All corruption is local in Philadelphia

Democratic Congressman and liberal icon Tip O’Neill once said all politics is local. Translate O’Neill’s quote for Philadelphia would read more like “all political corruption in the City of Brotherly Love is local.”

Not only are there regular reminders that ethics are a forgotten art in Philadelphia, but the side effects of rampant waste, fraud and abuse are impacting the lives of working-class Philadelphians each day.

With the highest individual tax burden in the country, Philadelphia residents not only pay federal, state and wage taxes, but business taxes, sin taxes on  liquor, tobacco, & now sugary drinks (soda). They also have the burden of a new .20 cents per gallon state gas tax hike, a rain runoff fee, and an exploding property tax.  So, despite having the fifth largest population in America, why does it have a $5.9 billion pension shortfall and has a school district ranked 6,714^th in the nation (395^th in the state)? How can Philadelphia rank so low in the nation when it spends $12,570 per pupil each year on public schools? Furthermore, with the aforementioned tax formula, why has there been a serious budget crisis each year that’s almost prohibited schools from operating?With massive hikes in property taxes, the retention of wage taxes, and the creation of new taxes; why is Philadelphia still operating as if it’s in a fiscal crisis?

Look no further than the corruption embedded deep in the city’s political infrastructure. Recently, the FBI and the IRS raided the offices of John Dougherty, the business manager of Electrician’s Local 98 and a large political patron, and Bobby Henon, former political director of Local 98 and a current Philadelphia city councilman. The feds seized truckloads of records, computers, and even firearms, reminiscent of similar raids leading to the indictment and conviction of the business manager and several members of the Ironworkers Local 401 for racketeering and arson charges.  While union involvement is, in no way, tantamount to corrupt behavior; it is important to understand that almost every politician named in this article was aided in money, manpower, and endorsement by local 98.

Even in death, former School Superintendent Arlene Ackerman was called out for corruption this summer, based on her cancelling the lawful award of a $7.5M a security camera contract to direct those funds to an unapproved, no-bid vendor, citing racial preferences as the reason. Meanwhile, former Sheriff John Green, who famously “lost” $53M, was indicted for corruption at the end of 2015.

So it’s safe to say that there is a serious crisis of ethics in the City of Brotherly Love.  This is amplified by the fact that there appears to be no effective oversight mechanisms in place to prevent such behavior before it becomes a major problem.  First, as previously mentioned, the state’s top law enforcement professional was just convicted of multiple crimes. Philadelphia’s District Attorney Seth Williams showed promise when recruiting defecting corruption prosecutors Pat Blessington and Frank Fina from the State Attorney General’s Office to successfully prosecute the sting case.  However, there is a recent federal probe looking into Williams’ campaign finance activities where numerous gifts were received, resulting in his recent amendment of years of his campaign finance reports to post $160K worth of gifts he received. On Friday, however, the majority of heads in the Philadelphia law enforcement community were shaking when Williams hired Tariq El-Shabazz, a personal friend and known scofflaw. On top of his several tax leins and judgemnets, El-Shabazz is locally known for defending murderers and drug kingpins, and is personally affiliated with anti-Semitic religious groups.

In looking at recent history, such an entrenched unethical culture can only be reformed when a massive external event forces change on the city outside its electorate.  In New Orleans, known for its culture of corruption, Hurricane Katrina brought millions in federal aid dollars into locally managed agencies, forcing oversight from numerous federal Inspectors General and watchdog agencies. This served to highlight a case in where former Mayor Ray Nagin was convicted of corruption, but forced the powerful political machine there to accept the oversight of independent Inspectors General on the local level with Ed Quatrevaux and Stephen Street on the state level.  In Detroit, the city’s corruption had a legacy that lived far beyond the arrest and conviction of Mayor Kwame Kilpatrick, when in 2013 it declared bankruptcy. Then, under state law, Michigan was allowed to appoint Emergency Manager Kevyn Orr to run the city in a way that took City Council’s input “under consideration”, but did not require local government approval of the city’s fiscal operations. This brief reprieve from the norms of mismanagement and ethical challenges allowed Detroit to emerge from its bankruptcy and elect Mayor Mike Duggan, who appointed Inspector General James Heath ushering in a new era of ethical oversight to the city.

Philadelphia must employ real political reforms to root out corruption.

