CITY OF P ILADELPHIA

BOARD OF ETHICS ONE PARKWAY BUILDING 1515 Arch Street 18TH Floor

Helen Gym 2110 Appletree St. Philadelphia, PA 19103 Via email: hgbf@aol.com

Rebecca Poyourow 434 Green Ln. Philadelphia, PA 19128

Rosemarie Hatcher 440 N. Broad St. Rm. 115 Philadelphia, PA 19130 Via email: rpinkchampagne@yahoo.com

Sabra Townsend 1505 Chelten Ave. Philadelphia, PA 19126

Re: Complaint submitted on December 5,2012

Dear ladies and gentlemen:

June Walters-Bey 5319 Race St. #2 Philadelphia, PA 19139

Gerald Wright 5501 Wayne Ave. #101 Philadelphia, P A 19144

J. Whyatt Mondesire 1619 W. Cecil B. Moore Ave Philadelphia, PA 19121

Philadelphia, PA 19102-1504 (215) 686 - 9450 FAX 686 - 9453

December 6, 2013

Via email: infosundaysun@yahoo.com

Robin Roberts 7013 Cresheim Rd. Philadelphia, PA 19119

On December 5,2012, you submitted a complaint alleging that William Penn Foundation ("the Foundation") and Boston Consulting Group had violated the City's lobbying law, which is found at Chapter 20-1200 of the Philadelphia Code. The heart of your complaint is the allegation that BCG lobbied the School Reform Commission on behalf of the Foundation.

If it were in fact true that BCG, on behalf of the Foundation, sought to influence the SRC's administrative action, such conduct would constitute lobbying subject to Code Chapter 20-1200 which would require BCG and the Foundation to register as a lobbyist and principal, respectively. The Foundation or BCG would also have to file quarterly expense reports. The failure of BCG or the Foundation to do so would be a violation of Chapter 20-1200. Because your complaint alleged a potential violation of Chapter 20-1200, we accepted your complaint and initiated an investigation

Re: Complaint submitted on December 5,2012 December 6,2013 Page 2 of3

Over the course of our investigation, we interviewed witness and obtained and reviewed documents, including emails. The investigation revealed the following:

In late 2011, Pedro Ramos approached the Foundation to ask whether it would fund an outside consultant to provide analysis of the School District's finances. The Foundation expressed potential interest, but asked the School District to be more specific.

In January of2012, Thomas Knudsen became Interim Superintendent and Chief Recover Officer. Based on his experience at PGW, Knudsen urged the SRC to retain a consultant to do much more than review the District's finances. Accordingly, the School District, with the assistance of its outside counsel at Blank Rome, prepared a Request for Qualifications for Consulting Services. The SRC approved the RFQ at its January 19,2012 meeting.

10 parties responded to the RFQ and six of them submitted formal bids. A committee made up of School District officials and Lori Shorr, The Mayor's Chief Education Officer, reviewed all of the submissions, conducted a first round of interviews, and a second round of interviews for a short­list of candidates. At the end of the second round of interviews, the committee voted unanimously to recommend awarding the contract to BCG. The SRC approved hiring BCG at its February 16, 2012 meeting.

The Foundation agreed to help fund the work provided to the School District by BCG. In order to do so, it used the United Way of Southeastern Pennsylvania as a fiscal intermediary. For the first phase ofBCG's work, the United Way transferred Foundation funds to the School District which, in turn, paid BCG. For the next two phases of BCG's work, the Foundation provided funds to United Way which paid BCG directly. At its March 15,2012 meeting, the SRC approved a resolution accepting grant money from the Foundation to pay BCG.

For the second and third phases ofBCG's work, BCG entered into written statement of work agreements with the Foundation. These agreements create the appearance that, for those phases, BCG was working for the Foundation, not the School District. However, BCG drafted the statements of work based on what the School District wanted to be in them. According to BCG, Jeremy Nowak did review the statements of work before they were finalized and had questions about them, which he discussed with Pedro Ramos or Tom Knudsen. However, according to BCG, none of the deliverables in either statement of work changed as a result of Nowak's review. BCG did not make changes of any kind in the statements unless directed to do so by Ramos or Knudsen.

According to Pedro Ramos and Tom Knudsen, at all times, Knudsen directly supervised and exercised control over BCG's work. According to BCG, at all times, they considered the School District, not the Foundation, to be the client for whom they were working. In addition, both the School District and BCG considered the work in the second and third phases to be covered by or related to the School District's RFQ.

These facts do not demonstrate that BCG was lobbying the School District on behalf of the Foundation. Rather, despite the appearance created by the statements of work, they demonstrate that BCG was providing consulting services to, and at the direction of, the School District.

Re: Complaint submitted on December 5,2012 December 6,2013 Page 3 of3

Although your complaint did not specifically allege it, the information you provided suggested that Jeremy Nowak might have directly sought to influence administrative action at the School District on behalf of the Foundation, which could have required him to register as a lobbyist. During the course of the investigation, we learned that Nowak had regular meetings with School District officials and representatives of BeG. Nowak frequently asked questions about District policy and the work being done by BCG and, as described above, reviewed and commented on the statements of work before they were finalized. On occasion, according to witnesses we interviewed, Nowak would express to School District officials his opinion about how the School District should respond to its fiscal crisis. Other witness said that they believed that Nowak's role as a funding source gave him significant influence with and access to School District officials.

Neither the City's lobbying law, nor Board Regulation No.9, directly addresses the relationship that arises when a private entity provides grant funding to a public enterprise such as the School District. However, when a private grantor provides a grant at the request of a public entity, we believe that communication between the grantor and public officials regarding the terms of the grant and compliance with those terms, will not, on its own, constitute lobbying. The analysis might be different if the private grantor seeks to influence a specific administrative or legislative action and provides money to enable the public entity to carry out that action. However, nothing discovered in our investigation indicates that either the Foundation or Nowak engaged in such conduct. Accordingly, the information discovered in our investigation does not support a finding that Nowak's interactions with School District officials constitute lobbying as defined by the City's lobbying law and the Board's Regulation No.9.

In conclusion, based on the facts we discovered in the course of our investigation, we do not find probable cause to believe that either the Foundation or BCG violated Philadelphia Code Chapter 20-1200. Accordingly, we must reject your complaint and terminate our investigation.

Lastly, pursuant to Board Regulation No.5, Paragraph 5.5, you are hereby notified that, the investigation having ended, you are no longer subject to the Code's prohibition on disclosure of information related to a Board investigation.

Thank you for your cooperation and courtesies with regard to this matter and please do not hesitate to contact me if you have any questions.

Michael J. Cooke Director of Enforcement