Coin-Operated Politics | News | Pittsburgh | Pittsburgh City Paper

Coin-Operated Politics 

On Feb. 4, former Pittsburgh City Councilor Twanda Carlisle was given a 12- to 24-month sentence for her involvement in a kickback scheme. Carlisle pled "no contest" to charges that she used money earmarked for her district to have cronies perform trumped-up services. In exchange, her "contractors" returned some $43,000 to Carlisle herself, to be deposited in her personal account or in the coffers of her political campaign.

Carlisle has lost her job and reputation, and will soon lose her freedom. But put aside the crudeness of Carlisle's schemes: Is what she did -- swapping city money to fatten her own coffers -- really so unusual?

To listen to city Councilor Bill Peduto, you might think "maybe not." In Pittsburgh as elsewhere, Peduto says, officials routinely trade contracts and other special considerations for fat campaign contributions -- an arrangement Peduto calls "pay to play."

"When developers are selected for projects without [open competition]," he says by way of example, "the people who benefit are the largest contributors."

Consider, for starters, the contributions garnered last year by Mayor Luke Ravenstahl. Ravenstahl reaped more than $1 million in campaign contributions, thanks in no small part to area developers. Boston-based Beacon/Corcoran Jennison is invested in a mixed-income project in the Hill District; its executives gave the mayor $23,000. Millcraft Industries, which is renovating the shuttered Downtown Lazarus department store, gave the mayor at least $10,000. Execs with Walnut Capital, a local firm developing East Liberty's Bakery Square project, gave $16,000.

In politics, "the modern golden rule is, 'He who has the gold makes the rules,'" says Barry Kauffmann, of Common Cause, a statewide watchdog group. "Everybody admits that a contribution gives people access. If there are five people waiting to see you in your office, the big donor will be the first one you talk to."

Pennsylvania is one of a dozen states that impose no limit on the size of a check a politician may receive. But last month, Peduto introduced a measure to impose such limits on himself and other city officials.

A public hearing on the bill has been set for Tue., Feb. 26, at 2 p.m. in city council chambers. But some are already challenging its premise.

A development like "Bakery Square is a tremendous project," says mayoral spokesperson Alecia Sirk. "With all the investment happening there, there's no way you can say it's not worth doing." Compared to the benefits of projects like Bakery Square or improving the Hill, in other words, campaign contributions don't even register as an incentive.

Even those who sympathize with Peduto's efforts don't entirely share his perspective. "I don't think it's realistic to pick out Walnut Capital or any one contributor," says city council President Doug Shields. "You're only looking at just one facet of the diamond, and they're a good developer." (Has Shields, whose Squirrel Hill district includes several Walnut Capital developments, accepted Walnut contributions? "Oh, aaaaaab-solutely," he says.)

Peduto is unbowed. After Carlisle's travails, Ravenstahl's high-profile re-election bid, and the victory of three new council members last year, he says, voters want accountability. "And campaign reform is at the root of every other reform," says Peduto. "The field needs to be leveled."

Doing so, however, may require a bulldozer. Or the sort of public pressure money can't buy.

Peduto's bill is a two-pronged attack; it limits both the size of contributions and the total amount a politician can raise. It applies to both individual givers and PACs -- political action committees that bundle up donations from like-minded donors. Under the measure:

-- No individual could contribute more than $2,500 a year to any city candidate. No PAC could contribute more than $5,000 a year to any city candidate.

-- Any contributor who made a maximum donation would be barred from receiving a city contract, unless it was through an open-bidding process.

-- Candidates could raise only so much money in years when the office was not up for election. In an off-year, mayoral candidates could raise only $250,000; city controller aspirants could raise only $100,000; council candidates would be limited to $75,000. (There are no limits on what a candidate can raise the year an election is held.)

-- While there would be no limit on a candidate spending his or her own money on a campaign, if a candidate spent more than $250,000 of such money, then the limits above would be doubled for all candidates.

-- The city's ethics board would investigate alleged violations of the limits, and the city solicitor would be authorized to seek a court injunction against anyone who doesn't play by the rules.

-- All reported contributions would be posted online by the city controller.

Peduto first proposed the measure in 2004. It was crafted with groups like Common Cause and modeled after a similar bill in Philadelphia. But the Philly limits were challenged in court, and the Pennsylvania Supreme Court upheld them only in late 2007. Peduto reintroduced his bill last month, but it's not necessarily being welcomed more warmly this time.

