This post is part of a larger series.

The first order of business in creating a more equitable Philadelphia is through governmental reform. We need to create a government that is accountable, efficient, transparent, responsive, and held to the highest ethical standards.

Thankfully, recent reforms and policies have already begun this change. However, there is a lot more that could be done. I don’t believe that there is any single reform that can solve our governance problems, but rather a series of reforms over time that work in tandem with each other. Here are my recommendations, in no particular order. I’m going to split this into several posts so it’s more manageable, starting with empowering watchdog departments.

 

Empower Watchdogs

The City currently has some government watchdogs in place—some of these created only a dozen years ago. However, they need more staff, more money, and more power to enforce their recommendations or findings. Here are the current watchdog departments.

Currently, the Office of the City Controller is the most significant oversight department. Their function is to “promote the effective and efficient operation of Philadelphia government by identifying cost savings, recommending best practices and modernization, and exposing fraud and mismanagement.” The controllers conduct annual audits of the City, each department, and the School District. They also audit the use of grant dollars and conduct specialized audits or reports as the need arises. For instance, they investigated the efficiency of pothole repairs, the effectiveness of the Bigbelly trashcans, and the revenue from the soda tax.

However, the Office of the City Controller is limited to primarily financial reporting and related matters. This is one critical element that needs attention, but it is not everything. We also need annual reports from each department on program outcomes and managerial efficiency, and oversight regarding potential corruption cases. The City Controller simply doesn’t have the resources to conduct the kinds of specialized reports listed above for every aspect of the City every year.

That brings us to the second watchdog department—the Office of Performance Management. This is one arm of the newly-created Office of the Chief Administrative Officer, and its role is to “measure, track, and report on the progress of major goals and initiatives and utilize data and evidence to make policy and program decisions.” They are supposed to measure and evaluate each aspect of the City’s programs, provide easy-to-understand data and outcome reports, and offer recommendations. However, their website currently does not have any information outside of explaining the office’s function. There are no published reports, no listed staff members, and no published recommendations. It seems that the office has been created on paper, but that it lacks funding and resources to actually carry out its function.

Next, there is the Office of the Inspector General, which began operations in 1985. Their role is to root out fraud and corruption by conducting investigations of all government entities under the Mayor’s jurisdiction. The office can issue subpoenas, demand testimony from City employees, examine all City records, make recommendations, and collaborate with law enforcement of every level. It seems that this is the oversight department with real teeth to its enforcement abilities. According to the department’s annual report in 2015, they have saved or recovered $70,915,790, filed 328 administrative actions (terminations, suspensions, demotions, etc.) and issued 89 arrests, indictments, or “informations” (I assume this means passing on information about criminal cases to law enforcement).

I discovered something intriguing about this office. Although it has existed since 1985, the available financial reports (Comprehensive Annual Financial Reports) I have access to show that it had zero funding until 2008, when the Nutter Administration came into office. This is because Mayor Nutter’s platform included a major commitment to revamping city ethics and oversight, and providing the OIG with sufficient resources was one pillar of this strategy (according to the OIG’s annual reports). Nutter appointed Amy Kurland, who has served as the Chief Inspector General ever since. She is now working closely with the Kenney Administration to continue this work. In 2017, Kurland published an article advocating for making the OIG permanent through amending the Home Rule Charter. Without this, future administrations could defund the department, as past administrations had done.

Next, there is the Board of Ethics, which was created by a ballot initiative passed in 2006 (presumably because people were, at that point, unhappy with the OIG). The board is five members, who are all volunteers appointed by the Mayor and approved by City Council for five-year terms. The board is also authorized to hire staff as needed, but its funding depends on the Mayor and City Council. Due to a lack of funding increases, they have had 12 staff since its creation, and their latest report details how they are heavily understaffed. The Board of Ethics is responsible for “administering and enforcing all provisions of the Charter and City Code that pertain to ethical matters.” This includes “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.” However, their power to enforce is very limited. They can issue opinions, inform people of regulations, and conduct investigations. Unfortunately, they can only act upon investigation results through using the Court of Common Pleas or through an administrative adjudication, which means the defendant pays a settlement to resolve the case. Almost everything is resolved through settlement, usually amounting to as little as $2,000.

Finally, the Office of the Chief Integrity Officer was created by an executive order of Mayor Kenney’s in 2016. It has a general mission of “ensuring that the City operates with fairness and integrity.” It seems to primarily serve as a resource of information, a way for employees to report violations, and a source of recommendations. However, the office does not seem to have enforcement powers, and many of its responsibilities overlap with others. Where it is unique is its consolidation of information and resources.

