CITY OF PHILADELPHIA BOARD OF ETHICS

Contact: Michael J. Cooke, Director of Enforcement, 215-686-9450 For Immediate Release: June 28, 2018 PHILADELPHIA – On June 27, 2018, the Board of Ethics approved settlement agreements in the following two matters. Copies of the approved agreements are attached. - Asian American Licensed Beverage Association. This agreement resolves two violations of the City’s Lobbying Law, one for the failure of the Asian American Licensed Beverage Association (“AALBA”) to register as a lobbying principal with the Board of Ethics, the second for the failure of AALBA to file an expense report for the fourth quarter of 2018. As explained in Paragraph I of the Agreement, the violations arose because AALBA spent over $2,500 in indirect communications that sought to influence proposed legislation to remove plexi-glass barriers from certain establishments in Philadelphia. AALBA has agreed to pay $2,000 in civil monetary penalties and $200 in registration fees. AALBA has registered for 2017 and filed a 2017 expense report with the Board, both of which are attached to the Agreement. - Tariq El-Shabbaz and Taylor Daukaus. This agreement resolves three violations of the City’s Campaign Finance Law related to Mr. El Shabbaz’s 2017 campaign for District Attorney, specifically: (1) acceptance of excess in-kind contributions from Trustwave PAC; (2) exercising control over and directing the expenditures of Trustwave PAC through agents of the campaign; and (3) failing to disclose in-kind contributions in campaign finance reports filed with the Board. Mr. El Shabbaz will pay civil monetary penalties of $2,750. Ms. Daukaus will pay civil monetary penalties of $2,000 and will file amended campaign finance reports with the Board.

The Philadelphia Board of Ethics is charged with interpreting, administering, enforcing and providing advice and training on Philadelphia's Public Integrity Laws. The Board was established as an

independent, five-member City board in June 2006 through voter approval of an amendment to the Philadelphia Home Rule Charter. The Board has jurisdiction over City laws pertaining to conflicts of

interest, representation and post-employment restrictions, gifts and gratuities, financial disclosure, interests in certain City contracts, prohibited political activities, campaign finance and lobbying. The

Board has authority to issue regulations and advisory opinions, provide informal guidance and trainings, engage in administrative and judicial enforcement actions and impose civil penalties.

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SETTLEMENT AGREEMENT

This Settlement Agreement is made and entered into by the Board of Ethics of the

City of Philadelphia, the Asian American Licensed Beverage Association, and J. Shane

Creamer, Jr., the Executive Director of the Board of Ethics, jointly referred to as “the

Parties.”

RECITALS

A. The Board of Ethics of the City of Philadelphia is an independent, five-member City

board established in 2006 through voter approval of an amendment to the

Philadelphia Home Rule Charter. Pursuant to Section 4-1100 of the Home Rule

Charter and Chapter 20-1200 of the Philadelphia Code, the Board is charged with

administering and enforcing Philadelphia’s Lobbying Law.

B. The Asian American Licensed Beverage Association (“AALBA”) is a non-profit

organization registered with the Commonwealth of Pennsylvania. The purpose of

AALBA is to advocate for and represent the interests of Asian American owned

beverage establishments throughout the City of Philadelphia.

C. Philadelphia’s Lobbying Law is found at Chapter 20-1200 of the Philadelphia Code

and Board Regulation No. 9, which provides a detailed interpretation of Chapter 20-

1200.

D. Under the City’s Lobbying Law, a principal is a person who engages in lobbying on its

own behalf or who pays someone else (a lobbyist) to engage in lobbying. Lobbying is

an effort to influence governmental administrative or legislative action through direct

communication, indirect communication, or by providing gifts, transportation,

hospitality, or lodging to City officers or employees. If a principal incurs expenditures

of more than $2,500 for lobbying expenses in a quarter, the principal must register

with the Board.

E. Under the City’s Lobbying Law, indirect communication is:

An effort to encourage others, including the general public, to take action, the

purpose or foreseeable effect of which is to directly influence legislative or

administrative action, such as letter-writing campaigns, mailings, telephone

banks, print and electronic media advertising, billboards, publications and

educational campaigns on public issues, but not including regularly published

periodic newsletters primarily designed for and distributed to members of a

bona fide association or charitable or fraternal nonprofit corporation.

Board Regulation No. 9, Paragraph 9.1(p).

