Blue Bell developer, began giving to Street's campaigns in 1999. He has become one of the city's most successful deal-makers, winning a string of controversial zoning changes and public subsidies for his projects.
Last week, the Street campaign took in a check from Goldenberg for $160,500 - more than most Philadelphians earn in a four-year mayoral term. That brought to $426,500 his total donations during Street's term, making him the mayor's biggest individual reelection benefactor.
Two weeks before, on Oct. 7, the Street administration had sent City Council a proposal to grant Goldenberg a $5 million tax break.
It was for his plan to renovate the Boyd Theater on Chestnut Street. The tax break was not mentioned when city officials announced the project a few weeks ago. Earlier in the year, Street helped Goldenberg win city approvals to build an Ikea in South Philadelphia and a shopping center in the Northeast.
When Street first took office in 2000, he approved a $1 million grant to help keep afloat Goldenberg's failing DisneyQuest project by paying for excavation. Taxpayers paid to dig the hole and then to fill it in. Street later signed off on a city loan that helped Goldenberg turn it into a parking lot.
Reached on his mobile phone Friday night, Goldenberg said he did not have time to talk.
Republican Katz, who has touted his independence from special interests, has also attracted big contributions from people who will want his help if he wins. His list includes some of the same law firms that have given to Street. Ballard Spahr Andrews and Ingersoll, whose lawyers have given Street's campaign fund $460, 683 since he became mayor - has given $76,800 to Katz.
Ballard Spahr is the single largest winner of legal work on city bond issues.
"I don't think a contribution gets you business," said Ballard Spahr managing partner Arthur Makadon, who is also advising Street in the federal probe. "It allows you to get business. It puts you in the queue."
Makadon's predecessor at Ballard Spahr, David L. Cohen, helped raise $42 million for Ed Rendell's 2002 gubernatorial campaign while working as Comcast Corp.'s executive vice president.
These days, Cohen, best known for his years as Rendell's top mayoral aide, says the lack of contribution limits in city and state law "produces exactly the wrong kind of culture and the wrong kind of appearance."
Katz has raised big money - $180,000 - from the Carpenters Union, which broke with Street (after donating $224,000 to his 1999 campaign) over his plan to lower union costs and improve service at the Convention Center.
Though Katz has criticized Street for raising the costs of doing business in Philadelphia, he won plaudits from the carpenters for opposing Street's limited change in prevailing-wage rules to make some housing construction less expensive in the city.
•
Pay to play goes way, way back. It happened under Rendell, W. Wilson Goode and Frank Rizzo. In the early 1980s William J. Green's administration awarded his former law firm, Wolf Block Schorr and Solis-Cohen, the lion's share of lucrative no-bid bond counsel work.
Harrisburg is no different. In 1997, The Inquirer reported that at least 120 of the 228 members of then-Gov. Tom Ridge's $50,000-plus donor club were getting something from the state.
That same year, State House Speaker John Perzel, (R., Phila.) said he favored what he called political "tithing" - meaning that businesspeople and interest groups should contribute to House Republicans as a way of thanking them for favorable legislation. Needless to say, his advice has been well-heeded.
In Trenton and Washington, where donations are capped, the system favors those who can raise lots of smaller checks. President Bush's top fund-raising team, for example, are "Rangers," who pledge to raise $200,000 each. They include David Girard-diCarlo of Philadelphia's Blank Rome law firm, which lobbies, contracts with and represents clients before the federal government.
In Pennsylvania, ethicists and editorial writers have been bemoaning the freewheeling nature of the fund-raising system for years, but the only thing that has changed is the size of the donations: They have gotten much larger.
That is driven by the growth in campaign spending. In 1983, Goode and Republican challenger John Egan spent about $4 million each, adjusted for inflation, on their mayoral runs. Rendell spent about $6 million in today's dollars to get elected in 1991. Street and Katz this year are on track to spend at least $12 million each.
Six-figure donations from a single source, once eye-popping, have become commonplace.
Such amounts convince ordinary taxpayers "that they do not have similar access to the government because they could not write that kind of check," City Councilman James Kenney, a longtime proponent of capping donations in city races, said last week. "They believe there's a small group running the government and 'What's the sense of me voting, because I can't afford to play in that arena.' "
Of course, whether or not pay to play corrodes democracy is an academic debate. Thanks to federal investigators, a different question - when is it a crime - now haunts the mayoral race.
This much is clear: It is not illegal for politicians to shower donors with the spoils of office.
Indeed, the U.S. Attorneys' manual urges federal prosecutors to "be careful" when building cases involving campaign donations, noting that they "represent a necessary feature of the American political process... and they are almost always given and received with a generalized expectation of currying favor with the candidate."
Generally, in order to show that a campaign contribution was actually a bribe - or the result of a shakedown - prosecutors would have to prove that there was an express agreement to trade campaign money for governmental action.
"We were taught very early on... that if you do that, you go to jail," Perzel said in 1997. "There is not allowed to be a quid pro quo."
And to avoid any hint of that, said Alan Kessler, a Philadelphia lawyer and master Democratic fund-raiser, both the giver and the getter must be careful in their conversations.
"It's not rocket science," Kessler said. "You just do not talk about what somebody wants or gets when you're talking about raising money. That's just a no-no."
Besides, fund-raisers and politicians say, there is no need to spell out what is often an unspoken understanding.
Perhaps that's why extortion cases involving only campaign donations - as opposed to money going into a politician's pocket - are so rare. To win such a case, authorities almost always need the defendant on tape, linking donations to favors.
As The Inquirer reported Friday, the two-week bugging of Street's office produced no such words from the mayor, who has said all along that the bug would find "no corruption, no sex, no profanity."
That was not the case in Chicago in 1998, when city treasurer Miriam Santos called a brokerage firm and told them it was time to "belly up" for her reelection campaign - or lose their contract.
"This is not a choice," she said, not realizing the firm taped all calls.
She eventually pleaded guilty to a felony.
Contact staff writer Cynthia Burton at 856-779-3858 or foreign@phillynews.com. Inquirer news researcher Frank Donahue contributed to this article.
© 2003 Philadelphia Inquirer and wire service sources. All Rights Reserved. http://www.philly.com
Extortion Cases??
I believe that is the first I've heard anyone in the media use that
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