Considering all of these departments together, the City has made major steps towards improving its infrastructure to conduct oversight. However, this should only be the beginning.

Here are some of the reforms we should strive to achieve:

Increase the budgets of watchdog departments

The budgets for the departments listed above are meager, and have remained so for quite a while. The city’s auditors in the Office of the City Controller have the most money to work with, but they are also tasked with conducting the standard annual audits for the whole City of Philadelphia. They do not have enough resources to conduct regular audits on performance or corruption. As for the Office of the Inspector General and the Board of Ethics, they don’t even have a collective $3 million to work with. It is no wonder the Board of Ethics only has 12 staff members, and I assume it must be a similar story with the OIG. Take a look at their budgets below:

Watchdog Departments Budgets Over Time
Created using City Council budgets and Comprehensive Annual Financial Reports.

Note that I could not find information on the budgets for the Office of the Chief Integrity Officer or for the Office of Performance Management, since they’re both buried within the budgets for the Mayor’s Office and the Office of the Chief Administrative Officer. Both of these budgets are about $5 million, and include many other aspects.

As the chair of the Board of Ethics wrote in the latest annual report, even a modest increase of $50,000 or $100,000 would allow them to increase output significantly. I agree, and this also applies to the OIG and the City Controller’s Office. Modest investments, compared to the overall City budget, would provide immense benefits. What’s more, these departments are likely to save the City significantly more money than they cost to operate, since they are preventing corruption and inefficiency.

I propose much more than just modest investments. Let’s create fully funded departments, with enough staff and resources to conduct full performance audits of every department, conduct ethics oversight for every department, and to act upon corruption, inefficiency, or other violations. Even if it takes $10 million per department annually, that is still a relatively small investment that will have enormous returns for the City.

The only way for this to happen is for the Mayor and City Council to increase the budget appropriations for these departments. Therefore, we need to pressure currently serving politicians, and we need to seek to elect representatives who support this kind of reform.

Increase the enforcement powers of watchdog departments

The only watchdog department that has real enforcement powers is the Office of the Inspector General, since they can subpoena, force testimonies, and examine any City documents or records. The Board of Ethics has minimal power in taking parties to court or reaching settlements, and they often issue only tiny fines, the court process can take a very long time, and they have difficulty enforcing rulings. Therefore, violators are happy to continue with business as usual, taking a slap on the wrist. Likewise, the City Controller and the Office of the Chief Integrity Officer can only make recommendations. Many of the reports from the Controller’s Office list recommendations prefaced with, “for the seventh year in a row, we are recommending…”, with no action following. It is up to the individual departments to make the changes.

Therefore, it is necessary to equip our watchdog departments with real means of enforcing the law, the ethics code, or even general recommendations for improving efficiency.

First, we need to dramatically increase the fines for Ethics Code violations. Currently, guilty parties might fail to report several tens of thousands of dollars in support, or receive several tens of thousands of dollars in excess of the limits, and then pay a fine of just $2,000. That’s because the Ethics Code says, “Each violation shall be subject to a fine or civil penalty of three times the amount by which an accepted contribution exceeded the limit, or $2,000, whichever is less.” Violating the code should be more expensive than it is beneficial. The fines need to be several tens of thousands of dollars, or even at least $100,000, depending on the case. For example, we could replace this rule with one that sets a minimum fine of $2,000, plus three times the excess in contributions. Similarly, failure to file required reports to the Board of Ethics only calls for a $250 fine each day, maxing out at $2,000 in the first month and $1,000 each month after. Failure to report donations and other information should result in a much heftier fine. One example could be a percentage of the donation received, such as 50%, and it could scale up to 100% the longer it takes to report. Finally, failure to attend ethics trainings or provide employees with the Code of Ethics only results in a $250 fine once. Instead, it should be met with serious administrative action, such as suspension, leading to termination if it continues.

The Ethics Code also has “mitigating” and “aggravating” factors that impact fines, such as promptly reporting, or repeat offending. Mitigating factors can provide up to $750 off the  fine, and aggravating factors can add up to $2,000. Aggravating factors should add much more in fines and other penalties, depending on severity. For example, they should be a multiplier of the fine depending on the offense, leading up to criminal charges or removal from the position or election. Mitigating factors should be removed entirely.