F. A principal must file an expense report for each quarter in which the principal incurs

lobbying expenditures of more than $2,500. In an expense report, the principal must

disclose its expenditures incurred that quarter for direct communications, indirect

communications, and gifts, transportation, hospitality and lodging to City officers and

employees as well as detailed information about the nature of those expenditures.

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G. Pursuant to Code Section 20-1207(1)(b) and Regulation No. 9, Paragraph 9.26, the

failure to register as a principal or to file an expense report is subject to a civil penalty

not exceeding $250 for each late day up to a maximum of $2,000 for any one

registration or report.

H. In early 2018, Board Enforcement Staff became aware of potential violations of the

City’s Lobbying Law by AALBA and opened an investigation in the course of which

they obtained documents and records and interviewed witnesses.

I. In December 2017, AALBA spent $6,000 to organize and publicize a December 14,

2017 press conference across from City Hall. The press conference and related activities

encouraged the public to urge City Council members to oppose proposed legislation to

remove plexi-glass from certain beverage establishments throughout the City of

Philadelphia. As such, under Philadelphia’s Lobbying Law, these activities were

indirect communications.

J. In the 4th

quarter of 2017, AALBA incurred expenditures of more than $2,500 for the

press conference and related activities and therefore should have registered as a

principal and filed a 2017 4th

quarter expense report. However, AALBA did not register

as a principal or file a 4th

quarter expense report.

K. At all times, AALBA fully cooperated with the Board’s investigation. AALBA has

registered for 2017 as a lobbying principal and filed a 2017 fourth quarter expense

report with the Board. Copies of the registration and the expense report are attached

hereto as Exhibit A.

L. The Parties desire to enter into this Agreement in order to resolve the issues described

herein.

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AGREEMENT

The Parties agree that:

1. By failing to timely register as a lobbying principal in 2017, AALBA violated Code

Section 20-1202(1) and is subject to a civil monetary penalty of $2,000.

However, in light of AALBA’s cooperation, the penalty is reduced to $1,000. AALBA

also must pay the City the 2017 lobbying registration fee of $200.

2. By failing to timely file an expense report with the Board for the 4th

quarter of 2017,

AALBA violated Code Section 20-1203(1) and is subject to a civil monetary penalty

of $2,000. However, in light of AALBA’s cooperation, the penalty is reduced to

$1,000.

3. AALBA shall pay the aggregate civil monetary penalties and registration fee of $2,200

within 14 days of the effective date of this Agreement. Payment shall be made by

check or money order made payable to the City of Philadelphia and delivered to the

offices of the Board.

4. AALBA releases and holds harmless the Board and its staff from any potential claims,

liabilities, and causes of action arising from the Board’s investigation, enforcement,

and settlement of the matters described in this Agreement.

5. In consideration of the above and in exchange for the compliance of AALBA

with all of the terms of the Agreement, the Board waives any further penalties or

fines against AALBA for the violations described in this Agreement.

6. The Parties will not make any public statements that are inconsistent with the terms of

this Agreement.

7. If the Board or the City is forced to seek judicial enforcement of this Agreement, and

prevails, AALBA shall be liable for attorneys’ fees and costs reasonably expended in

enforcing compliance with the Agreement. Fees for time spent by Board or City

attorneys shall be calculated based upon standard and customary billing rates in

Philadelphia for attorneys with similar experience.

8. This Agreement contains the entire agreement between the Parties. The Agreement

shall become effective upon approval by the Board. The effective date of the

Agreement shall be the date the Board approves the Agreement.

9. The Executive Director will submit a signed copy of this Agreement to the Board for

approval.

10. If the Board rejects the proposed Agreement, presentation to and consideration of the

Agreement by the Board shall not preclude the Board or its staff from participating in,

considering, or resolving an administrative adjudication of the matters described in

the Agreement. If the Board rejects the proposed Agreement, nothing in the proposed

Agreement shall be considered an admission by either party and, except for this

paragraph, nothing in the Agreement shall be effective.

EXHIBIT A

Name RegistrationNum Affiliated Start Date Affiliated End Date

Name RegistrationNum Affiliated Start Date Affiliated End Date

Lobbyist(s):

Registration No: P00519 Registration Status: Expired

Address: 207 N. 11th Street

1st Floor

Philadelphia State: Zip:PA 19107

Registration Name: Asian American Licensed Beverage Association

Lobbying Commenced: 01/01/2017

Acronym: AALBA Date Filed: 01/01/2017

Phone#: 215-923-3611 Ext.

