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Ethics Board: Blondell Reynolds Brown used campaign funds to pay back personal loan
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Ethics Board: Blondell Reynolds Brown used campaign funds to pay back personal loan
The City's Ethics Board just announced a settlement with Councilwoman Blondell Reynolds Brown, and it's a convoluted one. There are a bunch of different campaign-finance law violations in play here, resulting in 165 material omissions and six material misstatements in her campaign committee's reporting over the 2011 election cycle.
But here's one of the strangest: Brown borrowed $3,300 from Chaka Fattah Jr. to help avoid foreclosure, didn't report that money, and then had her campaign committee pay Fattah back. According to the report, she repaid her campaign committee this past April, and then finally disclosed the issue to the ethics board.
Brown's campaign also accepted over-the-limit contributions from a PAC, called Progressive Agenda, and from its de facto treasurer John McDaniel (who was also Brown's campaign manager). "McDaniel did not tell Councilwoman Reynolds Brown that he and Progressive Agenda were making excess contributions to the Friends of Blondell Reynolds Brown," the Ethics Board Report concludes. Nonetheless, Friends of Blondell Reynolds Brown will have to give up $20,134, and pay the city $20,450 in penalties.
From the Ethics Board Report, which was signed by the board and Brown:
"In April of 2012, Councilwoman Blondell Reynolds Brown voluntarily disclosed to Board enforcement staff that Friends of Blondell Reynolds Brown had failed to disclose two transactions in the 2010 cycle 7 campaign finance report it had filed with the Board. One was a December 10, 2010 contribution from Fattah for Congress of $4,000. The other was a December 1, 2010 expenditure of $3,300 to Chaka Fattah, Jr. The purpose of the expenditure was to repay a personal loan that Fattah, Jr. had made to Councilwoman Blondell Reynolds Brown in December of 2010 in order to prevent her home from being foreclosed.
Based on the information provided by the Friends of Blondell Reynolds Brown in April of 2012, Board enforcement staff opened an investigation. In the course of the investigation, Board enforcement staff discovered multiple violations of the City’s campaign finance law by the Friends of Blondell Reynolds Brown and Councilwoman Reynolds Brown and multiple violations of the City’s Ethics Code by Councilwoman Reynolds Brown. Board staff obtained documents and bank records and interviewed numerous witnesses in the course of the investigation. Councilwoman Reynolds Brown voluntarily provided a statement to Board enforcement staff and produced documents as requested.
… In late 2010, Councilwoman Reynolds Brown was having severe financial problems due to her husband, from whom she was separated, refusing to make payments for the mortgage on the home they shared with their daughter and the Councilwoman’s elderly mother. As a result, the Councilwoman’s lender initiated foreclosure proceedings and the Councilwoman had to come up with approximately $30,000 to save her home.
Although Councilwoman Reynolds Brown was able to raise most of the money from her own resources, in late November of 2010, she was between $3,000 and $4,000 short of the amount she needed.
Facing a deadline in the foreclosure proceedings, the Councilwoman called her long-time mentor Congressman Chaka Fattah and asked if he could help her. He said he would. Shortly after her conversation with the Congressman, the Councilwoman received a telephone call from Chaka Fattah, Jr. who told her that he had a check for her.
The Councilwoman met with Fattah, Jr. who gave her a check for $3,300 that listed him as the remitter. The money from Fattah, Jr. was a loan that the Councilwoman intended to repay as soon as possible. The Councilwoman should have, but did not, disclose on her City of Philadelphia 2010 Statement of Financial Interest the $3,300 she received from Fattah, Jr.
At the time he gave the Councilwoman the check for $3,300, Fattah, Jr. was an employee of a for-profit charter school that had a contract with the School District of Philadelphia. The City of Philadelphia provides substantial funding to the School District. Every year, City Council holds hearings on the School District’s budget and votes to approve the disbursement of City money to the District.
Shortly after receiving the check from Fattah, Jr., Councilwoman Reynolds Brown asked John McDaniel to use funds from the Friends of Blondell Reynolds Brown account to repay Chaka Fattah, Jr. for the money he had loaned her.
On December 15, 2010, McDaniel made out a check for $3,300 to Fattah, Jr. In the Friends of Blondell Reynolds Brown’s 2010 cycle 7 report, instead of disclosing an expenditure of $3,300 to Fattah, Jr., McDaniel disclosed a fictitious expenditure in that amount to Strassheim Graphic Design. Councilwoman Reynolds Brown should have, but did not, disclose on her City of Philadelphia 2010 Statement of Financial Interests the $3,300 Friends of Blondell Reynolds Brown paid Fattah, Jr.
On April 11, 2012, Councilwoman Reynolds Brown repaid Friends of Blondell Reynolds Brown for the payment Friends of Blondell Reynolds Brown had made to Fattah, Jr. on December 15, 2010.
In addition to serving as the de facto treasurer of Friends of Blondell Reynolds Brown, in 2011 McDaniel also served as the de facto treasurer of Progressive Agenda PAC and was the sole signer on Progressive Agenda’s checking account.
In 2011, McDaniel caused Progressive Agenda PAC to make a total of $42,000 in contributions to the Friends of Blondell Reynolds Brown checking account, as follows:
1. An April 15th check from Progressive Agenda for $10,000. 2. An April 20th deposit of $10,000 in cash from Progressive Agenda’s account. 3. An April 22nd check from Progressive Agenda for $15,000. 4. A May 13th check from Progressive Agenda for $500.
5. A June 14th deposit of $5,000 in cash. On the same day, McDaniel made out a check from Friends of Blondell Reynolds Brown to Progressive Agenda for $5,000 which the committee subsequently described in its 2011 cycle 3 campaign finance report as “contribution return.”
6. An October 18th deposit of $1,500 in cash from Progressive Agenda’s account.
In 2011, McDaniel personally made a total of $4,600 in contributions to the Friends of Blondell Reynolds Brown checking account, as follows:
1. An April 6th check for $1,000 drawn on his personal checking account; 2. An April 6th check for $500 drawn on his personal checking account; 3. An April 25th check for $500 drawn on his personal checking account; 4. A June 22nd deposit of $1,450 in cash from his personal checking account; 5. An August 26th check for $150 drawn on his personal checking account; 6. A September 30th deposit of $450 in cash from his personal checking account; and 7. A December 21st check for $550 drawn on his personal checking account.
McDaniel did not tell Councilwoman Reynolds Brown that he and Progressive Agenda were making excess contributions to the Friends of Blondell Reynolds Brown.
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