Second, ethics code violations should have more punishments attached to them than just monetary fines. Some currently do. Different forms of bribery or inappropriately abusing powers for personal gain, for instance, can result in termination, a ban from running for office for a certain time period, a ban from working for the City, a fine up to $300, or up to 90 days in prison. These penalties should also apply to election violations. Certain violations should require disqualification for an election, or even for an office. You should not be able to keep your political office if you cheated to get there. Additionally, certain violations should also be crimes, leading to a direct referral to the OIG for further action.

Third, the Office of the City Controller needs to have a way to enforce its recommendations, especially for cases of serious violations of procedure, such as failing to segregate payroll duties or committing overtime fraud. Certain violations, such as overtime fraud, should lead to immediate judicial action via a referral to the OIG. Lesser violations or problems with efficiency should lead to corrective action from the direct supervisor of that department, or where applicable, from Human Resources. This could include suspension, required trainings, termination, or other penalties.

Insulate watchdogs from politics

Watchdog departments must be free to act independently, and they must be safe from political retaliation. Several of the heads of departments are appointed by the Mayor. Only the Chief Controller is publicly elected. All of these departments must derive their power from public elections, with term limits included. Otherwise, they face a serious conflict of interest when it comes to investigating the current administration or any City Councilmembers. Additionally, if they are appointed, there is always the risk of them acting in the best interest of those who appointed or confirmed them. Even if they do not, there is always the risk of the perception or accusation that they are. Requiring that they all be publicly elected circumvents this issue, creating a trustworthy foundation for rooting out corruption and inefficiency.

A second reform that is needed is that these departments must be enshrined within the Philadelphia Home Rule Charter. As Amy Kurland (the current OIG head) and former Mayor Nutter pointed out, if the OIG is not required by the Home Rule Charter, then any administration or city council could gut it of funding. Creating an amendment to the Charter will protect the department from political retaliation or changing political winds.

The Office of the City Controller already presents the ideal model (see this). the Charter creates this office, describes the necessary positions, gives power to hire more staff, describes duties, and sets term limits and the electoral procedure. The Board of Ethics is similarly enshrined in the Charter. We should pass an amendment to the Charter that creates the OIG, requires public elections for the head, sets term limits, and requires enough funding for designated duties. Likewise, we should amend the the Charter to require public elections, term limits, and a certain level of funding for the Board of Ethics.

Amendments to the Home Rule Charter happen by public referendum. Only the voters of the City can make this happen.

 

Conclusion

The City has made hopeful strides towards empowering its own oversight infrastructure, but there is still a lot of room for improvement. We need to increase the budgets for our watchdog departments, increase their enforcement powers, and enshrine them in the Home Rule Charter.

Increasing the budget is done through the normal budgeting procedure. This is primarily determined by the Mayor submitting his budget to City Council, City Council voting on that budget, and then the Mayor vetoing or confirming the final budget (see my prior post for more detail). Therefore, the best way to achieve this goal is through pressuring our currently elected officials, and by electing officials who make this part of their campaign priorities. This is not an easy task. It will take a broader political movement over a prolonged period of time, just as it would to press for any political issue.

The second thing that’s needed is to pass a series of amendments to the Home Rule Charter. After lots of digging through documents, I found what that procedure is. According to the State’s Act 155 of 1949, amendments to the Charter can be made through two methods. First, the City Council can pass a resolution to issue a ballot initiative for the amendment with at least two-thirds of the members voting in favor. Second, eligible voters can submit a petition to City Council with at least 20,000 signatures. Then, City Council has to vote in favor of it by a simple majority. If a proposed amendment makes it this far through either method, then City Council must pass an ordinance setting a special election on a their choice of a November election or a primary. Then, if the referendum passes by a simple majority, it is successful. If the ballot initiative fails, it cannot be attempted again for at least five years.

So, ballot initiatives are also tough to pass. They ultimately depend upon some level of support from City Council. Therefore, this change also needs to come from a prolonged campaign to build public support, pressure current councilmembers, and elect councilmembers who would vote in favor of these initiatives.

Finally, the third reform is to increase the severity of the punishments in the parts of the Ethics Code that fall outside of the Home Rule Charter. Campaign finance regulations fall within the Philadelphia Code, which is all of the enacted legislation, under chapter 20-600. This needs to be amended through legislation, which of course requires a public campaign to pressure representatives or elect new representatives who support this.

These goals are difficult, but absolutely possible and achievable. They require grassroots political advocacy to raise awareness and support. This is what almost every reform will require, so this should not be a reason to retreat from political activity. Rather, this should be one pillar of a broader political movement.