The three men who will probably be the most influential players in the Philadelphia mayor’s race are so media-shy that I don’t even have photos of them.
The principals in a Bala Cynwyd-based securities trading firm called Susquehanna Group International are funding an independent effort to support state Sen. Anthony Williams for mayor, and they’ve begun with a TV ad buy worth over a half-million dollars. (You can see the ad here.)
For some perspective on the scale of that buy, the $500,000 cost is more than any of the six mayoral campaigns, including Williams, had in total in their last campaign finance filing in January.
Who are the Susquehanna boys? As best I can tell, they’re three very rich guys who are driven not by financial self-interest, but by an ideological commitment to school choice — charter schools and taxpayer-funded tuition vouchers for private and parochial schools.
At least one mayoral candidate says they’re getting some financial benefit from their activity – more on that in a moment.
Players on a big scale
The three men determined to see Williams become the next mayor are Jeff Yass, Arthur Dantchik and Joel Greenberg. Their firm has been around since the ’80s and now has 1,500 employees in seven offices around the country, as well as one in Dublin and four in Asia. Dantchik is on the board of the libertarian Cato Institute.
They made news in 2010 by funneling more than $5 million to Williams’ unsuccessful campaign for governor, but their political giving goes well beyond his ambitions. You can see dozens of their political contributions here, courtesy of the National Institute on Money in State Politics. (Those contributions don’t include the bulk of their funding of Williams’ gubernatorial campaign, which went through a political committee called the Students First PAC.)
One of the three donors, Greenberg, recently consented to an interview — though he wouldn’t be taped for broadcast. He wanted to say that the political donations have nothing to do with financial self-interest.
“We are not in this to run charter schools, to manage charter schools. This is purely altruistic,” Greenberg said. “We view this as helping kids have a choice who are trapped in failing, oftentimes violent schools.”
Greenberg was particularly troubled by a February press release from the campaign of candidate Jim Kenney which referred to Greenberg and his partners as “anonymous billionaires more concerned with making a profit than a quality school.”
The Kenney campaign at the time didn’t offer any evidence that the Susquehanna investors are profiting from their educational agenda, but asked about the subject at an event earlier this week, Kenney said the three have drawn a financial benefit.
“They have said they’re doing this only for the kids, but in fact there’s about $5 million in tax credits that they received,” Kenney said.
Kenney was referring to the Susquehanna partners’ participation in a pair of state programs that give generous tax credits to companies funding scholarships for kids in struggling schools.
One, the Education Improvement Tax Credit program, has been around for years. A second, the Educational Opportunity Scholarship Tax Credit program, was established by the legislature in 2012 with the active support of Williams — after he’d gotten such generous support from the Susquehanna partners in his gubernatorial bid. It’s targeted more at students in areas served by poorly performing schools.
Our education reporter Laura Benshoff looked into this and discovered that, indeed, four companies associated with the Susquehanna group got over $4.3 million in tax credits just last year from the programs.
But it’s important to note that, to participate, a company has to actually owe the state enough taxes to match the credit, and the credit doesn’t reimburse the entire scholarship contribution. In other words, the three donors didn’t make money through the program.
Ina Lipman directs the Children’s Scholarship Fund, which helps kids in Philadelphia. The Susquehanna principals donate far more than they get in tax credits, she says.
“The leadership in Susquehanna is really unique in their dedication to our mission to server under-served Philadelphia children and get them into quality schools today,” Lipman told us. “There’s a sense of urgency that runs through that leadership that real kids are at stake.”
The other side
Lawrence Feinberg of the Keystone State Education Coalition said the problem is that the tax credit program essentially substitutes state funds for what should be private support of private and parochial schools.
“You know, that’s millions of dollars that never gets into the general fund and therefore is not available in the budget when the legislature and the governor are sitting down to figure out how they’re going to fund basic education,” Feinberg said.
The Susquehanna donors get that. Indeed, that’s their policy goal. They favor using tax dollars to support alternatives to failing public schools.
Feinberg said there’s another problem with what the Susquehanna principals are up to. Politicians who back school choice programs, he says, are often supported by a handful of wealthy donors, both here and elsewhere.
Letting rich contributors use their money to tip the scales of educational policy, he says, is not healthy for democracy. “It would seem that with recent national court decisions, you know, money talks and everybody else walks,” Feinberg said.
I asked Greenberg if his group’s massive funding of an independent expenditure committee undermines the city’s campaign finance laws, which are intended to limit the influence of special interests in municipal elections.
It’s a fair question, Greenberg said.
His response was that there are a lot of free-spending super PACs out there promoting the interests of adults. His committee, he said, is just about helping kids.
Williams, whose fundraising is constrained by the city’s campaign contribution limits, is legally barred from coordinating with an independent group, such as the one funded by the three donors.
What does he think about the impact such groups might have on Philadelphia elections? In a January interview, he said he has no opinion.
“I’m working every day, to raise every nickel and every penny I can from the limited contributions one can give,” Williams said. “What anybody else does beyond that — I’m not involved in those conversations, and I will not be involved in those conversations.”
I asked Greenberg if he and his partners were prepared to back Williams’ mayoral bid on the scale of their $5 million-plus effort for his gubernatorial campaign.
He didn’t have an answer for me, but added that they’re committed to seeing Williams become the next mayor.