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e-ThePeople

How John Street plays the fund-raising game


These photographers are working for John Street. They accompany him on the campaign trail to take instant photos of him with constituents, who then are presented with the photo. (Ron Cortes / Inquirer Staff Photographer)
Last of three parts

By Robert Zausner,
Monica Yant
and Cynthia Burton
INQUIRER STAFF WRITERS
John Street laughs as he tells a story about how, early in his mayoral campaign, he unknowingly did something that upset a businessman who does work for the city. Actually, it was something he didn't do.

"A fellow Council member came up to me and said: 'You might want to ask this guy for a [campaign] contribution,' " Street says. " 'He does a lot of business with the city, and you never asked him. He's nervous because you never asked.' "

While most people would consider it a blessing not to get phone calls asking for money, many with business ties to City Hall are willing, even eager, to give. They recognize that helping to finance the campaigns of elected officials - the same officials who distribute contracts, tax breaks, grants and other largesse - is the way the game is played.

"We ask, and they give," Street says.

Asked whether he ever sought a contribution from the nervous businessman in his story, Street responds with a smile and a question: "Does a duck swim?"

Street's seven-year tenure as City Council president and his quest to become mayor vividly illustrate the intersection of business and political interests at City Hall.

Some critics of the political fund-raising game, and even some of the participants, have a name for it: "Pay to play."

Street said he participates, raising campaign money from people and businesses with a stake in city government, because everyone else does, and because it is necessary in order to compete in the arena of mayoral politics.

Street, who spent about $3 million on his primary campaign and expects to raise and spend an additional $5 million by Election Day, said his donors stand to get more city business under a Mayor Street than others who were not on his side.

"The people who support me in the general election have a greater chance of getting business from my administration than the people who support Sam Katz," Street said, referring to his Republican opponent.

"I think that's the way it works, [and] anybody who doesn't acknowledge that's the way it works is either a liar or thinks you're really stupid."

Street said, however, that he has never promised city contracts in return for campaign money, and would never award business to people who were not qualified.

An analysis of Street's campaign fund-raising since 1991, when he first sought the Council presidency, provides an inside look at how the game is played.

The vast majority of his biggest donors - those that gave his campaign $25,000 or more - had a tangible stake in having a good relationship with him. Street was Council president from 1992 until he resigned at the end of last year to run for mayor.

Of his 33 top contributors, 30 had something to gain or to keep - things such as contracts, legal work, tax breaks - from City Hall, an Inquirer analysis found. The other three top contributors were Mayor Rendell's campaign fund and two building-trades unions, traditionally pro-Democratic.

Since 1991, those 30 major donors have given Street a total of $1.4 million. That is one-fourth of all the campaign money he raised from 1991 to June 30 of this year, when mayoral candidates filed their most recent fund-raising reports.

Many others with ties to the city gave Street somewhat smaller contributions, typically $10,000 to $20,000, over the same eight-year period.

Of 128 people, companies and political action committees that gave him more than $5,000 apiece, most had business with city government, the Inquirer review found.

Law firms, which typically are major contributors to political campaigns at all levels, have been among Street's most generous donors.

His contributors also include vendors who got city contracts, developers who had - or hoped to get - deals with the city, hotel owners who got tax breaks, and money managers who invested city pension funds.

There is a Germantown entrepreneur with city contracts, an electrical contractor from East Stroudsburg who has worked on the airport, and a Philadelphia lobbying firm looking to preserve its access.

There are companies that leased property to the city, and some that leased from it, such as the Eagles and the Phillies, tenants at city-owned Veterans Stadium. Both teams are negotiating deals for new stadiums, to be paid for in part by large subsidies from the state and city.

Many of Street's larger donors, particularly law firms, also gave to Katz, and were among the vast network of contributors tapped over the years by Rendell, the most potent political fund-raiser in the city's history.

Yet some businesses with city contracts have made their political donations primarily, even exclusively, to Street.

Street's success and sophistication at raising money represent a remarkable change since he first ran for Council in 1979 as a rough-hewn outsider with a populist agenda and a $3,000 campaign kitty.

Street mounted that first campaign from a ramshackle office on Ridge Avenue in North Philadelphia. His mayoral campaign has a Center City office provided gratis by a commercial landlord with city contracts.