The most common objection is that such reforms should be implemented statewide, or at least across Allegheny County. (As it stands, the measure wouldn't even apply to Pittsburgh school-board candidates, over whom city council has no jurisdiction.) Freshman city Councilor Bruce Kraus, for example, says that while he's keeping "an open mind," he leans "toward a statewide reform. Otherwise, it could give city candidates a disadvantage going against candidates from elsewhere." A city councilor running for state treasurer, for example, would be hobbled by yearly contribution limits; a county councilor, though, could raise unlimited sums and transfer them to a statewide campaign.

Others fault Peduto's dollar limits. Some complain they aren't indexed for inflation; others wonder why city controllers are held to tighter limits than the mayor, when both offices require citywide campaigns.

But the biggest objection is philosophical. Politicians and donors alike insist that money follows political leadership -- not the other way around.

"The folks who are actively engaged in the city have made a commitment to be here," says mayoral spokesperson Sirk. "I hate to use the phrase 'protecting your investment,' but you're going to support leaders you believe will create situations that maximize it."

"It all depends on the office-holder -- how susceptible are you to that influence," contends council President Shields. "I make it clear from the get-go: I'll meet with you whether you give me a campaign contribution or not. But if you thought I was going to unlock the safe, that doesn't happen."

Donors too downplay the significance of their donations.

"I don't think a contribution has any outcome on decisions," says Jack Shea, who heads the Allegheny County Labor Council. Unions contribute widely to local campaigns (though generally at levels well below the maximums set by Peduto's bill). But Shea says such gifts do little to sway officials. "I think the elected official's personality guides decisions," he says. Sure, the Fraternal Order of Police might give $5,000 to a favored candidate, as they did last year to Republican Mark DeSantis. But labor's real muscle, Shea says, is "the fact that we're organized. We're very active, and very vocal."

So why donate at all? About all anyone will concede is that a contribution might buy a bit more access. As Shea puts it, "Maybe phone calls get returned quicker."

"There are people who contribute because it might give them a chance to get in front of an official and pitch something," agrees city Controller Michael Lamb. However, he adds, "I think a number of things motivate contributions." Among the biggest local givers are business executives whose corporations -- banks and steel companies, for example -- have little to gain from the city. For them, Lamb says, "It's not so much about their business as about the civic agenda. You'll see very responsible business leaders writing big checks because they want to be able to call the mayor."

Finally, he says, people contribute because ... people contribute. "There's a general consensus, that it's good business to have relationships with elected officials," Lamb says.

And even if contributors don't think a contribution gives them an "in," they don't want to be shut out. Hence some of Shea's wariness about Peduto's bill. Limiting PACs may disproportionately hurt labor, he cautions. Corporations can always get around PAC limits by having well-heeled execs "max out at the $2,500 individual level," but "Our members have to scrape together our nickels and dimes. I know what the other side says, but we don't spend dues money to give to candidates. The PACs are voluntary contributions, and people are giving a few cents a paycheck."

Still, says Lamb, "you have a citizenry who believe -- and sometimes rightfully so -- that all politics is about money." And while Lamb says he hasn't studied Peduto's measure too closely, "it at least attempts to say, 'We won't allow some big shot to throw down $100,000 and call the shots.'"

The real cynics, though, wonder whether any reform will keep big donors from trying.

"There's no doubt that people who give money want returns," says Morton Coleman, director emeritus of the University of Pittsburgh's Institute of Politics and a former city official. "The question is whether [Peduto's reform] will control that influence. The money always finds some loophole."

Doubters point to the federal level, where donations are capped and where the most recent attempt to reform campaign financing was the Bipartisan Campaign Reform Act of 2002. Better known as "McCain-Feingold," after its Republican and Democratic sponsors, the reform was needed because of how political contributors had responded to previous reforms. Earlier laws had limited the money donors could give to individual candidates, and so donors started giving to political parties instead. McCain-Feingold limited those "soft money" contributions as well ... but donors quickly found other ways to exert influence.

Just two years after McCain-Feingold became law, shadowy entities -- called 527s -- began appearing on the political landscape. The best-known of these, SWIFT Boat Veterans for Truth, helped derail the 2004 presidential run of Democratic nominee John Kerry. Named for a provision in the federal tax code, "527s ... raise unlimited [sums] for voter mobilization and certain types of issue advocacy," according to the watchdog group Center for Responsive Politics. What's more, 527s are not subject to the same financial disclosure that governs more traditional entities -- making the influence of money even murkier.

"McCain-Feingold didn't do what it was intended, and the next thing you know, you've got these mysterious 527s," Shields summarizes. Whatever flaws there may be in the current no-limit system, he says, at least donors don't have to find backdoor means of influencing elections -- which makes it easier to track their efforts. "There is something to be said for the clear light of day about who funds a campaign," Shields says.

