Honesty Integrity Transparency

Annual Report September 2017

City of Philadelphia Board of Ethics

Photo Credit: Bryan McHale

City of Philadelphia

Board of Ethics

Honesty, Integrity, Transparency

Michael H. Reed, Esq.

Chair

Judge Phyllis W. Beck (Ret.)

Vice-Chair

Sanjuanita González, Esq.

Brian J. McCormick, Jr., Esq.

JoAnne A. Epps, Esq.

Board Members

Philadelphia’s Board of Ethics was created by an amendment to the Philadelphia Home Rule

Charter that voters approved via a ballot question at the May 2006 primary election. The Board

is charged with administering and enforcing all provisions of the Charter and City Code that

pertain to ethical matters, and such additional duties as City Council may assign. The Board has

jurisdiction over City laws pertaining to conflicts of interest, representation and post-

employment restrictions, gifts and gratuities, financial disclosure, interests in certain City

contracts, campaign finance, prohibited political activities, and lobbying. The Board renders

advisory opinions, promulgates regulations, and offers trainings on how to comply with the

laws within its jurisdiction. The Board also has the power to conduct investigations and enforce

the laws over which it has jurisdiction.

Contact the Board:

One Parkway Building, 18th Floor

1515 Arch Street

Philadelphia, PA 19102

215-686-9450 (phone)

215-686-9453 (fax)

www.phila.gov/ethicsboard/

Twitter: @PhillyEthicsBd

Annual Report Page i

Page

Message from the Chair 1

Current Board Members 2

Message from the Executive Director 4

Current Board of Ethics Staff Members 5

Training and Outreach 7

Advice 10

Lobbying in Philadelphia 12

Financial Disclosure 15

Enforcement 16

Litigation 20

FY17 Fiscal Report 21

Looking Ahead 23

Appendices

Appendix I: FY17 Board and General Counsel Opinions 24

Table of Contents

Annual Report Page 1

On behalf of the members of the Board of Ethics, I am proud to present this Fiscal Year 2017

Annual Report to the Mayor, City Council and the citizens of Philadelphia. This Report

describes accomplishments during the past year to fulfill the Board’s Charter-mandated

responsibility to administer and enforce “all provisions of . . . [the] Charter and ordinances

pertaining to ethical matters.” These ethical matters, collectively known as the City’s Public

Integrity Laws, include the Campaign Finance, Ethics, Lobbying, and Financial Disclosure

Laws and the Charter’s political activity restrictions. This Report is also an opportunity to

reaffirm the Board’s commitment to administer and promote the Public Integrity Laws because

we believe that these efforts have, since the Board’s inception, enhanced public confidence in

the integrity of City government.

The daily work performed by the Board’s staff is as essential to promoting honesty, integrity

and transparency in City government as is the Board’s investigative and enforcement activity.

On any given day, if you were to visit the Board’s office, you would find staff members

providing guidance by telephone, e-mail and in-person meetings and written advice to

requestors on compliance with the Public Integrity Laws. Each day staff members assist the

public with access to the campaign finance and lobbying databases located on the Board’s

website, develop and provide ethics training for City officials and employees, help individuals

to file campaign finance, lobbying, and financial disclosure reports, and perform investigative

and enforcement activity. This Report summarizes and quantifies these activities during the

past year and demonstrates that the name “Board of Ethics” does not adequately describe the

breadth of the Board’s mandate or its accomplishments.

What this Report cannot convey is the remarkable effort that goes into the Board’s deliberations

and decision-making process. As Chair, I am always impressed by the Board’s thoughtful and

careful deliberations and the caliber of their decisions. We and our staff often face difficult and

complex issues whether they involve interpreting the Public Integrity Laws, giving advice on

conflicts of interest, reviewing proposed regulations, making enforcement decisions or

resolving disputes through the administrative process. Board members give of their time

willingly and generously and their many voices and perspectives enhance their decisions. I

cannot thank the Board enough for their dedication. This Report also gives the Board the

opportunity to recognize and thank its staff for their superb work and infectious enthusiasm.

The Board, Board staff, and I look forward to the challenges of the next year and pledge our

continued service to Philadelphia and its citizens.

Michael H. Reed, Esq., Chair

Philadelphia Board of Ethics

Message from the Chair

Annual Report Page 2

Michael H. Reed, Esq., Chair, is special counsel in the Philadelphia office of

Pepper Hamilton LLP where he is a member of the firm's Corporate

Restructuring and Bankruptcy Practice Group. He is a member of Temple

University's Board of Trustees and of the Board of Trustees of the Academy of

Natural Sciences of Drexel University. Mr. Reed is a 1969 graduate of Temple

University (B.A. Pol. Sci) and received his J.D. from Yale Law School in

1972. He has been associated with the firm of Pepper Hamilton LLP since

1972. Mr. Reed is a past President of the Pennsylvania Bar Association and is

the State Delegate for Pennsylvania in the ABA House of Delegates, having

previously served on the ABA’s Board of Governors. Mr. Reed was previously

a member of the Pennsylvania Judicial Inquiry and Review Board and chaired the Professional

Guidance (Ethics) Committee of the Philadelphia Bar Association. Prior to being selected as

Chair, Mr. Reed served as Vice-Chair of the Board of Ethics. His term runs until November

2020.

Judge Phyllis W. Beck (Ret.), Vice-Chair, served 25 years on the Superior

Court of Pennsylvania. She was the first woman elected to that office. Before

becoming a judge, she spent many years in private practice and she served as

a vice dean of the University of Pennsylvania Law School. After retirement

from the Superior Court, she was general counsel of The Barnes Foundation,

served as a mediator for the Superior Court, and now serves as a mediator and

arbitrator. Judge Beck is the Chair of the Independence Foundation, President

of the Beck Institute for Cognitive Therapy, Chair of the Advisory Committee

of Pennsylvanians for Modern Courts, and is a member of the Board of

Directors for the Free Library of Philadelphia. Her term on the Board runs until November

2017.

Sanjuanita González, Esq., practices in the areas of Immigration and Social

Security Disability law at Sanjuanita González Law Firm, a Center City

Philadelphia law firm. Ms. González is a former President of the Council of

Spanish Speaking Organizations (Concilio), the oldest Latino community

based organization in Pennsylvania. She previously served on the Board of

Governors of the Philadelphia Bar Association. Ms. González is a member of

the American Immigration Lawyers Association; the Philadelphia Bar

Association; the Hispanic Bar Association; and the National Organization of

Social Security Claimants’ Representatives. Ms. González's term on the Board

runs until November 2018.

