Unlikely to say no
A decade ago, as a councilman, Mr. Peduto prepared to challenge a sitting mayor. Luke Ravenstahl, though, raised seven times as much money, thanks to 10 five-figure contributions, some from executives with city contracts, proposals or permit applications. Mr. Peduto eventually quit the race.
In 2008, Mr. Peduto called for campaign finance reform. “Vendors, or potential vendors, believe [donating] is a requirement” for getting certain contracts, he said then. “When you have the mentality of pay to play, you cannot have good government.”
His efforts led in 2009 to an ordinance limiting donations. Under a 2015 update, candidates can’t collect more than $2,700 per election from any individual, or more than $5,000 from any political action committee.
As mayor, Mr. Peduto has raised funds from what he called “one of the broadest bases of political support in all of Western Pennsylvania.
“We have a list of about a thousand people,” he said. Most of the outreach is done by professional fundraiser Julie Hallinan, who has no government job. But reluctantly, the mayor has to make scores of calls himself.
“While you have them on the phone, you have to get two things: an amount, and a date” by which it will be paid, he said. “[I]t’s like a fishing expedition where you hook the fish, and you hand the rod over to your pro, who is Julie, and her job is to reel it in.”
“And then there’s a handful that are given out to a few people who do follow-up phone calls,” he said. “Kevin’s one of them.”
In 2015, the mayor recounted, decisions on who called whom were made by asking, “Who feels comfortable calling this person?”
Mr. Acklin provided the Post-Gazette with a list of the people he called. Most are in the development business.
The URA chairman makes no unilateral decisions but leads the mayor-appointed board that distributes millions in aid and buys and sells land. There is no legal bar to his making campaign fundraising calls while off the clock and out of the office, as long as contributions aren’t traded for official decisions.
“Out of deep respect for the rule of law and ethics, at no time was any city or URA business discussed, nor were any requests for political support conditioned upon any express or implicit promises of any business with the city or URA,” Mr. Acklin wrote in an email to the Post-Gazette.
“I don’t know that that’s inappropriate,” said Jim Ferlo, a URA board member and former state senator. “It’s kind of clear why they’re being called: They’re unlikely to say no to a request.”
None of the 23 people on Mr. Acklin’s list who were reached by the Post-Gazette said they remembered getting a call from him requesting a donation. But nearly all gave. The campaign logged personal checks from 18 of them, and got donations from employers, co-workers or PACs associated with the other five. During the last quarter of 2015, the 70 contributions associated with the people on the list exceeded $118,000, out of $627,000 the campaign raised that year.
City Controller Michael Lamb, a sometime rival of the mayor, called it “very bad practice for the chairman of the board of the URA to be making political fundraising calls to the people the URA is intending to do business with. … It makes the URA look like it’s a pay-to-play organization.”
A nice alignment
Mr. Peduto’s backers have in some cases won administration support, but in other cases unsuccessfully pleaded their cases.
For instance, Mr. Acklin said he called two top officials of Walnut Capital. They donated $2,000 each, and also provided space, worth $1,000, for a campaign event. Weeks after the contributions, Walnut sought URA backing to turn Shadyside’s Hunt Armory into apartments. The URA, though, chose a rival plan.
Also on Mr. Acklin’s call list was Chicago developer Dan McCaffery, who is working with the city to redevelop the Strip District produce terminal. He and his wife then gave a combined $10,000 to the mayor’s campaign.
Mr. McCaffery said that such a campaign solicitation is “nothing too unusual. … I do development in three or four cities, and it’s commonplace to support those who supported you.” Pittsburgh is “not as demanding as some other places, really,” he said, adding that the administration is “not a pushover.”
The URA has supported a $7.5 million subsidy for street and utility improvements near the terminal, but hasn’t yet gotten all of the other necessary approvals.
