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A candidate's fund points to quirk in PAC law

Derek Green says that when he worked for the City of Philadelphia, he had nothing to do with the Green Fund.

Derek Green says that when he worked for the City of Philadelphia, he had nothing to do with the Green Fund.

Sure, the political action committee shares his last name. Sure, he was guest of honor at its fund-raiser last July. And sure, when he quit his $129,000-a-year city job to run for City Council, the Green Fund became his campaign fund.

But he says he had nothing to do with the fund until then.

Which is good, because he might have run afoul of city ethics rules if he had.

Green, who worked for 11 years for Ninth District Councilwoman Marian Tasco, quit Feb. 13 to run for a Council-at-large seat - and only then, he says, did he connect himself to the fund.

"The Green Fund is a Pennsylvania political action committee supporting progressive candidates - you see green, some people think green environment," Green said this week. "Green is a common name, but it wasn't on my behalf."

The PAC and Green's relationship with it illustrate what one lawyer calls a "loophole" in the law:

The city bars its officers and employees from "collecting, receiving, or soliciting" political donations - a rule one of the city's chief ethics cops calls "very, very, very strict." But the Green Fund was formed under state law, which does not bar an unaffiliated PAC from raising money and then becoming a candidate's PAC.

State law "allows PACs to go from being candidate to non-candidate PACs . . . That is standard practice, it's done. It's not how it's done in most states, but it's how it's done in Pennsylvania," said Kevin Greenberg, a lawyer who specializes in election law.

The city's rules against employees raising political funds "are pretty good," Greenberg said, but "they don't work in a vacuum, and this is one of those loopholes."

Lawyer Ellen Mattleman Kaplan, former director of the watchdog group Committee of Seventy, said: "The question is really, what circumvents [the city code] legally, and what circumvents it in spirit? There seem to be a lot that circumvents it in spirit."

A third election law expert, who did not want to be quoted by name because of potential client conflicts, said that if Green spoke at a fund-raiser for the Green Fund, and then later adopted that PAC as his own campaign fund, his actions could violate the city's ethics code.

"I think it is prohibited political activity," the lawyer said. Green, himself a lawyer, said he knows the rules - and helped draft them when he was special counsel to Tasco.

"This was done within the rules and regulations I'm aware of from the Ethics Board and city regulations," he said.

The invitation for the Green Fund's July event, held at Capital Grille in Center City, made no mention of a campaign and was e-mailed out by the PAC's treasurer, Gregory Davis. Invitees were asked to give $250, $500, or $1,000 to the fund.

Two attendees interviewed by The Inquirer said there was no mention of Green running for office. "There was nothing about him being a candidate," said Anthony Ross, a friend who gave $200 that night. "I saw he was being honored, so I went, I wasn't sure what the Green Fund was."

Davis, a friend of Green's, said he created the PAC in 2009 to support a variety of candidates. He said he had always planned to back Green if his friend decided to run, but noted that Green, who also ran for Council in 2007, did not enter the latest race until February.

"The reality is Derek has not been fund-raising, it's been me," said Davis, an investment adviser who was formerly on the finance committee for the Democratic National Committee.

Davis conceded the fund's name is confusing.

"People could see it a certain way, but Green's a popular name," he said, "Green is synonymous with what I'm looking to do in terms of supporting candidates. I'm sprinkling money around. I honestly didn't put too much thought into it."

The city ethics code not only bars employees from political fund-raising, it calls for fines of $300 per violation - and says violators become ineligible for any city office for a year.

Green said giving a speech at the fund's 2014 event was within his rights, which he said the law has to balance.

"Having worked with the ethics board on both campaign finance law and the regulations, it's challenging because we're trying to provide guidance and regulate, but at the same time, how do you balance First Amendment rights . . . with how we govern elections?"

Michael Cooke, director of enforcement for the city's Board of Ethics, declined to comment on Green's situation but said the rules are clear.

"The rules are meant, especially on the fund-raising prohibition, to be very, very, very strict," Cooke said, "And for any city employee, it's just something we tell people: Don't go anywhere near it, because it's something where, given the strictness and the breadth of the rule, it's hard to go near and stay on the right side of the line."