Title
June 17, 2010
To The President and Members of
The Council of the City of Philadelphia:
For the following reasons, I am returning herewith to your Honorable Body Bill No. 100126, which was passed by Council at its session on June 3, 2010, without my signature.
I want to commend Council for taking the initiative on a number of matters raised by the Task Force on Ethics and Campaign Finance Reform in its report of last December. After introducing bills related to lobbyist registration; the regulation of contributions to inaugural and transition committees; contributions for the establishment of litigation committees related to political campaigns; and the revision of penalty provisions for various ethics-related infractions, Council worked cooperatively with my staff and the Board of Ethics to refine and amend the measures. On June 3, 2010, Council passed those bills. In my view, those bills will move ethics reform forward in Philadelphia and I have signed them today.
Unfortunately, although the same spirit of cooperation governed discussions regarding Bill No. 100126, and amendments were made to the bill in attempts to improve it, in the end I believe the bill has the potential to do more harm than good, and therefore I am returning it unsigned.
Bill 100126 would amend Chapter 20-1000 of The Philadelphia Code, entitled Political Contributions and Expenditures, by creating special rules regarding the Code's limits on campaign contributions for expenditures on the printing and distribution of sample ballots.
The origin of this bill is based on the particular facts of how sample ballots and their distribution are often paid for in our local campaign system. Often, candidates pool resources through contributions to ward committees or other types of political committees for the purchase and distribution of sample ballots, which can be costly and significant campaign expenditures.
Under current law, if a candidate has asked for participation in the pooling system, and the candidate coordinates sample ballot activities with the pooling committee, a difficult question is raised as to how to measure the value of the campaign contribution that the pooling committee has made to the candidate by printing and distributing the sample ballots on behalf of, and in coordination with, the candidate (as well as on behalf of others). The bill would provide that expenditures by a political committee for the printing and distribution of sample ballots containing the candidate's name simply would not count as a contribution to a candidate, even if the candidate has a measure of control
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of how those expenditures are handled, as long as the candidate contributes something financially toward the cost of the sample ballots.
Moreover, under current law, if a candidate whose name appears on a sample ballot is in control of the activities of the committee through which the sample ballot expenditures are made, and that committee is not the candidate's single designated campaign committee, the candidate will run afoul of our Code's requirement that candidates maintain only a single committee through which it makes campaign expenditures. The bill would provide, however, that candidates who are also ward leaders may use a ward committee to spend money on sample ballots in a manner beneficial to that candidate without running afoul of the single committee rule.
It is my understanding that some past candidates have been concerned that expenditures on sample ballot distribution by political committees - including expenditures that are not in any way controlled by or coordinated with the campaign of a candidate - might nonetheless be considered by the Board of Ethics to be contributions to the candidate. I am advised, however, that if the candidate does not control or coordinate with the ward or other political committee that pools the candidate resources, the Board of Ethics would consider the sample ballot costs an independent expenditure of the third-party committee that does not constitute a contribution to the candidate. I would support legislation that made clear that expenditures on printing and distribution of sample ballots containing the name of a candidate are independent expenditures that simply are not governed by the campaign finance law, as long they are made through political committees that are not in any way controlled by, or operated in coordination with, the candidate or the candidate's campaign. This would help clarify the distinction between independent expenditures, on the one hand, and expenditures on ballots that constitute contributions to the candidate.
Moreover, we cannot ignore the fact that some elected officials are also ward leaders who may have some role in connection with the ward political committee, or in connection with some other type of political committee. It is clear that our campaign finance laws allow candidates to be in control of more than one political committee, as long as only one of those committees is used to further the campaign activities of the candidate. I would certainly support any legislation that would help clarify any ambiguity in that regard.
Bill 100126 as passed by Council, however, would make allowances for situations where the candidate in fact has a role in controlling expenditures of the ward or other committee that is pooling resources for the distribution of sample ballots that benefit the candidate. Such allowances would open up our campaign finance laws to the potential for abuse, which might simply be inadvertent. Large contributions far exceeding the campaign contribution limits could be made to the committee used for pooling resources, which in turn could be used by the
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candidate with control or influence over the committee to support his or her campaign. Such large contributions would undermine the effectiveness of the campaign limits and potentially bring the appearance of improper influence of large campaign contributions back into our system.
Moreover, the special rule proposed for candidates who are ward leaders (and who may have a significant measure of control over the ward's political committee) to make expenditures on sample ballots to support that candidate's campaign, in addition to being subject to inadvertent or intentional abuse, is simply unfair. That rule would give candidates who are ward leaders a potential advantage in fundraising, because of access to funds raised by the ward committee for use on the candidate's campaign that do not count as contributions to the candidate. The Law Department has advised me that this potential advantage also creates a significant problem under the Equal Protection Clause of the U.S. Constitution, by creating separate fundraising rules for different candidates vying for the same office, and that in the view of the Solicitor this provision of the Bill is unlawful.
This is not in any way to suggest that the pooling system has actually been used in an abusive way to date, or that we expect most or even many of our candidates for City office would utilize committees that pool resources for the purchase and distribution of sample ballots in this way. But, unfortunately, laws such as these must be maintained to prohibit both unintentional problems as well as those few who might be tempted to intentionally abuse the system, to obtain an advantage.
I am certainly willing to continue to work with Council, and the Board of Ethics, to try to devise an alternative mechanism to prevent further problems in this complex area of campaign finance law, while continuing to adhere to the basic requirements of our campaign finance law. Even working collaboratively, however, we have as yet been unable to construct a lawful alternative that would not have the potential to do more harm than good. I am therefore returning Bill No. 100126 to you without my signature.
Respectfully,
Michael A. Nutter,
Mayor
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