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Philadelphia Mayor John F. Street’s recent executive orders regarding ethics in City Hall could change the way local law firms do business with the city. Lawyers seeking city business may no longer court members of the mayor’s administration with gifts or meals. In addition, the revival of the city’s board of ethics could lead to changes in campaign finance reform and in how contracts are awarded to professional service firms. In announcing the orders last week, Street said that the city will try and open up its contracting process for professional services, such as those provided by law firms, to more competition “while still retaining an important level of discretion for government decision-makers.” But the mayor noted that the nature of legal services limits the amount of competition the city could introduce into the bidding process. “I have said before that hiring lawyers is not like buying widgets,” Street said. “However, I remain open to ideas for increasing competition in professional services contracts generally.” Street said that he has asked three cabinet members to work with the newly formed board of ethics in producing such recommendations. The two executive orders comprise Street’s first major response to the bugging scandal at City Hall. When a listening device planted in the mayor’s office by the FBI was discovered in October, it made public an investigation into how the Street administration conducts business, with a specific focus on the pay-to-play culture of city government. It culminated earlier this summer with the indictments of influential lawyer and fund-raiser Ron White and City Treasurer Corey Kemp. One of the main charges levied against Kemp was that he accepted gifts from White in exchange for access to city government. The reconstituted board of ethics was recommended by the 12-member ethics committee — led by Common Pleas Judge Ida Chen — that the mayor created to restore faith in city government after the bugging scandal. Chen’s committee made several recommendations, one of which was to resurrect the ethics board, which was started more than 40 years ago by Mayor James Tate. The board was virtually disbanded in the 1970s by Mayor Frank Rizzo but was reconstituted by his two successors before petering out during the Rendell administration in the 1990s, according to Gregory Harvey, partner with Montgomery McCracken Walker & Rhoads and chairman of the ethics board during the 1980s. The new five-member ethics board includes four lawyers. Charisse Lillie, a partner with Ballard Spahr Andrews & Ingersoll, serves as chairwoman. The other members are solo practitioner and former city councilman Daniel McElhatton, Superior Court Judge Phyllis Beck, City Solicitor Pedro Ramos and the Rev. James Allen. Allen and McElhatton were all members of Chen’s committee, while Ramos, as city solicitor, was an adviser. Beck is the newcomer, but she has experience with reform as the former chairwoman of the state’s judicial reform taskforce. All members save for Ramos will serve staggered terms of four years. The city solicitor will always occupy one seat on the board. Street has directed the board to ensure compliance from city employees on all ethics laws. The mayor has also given the board several new responsibilities, including regular education and training of city employees on the city’s ethics rules and regulations; constant review of financial disclosure forms for possible conflicts of interest; reviewing ethics questions relating to the conduct of city officials; and reviewing campaign finance documents filed by candidates for city offices. The mayor also announced that he planned to support a series of initiatives dealing with ethics reform: When the city council reconvenes on Sept. 23, Street will ask it to pass into law a new code of ethics, the first draft of which was written by Chen’s committee in March. Street will also seek to change the Home Rule Charter to create stronger enforcement powers for the board. The charter change must be passed by the council and then approved by voters in a ballot question. The Street administration will advocate statewide campaign finance reform legislation in Harrisburg, Pa., this fall, particularly on the issue of “pay-to-play” reform. Chen’s ethics committee offered several suggestions for dealing with city contracts, which will presumably be considered by the new ethics board. One such suggestion was requiring city managers to consider no fewer than three firms when awarding no-bid professional services contracts. The committee also suggested changes designed to enhance confidence in municipal contracting and decision making, such as prohibiting renewals of one-year contracts without the city council’s approval. Of particular interest to law firms is a suggestion by the Chen committee that the basis for awarding a contract to a particular firm should be made public. Because much of the public believes there is a direct correlation between political contributions and the awarding of contracts, the committee believes something needs to be done to erase that perception. It suggested that donors exceeding an undefined threshold could not be granted city contracts. McElhatton said the issue of banning law firms that have made campaign contributions from seeking city contracts would be a difficult issue for the board. He wondered aloud whether the city would be spiting itself by eliminating quality law firms from city work just because one of its partners raised money for the mayor. Cozen O’Connor managing partner Tad Decker said while he understands the need for reform, he’s not so sure it’s a great idea to keep a firm from city work for making campaign contributions. “I was personal friends with Ed Rendell and I contributed to his campaigns when he ran for district attorney and mayor,” Decker said. “Should my firm have been debarred from doing city work? “I think there has to be some consideration for what the client wants. And if a city manager has a good relationship with a lawyer and the lawyer does good work, why create problems by cutting that lawyer out of the loop?” Decker continued, “It’s one thing if a firm has made an extraordinary contribution. I don’t have a problem with a reasonable cap but you can’t cut someone out because one of their partners gave $500.” Decker said that the real problems arise when a contributor attempts to wield influence over public policy. “If you want to be city solicitor, then become city solicitor. If you want to be managing director, then become managing director,” Decker said. “But if you don’t have the job, then don’t try and [unduly] influence the person that does.” Most other Philadelphia law firm managing partners had little to say on the record. “I think anything along those lines that clears this up is good for the city,” said one large law firm managing partner, who asked not to be identified. “I think we look silly from a national perspective. Not accepting favors seems so obvious. It seems to me that if an employee violates something like that they should be subject to termination. You don’t need a committee to tell you that.” Duane Morris chairman Sheldon Bonovitz said his firm does not do a lot of city work, but he views Street’s changes as welcome. “I think the investigations and indictments clearly were a call for reform and that’s what this is from the mayor,” Bonovitz said. “If Philadelphia has a reputation [for not being fair in awarding city contracts], then it will hurt, because no business is going to want to come to the city if they don’t think there is a level playing field.” In terms of the gift ban, while vendors such as law firms are not subject to fines like city employees are, they can suffer an even worse fate: They can be debarred from receiving city contracts. So law firm partners will have to cross city officials off their guest lists when dining at The Palm or using their luxury boxes at Phillies and Eagles games. McElhatton said problems arise when the gift is less overt. “You might have a scenario where a lawyer and his firm are working with a member of the administration on a project and they become personal friends,” McElhatton said. “Then the city employee becomes ill and is admitted to the hospital. The natural reaction from the lawyer might be to send flowers. But the city official probably should think twice before accepting them.”

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