To some, the notion of 527s infiltrating Pittsburgh seems absurd.

"It's a different game at the local level," says Mark DeSantis, the Republican who ran for mayor last year. "Saying reform will create these third parties at the local level makes me want to chuckle. In fact, I'm chuckling now. Can you hear me? Ha-ha-ha-ha-ha."

But Philadelphia, which passed its own reforms in 2003, has already seen such trends emerge.

"We had some 527s emerge shortly before the [2007 mayoral] election," says J. Shane Creamer Jr., executive director of Philadelphia's ethics board. "One of them seemed to target Michael Nutter [who won the race]; another two targeted [challenger] Tom Knox. I think they were just a minor force, a minor disruption" even though "those groups had less financial disclosure than people were used to."

Still, reformers say that Philadelphia's experience with finance reform has been positive. Even though Philly's law was only upheld by the Supreme Court in December, it was in effect throughout the city's 2007 mayoral campaign. And "It's had a seismic effect out here," says Zack Stalberg, president of the Committee of Seventy, a non-partisan Philadelphia watchdog group.

Stalberg says that in both 1999 and 2003, mayoral candidates spent roughly $12 million each on their campaigns, "give or take a million." Individual law firms and unions gave sums upward of half-a-million dollars ... more than it costs to run an entire campaign in Pittsburgh. But with the reforms in place, that all changed. "There was a lot less money spent on the media, and a lot more public forums," Stalberg recalls. "There were gatherings where you had four or five mayoral candidates in front of small groups of voters. It was really a throwback situation."

By Pittsburgh standards, the campaigns still spent prodigious amounts of money. Nutter spent roughly $7 million getting elected, while Knox -- who'd financed his own $10 million campaign -- dominated the airwaves. But that's less than in years before, and Stalberg says a cultural change is afoot. He recalls talking over lunch with a "middleman" -- one of the lobbyists and lawyers who help facilitate contributions and the favors given in return -- about whom he'd be supporting in the mayor's race. "He told me, 'I probably won't be in it; if the law stands, there won't be enough in it for me.' I about dropped my fork.

"There's definitely support throughout the community for this law," Stalberg adds. Even donors are seeing the upside: "It's saving them money, for one thing."

Fears that donors will seek an end-run around reform have an "element of truth," concedes Kauffmann, of Common Cause. "Money does always seek an opening. But I think a lot of loopholes in reform measures are put in there intentionally. Everything depends on the quality of the ordinance."

And "without any set of rules," Peduto adds, "you get the situation you have today."

But instead of changing the rules, some say, reforms should focus on making the game easier to watch.

"Campaign contributions are a form of political participation," says city Councilor Patrick Dowd, who won his post last year campaigning on a reform platform. "I don't want to discourage that, and this [reform] starts with the belief that contributions are nefarious. But what I do think is problematic is that there's not enough transparency. All our efforts should be toward putting [financial] information in a real-time, readily accessible format."

Currently, campaign contributions are recorded on paper, and filed with the county's Elections Department, Downtown. The documents are open to public inspection, but as Dowd points out, "The parking costs money, the copies cost money." Besides, "there are some people who are giving money to everybody, covering their bets." And since reports are filed by campaigns rather than by donors, "if I want to find out how many people Chris Potter gave money to, I can't" -- except by checking each campaign individually.

Putting that information online is a part of Peduto's reform everyone seems to like. The state and federal governments have such databases already, and Allegheny County is supposed to have that capability as well [see "Reporting Error".]

But for reformers, transparency could prove a double-edged sword. On the one hand, "transparency" means "making it easier to track contributions." But in itself, it won't reduce the size of the checks ... and it could even be an excuse to leave the current system in place.

The Ravenstahl administration, for example, hasn't taken a position on donation limits: "We'll pore over it when it comes to the mayor's desk," says spokesperson Sirk. But she adds, "We believe that transparency is the answer." The rise of 527s is "a possibility," she observes ... and at least under the current system of unlimited contributions, "The public knows who gave money, and to whom."

Peduto is under no illusions about the challenges ahead. Passing the bill "will be difficult," he says.

Council President Shields, for one, "has always been willing to support these initiatives, and I'm not ruling out anyone else on council," says Peduto. But it won't be easy to get the five votes he needs to put the measure before Ravenstahl.