Current Board Members

Annual Report Page 3

JoAnne A. Epps, Esq. is Executive Vice President and Provost of Temple

University. A member of the faculty of Temple Law School since 1985, Ms.

Epps served as Dean of Temple Law School from 2008-2016. In July 2016,

Ms. Epps assumed the role of Executive Vice President and Provost. She is

the author and co-author of several books and articles on Evidence and Trial

Advocacy. Commemorating Black History Month in February 2015, U.S.

Senator Robert P. Casey, Jr. honored Ms. Epps at the U.S. Senate. From

March 2015 until January 2017, she was the chair of the Police Community

Oversight Board created by Mayor Michael Nutter. In November 2016, Ms.

Epps was honored by The Philadelphia Inquirer as one of the inaugural class members of the

Philadelphia Business Hall of Fame. In 2017, she was the recipient of the Inaugural JoAnne

Epps Award by the Barristers’ Association of Philadelphia and also was honored by The Legal

Intelligencer as a Distinguished Leader in her field. A three-time honoree by Lawyers of

Color Magazine as one of the 100 most influential black lawyers in the country, Ms. Epps was

also named by National Jurist Magazine in 2013, 2014, 2015 and 2016 as one of the 25 most

influential people in legal education. She serves on several non-profit Boards and is the court-

appointed monitor of the settlement of the lawsuit challenging Philadelphia’s stop and frisk

activity. A former Deputy City Attorney for the City of Los Angeles and Assistant United

States Attorney for the Eastern District of Pennsylvania, Ms. Epps continues to keep teaching

among her many activities. Her term on the Board runs until November 2019.

Brian J. McCormick, Jr., Esq., is a trial lawyer at Ross Feller Casey, LLP in

Philadelphia. He has a national practice that includes pharmaceutical injury

and products liability mass tort litigation, as well as representing

whistleblowers in qui tam and fraud actions involving the waste of

government funds and resources. Mr. McCormick received his J.D. from

Rutgers University School of Law and is a graduate of the University of

Richmond. Before being appointed to the Board of Ethics, Mr. McCormick

was selected by Philadelphia Mayor Michael Nutter to serve on the Mayor’s

Task Force for Campaign Finance and Ethics Reform, which produced a final

report in late 2009. A number of the recommendations in that report have been enacted in

Philadelphia. Mr. McCormick formerly served as a member of The Committee of Seventy, the

Philadelphia nonpartisan watchdog group. Before attending law school, Mr. McCormick served

as an analyst with the FBI in its Philadelphia office, and also worked as a newspaper reporter in

the Philadelphia area. Mr. McCormick’s term on the Board runs until November 2021.

Swearing-in Ceremony

on March 15, 2017 for

Board Member

McCormick. Pictured

are (l-r): Board Member

JoAnn A. Epps, Chair

Michael H. Reed, Judge

M. Teresa Sarmina, and

Board Members Brian J.

McCormick, and

Sanjuanita Gonzalez..

Vice-Chair Phyllis Beck

was not present.

Annual Report Page 4

“To wipe out corruption, look to Philadelphia.” That’s the title of an article

in the September 2017 issue of Governing Magazine, which observed that

the City went almost a decade without a single corruption scandal, and asks

the question “what’s its secret?”

The article notes that former District Attorney Seth Williams is the first

City official convicted or even charged with a crime since 2008. The Ethics

Board fined Williams $62,000 in early 2017 for gift and disclosure

violations related to his subsequent criminal indictment and mid-trial plea

agreement in June.

Governing Magazine suggests that the near-decade without City corruption scandals may be

more revealing than the fact that Williams got caught – noting that under any system, rules are

going to be broken – and attributes the change in local culture, where most people now know

the rules and have been staying out of trouble, to the creation of an ethics board with teeth, and

a strengthened city inspector general’s office. This Report details the Board’s continuing efforts

to build and maintain what is now a thriving ethics program that has received national attention.

In FY 2017, Board staff responded to 1,865 informal guidance requests and provided ethics

training to almost 1,450 City officers and employees in 56 training sessions. This represents a

24 percent increase over the 45 training sessions in FY 2016 and a 20 percent increase in

attendees. In addition to the 56 ethics training sessions for City officers and employees, Board

staff conducted 26 training sessions for board and commission members.

In addition to the advice and training, the Board also issued five advisory opinions, conducted

two administrative adjudications and approved 17 settlement agreements, in which parties

agreed to pay the City a total of $99,800 in penalties, disgorge to the City $3,840 in prohibited

gifts and take remedial action ranging from terminating conflicted employment to filing or

amending disclosure reports and attending training sessions.

In FY 2017, the Board also implemented a new process for resolving violations for filing late

campaign finance reports without a formal settlement agreement. The Board collected $6,900

from eight late filers with this new streamlined process. Details about these late filer penalties

are available on the Board’s website.

As the Board enters its twelfth year of operation, our principal challenge continues to be

managing increasing demand with stagnant funding and resources. Although the Board has seen

major new responsibilities assigned to it and has experienced significant increases in its

workload over the years, the Board’s budget is only seven percent more than it was in FY 2008.

Nevertheless, even with the stagnant funding and resources that it has, the Board will continue

to strive to fulfill its broad mandates with diligence and fairness.

J. Shane Creamer, Jr., Esq.

Executive Director

Philadelphia Board of Ethics

Message from the Executive Director

Annual Report Page 5

J. Shane Creamer, Jr. has been Executive Director to the Philadelphia Board of Ethics since

it was reconstituted in November 2006. Previously, he served as the Executive Director of the

City’s advisory Board of Ethics, and was Assistant Secretary of Education and Assistant

Managing Director for the City of Philadelphia. Before joining City government, he was a

partner with Duane, Morris & Heckscher. Mr. Creamer served as a member of the Steering

Committee of the Council on Governmental Ethics Laws (COGEL). A Philadelphia native, Mr.

Creamer is a graduate of Gettysburg College and Villanova University School of Law.

Tina Formica Simone has been a member of the Board's staff since March 2007. She serves as

the Board’s Legal Support Services Coordinator. A Philadelphia native, she graduated from St.

