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William Penn suspends city-related grants, cites Ethics Board complaint
William Penn Foundation suspends grant-making to city-related agencies after public education advocates filed a complaint charging lobbying code violation.
William Penn suspends city-related grants, cites Ethics Board complaint
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The William Penn Foundation has suspended grant-making to city-related agencies after public education advocates filed a complaint charging that the $2 billion philanthropy violated Philadelphia's new lobbying code when it funded and directed millions of outside dollars to pay the Boston Consulting Group to develop a controversial restructuring plan for the School District of Philadelphia.
"A citizen complaint was recently filed with the Philadelphia Board of Ethics alleging that certain grantmaking activities of the Foundation are regulated by the City’s lobbying registration and reporting ordinance," according to an email from Interim President Helen Davis Picher. "The Foundation wants to ensure our full compliance with the ordinance and is awaiting further clarification with regard to its scope concerning permissible grant activity."
The city says that it received a letter announcing the decision in reference to a grant application seeking funding for Bartram's Mile, a proposed 1.1-mile trail extension linking the east and west sides of the Schuylkill River.
"We will be talking with representatives of the foundation to understand why they are taking this approach and why they believe they have concerns about this lobbying ordinance," said Mark McDonald, a spokesperson for Mayor Michael Nutter.
The mayor's office did not indicate what city-related agency had applied for the grant, and said that the suspension would not affect already-approved funding.
According to PlanPhilly, Philadelphia Department of Parks and Recreation, Schuylkill River Development Corporation and the John Bartram Association are involved in the project. In addition, the Mayor's Fund for Philadelphia, a nonprofit organization that "advances the Mayor's goals through facilitation of public-private partnerships," is involved in related "Greenworks" projects. Improving access to Philadelphia waterfronts is a core William Penn initiative, and the Fund has received more than $2.5 million from William Penn since 2010, including funding to support Parks and Recreation Department-related projects.
Public education activists denounced the suspension.
"We are deeply concerned and surprised to hear about William Penn's misplaced action in suspending funding to city agencies," according to a statement from Parents United for Public Education, one of the organization's that filed the complaint. "The complaint says nothing about funding City and City-related agencies that the Foundation has in fact funded responsibly for years, but addresses specific violations by one of their now-former officers. It makes no sense to hold libraries and gardens accountable for improper actions for which the Foundation itself should assume accountability."
Some see hardball tactics geared to pressure the Ethics Board to expedite its ruling, influence its outcome or embarrass the activists.
"Whether that's trying to influence the outcome or expedite the outcome, that would be speculation on my part," said one City Hall employee who discussed the matter on condition of anonymity. "It's definitely intended to be punitive to the city."
In December, advocacy groups filed a complaint with the Philadelphia Board of Ethics alleging that the Boston Consulting Group and William Penn violated the lobbying code by failing to register as a lobbyist and principal. The William Penn Foundation allegedly violated the code by failing to register as the principal on whose behalf, along with the undisclosed anonymous donors they solicited funds from, BCG lobbied the School District to close down traditional public schools, possibly accelerate privatization through charter expansion and increased private management, and bust blue-collar unions.
The Daily News editorial page, which has defended the Boston Consulting Group study, criticized activists, warning that the complaint could be "potentially damaging if it chills the willingness of donors to give money to the district." This was my response.
Michael Churchill, an attorney with the Public Interest Law Center of Philadelphia who performed a legal analysis of the BCG-funding for the complainants, calls the move "entirely unnecessary." Routing funding through a third-party, not the direct funding city or city-related agencies, is what he says is the concern.
"We had actually said in our memorandum to the foundation that we had no problems with the grant that they had made to the school district nor any grants that were made to any city agencies," says Churchill. "We would support any effort of the city to clarify it, and do not think it will clarify whether they acted appropriately or not with their grants to BCG."
The complaint was filed by Parents United for Public Education, the Philadelphia Home and School Council, and the Philadelphia NAACP, accuses William Penn of collaborating with outside donors, many of whom were not disclosed (one donor was Janine Yass, wife of conservative Bala Cynwyd hedge-fund manager and voucher activist Jeffrey Yass). Lobbying, according to the Ethics Board, is as an "effort to influence legislative action or administrative action" in city agencies, including the School District.
(Read a breakdown of the complaint here)
In December, former William Penn spokesperson Brent Thompson told CP that they "are aware of their intent to file a complaint, and our attorneys are confident that it is without merit." BCG likewise told CP that they were "hired as a consultant to the school district. ... We were engaged at all times to perform services for the district and for no other purpose. None of our activities on behalf of the district constituted lobbying under the law. We are confident that any potential complaint will be dismissed."
Former foundation president Jeremy Nowak, whose ardent support for BCG and the so-called school reform agenda proved controversial, left the organization after less than a year-and-a-half on the job in November. City Paper published an investigation of Nowak in July.
"We would support any effort of the city to clarify it, and do not think it will clarify whether they acted appropriately or not with their grants to BCG." WPF made grants to BCG?? i think Churchill needs to get his facts straight.— kornbread- What facts do you need set straight? WPF solicited a group of private donors for a multimillion dollar fund designated specifically and solely for the Boston Consulting Group then contracted directly with the Boston Consulting Group without the School District of Philadelphia being a partner to the contract. Among the contract deliverables were: identifying 60 schools for closure, charter expansion, and input into labor negotiations and contracts. That's the basis of our complaint to the City Ethics Board, and that's what our lawyer Michael Churchill was speaking to. — Helen Gym
- An additional important detail about the ethics complaint that the William Penn Foundation misconstrues. Our ethics complaint actually supports the case that WPF should fund city agencies directly. In fact, if WPF had funded the District directly, instead of hiring a third party to lobby the district, we would not have a lobbying complaint before the Ethics Board. WPF's inexplicably aggressive action seeks to distort the message and has us deeply concerned about a fair and independent hearing for the Ethics Board on an important issue.— Helen Gym
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