John D. McDaniel, a political operative for City Councilwoman Blondell Reynolds Brown, Mayor Nutter, and other city politicians, was fired Tuesday by the Nutter administration after the city Ethics Board documented widespread financial irregularities in Brown's 2011 reelection campaign.
In the city's political and legal circles, there was speculation that the scandal could end Brown's political career as well.
The Ethics Board reported Monday that with McDaniel's cooperation, Brown had used campaign funds to repay a personal loan of $3,300 from Chaka "Chip" Fattah Jr., the son of U.S. Rep. Chaka Fattah (D., Pa.), and tried to conceal the transaction on campaign finance reports by listing it as a payment to a printing firm.
The councilwoman also admitted depositing four campaign contributions, totaling $1,400, into her personal bank account.
Several lawyers said the transactions could lead to criminal prosecution, and the president of the Committee of Seventy, Zack Stalberg, called on law enforcement officials to investigate. The District Attorney's Office and the U.S. Attorney's Office - already probing the financial affairs of Chaka Fattah Jr. - declined to comment.
The Ethics Board levied record civil penalties, totaling $48,834, against Brown and her campaign organization, Friends of Blondell Reynolds Brown, for the personal use of campaign dollars and dozens of omissions and misstatements, in both her campaign finance reports and personal financial statements, where public officials are required to list sources of income, debts, real estate holdings, and other financial information.
Brown told Ethics Board investigators that she had severe financial problems in late 2010 after a separation from her husband and had to raise about $30,000 to save her home from foreclosure.
McDaniel, 39, was Brown's campaign manager when she won reelection to her fourth four-year term in 2011 and, according to the Ethics Board, was the only person with authority to write campaign checks.
He had also worked on Nutter's reelection campaign and, with Nutter's backing, landed a patronage job at the Philadelphia airport in January 2012, as Nutter began his second term. Until this week, he earned $87,125 a year as an assistant managing director, running a program where volunteers answer questions for travelers.
McDaniel lost the job at the close of business Tuesday, on Nutter's orders.
"I have known John McDaniel for a long time, and certainly I'm disappointed by his actions and admissions as outlined in the Ethics Board report," Nutter said in a statement distributed by his press office. "It's regrettable that I must take this action on behalf of city government and the taxpayers, but it's an action that is imperative to ensure the integrity of our government and our personnel."
McDaniel could not be reached for comment.
He had held other patronage jobs for five years under former Mayor John F. Street, but was forced to resign in 2005 after a judicial candidate paid him $450 in "consulting fees" and $615 for various campaign expenses, in violation of a City Charter provision that prohibits city employees from working "in the management or affairs of . . . any political campaign."
The city's inspector general had also looked into allegations that McDaniel stole $13,000 from a nonprofit agency while he was working at the Mayor's Office of Community Services. The nonprofit filed a police complaint but withdrew its charges after McDaniel repaid the $13,000 in a settlement agreement.
Philip Goldsmith, the former city managing director who was McDaniel's boss in 2005, said Tuesday he was "shocked" to read that McDaniel had returned to the city payroll.
"I'm all for giving people second chances, but this guy seems to have nine lives," Goldsmith said, before the mayor announced McDaniel's dismissal. "And the position he has now is one of those jobs that seems to be made up, the type of thing that should go away in a government that's downsizing. . . . Obviously he had influence with someone."
That someone was apparently Nutter.
Nutter's campaign had paid $14,860 to McDaniel personally for work in 2011, listing him as a "field director" in one report, and the campaign paid an additional $59,700 to a political action committee McDaniel controlled, the Progressive Agenda PAC.
After the election, the mayor sat down with McDaniel and discussed McDaniel's work history before offering him a job, said Nutter's spokesman, Mark McDonald. "Basically, the mayor gave him a second chance," McDonald said.
Brown attended a brief Council Rules Committee meeting Tuesday. Cornered by reporters, she dismissed her personal use of campaign dollars as "an error in judgment" and walked away when asked if she had been questioned by the FBI.
"I've indicated in my statement that I take full responsibility for the actions of my campaign staff, I take responsibility for my error in judgment, I've taken corrective action, and I apologize to my colleagues and my supporters," she said, repeating the phrases with minor variations in response to every question asked.
Besides urging a criminal review of the Ethics Board findings, Stalberg called for the city to put online the annual financial disclosures filed by city officials.
"The lack of transparency . . . makes it exceedingly difficult to find out if sources of income are properly reported, much less figure out what may not have been reported," Stalberg said.
He also questioned whether the civil penalties for violations of campaign finance and ethics laws were stiff enough.
Stalberg noted that Brown had acknowledged a prior breach of the campaign finance code in a 2011 settlement with the Ethics Board.
At that time, she agreed to pay a personal $1,500 fine and refund $9,900 in excessive contributions made by the Progressive Agenda PAC.
The Ethics Board disclosed this week that Brown and McDaniel dodged both those commitments.
Brown asked McDaniel to reimburse her for the $1,500 "personal" fine, and McDaniel complied, the board said.
To cover the $9,900 refund, McDaniel wrote out a Brown campaign check for $9,900 to the Progressive Agenda PAC and gave a copy to the Ethics Board.
But he never deposited the check in the PAC's account. It would have bounced, according to the Ethics Board, for insufficient funds.