Hubert’s High School and has worked in City government since 1997 with the Law

Department, Mayor’s Office, and City Council.

Nedda Gold Massar is Deputy Executive Director of the Board of Ethics. Prior to her

appointment to that position in November 2007, for more than 21 years she was a staff member

of the New Jersey Election Law Enforcement Commission (ELEC) where she served ELEC as

a staff attorney, the Director of the Gubernatorial Public Financing Program, Deputy Legal

Director, and Legal Director. Ms. Massar is a past president of the Council on Governmental

Ethics Laws (COGEL). She is a graduate of the University of Pennsylvania and Rutgers

Camden School of Law.

Maya Nayak was appointed as the Board’s General Counsel in 2013. She had served as the

Board’s Associate General Counsel since 2008. Previously, Ms. Nayak was a litigation

associate with Hangley Aronchick Segal & Pudlin and was a law clerk to the Honorable Berle

M. Schiller in the U.S. District Court for the Eastern District of Pennsylvania. She holds

undergraduate and law degrees from Yale University.

Michael J. Cooke, Director of Enforcement, joined the Board in April of 2008. Mr. Cooke was

formerly an associate at the Philadelphia firm Burke O’Neil LLC and a Staff Attorney at the

Pennsylvania Institutional Law Project. Mr. Cooke graduated from Northeastern University

School of Law in 2002.

Hortencia Vasquez joined the Board in 2008 and is the Board’s Legal Services Clerk. A native

of the Virgin Islands, she came to Philadelphia 11 years ago and attended Cite Business School,

taking computer-related courses. Before joining the Board, she was an intern with the Police

Advisory Commission. She is bilingual in Spanish and English.

Bryan McHale joined the Board in September 2012 as a Public Integrity Compliance

Specialist. He is currently the Board’s Public Integrity Compliance Services Supervisor. A

Philadelphia native, he holds a bachelor’s degree in political science from Temple University.

He has worked for the U.S. Census Bureau and the Internal Revenue Service and prior to

joining the Board was a facilitator at public meetings for the Penn Project for Civic

Engagement.

Current Board of Ethics Staff Members

Annual Report Page 6

Jordan E. Segall joined the Board in July 2014 as a Staff Attorney. Before joining the Board,

Mr. Segall served as a Senior Investigator for the Office of the Inspector General for the City of

Philadelphia. He is a native of Baltimore, MD and a graduate of the American University in

Washington, D.C. and the University of Pittsburgh School of Law.

Diana Lin, Associate General Counsel, joined the Board’s staff in June 2015. Diana was

formerly an associate at Cozen O’Connor in the commercial litigation department. She is a

graduate of Temple University Beasley School of Law, Harvard Graduate School of Education

and Yale University.

Thomas E. Klemm joined the Board in November 2015 as a Staff Attorney. Before joining the

Board’s staff, Mr. Klemm was a litigation associate at White and Williams, LLP specializing in

reinsurance and insurance-related disputes. He is a native of the Washington, D.C. metropolitan

area and is a graduate of St. Mary’s College of Maryland and the George Washington

University Law School.

Eileen Donnelly joined the Board of Ethics in June 2016 as an Administrative Technical

Trainee and now serves the Board as Public Integrity Compliance Specialist. A Philadelphia

native, she holds a bachelor's degree in Business/Organizational Management from Gwynned

Mercy University. She has worked for the City of Philadelphia since August 1997 in various

administrative roles. Prior to joining the Board of Ethics, Eileen was an Executive Secretary to

the Deputy Commissioner of Technical Services in the Philadelphia Fire Department.

Annual Report Page 7

Early in its existence the Board recognized that training about all Public Integrity Laws, not just

the ethics rules, is the most effective way to achieve honesty and integrity in City government.

When City officers, employees, and the regulated community know how the Public Integrity

Laws apply to them, and when they know that they can receive Board advice to comply with

those laws, they will be able to avoid violations of the laws. The Board therefore continues to

look for every opportunity and method available to expand its training and outreach.

The number of classes offered and attendance at training during a year presents an incomplete

picture of staff participation in training and outreach. In addition to conducting training and

outreach sessions, other staff members review and update training materials and improve the

information posted on the Board’s website. Another important, but less visible, component of

the Board’s training and outreach efforts is the assistance that staff members provide to

members of the public who wish to locate materials on the Board’s website or to search the

complex online campaign finance and lobbying databases.

Campaign Finance Training and Outreach

Because the offices of District Attorney and Controller were on the May 2017 Primary Election

ballot, the Board offered six Campaign Finance training sessions from December 2016 through

March 2017. The classes, presented with a representative of the Office of the City

Commissioners, covered not only the requirements for candidates and political committees

under the Pennsylvania Election Code and Philadelphia’s Campaign Finance Law, but also the

“nuts and bolts” of the City’s mandatory electronic filing process.

Email alerts on important issues and frequent email reminders of filing dates and requirements

were used in addition to the in-person classes to provide maximum notice to candidates,

treasurers and committees about campaign finance filing obligations.

On-going Ethics Training

Are there ethics rules to guide City elected officials and employees in the decisions they make

on-the-job? How do elected officials and employees learn these rules that apply to their daily

activity? For example, is a City official or employee permitted to hire a relative? Does it make

a difference whether the relative is the employee’s brother or nephew? Are there restrictions on

political activity that apply to City employees?

These are among many questions discussed during ethics training classes that are mandated by

the City Code and provided by the Board of Ethics to elected City officials and City employees.

The citizens of Philadelphia are entitled to have confidence in the decisions made by elected

officials and employees, and the ethics rules are intended to ensure the fairness and

independence of those decisions. In addition to the ethics training for City officials and

Training and Outreach

Annual Report Page 8

employees, Board staff also conducts mandatory ethics training for the members of City boards

and commissions.

The number and variety of ethics training classes presented by the Board continues to expand.

Between July 2016 and June 2017, Board staff members conducted 56 ethics training classes

that were attended by almost 1,450 City officers and employees. This training activity

represents a 24 percent increase over the 45 classes in 2016 and a 20 percent increase in the

number of attendees. In addition, twenty-six classes were conducted for members of City

boards and commissions.

This volume of training activity requires the attention of several Board of Ethics staff members

who schedule, design, revise and present the in-person ethics training sessions. Training for

new employees differs from refresher training for current employees, and the content of each

class is reviewed and made as specific as possible to the needs of the attendees. Examples of

ethical issues are “ripped from the headlines” and discussed to make each training real and

relevant.

