On Thursday, December 9, 2021, the KYW Newsradio reported that the Philadelphia Board of Ethics approved a settlement agreement with Larry Krasner’s re-election campaign for campaign finance violations. Throughout their bid for reelection, the Krasner Campaign had partnered with the Real Justice PAC for its staff to perform services and work for the campaign, which was paid for in advance by the campaign. This was covered heavily by the Philadelphia Weekly, the Philadelphia Law Blog, as well as Broad + Liberty, yet no action was taken before Krasner was able to gain an illicit advantage against his primary opponent Carlos Vega (D), and in the general election race against Charles Peruto (R).
Shane Creamer, the executive director of the Board of Ethics, told KYW Newsradio that Real Justice PAC failed to properly disclose information including how its workers were being paid, and that the Krasner campaign paid Real Justice PAC in advance and the workers were being paid directly by that political action committee.
“They are two separate agreements, but they do happen to relate to each other in that they were disclosure violations related to this agreement that they had between each other,” Creamer said. “The public didn’t have adequate information about how these staff workers that were provided by Real Justice PAC and were working on the Krasner campaign were being paid.”
In the nation’s most violent big city – sometimes “I told you so” is not good enough.
In an article entitled “TRANSPARENCY: WHERE’S PHILLY’S FISCAL WATCHDOG?” the February 18, 2021 issue of PW, this author wrote:
“The ethics board cites violations in relation to campaign finance laws, but the fines are normally negligible, leaving violators to simply pay their fines as a “cost of doing business,” so they can be re-elected despite their violations.”
This sentence prompted a “shout back” response from Shane Creamer, which appeared in the following week’s edition, accusing PW of “missing the mark”” on the Board of Ethics. In his response, Creamer wrote:
“The Ethics Board is independent of the administration and has the authority under the city’s Home Rule Charter to administer and enforce the city’s Public Integrity Laws, which include the Ethics Code, Campaign Finance and Lobbying Laws and political activity restrictions in the Charter. The Board has subpoena power and a dual enforcement track, meaning it can either enforce the City’s Public Integrity Laws by Administrative Adjudication or by going to the Philadelphia Court of Common Pleas. As an independent Charter agency, the Board has jurisdiction over all of city government.
Mr. Mannes also suggests that the Ethics Board’s fines are limited only to campaign finance and that the fines are “normally negligible.” This claim is not accurate. Apart from the fact that any City agency’s fines – including the Ethics Board’s and any future independent inspector general that Mr. Mannes argues for – are limited to $2,000 per violation by state law, the Ethics Board has leveled significant fines for campaign finance, ethics, lobbying and political activity violations when appropriate.
Perhaps more important than the amount of any fine, the Ethics Board has held elected and top government officials and others accountable for violations of the City’s Public Integrity Laws since it was established 14 years ago.”
Statutorily, Creamer’s response is true, but the budgetary constraints, low sanctions thresholds, and inaction by prosecutors like the Pennsylvania Attorney General leave the Ethics Board with no way to respond to the blatant campaign finance violations reported as early as February, in numerous outlets before the election. Furthermore, Creamer response to PW’s assertion that Ethics Board fines “are normally negligible, leaving violators to simply pay their fines as a cost of doing business, so they can be re-elected despite their violations” is inaccurate is refuted by the fact that, for the second time Krasner and his supporters violated the law, got reelected, and paid fines after the fact with no sanctions thereafter. Moreover, the $40,000 of fines in the Krasner campaign/Real Justice PAC settlement pales in comparison to the roughly $500,000 reported to be pumped into the Krasner Campaign by Real Justice PAC before the May 2021 primary election.
PW contacted Mr. Creamer for comment, and what we learned was that these seemingly low accountability thresholds were not based on a perceived choice or inaction by the Board of Ethics, but because the Mayor and City Council have essentially set up both of its oversight agencies for failure.
“The Board of Ethics currently has no full-time enforcement staff,” Creamer said, who described an agency responsible for all municipal campaign finance, political activity, and ethics violations that only has eight staff members. “In 2006, we had $1M in funding when the Board of Ethics was founded, then we were cut 20% in 2008 with the financial crisis. Now we are back to $915,000,” Creamer said.
When asked if candidates who continually violate campaign finance laws should be removed from office, Creamer said that “removal from office has never been on the table regarding campaign finance violations, and only one official has been removed in their history – for political activity violations.” Creamer continued: “…and the ability to remove from office for political activity [while on city time] was removed in the last charter revisions.” Creamer has confirmed that his office has made criminal referrals to the State Attorney General and US Attorney’s Office in the past but could not give specifics on who and when.
Thus, the city has an Ethics Board with independent authority and an Inspector General without independent authority, both of which have been starved of resources to the point where they have been rendered ineffective. It leaves them no match for political operations with deep legal and fiscal resources like Real Justice PAC, George Soros, and the Krasner Campaign. Regarding Krasner, Creamer stated he could not comment on ongoing investigations or settlement negotiations, but stated he was not aware of more than what was detailed in last week’s settlement.
As the US Attorney declined to comment, and Attorney General Josh Shapiro’s office failed to respond to PW’s request for comment; it is not known whether Krasner’s campaign was ever investigated for the possible criminal behavior reported preceding the 2021 elections. This includes reports of campaign payments of $70,000 by Krasner’s campaign in ”marketing expenses” to a group called The Social Practice LLC, which shares the same address — 3041 Mission St. in San Francisco — and at least five lead staff members, with Real Justice PAC. The appearance that the Krasner campaign received both funding and marketing consulting from the same individuals who comprise a PAC could constitute an even greater violation of laws banning coordination between campaigns and PACs then was detailed in the Ethics Board settlement.
Additionally, property records show that Larry Krasner personally owns a 40% interest in Tiger Building, LP, which owns 1221-23 Locust Street in Philadelphia. In 2020-21, Tiger building’s tenants included Krasner’s campaign headquarters, which paid $29,450 in rent, as well as Real Justice PAC, who also paid rent at that same location. That means that not only is Krasner’s campaign paying rent to Krasner’s own real estate investment, but one of his largest PAC donors seems to be doing so as well. Add to that the fact that it is illegal for PACs and candidates to coordinate directly, and this arrangement raises all kinds of red flags.
Philadelphia consistently underfunds and places low thresholds for accountability on the agency responsible for enforcing campaign finance and political activity violations speaks volumes as to why corruption scandals are so frequent here.
It’s up to Philadelphia voters to demand more funding and oversight for city and state watchdogs. This extends to our state government as well, as we should be asking our state Attorney General (and Democratic candidate for Governor) to address these issues as the responsible law enforcement officer with jurisdiction over allegations against our District Attorney.