Fax#: Last Renewed:

Additional Phone#:

Last Amended Date: 05/31/2018Registration Period: 2017-2017

City:

Email: xuadam@aol.com Additional Email:

BeveragesNature of Business:

Lobbying Firm(s):

Political Action Committee(s):

FILER AFFIRMATION:

Association/Organization members:

228

2017

No Number of Dues - Paying Members:

For The Calender Year :

Is this Principal an Association or Organization? Yes

Name Acronym

IDENTIFICATION OF LOBBYIST(S)/LOBBYING FIRM(S) LOBBYING ON PRINCIPAL'S BEHALF:

Filing Period: Quarter: Year:

P00519

Oct - Dec 2017

Filer's Name: Asian American Licensed Beverage Association

PERMANENT BUSINESS ADDRESS:

Address: 207 N. 11th Street

1st Floor

City: Philadelphia State: Zip:PA 19107

CONTACT INFORMATION OF FILER:

Phone: 215-923-3611 Ext.

Email Address: xuadam@aol.com

FILER'S INFORMATION:

Registration No.:

LOBBYING DISCLOSURE QUARTERLY EXPENSE REPORT

TOTAL LOBBYING EXPENSES DURING THE REPORTING PERIOD:

Registration Name Related to RegistrationNum Affirmation Status

INDIRECT COMMUNICATIONS:

Accessibility

SUBJECT(S) OF LOBBYING:

TOTAL EXPENDITURES FOR GIFTS, HOSPITALITY, TRANSPORTATION, AND LODGING

TO CITY OFFICIALS, EMPLOYEES OR THEIR IMMEDIATE FAMILIES :

0.00

TOTAL EXPENDITURES FOR DIRECT COMMUNICATION:

TOTAL EXPENDITURES FOR INDIRECT COMMUNICATION:

0.00

6,000.00

TOTAL EXPENDITURES OF ALL LOBBYING FOR THE PERIOD:

6,000.00

+

None.

DIRECT COMMUNICATIONS:

FILER AFFIRMATION:

None.

LOBBYING FIRM/LOBBYIST NOT ASSOCIATED WITH A LOBBYING FIRM AFFIRMATION:

By affixing my signature to this expense report, I affirm that I have actual knowledge of the contents of this expense report and that the information reported herein is valid, accurate, and complete to the best of my knowledge. To the best of my knowledge at all times relevant to this quarterly expense reporting period, I have complied with the requirements of City Code §20-1205(5). I acknowledge that this affirmation is being made subject to 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities). I consent to receive service of notices, other official mailings, or process at the address or email listed in this expense report.

First Name: adam MI:

Last Name: xu

Title: chairman

Date: 06/08/2018

None.

SOURCE OF CONTRIBUTIONS:

None.

REPAYMENTS:

None.

GIFT RECIPIENTS:

Lobbying Category Subject Matter Position Taken Method of Communication

Recipient Group

Communications bulletproof glass bill 12/14/17

Oppose news media press conference

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SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is made and entered into by the Board of Ethics of the City of Philadelphia, J. Shane Creamer, Jr., the Executive Director of the Board, Tariq El Shabazz, and Taylor Daukaus, jointly referred to as “the Parties.”

RECITALS

A. The Board of Ethics of the City of Philadelphia is an independent, five-member City board established in 2006 through voter approval of an amendment to the Philadelphia Home Rule Charter. Pursuant to Section 4-1100 of the Home Rule Charter, the Board is charged with administering and enforcing the City’s Campaign Finance Law.

B. Tariq El Shabazz was a candidate for District Attorney in the May 2017 Philadelphia Primary Election. Mr. El Shabazz designated the political committee Tariq for Justice as the one committee which would accept contributions and make expenditures for his campaign for District Attorney. The committee was terminated in June of 2017.

C. Taylor Daukaus was the treasurer of Tariq for Justice during Mr. El Shabazz’s campaign for District Attorney. Kristen Stoner was the assistant treasurer of the committee.