In addition to regular monthly ethics classes for new and existing employees, the Board joined

the new Employee Onboarding project of the City’s Office of Chief Administrative Officer.

Onboarding is a two-day event for new employees of major City departments which introduces

them to topics as diverse as employee benefits and on-the-job safety. A Board staff member

now conducts a full ethics training class as a component of each two-day Onboarding session.

The benefit of ethics training during Onboarding is that new City employees are introduced to

the ethics rules at the very start of their City jobs.

In very large City departments such as the Police and Fire Departments whose employees are

on multiple shifts or at remote locations, ethics training for new employees is conducted by

embedded departmental trainers. The Board of Ethics therefore prepares, updates, and supplies

training materials and conducts train-the-trainer sessions for the embedded trainers. Board staff

members are always available as a resource for the embedded trainers.

Training Progress

In its last Annual Report, the Board noted that it had begun to participate in a City training-

related initiative to implement a Learning Management System (LMS) to organize, present and

track all types of City training activity. As we described last year, many City departments

conduct a wide variety of training programs for City employees. Some classes are mandatory,

like ethics training for all City employees, and others are voluntary. Some classes are open to

employees in all departments and some are limited to employees in a specific department or

unit. Finally, some training is required of individuals who are not City employees, like ethics

training for City board and commission members. In the past, records of ethics training

attendance were maintained in multiple places including the Board, City departments, and

Central Human Resources.

Annual Report Page 9

In a major step, Board of Ethics staff members are now actively using the LMS, deployed by

the City’s Office of the Chief Administrative Officer, to manage and track mandatory ethics

training registration and attendance. The immediate benefits of the LMS to the Board will be

unified training records, maintenance of class registration and waiting lists, and the ability to

send reminder emails to those attending the Board’s schedule of in-person, instructor-led ethics

training classes. In a later phase, Board staff expects to design and offer online ethics,

lobbying, and campaign finance training options. Because the Board has a small staff, the LMS

project is important because it maximizes staff resources and will, in the future, allow the Board

to reach a larger number of individuals with training.

Board of Ethics staff participate in 2016 Integrity Week outreach program regarding the City and

State Conflicts of Interest laws. Pictured are (l-r) Board of Ethics General Counsel Maya Nayak

and PA State Ethics Commission Chief Counsel Robin Hittie.

Annual Report Page 10

The Board’s advice function is frequently used. People seek advice from the Board every day,

and over the course of a year, the Board fields hundreds of requests for guidance. Requestors

include current and former City officers and employees, candidates for City elective office,

campaign contributors, political committees, lobbyists, principals, and gift givers.

The steady, high demand for advice is reflected in the 1,865 informal guidance contacts that

Board staff logged in FY2017. Informal guidance numbers remained relatively constant

between FY2016 and FY2017. Board staff endeavors to deliver informal guidance as quickly as

possible and in an accessible manner. Informal guidance is available by phone, by email, and in

person.

The first chart on the next page demonstrates the consistent demand for the Board’s advice and

compares the amounts of guidance provided by category in FY2016 and FY2017.

In terms of trends, conflicts of interest guidance was the only category to show a significant

increase in the number of recorded contacts. Post-employment and campaign finance inquiries

decreased as compared to the prior fiscal year, which is to be expected because a change in

administrations and large number of City covered elections had occurred in FY2016. The

number of lobbying and financial disclosure questions also decreased.

The second chart on the next page shows informal guidance contacts on a monthly basis in

FY2016 and FY2017. The pattern of total monthly inquiries over the course of two years is

displayed in this chart.

Although the vast majority of questions are addressed through informal guidance, the Board

also provides advice to the regulated community via advisory opinions. Advisory opinions are

written opinions that offer a detailed analysis of the application of public integrity laws to

specific facts provided by a requestor regarding prospective behavior that the requestor is

contemplating. The process for seeking an advisory opinion is detailed in Board Regulation 4.

Requestors are entitled to act in reasonable reliance on advisory opinions issued to them and not

be subject to penalties under the laws within the Board’s jurisdiction as long as they have not

omitted or misstated material facts. Requestors can choose to receive a non-public advisory

opinion, which in its published form is redacted to conceal facts that are reasonably likely to

identify a requestor.

The five advisory opinions issued from July 2016 through June 2017 are described in detail in

this annual report at Appendix I. Of these, one was a Board Opinion, which is an advisory

opinion that is approved and issued directly by the Board. In contrast to General Counsel

Opinions, Board Opinions generally provide advice on novel questions that have not been

previously addressed. All advisory opinions are available on the Board’s website.

Advice

Annual Report Page 11

* The high volume of financial disclosure assistance provided during these

months does not map to the scale of the chart, which extends only to a maximum

of 200 guidance contacts. In March and April 2016, there were a total of 355 and

909 informal guidance contacts, respectively. In April 2017, there were 1,013

total informal guidance contacts.

Annual Report Page 12

The City’s Lobbying Law, City Code Section 20-1200, provides the public with a view into the

lobbying activities by various entities directed toward government officials and employees in

order to shape administrative or legislative decisions. In 2017, the Board entered its fourth

calendar year with the online Philadelphia Lobbying Information System (PLIS) in place for

filing lobbying information by lobbyists, lobbying firms, and principals as mandated by the

Philadelphia Lobbying Law. PLIS is also the portal through which the public may search for

information concerning lobbying activity in the City.

Amendments to Regulation No. 9, Lobbying

Based on its experience with administration of the Lobbying Law, Board staff undertook a

complete review of Regulation No. 9 on Lobbying during the past year. Proposed amendments

to the Regulation were presented to the Board at its October 19, 2016 meeting. The

amendments aimed to condense, clarify, and streamline the Regulation as well as to increase the

lobbying registration fee from $100 to $200 per year. A hearing was held on November 16,

2016 to receive public comment on the proposed changes. At its December 21, 2016 meeting,

the Board approved the proposed amendments with modifications, and the amendments to

Regulation No. 9 became effective on January 3, 2017.

Lobbying Registrations

Lobbying registration in Philadelphia is conducted on an annual basis. Therefore the number of

registered lobbyists, firms and principals can change from year-to-year depending on what

issues or projects are being considered for legislative or administrative action at that time.