No-bid professional contracts

worth tens of millions a year

The connection between political contributions and city business is not direct or easily defined. Much of the work of city government is awarded based on strict competitive bidding.

Relationships with and access to elected officials come into play with regard to the no-bid professional contracts awarded to lawyers, architects, developers and others. Those amount to tens of millions of dollars a year.

As Council president, Street often recommended firms to Rendell, who has the final say on professional-services contracts. Equally important, as Council president, Street controlled the flow of legislation. He was in a position to block or expedite Council action on matters ranging from tax breaks to bond deals, from street closings to giant trash-hauling contracts.

In a lengthy interview, Street was by turns philosophical and blunt in describing the fund-raising culture.

In some cases, he solicited contributions from what he called the "vendor community," he said. In some cases, they sought him out.

"Sometimes it's the chicken; sometimes it's the egg," Street said.

Barry Kauffman, director of Pennsylvania Common Cause, deplores the culture of making contributions in hopes of getting government business.

"This pay-to-play relationship between campaign contributions and who gets government contracts rears its ugly head far too often," Kauffman said. "And the public should be concerned about it."

Kauffman said that, when major contributors get contracts, the public does not always get the best price. Common Cause supports a bidding process for professional contracts; Kauffman noted that Maryland now has law firms bid on bond work.

Street said he does not like the game, either.

"Let me tell you what my philosophy is: This is the way the system has been working for as long as I know," he said. "As much as I might wish it were different, it isn't."

At the height of his power in Council, Street was sometimes in a position to move legislation that would benefit contributors, and he did.

In December 1998, just before he resigned as Council president, Street helped move through Council a tax break for the planned DisneyQuest theme park at Eighth and Market Streets. During the previous 12 months, Street got $31,300 in contributions from the DisneyQuest developer and an architect, plus $43,000 from attorneys and the law firm involved in the project. In another case the same year, Street scheduled a key committee vote on a $6.6 million tax break for Parkway Corp. to build a garage near the Convention Center. Parkway executives had given Street's campaign fund $15,400 in 1998. The tax break was approved shortly after Street left office.

In a third instance, executives of Comcast Corp. gave Street $18,500 in the months just before and after renewal of the company's two cable-television franchises came up for a Council vote in June 1998. The 15-year contracts, covering 171,000 customers, were approved two years ahead of schedule - with Street's support.

Street said his actions had no relation whatever to the campaign contributions.

He said he observes his own set of rules for almost-daily fund-raising events and in making phone calls to potential donors.

"I have my dignity when I pick up the phone, and I have my dignity when I hang it up, whether or not a person has agreed to contribute anything," Street said.

"There is no quid pro quo in this business for me. I can tell you I have not promised a single piece of business to any person or group at any time to date, and I don't intend to promise anybody anything."

To some donors, just getting the chance to ask for city business is enough of a return on their dollars.

"I think they want access. They want to be able to make their argument," Street said.

Firm makes 'various commitments'

to be 'a part of the community'

Executives at Lombardo & Lipe, an electrical contracting company from East Stroudsburg, Monroe County, invested $10,000 in Street's mayoral campaign in 1998.

"It's part of being in town," company president Fred Lipe said in an interview. "We don't take any strong political positions. We just feel that, to be a part of the community there, you have to make various commitments."

City records show that Lombardo & Lipe has been paid $13 million since 1995 for its work on terminal improvements at Philadelphia International Airport. Lipe said the company intends to seek more city work.

Lombardo & Lipe's contribution pales in comparison to the $500,000 given to Street's campaign since 1991 by just 10 Philadelphia law firms. Most of that money was donated for his mayoral campaign.

Law firms get a great deal of work from the city. In 1996 and 1997, the 20 firms with the most work collected nearly $50 million from the city and related agencies. The work included serving as bond counsel, and representing the city in civil rights lawsuits, workers compensation cases, and other matters.

Lawyers said that political contributions also help them gain informal access to city officials, and create relationships with those in government. That helps land clients.

Among Street's biggest campaign donors is Ballard, Spahr, Andrews & Ingersoll, long a player in city politics. The law firm is especially close to Rendell, who worked closely with Street during his Council presidency and has endorsed him for mayor.

