Philidelphia’s Conflicted, Shameless, Greedy—But Law-Abiding!— City Council

In the City of Brotherly Love, why shouldn't the City Council show a little love to itself--and its members' bank accounts?

Philadelphia, a city that like all cities these days is reeling under budget deficits, contemplating harsh cuts in city services and programs and raising taxes, is receiving a cruel lesson in the limits of public-mindedness by elected officials when the price is right.

Philadelphia City Councilwoman Marian Tasco retired yesterday, collected $478,057 in pension payments, and then plans to return to work after she is sworn-in on Monday to serve her seventh term. Register of Wills Ronald Donatucci retired Dec. 23 and will also return to work on Monday. He collected $366,797.

Why are they doing this? Because they can. Because it’s a lot of money. Because nobody can stop them. In Tasco’s case, because her irresponsible, disengaged, foolish constituency voted her into office despite ample warning that this is what she had planned.

The City Council made this low-point in public treasury looting possible back in 1999, when deficits weren’t so much on everyone’s mind, times were good and, as they say, “deep water hides all stumps.” This stump was the Deferred Retirement Option Plan, or DROP, which permitted  city workers to collect salary and while accumulating pension money over the last four years of their employment as if they had already retired. It was sold as “revenue neutral” (when a law-making body says that, check your pocket) and was ignored by press and public until Philly’s mayor announced in 2010 that it was costing the city about 22 million dollars a year that it couldn’t afford.  DROP has taken $258 million out of the city’s pension fund since it was instituted.

Mayor Michael Nutter has repeatedly called for the abolishment of the bonanza, but the public unions—naturally, because why should public employees care about whether they bust their city’s finances or not?—oppose any change, and City Council members, who have to be the ones to change it, are also eligible for the enhanced pension pay-outs. The Council has refused to do anything about it; it is “considering options,” which translates as “stalling.” Not every Council member has enrolled in DROP, but many did, and believing that the public wouldn’t stand for this flim-flam for much longer, pulled the same stunt Tasco and Donatucci are engaged in now—a fake “retirement.”  As a result, many of the DROP enrollees on the Council either lost their re-election bids or didn’t run at all…but they still took the money, “crying all the way to the bank,” as my father liked to say.  Nutter’s predecessor as mayor, John Street, did it too.  Two of Tasco’s colleagues, Councilwoman Joan Krajewski and City Commissioner Marge Tartaglione have already retired and unretired, taking home $288,136, and $308,625 respectively.

Obviously, all of these pragmatic, greedy people are exploiting a dumb and very expensive loop-hole in Philly’s laws: nobody should be able to retire for two days, take a whopping pension, and then return to office. That doesn’t begin to cover the unethical expanse of this conduct, however. The DROP plan created a clear conflict of interest for all elected officials. who have fiduciary duties to the people of Philadelphia. It enabled them to take excessive compensation, which was especially unconscionable while they were raising taxes on everyone else. I wish I knew the names of the Council members who refused to participate in DROP—I haven’t been able to find them—but they understand their ethical duties, and respect them. (Their greedy colleagues probably understand their ethical duties too, but figure, “Hey, the money’s there for the taking. I’ll take it! I’m no fool!!”). It is unethical for Council members to accept the irresponsible benefits of the DROP program, because it compromises their judgment, creates the appearance of impropriety, undermines public trust, and uses scarce resources that the Council is obligated to allot according to public priorities, not private ones, such as “Look out for #1!”

Yes, taking advantage of DROP is legal. It’s just not ethical. Many individuals cannot see that, of course, like commenter “John” in his reaction to a story about DROP on the “Philly Now!” website:

“I think your article is a joke. You know for a fact that if u were offered this kind of money to retire for a day u would do it in a minute so get off ur high horse and fuck yourself. These are people who serve our city. They are completely 100 percent entitled to that money!!!!

Why thank you, John, for that illuminating analysis.

Such is the comprehension of ethics in much of America. Individuals like John believe that it is acceptable to sell out those you have pledged to serve if

1) it’s legal,

2) if most people would do it,

3) you’re “entitled.”

The exact same rationale is being heard to justify insider trading by members of Congress, which  has allowed those willing to exploit the advantages of their office to become rich, often while making speeches about the greed and ethical deficits of private investors who would be prosecuted for the very same acts these Representatives and Senators engage in with impunity.

How different, really, are the fake retirees in the Philadelphia government, and thieves who ran Bell, California, voting themselves kingly salaries and pensions while most of the citizens labored in near poverty?

Not very.

7 thoughts on “Philidelphia’s Conflicted, Shameless, Greedy—But Law-Abiding!— City Council

  1. Just to add a little information, the idea behind DROP programs is to encourage people with highly valuable skills to keep working. Say you’re an employer (public or private), and one of your financial wizards puts in his 20 years. He could retire and start receiving retirement benefits. Then he could go and get another job on top of his retirement benefits. With that kind of incentive, why would he keep working for you when he could make a lot more money by retiring and working for someone else? If you want him to stay, perhaps because you’re having financial problems and you need him to straighten out the situation, you’re going to have to give him an incentive. A DROP program — which basically pays a lump sum instead of contributing to a retirement program — is one way to do that.

    Of course, this only makes sense if the employees really are worth the expense of keeping around, and if they really would retire without the money. I’m guessing that members of the Philadelphia City Council fail on both accounts.

    • Thanks WP..good theory for the DROP squad, bad law. As you say—it’s an awfully expensive way to keep a theoretical group of valuable employees around—if that was indeed the sole reason it passed initially.

  2. Big city machine politics in action. When public officials are chosen by amachine and elected on a basis of robbing the treasury for the “entitlement” of their base voters, they’ll keep being returned to office and upheld, in turn, for “getting their’s” as a further entitlement. This was the attitude that “John” was displaying. It’s all too common in American urban areas.

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