Through the first two quarters of 2017 there have been 218 registrations filed by lobbyists,

lobbying firms, and principals. The number of total registrations per year has been consistent at

around 230 through the first four years of the online system. (See Figure 1)

Lobbying Communications

There are two types of lobbying communications that are reported each quarter, those for Direct

Communications and those for Indirect Communications. Direct lobbying communications

include, but are not limited to, written, in-person, telephone, and email contacts between a

lobbyist or principal and a City official or employee to affect legislative action or administrative

action. Indirect lobbying communications occur when a lobbying entity makes an effort to

encourage others, including the general public, to take action that is intended to directly

influence legislative action or administrative action. Examples of indirect lobbying methods

include letter-writing campaigns, mailings, telephone banks, print and electronic media

advertising, billboards, publications and educational campaigns on public issues.

Lobbying in Philadelphia

Annual Report Page 13

The impact of high-profile City-wide issues on lobbying activity was highly visible in the first

two quarters of 2016 and continues to be seen in lobbying spending in the first two quarters of

2017. In the first two quarters of both years, reported lobbying expenditures on indirect

communications exceeded $1,000,000, primarily due to the use of electronic ad campaigns by

advocates for and against the soda tax. (See Figure 2)

Information disclosed in quarterly expense reports filed by principals is available on the

Board’s website in a searchable database. Among other things, members of the public can use

the database to search for amounts spent on Philadelphia lobbying by principals, to identify City

officials who were contacted by lobbyists and the subjects of those contacts, and to determine

whether gifts were given to elected and appointed City officials. Board staff members are

always available by telephone or in-person to assist interested individuals who want to search

and sort the information in the searchable PLIS database.

Figure 1

Figure 1 compares the number of registrations filed in PLIS from the system’s launch in January of 2014 through the

end of the second quarter 2017. (*) Lobbying registration is on an annual basis, and new and renewed registrations

may be submitted throughout the course of a calendar year.

Annual Report Page 14

Figure 2

Figure 2 shows total reported expenditures by quarter on direct and indirect communications between January 1,

2014 and June 30, 2017. (*) Note that the total expenditures for the second quarter of 2016 were $12,402, 807. Due

to the high total, the second quarter of 2016 does not map to the scale of the chart, which extends only to a maximum

of $3 million.

Annual Report Page 15

To promote transparency in City government and to ensure that no conflict exists between an

individual’s City responsibilities and his or her personal financial interests, thousands of City

officers and employees and the members of City boards and commissions are required to file

one or more of three annual financial disclosure statements. While there are differences among

the three forms, filers generally disclose sources of income and other financial interests.

The deadline for filing financial disclosure was May 1, 2017. Whether an individual City

officer, employee or board or commission member files the City Form (required by the City

Ethics Code), the Mayor’s Form (required by Mayoral executive order), or the State Form

(required by the State Ethics Act) depends upon that person’s position and job responsibilities

or specific board or commission membership.

All financial disclosure statements are required to be filed with the City Records Department,

which maintains the City’s online financial disclosure electronic filing system. City officers,

employees and board and commission members are encouraged to use the online filing system

rather than filing paper reports. This year 92 percent of the almost 4,600 financial disclosure

statements filed were filed electronically. Electronically-filed reports save paper and reduce the

time necessary to process the information.

The Financial Disclosure process is successful because of the cooperation among the Records

and Human Resources Departments and the Board of Ethics. From January through May of

each year, as many as five of the Board’s eleven staff members are involved on any given day

in the tasks necessary to implement the financial disclosure process. These tasks include

assisting filers by phone, email and in-person with technical and reporting questions. Board

staff members work hand-in-glove with the City Records Department to upgrade and improve

the online financial disclosure system and with the City’s Human Resource Managers who

work directly with City employees who are required to file financial disclosure statements.

The Office of Human Resources again assisted the financial disclosure process by issuing email

filing reminders to thousands of current City officers and employees subject to the disclosure

requirement. Board staff issued email reminders to hundreds of members of City boards and

commissions and mailed letters to more than 600 employees who left City government during

the past year, but still have to file one last time. Each set of reminders triggers phone calls to

our office with two consistent themes: callers wanted to know why they had to file and how to

use the online system.

The Board again wishes to thank the Records Department for providing financial and staff

resources for an in-person Financial Disclosure Filer Support Center which provided invaluable

technical assistance to individuals who needed help to file reports using the online system.

Financial Disclosure

Annual Report Page 16

2007-FY 2017 Enforcement Overview

The Board of Ethics is responsible for enforcing the City’s Public Integrity Laws and is

required to include information concerning its enforcement activities in its Annual Report.

The Board’s Executive Director can initiate an investigation either upon receipt of a complaint

or a referral or if he determines that a potential violation of a law within the Board’s jurisdiction

has occurred. Upon completion of the investigation, if the Executive Director finds probable

cause to believe a violation has occurred, he can initiate an enforcement action. If, after

conducting an investigation, the Executive Director does not find probable cause, he will

terminate the investigation. Similarly, the Executive Director will reject a complaint that does

not state a potential violation of a law within the Board’s jurisdiction.

At any point, the Executive Director can seek to resolve a matter through a settlement

agreement. In a settlement agreement, subjects of enforcement admit to violations and, in most

cases, agree to pay a civil monetary penalty.

The table below summarizes the Board’s investigation and enforcement activity since 2007:

*Board enforcement staff only began tracking complaints accepted starting with FY 2010.

** In FY 2017, Board enforcement staff received nine anonymous complaints and four referrals from other

governmental entities that it did not pursue because they did not state potential violations of the City’s Public

Integrity Laws.

Enforcement

Investigations

Opened

Investigations

terminated,

no probable

cause

Complaints

accepted

Complaints

rejected

Enforcement

actions initi-

ated

Settle-

ments

Total 202 108 36* 100 22 120

FY 2017 21 5 6 16** 1 16

FY 2016 30 19 8 14 2 41

FY 2015 32 8 5 14 2 13

FY 2014 13 8 6 7 0 4

2012/

FY2013

13 7 3 5 0 13

2011 54 26 8 12 11 15

2010 0 24 0 12 1 2

2009 25 6 * 11 3 10

2008 14 5 * 9 1 3

2007 N/A N/A * N/A 1 3

Annual Report Page 17

The chart below depicts the 382 violations that have been resolved through the settlement

agreements the Board has approved since the Board’s inception, which has resulted in $465,099

in civil monetary penalties:

FY 2017 Enforcement Activity

Administrative Adjudications

The Board is authorized by the Philadelphia Home Rule Charter and the Philadelphia Ethics

Code to conduct hearings to adjudicate alleged violations of the City’s Public Integrity Laws.