D. In May of 2017, Board enforcement staff learned of potential violations of the City’s Campaign Finance Law involving the El Shabazz campaign and a local political committee named Trustwave PAC. Accordingly, the Executive Director opened an investigation, during which enforcement staff obtained documents, including bank records, emails, and text messages, and interviewed witnesses.

E. Trustwave PAC is a political committee based in Philadelphia. On April 16, 2017, Kristen Stoner filed a Political Committee Registration Statement for Trustwave PAC with the Department of State. The Statement listed Derrick Susswell as Treasurer and Ismail Shahid as Chair of the PAC. On May 6, 2017, Ms. Stoner filed an amended Political Committee Registration Statement for Trustwave PAC that made her the Chair in place of Mr. Shahid.

F. Ms. Stoner is the principal of the St. Bernard Group, a Philadelphia based campaign finance consulting firm. Mr. El Shabazz retained the St. Bernard Group to provide fundraising and campaign finance compliance services to his campaign. Ms. Daukaus served as treasurer of Tariq for Justice at Ms. Stoner’s request and worked under her direction. The St. Bernard Group also provided campaign finance and consulting services to Trustwave PAC. Mr. El Shabazz was not aware that Ms. Stoner was the Chair of Trustwave PAC or that Trustwave PAC was a client of her firm.

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G. For a period of time during the 2017 Primary Election, in addition to his activities with Trustwave PAC, Ismail Shahid acted as an agent and unpaid senior adviser of the campaign of Tariq El Shabazz for District Attorney.

H. On October 18, 2017, the Board approved a settlement agreement with Trustwave PAC, Mr. Susswell, Ms. Stoner, and Mr. Shahid. In the agreement, they admitted that:

i. In the months leading up to the 2017 Primary Elections, Mr. Shahid solicited contributions for both the El Shabazz campaign and Trustwave PAC, in some cases from common donors. After he stepped down as Chair in early May of 2017, Mr. Shahid remained actively involved in Trustwave PAC’s activities, including implementing and directing its election-day get-out-the-vote activities and ordering a Trustwave PAC sample ballot.

ii. Trustwave PAC’s activities during the 2017 Primary Election almost exclusively involved printing and distributing a sample ballot promoting candidates for District Attorney, Controller, and judicial office. A copy of the ballot is attached hereto as Exhibit A.

iii. Among its expenditures, Trustwave PAC paid the consulting company Countywide Strategies for consulting services, including management of Trustwave PAC’s ballot distribution in a part of Philadelphia. One of the principals/partners of Countywide Strategies is Steven Vaughn, who also held a leadership position in the El Shabazz campaign.

iv. The candidate for Controller and most of the judicial candidates paid to be on Trustwave PAC’s ballot. The El Shabazz campaign contributed $5,000 to Trustwave PAC, approximately 5% of the total amount contributed by the candidates on the ballot. Given Mr. El Shabazz’s prominence on the ballot, the amount the other candidates contributed, and the amount Trustwave PAC spent to print and distribute it, the amount the El Shabazz campaign contributed was not the usual and normal charge.

v. The total amount Trustwave PAC charged candidates to be on its ballot was approximately $80,000. Trustwave PAC used this money, as agreed with those candidates, to promote their election. Trustwave PAC raised an additional $81,500 from non-candidate PACs, which it also used to pay for and distribute its sample ballot.

I. As provided by Board Regulation No. 1, Paragraph 1.1(q), if a political committee coordinates its expenditures with a candidate’s campaign and those expenditures are made to advocate or influence the election of the candidate, the expenditures are an in-kind contribution to the candidate. In-kind contributions are subject to the contributions limits of the City’s Campaign Finance Law.

J. Under the City’s Campaign Finance Law, in 2017 a candidate for District Attorney could not accept contributions of more than $23,8001 from a political committee. Acceptance by a candidate of an excess contribution violates Philadelphia Code § 20-1002(12).

1 This figure is double the usual contribution limit because one of the candidates for District Attorney in 2017 contributed more than $250,000 of his own money to his campaign.

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K. Regulation No. 1, Paragraph 1.38 provides detailed guidance on what conduct gives rise to coordination between a political committee and a candidate’s campaign, including expenditures made in cooperation, consultation, or concert with the candidate’s campaign or with the knowledge and assent of the candidate’s campaign. A political committee’s expenditures are also coordinated with a candidate’s campaign if the candidate solicits funds for or directs funds to the political committee within the 12 months before the election that the expenditures seek to influence.