Philadelphia currently has an “ethics czar,” appointed by the mayor, an Ethics Board, Office of the Inspector General, and an elected City Controller.  The Ethics Board has cited numerous violations, especially in relation to campaign finance laws, but the fines are normally negligible and the violators simply pay their fines and get re-elected.  The controller has conducted numerous audits exposing financial discrepancies in agencies like the Sheriff’s Office, School District, and others in the past, but they’ve not affected change. More concerning is that yesterday, the City Controller published the findings of a public audit into a nonprofit fund that he claims was a slush fund for the former Mayor who has been out of office for eight months.  Obviously, as a city with many money concerns as ours, the Controller can find more useful audits to perform. Lastly, the Office of Inspector General (OIG), while currently led by a respected former US Attorney, has been denied by City Council, the independent authority it needs to conduct investigations outside the executive branch. Therefore it is not able to investigate waste, fraud, and abuse in the city’s elected offices or school district and is painfully small in manpower considering the size of the job it’s responsible for.

In order for meaningful local reform to occur in Philadelphia, it should follow the best practices in the ethics community and give the Office of Inspector General the independent authority to investigate all branches of city government, and give it the budget and staff it needs to create omnipresence and limit the opportunity for corruption.  Ethics Board fines should also come with the legislated authority that enables them to revoke eligibility to run for office.  Habitual campaign finance violators shouldn’t be able to write a five-digit check from the same account and then sail to victory.  Lastly, if a Controller’s audit identifies waste, fraud and abuse it should be followed up by a referral for criminal investigation.  

The city must also look to the feds for help. The FBI and US Attorneys have proven to be extremely effective in investigating and prosecuting public integrity cases, but these cases take years to investigate while the corrupt officials continue in office.  As a former law enforcement official working with both local and federal agencies, one has to wonder who else is working on these public integrity cases.  While the IRS Criminal Investigations Division has definitely worked on many of these cases, much of what’s been discussed is an example of waste, fraud and abuse of public funds. As many of these funds are subsidized federally, one has to wonder why the various federal inspector general agencies with criminal investigators aren’t assigning staff to/from Philadelphia field offices to actively build their own cases therein.  For example, a massive cheating scandal was uncovered in where 53 Philadelphia schools were under investigation for over 138 counts of tampering on the state-regulated standardized tests that are a part of the funding formula for both state and federal education dollars. Since 2011, only 11 district educators have been disciplined as a result, and the case was a “hot potato” that traveled from the State Education Department to the understaffed State Inspector General before landing with the Attorney General’s Office.  As a good portion of the monies awarded due to the No Child Left Behind Act and Every Student Succeeds Act funding formulas are federal, where was the US Department of Education’s Inspector General? Similar questions can also be said with the 2014 case of improper lobbying made by the HUD Inspector General into former Philadelphia Housing Authority (PHA) Director Carl Greene, after he had been shamed years before into resigning because of almost $1M in sex-harassment settlements were approved by the PHA board?   

As learned in post-Katrina New Orleans, everywhere there is federal money being spent is an opportunity for oversight. Currently, there is a transportation crisis due to the discoveries of multiple crumbling roads and that 120 of the transit authority’s newest train cars are defective. Is an audit by the DOT Inspector General in order?  The idea is to make those in local government understand that there are people watching and looking out for the taxpayers. 

Philadelphia must also end the era of the career politician. There are currently no term limits for City Council, Members of the State House of Representatives, or any of the city’s elected row offices like Sheriff, Commissioners, or Registrar of Wills.  These smaller elections is where actual change can be effected.  However, one of the main reasons there are virtually no checks and balances in the electorate is because Philadelphia Democrats outnumber Republicans in this city to a seven to one ratio.  Even the local media has suggested that “the best way to have real democracy in the city that gave you the Declaration of Independence and the U.S. Constitution would be to have two viable political parties.” 

Beating an entrenched political machine is never easy, but if the saying “all politics are local” is true, why don’t big national donors support change at a local level? 

Mannes is a national subject matter expert in public safety. He serves as a member of the Peirce College Criminal Justice Studies Advisory Board in Philadelphia and is a Governor on the Executive Board of InfraGard, the FBI-coordinated public-private partnership for critical infrastructure protection. Follow him on Twitter @PublicSafetySME 

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