The administrative enforcement process is confidential until there is a final determination

issued by the Board, at which point, the final determination is made public.

In FY 2017, the Board issued its second and third Final Determinations and Orders in

administrative adjudications.

Annual Report Page 18

In the matter of J. Shane Creamer, Jr. v. Marnie Aument Loughrey for Change et. al, the Board

found two violations of the City’s Campaign Finance Law by the Respondents and ordered

them to pay a total civil monetary penalty of $13,000. The violations resulted from the fact that

the candidate political committee Marnie Aument Loughrey for Change failed to timely file two

campaign finance reports with the Board in 2015. A copy of the Final Determination and Order,

along with the filings and transcript of the administrative enforcement proceeding, is available

on the Board’s website.

In the matter of J. Shane Creamer, Jr. v. Liran Ben Shoshan the Board found the Respondent

violated the gift restriction in the City’s Ethics Code at Section 20-604(2) and ordered him to

pay a civil monetary penalty of $2,000. The violation resulted from the fact that the Respondent

knowingly offered a prohibited gift of cash to a Hearing Master at the City’s Bureau of

Administrative Adjudication. A copy of the Final Determination and Order, along with the

filings and transcript of the administrative enforcement proceeding, is available on the Board’s

website.

Settlement Agreements

In FY 2017, the Board approved 17 settlement agreements, as follows:

One agreement involved the failure to disclose required gifts and sources of income

on statements of financial interests as required by the City’s Ethics Code. This

agreement also resolved violations of the Ethics Code’s restrictions on accepting

gifts.

Two other settlement agreements also resolved violations of the Ethics Code’s gift

restrictions.

Two settlement agreements resolved violations of the conflict of interest restrictions

in the Ethics Code.

Three agreements resolved the failure of lobbying principals and lobbyists to register

and file expense reports as required by the City’s Lobbying Law.

Three agreements resolved violations of the Home Rule Charter’s restrictions on

political fundraising and political activity.

Six agreements resolved violations of the City’s Campaign Finance Law.

In FY 2017, parties to settlement agreements agreed to (i) pay to the City a total of $99,800 in

civil monetary penalties; (ii) disgorge to the City $3,840 in prohibited gifts; (iii) take remedial

action such as terminating conflicted employment relationships, attending ethics trainings, and

filing and amending campaign finance, lobbying, and financial disclosure reports with the

Board. All of the Board’s settlement agreements are available on the Board’s website.

Terminated Investigations

In FY 2017, Board enforcement staff terminated 5 investigations after determining that

probable cause did not exist to believe a violation had occurred. Of those investigations, three

involved potential violations of the City’s Campaign Finance Law and two involved potential

violations of the Charter’s restrictions on political fundraising and political activity.

Annual Report Page 19

2017 Campaign Finance Compliance

In FY 2017, the Board implemented procedures to efficiently resolve violations arising from the

late filing of campaign finance reports with the Board. The procedures expedite and simplify

the assessment of penalties for the late filing of campaign finance reports except in certain

delineated cases. Descriptions of the procedures can be found on the Board’s website.

In FY 2017, Board enforcement staff collected $6,900 from eight filers that did not timely file

campaign finance reports with the Board. Board staff routinely update the penalties list on the

Board’s website as payments are collected for the City.

Annual Report Page 20

During FY 2017, the Board was involved in two litigation matters.

Liran Ben Shoshan v. Philadelphia Board of Ethics

On December 20, 2016, Liran Ben Shoshan filed an appeal in the Philadelphia Court of

Common Pleas from the Board’s Final Determination and Order finding that Mr. Shoshan had

violated the Ethics Code’s gift restriction when he knowingly offered a cash gift to a Hearing

Master at the City’s Bureau of Administrative Adjudication. The Board imposed a $2,000 civil

monetary penalty on Mr. Shoshan.

Because, Mr. Shoshan did not submit a brief in support his appeal, on May 25, 2017, Board

Enforcement Staff filed a motion to quash the appeal. On June 19, 2017, the Court granted the

motion and quashed, dismissed, and terminated Mr. Shoshan’s appeal with prejudice.

Philadelphia Board of Ethics v. Citizens Organizing for Pennsylvania’s Security PAC, et. al

On June 7, 2017, the Board filed a petition in the Philadelphia Court of Common Pleas against

the political committee Citizens Organizing for Pennsylvania’s Security and its treasurer Kevin

Price. The petition alleges that the Respondents failed to file two campaign finance reports with

the Board in 2015, despite spending tens of thousands of dollars to influence the City’s Primary

Elections.

The failure to timely file a required campaign finance report with the Board is subject to a

maximum civil monetary penalty of $2,000 for the first thirty days the report is not filed, plus

an additional maximum penalty of $1,000 for each additional thirty day period or part thereof

the report remains unfiled. The Board’s petition sought the maximum civil monetary penalty for

the late filings as well as an order directing Respondents to promptly electronically file the late

reports.

To date, Respondents have not filed an answer to the Board’s petition. Judge Abbe Fletman has

scheduled a hearing for October 12, 2017.

Litigation

Annual Report Page 21

In addition to filing an annual report of its activities, the Board is required by Home Rule Char-

ter Section 3-806(k) to provide an annual accounting of its expenditures. As reported below, the

Board spent a total of $951,956 between July 1, 2016 and June 30, 2017.

*adjusted for rounding

Two major factors contributed to spending below the Board’s FY 2017 total appropriation.

1. The amount spent in Class 100 funds during FY 2017 was less than the appropriated amount

because the Board was unable to modify a vacant entry level position and to fill that position as

a Staff Attorney position. The Board considered the Staff Attorney position to be essential to

its administration of the City’s Public Integrity Laws through tasks such as preparing and con-

ducting training and preparing educational materials. Further, the additional Staff Attorney

would increase the Board’s capacity to enact new regulations that offer clear rules in plain lan-

guage for compliance with the Public Integrity Laws.

