Nutter: Grants requested by the city do not constitute lobbying

The William Penn Foundation recently suspended grants to city-related agencies after Philadelphia public school advocates filed a complaint alleging the foundation violated the city’s lobbying ordinance when it paid a consultant that made financial recommendations to the city school district.

Worried that reports on the William Penn Foundation’s decision “could chill grant-making to the City and City-related agencies,” Mayor Michael Nutter Friday wrote a letter to Ethics Board Chairman J. Shane Creamer, urging him “to clarify that the (lobbying) ordinance does not apply to grants that are made at the request of city departments or city-related agencies.” In a letter back to the mayor, Creamer said he would present Nutter’s request, along with the proposed response, to the Ethics Board at its next public meeting, set for 1 p.m. Wednesday.

The complaint filed last December by Parents United for Public Education, Philadelphia Home and School, and the NAACP alleges that the foundation lobbied the school district by giving money directly to the Boston Consulting Group – the consultant that recommended financial restructuring, including controversial school closings, to the district.  Parents United’s Helen Gym said the complaint maintains that William Penn violated the city’s lobbying policy by failing to register as a lobbyist.

The foundation “wants to ensure our full compliance with the ordinance and is awaiting further clarification with regard to its scope concerning permissible grant activity,” said Foundation Interim President Helen Davis Picher in a statement emailed to PlanPhilly after a request for comment. An assistant to Picher told PlanPhilly that the William Penn Foundation, which awards $80 million in grants around Greater Philadelphia annually – and funds PlanPhilly – had no further comment.  That did not change after the mayor sent his letter Friday.  The grant the complaint is based on happened before Picher’s tenure, under former Foundation President Jeremy Nowak.

Gym of Parents United doesn’t think William Penn should have suspended city grants.  She called the action unfortunate and ironic, since the complainants would not have filed with the Board of Ethics if William Penn had funded the school district directly.

Gym worries that the Foundation’s decision to stop funding much-needed grants around the city could have an impact on any potential review by the Ethics Board.

“We believe the foundation’s decision to issue a blanket suspension of funds to city agencies was unnecessary and unreasonable and serves as a distraction to the central concerns outlined in our filing last December,” she said in an email Friday evening. “What we would like is for the Ethics Board to view the merits of our complaint in the fairest and most objective light possible.”

The Delaware River Waterfront Corporation, the quasi-city agency that is overseeing the effort to revitalize the Central Delaware Waterfront, has received a significant amount of grant money from William Penn, including a two-year $5 million grant announced in January 2011 that paid for some of the riverfront projects.

“We are hoping, of course, that this (decision to suspend city-related agency grants) doesn’t impact us. But we don’t know anything yet,” DRWC Vice President Joe Forkin said in a telephone interview Thursday.

Forkin wasn’t concerned about the $5 million. Most has been spent, and the rest, while still in DRWC coffers, is encumbered. But DRWC is gearing up to apply for a new grant, and he wasn’t sure if that would be possible.

Forkin said William Penn’s grants to the DRWC have had an exponential role in his organization’s ability to fund projects, because DRWC has used the William Penn grants to leverage additional funds.

For example, $350,000 from William Penn went toward the Race Street Connector project. That grant enabled DRWC to convince the city and other sources to fund the remainder of the $1 million total, Forkin said.

Nutter said in his letter that grant money from William Penn, and more so, from federal and state agencies, help pay for city priorities such as “creating and maintaining urban sustainability, encouraging logical development, improving citizens’ health and welfare, and encouraging more local high school students to attend college.”

As was first reported in City Paper, the city learned of the William Penn Foundation decision in a letter the foundation wrote to the CEO of The Mayor’s Fund for Philadelphia regarding funding sought by The Mayor’s Fund and the city’s Department of Parks and Recreation to design Bartram’s Mile Riverfront Trail and Park.  The Mayor’s Friday letter to Creamer states the foundation expressed concerns that such grantmaking would violate the lobbying ordinance.

The complainants are working with attorney Michael Churchill from the Public Interest Law Center of Philadelphia. Churchill said if the Board of Ethics finds the William Penn Foundation in violation of the lobbying ordinances, the Foundation would require the foundation to register and “to provide information about their lobbying.”

Gym said she hopes to also get information that her organization has been denied. Her group has the original contract between The Boston Group and the school district, and William Penn also gave them the contract from April through June 2012.  “What we don’t have is any of the contracts or  information about what they were doing between June and September,” she said.

View Mayor Nutter’s Letter To Ethics Board PDF

View Ethics Board Chair Creamer’s Letter To Mayor Nutter PDF