One Ballard lawyer, David L. Cohen, managed Rendell's 1991 mayoral campaign, and became his chief of staff in City Hall. Cohen is now chairman of the firm.

The firm, its top lawyers, and their spouses have given Street's campaign fund more than $119,000 since 1991. The firm has also contributed to Katz, though on a smaller scale.

Cohen said he and other top partners think highly of Street.

"I have gotten to know John Street very well. I consider him a friend. We socialize with our wives," Cohen said. "I have gotten to see his abilities and talents, and I think he would make an extraordinary mayor."

Architect Cheryl McKissack and entrepreneur Willie Johnson also have supported Street's campaigns generously. They are members of an investment group that is trying to buy a piece of a local cable-television franchise, an acquisition that will require approval from the next mayor and Council.

McKissack, of East Falls, has a $150,000 no-bid contract for improvements at the airport.

Johnson is a former social worker whose Philadelphia company, PRWT Inc., is a $30 million enterprise with 900 employees across the country. The company specializes in doing customer-service work for larger companies and nonprofit groups.

Johnson began PRWT in 1988 with a subcontract to handle ticket payments for the Parking Authority. He still has that job, among other government contracts around the nation.

While his company grew, Johnson put together a group of investors wanting to buy a piece of Wade Communications, the cable franchise owned by Time Warner Inc. that serves 61,000 local subscribers. The firm's franchise with the city will expire next year.

Since 1995, Johnson, along with several other PRWT staff members, have given Street $45,000. Since 1996, McKissack and her associates have given Street nearly $25,000. Johnson and McKissack declined to be interviewed.

Bill Wilson, owner of Synterra Inc., a landscape architecture and planning firm in Germantown, is one of Street's largest contributors, and serves on his campaign finance committee, raising funds from others to help Street. Since 1996, Wilson, Synterra employees, and a PAC he formed have given Street $56,500.

Before giving, and since, Synterra has had a series of city contracts. Last July, Synterra finished a $1.25 million contract to help the Norwegian ship builder Kvaerner Group fix up the former Philadelphia Naval Shipyard. The city owns the yard, and is overseeing its commercial redevelopment.

Synterra also has a contract to do site design for two new airport terminals, was paid nearly $200,000 for water-testing work, and monitors construction projects for the Philadelphia Industrial Development Corp., the economic development arm of city government.

Wilson said he contributed because he likes Street and respects him as "a man of conviction, with strong values."

Wilson also has invested $700,000 in the Philadelphia Marriott, the city's convention headquarters hotel. Wilson wants to protect that investment, and sees Street as a worthy successor to Rendell, able to promote the city as a convention destination and fill hotel rooms.

"My wife and I are really very quiet people. We're not looking for glory," he said. "We feel the only person who can really keep Philadelphia moving forward is John Street. We made a conscious decision to do whatever we could to help him."

One person hoping for a major development deal is Bill Giles, part-owner and chairman of the Phillies. Giles and the team have given Street $23,000.

Giles contributed to all the mayoral candidates in the May primary, including Katz, and he did not mince words as to why, saying: "It helps to be on good terms with the boss, so to speak."

Jeffrey Lurie, owner of the Eagles, and the Philadelphia Eagles Limited Partnership have given Street $36,200, including $25,000 in May. The Eagles also gave $9,000 to two political action committees that contributed to Street and other politicians.

S.R. Wojdak & Associates, the city's leading lobbying firm, has been a steady Street donor over the years. The firm's varied clients include Bell Atlantic, Peco Energy Co. and the Eagles.

Since 1991, the company's founder, Stephen Wojdak, a former state legislator, has given Street $19,000, while company PACs have given another $15,000.

"We're in the business of representing clients before both City Council and the legislature," said Joe McLaughlin, a lobbyist at Wojdak and a deputy mayor under Mayor William J. Green 3d. "And it would not be a reciprocal [relationship] if we brought them tough issues, and then, when it was time for them to get reelected, we said we were not going to be helpful."

McLaughlin said contributions "do not guarantee results," but they do help provide access.

"I think it's normal," he said, "for someone to be responsive to someone who has been supportive of them."




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