The Board requested, but did not receive for either FY2016 or FY2017, additional Class 100

funding that, among other purposes, would have been used to convert the existing vacant entry

level position to the Staff Attorney position. The Board notes that the change in this position

would not have increased the Board’s number of budgeted positions (12). The Board will con-

tinue to seek additional Class 100 funds to fill the vacant position because the Staff Attorney

would significantly advance its ability to meet its statutory responsibilities.

2. The Board’s Class 200 spending in FY 2017 was less than the appropriated amount. The

Board is responsible for administration, implementation and enforcement of the City’s Public

Integrity Laws, which include the laws governing Ethics, Campaign Finance, Lobbying, and

Financial Disclosure. Months before the start of a fiscal year, the Board must predict its need

for Class 200 funds to purchase two types of professional services directly related to its respon-

sibilities: for accounting, computer and other forensic professional services related to complex

investigative matters, and for professional information technology services that are outside the

scope of the maintenance contract for the statutorily-mandated online lobbying registration and

reporting system. The need for these services did not arise in FY 2017.

The Board remains aware, however, that while it did not spend all of the Class 200 funds appro-

priated in FY 2017, it is foreseeable that costs of a major investigative matter or the need to

Class FY 2017 Appropriation FY 2017 Total Spent

100 – Salaries $962,566 $921,892*

200 – Purchase of Services $96,000 $22,089

300/400 – Materials, Supplies & Equipment

$14,000 $7,975

Total: $1,072,956 $951,956

FY17 Fiscal Report

Annual Report Page 22

adapt the lobbying software to a change in the law might require the entire Class 200 appropria-

tion in a future fiscal year. The Board therefore continues to budget for these contingencies in

order to meet its statutory responsibilities.

Between July 1, 2016 and June 30, 2017, the Board spent $951,956, as follows:

Class 100 – Personal Services

*adjusted for rounding

Class 200 – Purchase of Services

Class 300 & 400 – Materials, Supplies & Equipment

Total FY17 Expenses = $951,956

Class Name Title FY17

101 Cooke, Michael Director of Enforcement 113,848

101 Creamer, Jr., J. Shane Executive Director 142,741

101 Donnelly, Eileen Administrative Technical Trainee/Compliance Special-

ist

45,205

101 Simone, Tina Legal Support Services Coordinator 59,284

101 Klemm, Thomas Staff Attorney 61,988

101 Lin, Diana Associate General Counsel 89,993

101 McHale, Bryan Compliance Services Supervisor 50,814

101 Massar, Nedda Deputy Executive Director 126,571

101 Nayak, Maya General Counsel 121,365

101 Segall, Jordan Staff Attorney 69,008

101 Vasquez, Hortencia Legal Services Clerk 41,075

Total Class 100 $921,892*

Class Class Description Description of Services Amount Paid

209 Telephone Staff Cell Service 882

210 Postal Services Delivery Service & Postage 1,022

211 Transportation Travel & Transportation 6,194

255 Dues Professional Membership Dues 2,100

256 Seminar & Training Sessions Seminars, Training & Continuing

Legal Education

4,640

258 Court Reporting Court Reporting Services 573

260 Repairs & Maintenance Copier Maintenance & Fees 3,510

285 Lease Copier 3,168

Total Class 200 $22,089

Class Class Description Description of Purchase Amount Paid

304 Books & Other Publications Books 2,215

320 Office Materials & Supplies Office Materials, Supplies & Paper 2,979

427 Computer Equipment & Pe-

ripherals

Desktop Computers & Printers 2,111

430 Furniture Office Furniture 670

Total Class 300/400 $7,975

Annual Report Page 23

In his message at the beginning of this Annual Report, Board Chair Michael H. Reed explained

that this Report summarizes and quantifies the Board’s work during the past year, but that the

name Board of Ethics “does not adequately describe the breadth of the Board’s mandate or its

accomplishments.” The Board believes that the increasing demand for its guidance, advice,

training, disclosure and enforcement activities is proof that the culture in Philadelphia's govern-

ment is changing for the better. To further promote this positive movement, the Board will con-

tinue to accept the challenge of promoting honesty, integrity and transparency in City govern-

ment.

Looking Ahead

Annual Report Page 24

Appendix I: FY17 Board and

General Counsel Opinions

Annual Report Page 25

FY17 Index of Board Formal Opinions

Advisory

Opinion No.

Date Issued Brief Description

Key Words

Citations

2016-002

Public

Advisory

Opinion

07/26/16 Advised the Philadelphia Land Bank re-

garding application of City ethics and

lobbying laws to the Land Bank, its board

members, and staff. The requirements

and prohibitions of the City Lobbying

Law apply to efforts by lobbyists and

principals to lobby the Land Bank. Ethics

Code provisions apply to Land Bank

board members in the same manner they

apply to members of a City board or com-

mission. Ethics Code provisions apply to

Land Bank staff members in the same

manner they apply to City employees.

The Opinion also addressed six specific

questions regarding: (1) board members’

conflicts of interest with respect to former

employers; (2) post-service restrictions

for board members; (3) whether decisions

made under an established policy are offi-

cial action subject to conflict of interest

disqualification; (4) permissibility of

blanket disclosure and disqualification

letters for board members; (5) obligations

of board members who work for City

Council; and (6) obligations of board

members who are members of an outside

agency or organization.

LAND BANK; UNCOMPEN-

SATED BOARD MEMBER;

LOBBYING; FINANCIAL

DISCLOSURE; CONFLICT

OF INTEREST; PRE-

SERVICE EMPLOYMENT

RELATIONSHIP; POST-

EMPLOYMENT; OFFICIAL

ACTION; BLANKET DIS-

CLOSURE AND DISQUALI-

FICATION LETTER; REPRE-

SENTATION RESTRICTION;

MEMBERSHIP IN OUTSIDE

AGENCY OR ORGANIZA-

TION; DISCRETIONARY

DECISION; MINISTERIAL;

CITY COUNCIL STAFF-

MEMBER; TRANSACTION

INVOLVING THE LAND

BANK

Code Chapter 16-700

(Land Bank Ordinance),

20-1200 (Lobbying

Code); Code §§ 20-601

(17), 20-602; 20-607(a)&

(c), 20-608, 20-609;

Regulation 9

Annual Report Page 26

FY17 Index of General Counsel Opinions

Advisory

Opinion No. Date Issued Brief Description

Key Words

Citations

2017-501

Non-public

Advisory

Opinion

02/21/17 Advised City employee on the applica-

tion of the Philadelphia Home Rule Char-

ter political activity restrictions to an in-

vitation received from a candidate’s po-

litical campaign for the employee to in-

teract with campaign advisors regarding

potential policy positions or to otherwise

contribute to the formulation of policy

positions and the drafting of policy pa-

pers of the candidate. The Opinion ad-

vised that the Charter political activity

restrictions prohibit the employee from

assisting the campaign of a candidate be-

cause such assistance qualifies as activity

directed toward the success of the candi-

date and for the purpose of obtaining the

candidate’s election to public elective

office. The proposed behavior of volun-

teering to assist a candidate’s campaign

constitutes prohibited participation in the

candidate’s campaign as well as prohib-

ited political activity performed in con-

cert and coordination with a candidate.