L. Board Regulation No. 1 defines a candidate’s campaign as a “candidate, the candidate’s candidate political committee (or litigation fund committee), or an agent of any of the foregoing.”

M. As a result of the activities described in Paragraph H, Trustwave PAC’s expenditures were coordinated with the El Shabazz campaign. Accordingly, the expenditures Trustwave PAC made to advocate for or influence Mr. El Shabazz’s election in the 2017 Primary were in-kind contributions to the El Shabazz campaign. These in-kind contributions exceeded the limits for contributions from a political committee to a candidate for District Attorney in 2017.

N. Additionally, Code Section 20-1003 requires a candidate for City office to have no more than one political committee for the City office he or she is seeking and to make all expenditures for that office out of that committee. As such, as explained at Regulation No. 1, Paragraphs 1.29 and 1.30, it is a violation of the Campaign Finance Law for a candidate’s campaign to exercise control over another political committee or over the expenditures of another political committee.

O. Tariq for Justice filed a 2017 thirty day post primary election (cycle 3) and several 24 hour campaign finance reports with the Board. However, the committee did not disclose any in-kind contributions from Trustwave PAC in the reports it filed with the Board.

P. Pursuant to Philadelphia Code § 20-1006(4) and Regulation No. 1, Paragraph 1.24, the making of a material misstatement or omission in a report filed with the Board is a violation of the City’s Campaign Finance Law.

Q. Mr. El Shabazz and Ms. Daukaus fully cooperated with the Board’s investigation and resolution of this matter.

R. The Parties desire to enter into this Agreement in order to resolve the issues described herein.

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AGREEMENT The Parties agree that:

1. Because the El Shabazz campaign controlled Trustwave PAC and the expenditures made by Trustwave PAC in violation of Philadelphia Code § 20-1003, Mr. El Shabazz shall pay a civil monetary penalty of $750 within 30 days of the effective date of the Agreement.

2. The in-kind contributions Trustwave PAC made to Mr. El Shabazz’s campaign exceeded the City’s contribution limits in violation of Philadelphia Code § 20-1002(12), for which Mr. El Shabazz shall pay a civil monetary penalty of $2,000 on the following schedule:

2.1 $1,000 within 60 days of the effective date of the Agreement; and

2.2 $1,000 within 90 days of the effective date of the Agreement.

3. The campaign finance reports Tariq for Justice filed with the Board did not disclose in-kind contributions from Trustwave PAC in violation of Philadelphia Code § 20-1006(4), for which Ms. Daukaus shall pay a civil monetary penalty of $2,000 on the following schedule:

3.1 $500 within 30 days of the effective date of the Agreement;

3.2 $500 within 90 days of the effective date of the Agreement; and

3.3 $1,000 within 150 days of the effective date of the Agreement.

4. Within thirty days of the effective date of the Agreement, Ms. Daukaus will amend Tariq for Justice’s campaign finance reports to correct the reporting failures described in this Agreement.

5. All payments required under the Agreement shall be made by check or money order made payable to the City of Philadelphia and delivered to the offices of the Board of Ethics.

6. Mr. El Shabazz and Ms. Daukaus release and hold harmless the Board and its staff from any potential claims, liabilities, and causes of action arising from the Board’s investigation, enforcement, and settlement of the matters described in the Agreement.

7. In consideration of the above and in exchange for the compliance of Mr. El Shabazz and Ms. Daukaus with all of the terms of the Agreement, the Board waives any further penalties or fines against them for the conduct described in the Agreement and any related conduct.

8. The Parties will not make any public statements that are inconsistent with the terms of the Agreement.

9. If the City is forced to seek judicial enforcement of Paragraphs 1, 2, 3, 4 or 5, or an order of the Court, and prevails, Mr. El Shabazz and Ms. Daukaus shall be liable for attorneys’ fees and costs reasonably expended in enforcing compliance with the Agreement. Fees for time spent by City attorneys shall be calculated based upon standard and customary billing rates in Philadelphia for attorneys with similar experience.

10. The Agreement contains the entire agreement between the Parties.

11. The Executive Director will submit a signed copy of the Agreement to the Board for approval. The Agreement shall become effective upon approval by the Board. The effective date of the Agreement shall be the date the Board approves the Agreement.

EXHIBIT A