Ex-Philadelphia finance director tapped to oversee stimulus spending

In 1974, 29-year-old G. Edward DeSeve quit his city finance job rather than follow then-Mayor Frank L. Rizzo's instructions to balance Philadelphia's budget on numbers that to him didn't add up.

It was an act of integrity that defined him early on, and yesterday few who know him were surprised when the Obama administration announced its selection of DeSeve as special adviser to the president and vice president to oversee the federal stimulus program.

A former deputy director of the Office of Management and Budget during the Clinton administration, DeSeve will lead the White House's efforts to implement the Recovery Act, which includes managing the distribution of $787 billion in stimulus funds.

"He has a dual competency that I think gives the president exactly what he needs," said U.S. Rep. Chaka Fattah (D., Pa.), referring to DeSeve's local and federal government experience.

A former Philadelphia finance director who in the 1980s helped steer the city away from bankruptcy, DeSeve until recently was the chairman of Strategy and Solution Partners, which provides sustainability and consulting services to governments and nonprofits.

"We've never seen a recession like this," DeSeve, 63, who lives in Montgomery County, said in a telephone interview yesterday. "We've never seen the need to demonstrate that government can produce results that can change the economy and make it more sustainable."

For that reason, he said, "I was drawn to this job."

DeSeve first received a call about the position from the vice president's office three weeks ago. He began work Wednesday.

The position is expected to last about two years, which is the same time period in which the stimulus funds are required to be spent.

As a high-level budget official under Clinton, DeSeve coordinated the development of strategic and performance plans for various federal agencies, and managed efforts to prevent a massive computer breakdown because of feared Year 2000 problems. He also produced a government-wide audited financial statement.

Also during the Clinton years, DeSeve worked as the chief financial officer of the U.S. Department of Housing and Urban Development.

He has private-sector experience as well, working as a partner and national industry director at the accounting and consulting firm KPMG. DeSeve also worked at Merrill Lynch Capital Markets as a managing director.

This latest position will be challenging in that DeSeve must coordinate the work of many federal agencies with the multiple government jurisdictions and outside entities that will receive the funds.

In addition, Obama has emphasized the need for transparency and accountability in the decision-making and distribution of stimulus dollars.

"That is a lot to do at once," DeSeve said. He cited two experiences that have prepared him for the position: working in Philadelphia during difficult financial times, and working for the federal government as deputy director of OMB during the Y2K preparations.

In Philadelphia, DeSeve helped shape the city's finances during the tenures of three mayors: Rizzo, Bill Green, and W. Wilson Goode Sr.

"I used to say, 'He's got the wisdom, I've got the will,' " Green recalled yesterday.

"Ed DeSeve is brilliant in terms of finances, in terms of understanding how things ought to work, and has had an enormous successful record in helping to oversee big projects," said Goode, who served as Green's managing director while DeSeve was finance director. "In my view, he is one of the best in the country."

In 1975, a year after resigning as Rizzo's deputy finance director, DeSeve established an economic consulting firm, Public Financial Management, which continues to provide financial advice to local governments and public authorities.

"Ed was always the guy who was a good company man," said former mayoral candidate Sam Katz, who was DeSeve's first hire. "You never read about him, never hear about him, but the people who end up working for him have a lot of respect for him."

In 1979, DeSeve left the firm to join the incoming Green administration, where he became a key figure in guiding Philadelphia out of a financial meltdown. As Green's finance director, he oversaw a budget that forced the layoffs of 1,300 city workers.

Nearly 10 years later, DeSeve helped save Philadelphia from another perilous fiscal plight. Serving as a special assistant to Pennsylvania Gov. Robert P. Casey, he helped prevent the city from running out of cash during Goode's first term.

In that role, DeSeve participated in talks that led to the creation of the Pennsylvania Intergovernmental Cooperation Authority, a state agency that monitors city spending.

Those who have worked with him credit DeSeve with improving the city's finances, and increasing the city's financial integrity.

More recently, DeSeve served as a fiscal adviser to Fattah during his 2007 bid for mayor. He developed tax-policy and spending proposals, and was behind Fattah's proposal to privatize Philadelphia International Airport to generate millions in new revenue.

Mayor Nutter said he reached out to DeSeve during his 2007 campaign and his transition into the mayor's office.

A professor for eight years at the University of Maryland's School of Public Policy, DeSeve is now a professor at the Fels Institute of Government at the University of Pennsylvania. He said he will finish teaching two courses, one graduate-level and one undergraduate. Both end next month.

Raised in Albany, N.Y., DeSeve moved to Philadelphia in 1967 to study public finance at the University of Pennsylvania's Wharton School. He obtained his bachelor's degree from Cornell University.

A fly-fishing enthusiast, DeSeve once said he would go "anywhere there is a trout in the water."

Yesterday, he said, "I'll try to make time, but this certainly will cut into my fly-fishing."