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Looking at Nutter on ethics

Democratic rivals say he is not quite the reformist he says he is. Nutter gives his side in several controversies.

At the KYW-1060 Radio studio last month were (from left) Dwight Evans, Nutter and Chaka Fattah. They took part in a "Breakfast With the Candidates" live debate.
At the KYW-1060 Radio studio last month were (from left) Dwight Evans, Nutter and Chaka Fattah. They took part in a "Breakfast With the Candidates" live debate.Read more

A few days ago, in a television interview, Tom Knox gave public voice to a view that a number of candidates and strategists in the Democratic mayoral primary have been expressing privately in recent days:

That the political actions of Michael Nutter, who has surged in the polls, have not always lived up to his reformist image and his advocacy of high ethical standards.

Speaking on NBC10 Live@Issue, Knox accused Nutter of having held a no-show job with a consulting firm; said the former councilman had lobbied for a no-bid consulting contract for a political ally; and noted that Nutter had given out no-bid contracts while chairing the Pennsylvania Convention Center Authority.

Knox has since issued a mailer that surfaced just yesterday, calling Nutter "a part of the machine."

Nutter says that he has done nothing improper in any of the cases cited by Knox or by other rival camps. His opponents, he says, are desperate, pure and simple.

"I've operated with integrity. I have a real record of change and reform . . ." Nutter said yesterday. "These other issues are the kind of scurrilous attacks that get made late in the campaign."

Here are some of the elements of Nutter's career that his rivals say are worthy of voters' attention, along with what Nutter and others have to say about them.

The subject was payment of an $80,000 no-bid contract sought by Campbell's company, the Visionary Group. The contract was for consulting services to improve efficiency in the sheriff's office.

Campbell, who heads Philadelphia's black Democratic ward leaders, ultimately did not get the money - Sheriff Green killed the deal, saying he neither needed nor wanted her services.

Nutter said yesterday that the contract was not his idea and that he had not sought to exert political influence.

"I was a member of City Council, I was on the appropriations committee, and if a department or agency was having some kind of budget problem, it was in the normal course of my service," he said.

Campbell, who has succeeded Nutter in the Fourth Councilmanic District, is supporting Bob Brady for mayor.

In the Sunday television interview, Knox said he had no doubt that Nutter was playing the old politics, trying to do a favor for a powerful ward leader. "It did happen," Knox said. "You can count on it."

The contract, for $145,000, was for bond counsel on the refinancing of $229 million of the center's construction debt. The law firm was Saul Ewing. The future Nutter campaign manager was Richard W. Hayden, a former state representative and a partner at the firm.

Al Mezzaroba, executive director of the convention center, said in an interview that Nutter played no role in Saul Ewing's selection.

According to Mezzaroba, Saul Ewing began structuring the bond sale in 2002 - a year before Nutter joined the center's board.

In 2005, when the bond market was ripe, the center's bond issue was finally floated. Mezzaroba said it was he, not Nutter, who urged Saul Ewing be named bond counsel because it had done the initial work.

Saul Ewing has given campaign money to all five Democrats in the mayoral primary. So far, the firm has given the most ($29,000) to Chaka Fattah and the least ($10,000) to Knox, according to the latest campaign reports. It has donated $20,250 to Nutter.

Hayden does not do bond work.

So did the husband direct money to his wife's nonprofit? Mezzaroba and Nutter say no.

When the convention center was created, the state designated money from a tax on hotels to teach students about the hospitality industry. The Philadelphia School District was named as one recipient of the money; the district contracted with Philadelphia Academies to run programs in three high schools.

The arrangement dates back to 1990 - more than a decade before Lisa Nutter joined Philadelphia Academies and her husband joined the convention center board.

Nutter said yesterday he had never had a conversation about the matter as board chairman.

Two years earlier, at Nutter's recommendation, Council had hired Econsult in 2004 to analyze the city's tax structure.

"I'm a public policy guy," Nutter said yesterday. "They're a public policy firm."

Knox called this "a no-show job" for Nutter and implied it was a reward for past favors. Nutter said that the work was real and that he left Econsult last Oct. 31, because the job was getting in the way of running for mayor.

"I have not had any income from anybody, anywhere since the end of October," he said.

Nutter said his work for Econsult did not involve the city or its related agencies. His 2006 tax return showed he was paid $27,000 for his three months with Econsult.

The purpose was to make sure that Nutter, who had not yet begun his first term on City Council, paid $30,799 worth of unpaid taxes he'd amassed in 1989 and 1990. On Dec 13, 1991, the lien was lifted, signifying that the taxes had been paid.

Nutter said recently that the debt arose from the failure of his employer, the investment firm of Pryor Counts & Co., to withhold taxes from his pay. That failure, he said, stemmed from internal confusion over whether his new role with the firm, which he had left and then rejoined, was that of employee or independent contractor.

Asked why it took him as long as it did to recognize that taxes weren't being withheld from his pay - and why he didn't do something about it before running up a substantial obligation to the IRS - Nutter said he could not remember the details of what happened nearly 20 years ago.

"I entered into a payment agreement with the IRS to pay it off," Nutter said. "Then they put the lien against me, which I found out is standard policy. At that point, I did what I had to do, borrowed some money, and paid it off. Somewhere at home, I have a letter from the IRS thanking me for resolving the matter."