City Ethics Board Faults Tony Williams for Major Campaign Finance Violations
After months of investigation, the Philadelphia Board of Ethics today released a carefully-worded settlement agreement with mayoral candidate Anthony Williams that requires his campaign to pay $8,000 in fines, forfeit to the city $17,250 in illegal campaign contributions and to freeze another $62,927 now in his campaign account.
Those are big numbers, but not unprecedented ones. Council members Curtis Jones Jr. and Blondell Reynolds Brown have paid larger fines for campaign finance violations, as have the Electricians Union, as did 2oo7 mayoral candidate Bob Brady.
But make no mistake. This is much more than a slap on the hand. And while the Williams campaign made a tactical decision to settle, it vehemently disagrees with the Board of Ethics on one of two central questions at issue.
Let’s deal with the (relatively) easy one first.
The Williams campaign isn’t disputing that it accepted six donations last year that were in excess of the city’s contribution limits. Those checks totaled $17,250, and the cash will be forfeited to the city, not returned to the donors. Those donations, which had been previously reported by the Inquirer’s Claudia Vargas, are what led to the $8,000 in fines as well. In each instance, the donor had written a check to Williams’ Senate re-election committee, and then wrote a second check later in the same year to Williams’ mayoral campaign, in excess of the city’s contribution limits.
George Bochetto, the well-known attorney, was one of those donors. He says he continues to think his contribution was “perfectly authorized and legal.” “I donated to two different causes,” Bochetto said. “One time to Williams for Senate and then when he decided to run for mayor.”
But the Williams campaign isn’t arguing with the Board on this. “It wasn’t an intentional violation, but it was a violation,” said Adam Bonin, an election and campaign finance attorney who is representing Williams’ campaign (full disclosure: Bonin is also a Citified contributing columnist).
Now the hard part.
The larger, considerably more complicated issue is whether or not Williams appropriately managed money he raised before he was a mayoral candidate. Candidates like Williams who raise cash running for state office before declaring their candidacy city office can only use some of the money they raised before their city campaign launch. That’s because, while there’s no contribution limits at the state level, there are strict caps in Philadelphia. It’s obviously unfair for a state official to collect big five- and six-figure checks from donors and then sink that cash into a mayoral run, when his or her competitors have been laboring under the city’s strict limits the whole time.
So city ethics regulations require newly announced city candidates to set aside, or exclude, any unspent cash they have sitting around in their campaign account from donors who gave contributions above the city’s limits. The Board of Ethics says Williams didn’t do that.
“They were not in compliance with this provision of the law,” said Shane Creamer, executive director of the Board of Ethics. “They had to comply with this provision within 10 days of Williams’ declaration of his candidacy. They chose to exclude zero dollars. The decision to exclude zero dollars did not comply with the law.”
On that, the Williams campaign sharply disagrees.
“The agreement is, essentially, an agreement to disagree with the Board of Ethics,” said lawyer and former City Solicitor Mark Alan Aronchick. “There is no concession or finding of wrongdoing in any sense. There’s nothing in this that concedes in any way that we ran afoul of the law.”
The Williams campaign contends that this is, at core, a dispute over accounting practices. Their accountant concluded that, out of $438,000 in “excess pre-candidacy contributions” raised by Williams’ Senate re-election committee between January 1, 2012 and November 18, 2014, there was no money that needed to be excluded from Williams’ mayoral campaign pot. The Board’s accountant simply concluded differently. To make matters more complicated, the Board of Ethics changed its regulations around this issue on Oct. 31 of last year. That has the Williams campaign howling. “It’s like me telling you all your articles have to be written in red ink, including the ones you wrote two years ago,” Aronchik said.
Creamer shot back: “That argument is a rhetorical bridge to nowhere for the Williams campaign. Under the old existing regulation, they would have had to exclude double the amount of money they had to exclude under the new regulation.”
When told of Creamer’s remark, Bonin sighed and said, “this is the stuff which would have been litigated in court, and there was definitely strong sentiment within the campaign that it might be worth litigating.”
Instead, the Williams campaign settled. “It didn’t make any sense, when you look at the amount of money—$62,000 in a campaign that’s going to cost several million—to have all that diversion, all that activity,” said Aronchik. Under the terms of the settlement, the Williams campaign must now transfer $62,927 into a holding account; the funds will be unavailable for use until after the election. The campaign also will pay the Board $10,000 to offset its expenses in hiring an accountant to examine Williams’ books.
Aronchik repeatedly said the Williams campaign had been completely forthright and cooperative in its dealings with the Board. “I don’t think there’s any question that we have, at all times, been transparent and fully accountable … we were the ones who have provided whatever information they wanted,” Aronchik said.
That’s not exactly what Creamer remembers. “The settlement agreement does not include a provision that they cooperated. There is a paragraph in there that does describe our interactions, but it does not include the word ‘cooperate.'” Creamer said. (The paragraph reads in part that “The Williams campaign … provided certain information and documents upon request.” My italics).
How damaging will all this prove to be for Williams? That’s difficult to say. Council members Jones and Brown don’t appear to have suffered politically all that much, in spite of their brushes with the Board of Ethics. Williams, though, is in the midst of a campaign. His opponents will surely attack him over this (Lynne Abraham already has, actually). And it’s a headline that plays into some pre-existing concerns about Williams, whose campaign is getting a massive assist from an independent Super PAC. There’s no connection between that PAC and this settlement. But the point is there’s already some buzz out there about how the elect-Williams effort is being funded. This won’t help Williams quiet those concerns.
Which perhaps explains why Camp Williams is not-so-subtly complaining that the Board of Ethics is unduly focused on their candidate. Bochetto—who, it should be said, is just a supporter of Williams, not a member of his campaign—is hurling nothing short of rhetorical bombs at the board. “It’s a complete overstepping of the authority of the Board of Ethics, and I’m considering what I can do about it. Maybe I’ll file suit against the board for engaging in conduct that is beyond the scope of its authority to act, and is designed perhaps to help influence the outcome of the election.” It is not clear if Bochetto is serious, or if he is simply trying to muddy the waters.
Said Creamer: “We are doing our job and we are carefully looking at everyone’s disclosures, and we will take appropriate action wherever we have concerns about compliance.”
The candidates should have known that already. This Board of Ethics is no paper tiger.