POLITICAL ACTIVITY;

VOLUNTEERING; OFF

DUTY; CAMPAIGN; INTER-

ACT WITH CAMPAIGN AD-

VISORS; FORMULATING

POLICY POSITIONS;

DRAFTING POLICY PA-

PERS; ACTING IN CON-

CERT OR COORDINATION

WITH A CANDIDATE

Charter § 10-107; Regu-

lation 8; Board Opinion

2009-005, 2016-001

Annual Report Page 27

Advisory

Opinion No. Date Issued Brief Description

Key Words

Citations

2017-502

Non-public

Advisory

Opinion

03/07/17 Advised City employee on the applica-

tion of the City ethics laws to the em-

ployee’s proposed participation in an in-

vestment opportunity in which the Phila-

delphia Industrial Development Corpora-

tion (“PIDC”), a non-profit with close

ties to the City, is one of several other

potential co-investors. The employee’s

participation in the investment opportu-

nity is not prohibited by the Charter pro-

hibition on interests in certain City con-

tracts or other City ethics restrictions.

The investment opportunity in which

PIDC will be a co-investor does not result

in a financial obligation of the City to the

employee or cause any money to flow

from the City treasury to the employee

through City contracts. Rather, the em-

ployee, PIDC, and other co-investors

would be contributing money into the

same investment opportunity.

PROHIBITED INTERESTS IN

CERTAIN CITY CON-

TRACTS; FLOW OF MONEY

FROM THE CITY TREAS-

URY; PIDC; INVESTMENT

OPPORTUNITY; CO-

INVESTOR; CONFLICT OF

INTEREST; FINANCIAL

INTEREST; CITY-RELATED

NON-PROFIT; POTENTIAL

OWNERSHIP INTEREST

Code §§ 20-607, 20-608,

20-609; Charter §§ 10-

100, 10-102; Board Opin-

ion 2009-003, 2012-001,

2013-005, 2014-001;

General Counsel Opinion

2015-501

Annual Report Page 28

Advisory

Opinion No. Date Issued Brief Description

Key Words

Citations

2017-503

Non-public

Advisory

Opinion

03/31/17 Advised City employee regarding the

application of the Charter political activ-

ity restrictions to employee’s proposed

participation in the activities of a group

called Tuesdays with Toomey in a per-

sonal capacity while off duty during the

employee’s lunch break. The City em-

ployee’s proposed participation in the

group is not prohibited by the Charter’s

political activity restrictions and would

not violate the prohibition on City em-

ployees engaging in political activity in

coordination with a political party, candi-

date, or partisan political group. The ac-

tivities of the group are not directed to-

ward the success or failure of a political

party or candidate and focus on constitu-

ents raising their concerns regarding vari-

ous social, economic, and policy issues

with Senator Toomey in his capacity as

their representative and as a government

official. Furthermore, Tuesdays with

Toomey does not coordinate or have an

affiliation with any political party, candi-

date, or partisan political group. Advised

that if relevant facts change as the activi-

ties, affiliations, or purpose of Tuesdays

with Toomey further evolves, the applica-

tion of the Charter political activity re-

strictions may also change, and the re-

questor should seek updated advice.

POLITICAL ACTIVITY RE-

STRICTIONS; TUESDAYS

WITH TOOMEY; POLITICAL

ACTIVITY; PARTISAN PO-

LITICAL GROUP; PER-

SONAL CAPACITY; OFF

DUTY; ON DUTY; LUNCH

BREAK; INCUMBENT GOV-

ERNMENT OFFICIAL; CON-

STITUENT CONCERNS;

MATTERS OF PUBLIC IN-

TEREST; POLICY ISSUES;

SOCIAL ISSUES; ECO-

NOMIC ISSUES; ADVO-

CACY; GRASSROOTS CITI-

ZEN ADVOCACY GROUP;

CANDIDATE; POLITICAL

CAMPAIGN

Charter § 10-107; Regu-

lation 8; Board Opinion

2012-002; General Coun-

sel Opinion 2017-501

Annual Report Page 29

Advisory

Opinion No. Date Issued Brief Description

Key Words

Citations

2017-504

Non-public

Advisory

Opinion

06/06/17

Advised former City employee regarding

the application of post-employment re-

strictions to proposed employment in a

position at a local, private entity that has

a contract and interacts with the re-

questor’s former City department. The

requestor had helped the former City de-

partment implement a new service deliv-

ery model that involved a rate change

uniformly reducing payment amounts to

all thirty or more providers in a category

of providers that included the potential

new employer. The Opinion advised that,

based on these specific facts, any finan-

cial interest the requestor may acquire in

this rate change by virtue of becoming an

employee of the new employer would be

too attenuated to cause an issue under the

Code’s two-year post-employment re-

striction on becoming financially inter-

ested in official action the requestor took

while employed by the City. Addition-

ally, although the requestor’s former City

department has a current contract with the

new employer, the requestor did not take

official action as a City employee with

respect to the current contract.

POST-EMPLOYMENT; AC-

QUIRING FINANCIAL IN-

TEREST IN OFFICIAL AC-

TION; LARGE CLASS; RE-

MOTE OR ATTENUATED

FINANCIAL INTEREST;

CITY CONTRACT; IMPLE-

MENTING RATE CHANGES;

TRANSACTION INVOLVING

THE CITY; REPRESENTA-

TION

Code §§ 20-603 & 20-

607(c); Board

Opinions 2009-003, 2012

-001 & 2016-002; Gen-

eral Counsel Opinion

2015-501; 65 Pa. C.S. §

1103(g)