In addition to Peduto and Shields, City Paper spoke with the three new councilors elected in 2007. Each ran on promises of reform ... but while all expressed sympathy with Peduto's goals and pledged to consider his bill carefully, none have embraced it yet.

Like Bruce Kraus, "I think it should be a state-wide or county-wide measure, to level of the playing field," says Councilor Ricky Burgess, who replaced Twanda Carlisle in District 9. Burgess says Peduto's limits wouldn't affect him -- "my biggest contributor was my wife" -- but he's not sure they could withstand a legal challenge. Philadelphia's limits were upheld by the courts, but Philadelphia is a combined city/county government, and elections are a county, not a city, responsibility.

"I'm in favor of forming some kind of blue-ribbon commission" to study the matter, Burgess adds. "I'm not sure you want politicians doing this themselves."

Peduto is also dogged by suspicions about his motives. Behind the scenes, there are mutterings that he's trying to position himself for a run at Ravenstahl in 2009. If Peduto neutralizes the mayor's fund-raising advantages, the thinking goes, he has a shot at doing what he couldn't do in 2007, when he abandoned a brief run for mayor.

Peduto counters that he first proposed the measure in 2004 ... and that "it didn't become any more important to me after the 2007 race."

It's also not clear how the measure would affect a 2009 race anyway. Ravenstahl's campaign already has $472,000 left over after a fairly easy 2007 campaign. Could Peduto's reform apply to donations made before it was passed? Or would Ravenstahl get to sit on nearly half a million dollars -- an amount Peduto's reforms would make even harder for rivals to match? Peduto says such questions are open to debate. But he maintains that "if anybody on council would be affected by this reform, it's me."

Peduto himself garnered the biggest check of the 2007 election season: a $50,000 gift from William Benter, who owns a medical-transcription service. And while his campaign is currently $6,000 in the hole, he has garnered numerous other four-digit contributions. "Other than Doug [Shields, who also ran for city controller last year], I'd bet no one else on council has ever gotten a $2,500 amount," Peduto says.

Actually, had his bill been in place last year, several of the contributions it would have barred were given to reformers ... the very people whose support he needs.

In 2007, for example, Dowd raised nearly $106,000 for his run against incumbent Leonard Bodack. A hefty $5,000 of that came from real-estate developer Chris Hollingshead just days before the May primary. Dowd notes that "the average dollar amount of my contributions is really low," and nearly half of his support was in amounts of less than $250. But Bodack raised less than half of what Dowd did, and none of Bodack's 2007 fund-raising would have been affected by Peduto's bill. (Bodack was, however, sitting on a $76,000 war chest at the outset of the campaign.)

In District 3, meanwhile, Kraus ran a reform campaign while out-fund-raising incumbent Jeff Koch. Koch raised just over $26,000, roughly $10,000 of which was from contributions of less than $50. Kraus raised more than that from a single contributor; a client of his interior-design business, Atlanta-based businessman Todd Nelson, gave Kraus $15,000.

And what about last year's mayoral race? DeSantis barely campaigned until June but still managed to raise more than $400,000. He did so in part thanks to $30,000 from two Republican PACs. Friends and associates were also generous: Internet entrepreneur Glen Meakem, for example, contributed $10,000.

DeSantis draws a distinction between his backers and Ravenstahl's. "What kind of business were my supporters trying to get?" he asks. He adds that he'd happily have sacrificed his biggest donations if Ravenstahl had done the same. "It's fine if we're going to play by the same rules."

Dowd, however, contends that the field is already tilted in favor of incumbents ... and that limiting contribution amounts could make it even harder to catch up.

"I had to raise over $80,000 to get this done -- and we still just barely won," Dowd says. "It's already hard enough to raise money. If we start putting limits on, you're limiting the resources outsiders can mobilize. Rather than encouraging participation -- either from contributors or candidates -- this might have the opposite effect."

Peduto's bill does have one thing going for it: Unlike in Philadelphia, where mayoral campaigns cost eight-digit sums, Peduto's measure wouldn't have a significant effect on local races. At least not for now.

"One way to look at this, through purely political eyes, is to match up the law against your contributions history," says Shields. And despite a few high-dollar contributions here or there, "I don't see how this will hurt anyone's ability to raise money, particularly at the council level. It's a $5,000 limit for PACs, but if you look at PAC contributions in council races, they almost never even approach that."

"Reformers could say the limits are too high," Peduto concedes. At the same time, though, people are casting aspersions about establishing any limits at all.

"Everyone keeps saying there must be a hidden motive," he grouses. "There isn't. I may not be able to run for mayor again, but I do have the power to make the system fairer for the next guy."


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