With campaign money running amok across the nation this election season, Philadelphia at least has some solid constraints in place.
Don't get me wrong: There is much that can be improved in the financing of Philadelphia's campaigns. But at least two developments are reining in some of the more egregious abuses: strong "pay to play" regulations and the earnestness of the Philadelphia Ethics Board in enforcing the law.
In 2005, Philadelphia was engulfed in a wide-ranging municipal corruption scandal. An FBI wiretapping investigation uncovered a pay-to-play scheme in which a major city contractor and fund-raiser for then-Mayor John Street lavished gifts and campaign contributions on city officials in exchange for lucrative government contracts. Fifteen individuals were convicted of corruption.
Pay-to-play corruption is especially prominent at the state and local levels. Today, city officials in Washington are awash in campaign contributions from government contractors. Despite several recent convictions for corruption, the D.C. Council refuses to address pay-to-play abuse. The results are stunning. A study by WAMU-FM found that city contractors provided $5 million in campaign contributions between 2005 and 2014. Roughly half of the contributions have been donated within one year of "winning" a city contract.
Unlike Washington, Philadelphia did not turn its back on the problem. Spearheaded by Mayor Nutter, the city approved one of the strongest anticorruption measures in the nation. Any business seeking a city contract, along with its owners, directors, and officers, is prohibited from making aggregate contributions in excess of $11,500 per year to a city candidate. If a fund-raiser is an officer, director, controlling shareholder, or partner of a business that applies for a city contract, then all contributions attributed to the fund-raiser are attributed to the business. Furthermore, all contributions must be disclosed.
This ordinance has fundamentally changed the nature of campaign fund-raising in Philadelphia. As attorney Alan Kessler, a former big-money fund-raiser, bemoaned: "If we have 30 people here at a fund-raiser, the total of all those people's contributions get attributed to me" - which would eliminate his law firm from any city business.
To make good anticorruption regulations work, they must be enforced. Not only is the Philadelphia Ethics Board actively monitoring compliance to the pay-to-play ordinance and disclosing campaign-finance activity on its website, but the board recently approved new regulations to address the growing problem of super PACs.
Super PACs are the latest way in which candidates evade contribution limits. These are "independent expenditure only" committees that the courts have declared are not subject to any contribution limits. As a result, almost every serious campaign is supported by a super PAC, enabling wealthy donors to chip in unlimited funds indirectly to a candidate.
Though super PACs are not supposed to coordinate with campaigns, they in fact tend to be super-connected to candidates. Not only are they frequently established by former staff of a candidate or party boss, Public Citizen also found that about half of federal super PACs spent all of their money in support of just a single candidate. Yet, the Federal Election Commission turns a blind eye.
Since super PACs are the creation of recent court decisions, the Ethics Board cannot ban them, but it can narrow how closely super PACs coordinate with candidates. The Ethics Board did precisely that last year, banning super PACs from reusing campaign materials and ads produced by candidates.
The board could take one more big step. The city's pay-to-play ordinance restricts contractor contributions to super PACs that spend more than half their funds for a single candidate, but many super PACs and contractors do not know this. The ethics agency should issue clear guidance on how pay-to-play regulations may well capture these entities. This won't solve the super-PAC problem altogether, but it would help shore up the city's contribution limits and disclosure requirements.