City Council 'walking-around money' aided McDaniel's wife
[ politics ]
Recently, the public has learned of the special treatment — in the form of a patronage job paying $87,125 per year — afforded to John McDaniel, the politically connected former campaign manager for Councilwoman Blondell Reynolds Brown, who kept his job at the city while bringing home $100,000 a year from a political-action committee and stealing from Brown’s campaign.
Now, it appears that his wife, Judith Dumorney-McDaniel, has also benefited from thousands of dollars funneled her way by political friends. The source of that money? The Philadelphia Activities Fund, an obscure, $1.98 million grant program known as a source of “walking-around money” for Philly’s 10 district City Council members to dole out to constituents — and to connected friends.
Last year, CP reported on the existence of that fund and its apparently unchecked control by Council members [“One-Man Show,” April 5, 2012]. Today, the fund persists without any new forms of oversight, keeping political exploitation easy and nearly certain.
Activities Fund records indicate that Dumorney-McDaniel received $8,000 from 2009-’11 for a nonprofit she runs called Teenagers in Charge (TIC). $2,250 went to a nonprofit she founded called Philadelphia Mocha Moms. A third, apparently defunct organization with which she was formerly affiliated, American Cities Foundation, accepted $4,000 in grants. Some of TIC’s money was even transferred to the political-action committee her husband ran and admitted to stealing from, according to campaign-finance records.
It’s an ironic twist, given that the Activities Fund was set up to put an end to taxpayer-funded gifts directed by cronyism. And it turns out that one of the original architects of the Activities Fund was Mayor Michael Nutter himself.
But first, some background: The Activities Fund is really just a pot of money nestled deep within the Department of Parks and Recreation’s annual operating budget, nominally designed to help community-based organizations supplement programming at rec centers. Think little-league teams or after-school dance classes.
However, a lack of protocols and oversight has led to the money being used to fund more than 1,000 small grants each year, going to things as varied as a for-profit newspaper, private day-care centers, Mummers clubs and, in one case, a nonoperational police substation — in short, whatever a district councilperson feels like funding. As CP reported last year, Activities Fund dollars were directed to a Democratic committeeman, Shawn Kelly, who presented himself as the head of a (nonexistent) 501(c)3 and community organization. After Kelly attempted to derail neighborhood zoning meetings to halt a large development project, it was revealed that there was no such group beyond Kelly himself. His “activities” were limited to organizing neighborhood cleanups and tree plantings near his own home. For those efforts, Kelly received $2,000 per year. Councilwoman Jannie Blackwell, who installed Kelly as a committeeman in 2006, approved his grant applications.
The case exemplified the question that swirls around many Activities Fund transactions: Was this the city funding a service, or just a politician directing cash to a loyal supporter?
Nutter, known as a reform-minded mayor, was quiet on the subject last year, referring queries to Parks and Rec. But former Coun-cilman Dan McElhatton, who co-sponsored the legislation that created the fund with Nutter, says this is Nutter’s baby as much as anyone’s. “I was one of the councilmembers who was instrumental in the establishment of the Fund. I advocated for its establishment and its structure,” he says. “Michael’s role was identical to mine.”
The Activities Fund was designed to replace a previous scandal-ridden grant program that also operated, in part, out of Parks and Rec. The earlier program centered on “Class 500 grants,” a reference to the grants’ designation in the city budget. That program gave Council the power to dole out large sums with no oversight. At the program’s peak in the late ’80s, Council steered $15 million to Class 500 grants. In 1987, the program came under heavy scrutiny after the Daily News revealed that then-Council President Joseph Coleman had funneled $500,000, via grants to two nonexistent youth groups, into an account he controlled. The ensuing scandal and dwindling city finances led to the program’s dissolution in 1990.
But, just four years later, McElhatton and Nutter were pushing then-Mayor Ed Rendell to reintroduce a new, reformed version of the Class 500 grants. That would eventually become the Activities Fund. Appealing to Rendell on the grounds that the grants were critical to rec centers’ operations, the councilmen proposed a new system. “There was supposed to be a board that would independently review and recommend to council members grants to organizations within their district,” says McElhatton.
In addition to a review board, Nutter proposed that the new program gain access to a direct funding stream from the revenue to be generated by the Wells Fargo Center, then still under development.
But Nutter’s vision, both for a sustainable revenue stream and for an oversight board, would be short-lived. While the Activities Fund technically has a board, mayoral spokesman Mark McDonald says it has not met in over a year. The seven-seat board currently has just three members: Parks and Rec Deputy Commissioner Susan Slawson, Councilman Brian O’Neill and Councilwoman Cindy Bass. A council insider indicated that O’Neill’s term expired some time ago, and Council President Darrell Clarke had not gotten around to renewing it.
If the apparently nonfunctioning board still has a role, it is unclear. Numerous sources acknowledged that the majority of grant applications are now handled solely by district council members.
McDonald says “the Mayor [is] in the process of appointing new board members,” and notes that a restored board will be better able to “oversee” the fund. However, he indicated that grant applications would still go through district council members first. “[Nutter] has no interest in eliminating the program” or radically reorganizing it, McDonald says. “He believes it to be a good program.”
It seems the nearly $2 million fund will continue to be administered at Council members’ discretion — which means that politically connected types may continue to have an edge.
Dumorney-McDaniel’s group, Teenagers in Charge, was founded the same year the Activities Fund began disbursing grants, 1995. Only three years of Activities Fund records have been made public through a right-to-know request, but TIC received grants for each of those cycles. Additionally, a chapter of a parents’ group called Mocha Moms that she founded also received grants each year.
TIC appears to be an active community organization that hosts weekend events at a rec center in the McDaniels’ neighborhood, as the money was intended. But the politics of how that money reached Dumorney-McDaniel remains elusive. Grants to groups she was associated with were steered her way by former Council President Anna Verna, Councilman Curtis Jones Jr. and Blackwell.
TIC also receives funding from other seemingly unlikely sources, including the labor union McDaniel lobbied for (Laborers Local 322) and the politically connected Linebarger Goggan Blair & Sampson, a law firm contracted by the city to handle some delinquent-tax collections. TIC also got money from the city’s Office of Supportive Housing, though officials would not say why or how much.
Campaign-finance records indicate that TIC transferred $340 to Progressive Agenda PAC, one of the entities John McDaniel admitted to stealing from. In an email, Dumorney-McDaniel said that was a “reimbursement,” after the PAC “rented a 15-passenger van for our youth organization to attend a Youth Summit in Allentown … through its corporate account.”
A local expert in nonprofit law called such an exchange “very unusual.” Similar monetary transfers have been controversial at the national level, as they are often accused of being used to mask questionable nonprofit donations to super PACs.
Dumorney-McDaniel did not respond to further questions.