Also on Mr. Acklin’s call list was Trek Development president William Gatti, who donated $7,000 to Mr. Peduto’s 2013 campaign, plus $3,000 in late 2015. Mr. Gatti has worked with the URA on projects including The Bradberry building in Central North Side.
Mr. Gatti said his firm is “enjoying a nice alignment with political leadership these days … Mayor Peduto’s platform, he’s very interested in vital urban centers and affordability and historic restoration and many of our core values.”
On Sept. 6, Mr. Acklin emailed Mr. Peduto, describing a proposed $2.15 million URA package to help Trek to convert The Bradberry into 16 apartments. “That’s $135K per unit, zero [rent] affordability,” Mr. Acklin wrote. “I’m inclined to pull this from the [URA] agenda.”
Mr. Peduto responded that he was “pretty sure it does include affordability.” Though there was actually no guarantee of low-income units, the package remained on the Sept. 8 agenda, and won initial approval.
Mr. Acklin said last week that he got “a verbal commitment” to “workforce” rents. “I want that to be converted to something legally enforceable in the future,” before the URA finalizes the package.
In October, the Peduto administration announced that it was adopting the “P4 Performance Measures,” making development decisions based on “people, planet, place and performance” — not politics.
The URA will “score every project,” Mr. Acklin said, based on job creation, environmental impact, inclusiveness and public benefits. “If you’re going to do development in the city, this is what we expect, in a very open and transparent manner.”
Quirk of timing
Mr. Peduto contends that the contribution limits are another brake on undue influence, because five-figure donations are no longer allowed. The fundraising push in which Mr. Acklin participated, though, benefited from a quirk of timing.
In September 2015, Mr. Peduto’s former aide, Councilman Dan Gilman, proposed a new campaign finance ordinance. It passed council on Oct. 20, 2015, raising the limits on contributions by individuals to mayoral campaigns from $2,000 to $2,700 per election. It disallowed a practice called stacking, which had enabled contributors to give a candidate $4,000 at one time — $2,000 for the primary, and $2,000 for the general election. It took effect Nov. 4, 2015, the day after a general election.
During the two weeks between the new law’s passage and its effective date, Mr. Peduto’s campaign collected $240,000, in part by collecting “stacked” donations of as much as $4,000 from 29 individuals or partnerships, and as much as $8,000 from three PACs. After the new law reset the campaign finance game clock, they collected within weeks additional checks from seven of those donors.
The combination of stacking and the reset allowed the McCaffery family, Highmark Health PAC and the International Brotherhood of Electrical Workers Local 5 to give $10,000 each in late 2015. From Mr. Acklin’s list, a Walnut partner’s wife gave $6,700, a CORE Realty executive contributed $6,666.67, and others pitched in between $3,000 and $5,000.
Mr. Peduto said that his campaign fundraising effort has become so broad, raising $3.3 million since 2012, that even if checks from a firm add up to $10,000, no single contributor is more than “a drop in the bucket.”
He said his method is less prone to abuse than that of some past administrations, in which private, unofficial “bundlers” gathered checks, and expected favorable treatment in return.
Acknowledging that city “history or tradition is all over the map on this,” Mr. Murphy disputed any notion that local officials make decisions based on contributions. “Rarely is there a quid pro quo that actually happens.”
Mr. Ravenstahl, who also placed his chief of staff atop the URA board, could not be reached for comment.
Mr. Warner, of Common Cause, said true reform shouldn’t include campaign calls from a top development official to developers. “As an architect of the city’s campaign finance reform law, Mayor Peduto should certainly recognize the impropriety of this activity and stop it immediately.”
Mr. Acklin, who earns $107,000 with the city, said he didn’t make fundraising calls in 2016. He didn’t attend the mayor’s Nov. 15 fundraiser, for which contributions should be disclosed Jan. 31.
Mr. Peduto, though, didn’t rule out calling his chief of staff to the phone bank if he faces a challenger this year. “It will be basically back into the war room, on the phone, making the phone calls, raising the money, one by one, until we get to the point of around $2 million.”