Dark money group in Philly mayor’s race stays in the shadows – UPDATED

     Leadership Matters, the group that ran an ad attacking Jim Kenney in the mayoral primary refuses to reveal its donors.

    Leadership Matters, the group that ran an ad attacking Jim Kenney in the mayoral primary refuses to reveal its donors.

    A Washington-based political group that spent $93,000 on a hard-hitting ad attacking Jim Kenney in the closing days of the Philadelphia mayoral primary is refusing to say who funded the effort, in defiance of the city Board of Ethics. 

    Final campaign finance reports are due today from candidates and committees active in the mayor’s race, and the three super PAC’s that spent more than $8 million on the race will reveal their donors, as they did on previous reports.

    But Leadership Matters, the newly-formed group that ran the attack ad on Kenney organized as a nonprofit corporation rather than a political committee, a technique used by some national groups to conceal the identity of their contributors.

    The Philadelphia Ethics Board has stated that it regards nonprofit groups that spend at least $250 to influence city elections as bound by the same reporting requirements as candidates and super PAC’s.  That means they’re supposed to reveal the date and amount of every contribution they get, along with the name, address, occupation and employer of every donor.

    Chris Lapetina, the Washington-based consultant who’s executive director of Leadership Matters, emailed yesterday that he “talked extensively with our counsel and he has advised us that [today’s] filing is not a requirement for Leadership Matters Inc.”

    What happens now?

    I spoke to Michael Cooke, director of enforcement for the city Ethics Board, and while he wouldn’t comment on Leadership Matters specifically, he confirmed that a nonprofit corporation spending thousands to influence the Philadelphia mayor’s race should file a complete report.

    “Different jurisdictions have different rules,” Cooke said. “Some require this kind of filing and some don’t, but it is our view that in Pennsylvania and Philadelphia, this kind of disclosure is required for nonprofit entities.”

    I asked Cooke what the board would do about Leadership Matter’s apparent non-compliance, and he said decisions about enforcement actions “are made on a case by case basis.”

    As I understand it, the Ethics Board’s requirements for non-profits filing is based on the broad definition of a political committee in the state election code. It says a political committee is “any committee,club, association or other group of persons which receives contributions or makes expenditures” in political campaigns.

    That would seem to cover everything from a candidate committee to a book club, if they’re raising and spending political money.

    City Council, by the way, recently enacted legislation imposing new reporting requirements for political committees, and it explicitly states that nonprofit  corporations have to file if they’re spending to influence city elections.

    I wasn’t able to speak to Leadership Matters’ attorney, but my understanding is that such groups argue that as corporations, they they’re legally regarded as persons, and not subject to rules established for political groups.

    There will no doubt be further legal proceedings on these issues. In the meantime we still don’t know who decided to spend $93,000 attacking Kenney as long as they could do it anonymously. If you know and would care to share it, hit the “contact” link above.

    UPDATE: Friday, Ryan Briggs at Philly.com published this story raising the possibility that an educational consulting group in Illinois could be connected to the ad. Two of the principals in the group told Briggs they had nothing to do with any political ad in Philadelphia, but an FCC disclosure document filed with the local Fox affiliate lists their names.

    When I asked Lapetina in an email if those people were connected with his ad, he responded, “No!”

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