The Philly ethics board has clarified its rules on super PACs in the wake of the 2023 mayor’s race

The Philadelphia Board of Ethics on Wednesday amended its campaign finance rules in response to its failed lawsuit against For a Better Philadelphia, the outside spending group, or “super PAC,” that last year backed candidate Jeff Brown’s unsuccessful mayoral run.

The revised rules make clear that a prohibition on candidates coordinating with outside spending groups, or so-called super PACs, applies even before the candidates launch their campaigns.

That was the key issue in the board’s high-profile and ultimately unsuccessful suit against Brown, a businessman and first-time candidate, during the 2023 Democratic primary for mayor. Super PACs are allowed to raise and spend money in unlimited amounts, but are prohibited from working in coordination with candidates’ campaigns, which are subject to limitations on donations.

The board accused the group of illegally coordinating with Brown, who was well-known as a ShopRite proprietor before running for mayor, because he had raised money for it before entering the race in the fall of 2022. But a Philadelphia judge last year threw out the suit, saying the board’s regulations did not make it clear that the prohibition on coordination applied to people who have not yet announced their candidacies.

» READ MORE: Inside the Board of Ethics’ case against the super PAC supporting mayoral candidate Jeff Brown

The board, a city agency responsible for enforcing Philadelphia’s public integrity laws, then decided to amend its regulations rather than appeal the decision, leading to Wednesday’s unanimous vote to approve the rule changes.

“Where conduct constituting coordination occurs before an individual is a candidate, and a resulting coordinated expenditure is made after the individual becomes a candidate, such expenditure is an in-kind contribution,” the new regulations state in part.

The new rules, which only apply to city elections and not state or federal races, now go to the city Law Department for final approval, and will be posted online by the Department of Records for 10 days before taking effect.

“The public interest is best served by clarifying [the board’s] campaign finance regulation through the amendment process, to remove any doubt about how the coordination rules apply,” J. Shane Creamer Jr., the board’s executive director, said in a statement, adding that, with Wednesday’s vote, the new rules will be in place well in advance of next year’s municipal elections.

An attorney for Brown and the super PAC did not respond to a request for comment.

When a candidate coordinates with a super PAC that is spending money to support a campaign, the super PAC’s expenditures are classified as in-kind contributions to the candidate’s campaign. That means they are subject to the city’s contribution limits, which for next year’s elections will be $3,700 a year for individuals and $14,800 a year for organizations.

Super PACs are usually organized for the purpose of accepting large donations beyond those limits and consequently must avoid coordination — fundraising, advertising, or strategy―in order to spend and raise large sums.

If coordination occurs, the super PAC’s expenditures will then be treated as in-kind contributions to the campaign, triggering a violation of the city’s contribution limits. And if the ethics board hears about it, investigates, and finds a series of large contribution infractions, it can assess significant fines or seek to have the money paid back, which in some circumstances would effectively bankrupt the campaign.

» READ MORE: Philly’s ethics board usually flies under the radar. That changed with its lawsuit against a super PAC backing Jeff Brown.

For a Better Philadelphia spent millions during the mayor’s race, helping Brown make a splash and become an early front-runner. But he fell in the polls following the ethics board lawsuit, which was filed in April, and other stumbles on the campaign trail and ended up finishing fifth in the May primary, which was won by now-Mayor Cherelle L. Parker.

The lawsuit centered on ambiguity in the board’s regulations about when the coordination rules apply. The ethics board pointed to one part of the rules that stated that coordination can occur at any point in the 12 months before an election. Another part, seized on by For a Better Philadelphia’s lawyers, indicated that coordination can only occur with a candidate — meaning Brown could not have been prohibited from coordinating with the group before he entered the mayor’s race.

Common Pleas Court Judge Joshua Roberts in September sided with For a Better Philadelphia and threw out the lawsuit. The board initially said it would appeal the decision to Commonwealth Court but announced in December that it was dropping the case and making plans to amend the regulations instead.

The new rules make clear that the board will consider coordination to have occurred when a candidate or someone who becomes a candidate “directs or donates funds to, solicits funds for, or otherwise provides funds to the [outside spending group] in the twelve months before the covered election.”

For a Better Philadelphia and Brown in January sued the ethics board, arguing the agency knew its actions during the mayor’s race were invalid and that they were designed to damage the reputations of Brown and the group’s organizer. The case is pending.