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Did the Cobbs Creek Foundation make an illegal political contribution?

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On December 28, 2021 a private foundation signed a 30-year lease with the City of Philadelphia and took control of 350 acres of Philadelphia park land with an assessed value of $92.7 million.

The rent? $1.

To supporters of the agreement, it is nonetheless a good deal for the city.

Councilmember Curtis Jones Jr., who represents the fourth councilmanic district, which includes the land occupied by the Cobbs Creek and Karakung golf courses, describes the land before the transfer as a “stranded asset.” Much like a broken-down car in your driveway that you can’t afford to fix, the golf courses were in disrepair, and the city didn’t have the money to restore them.

According to Jones, the West Conshohocken-based Cobbs Creek Restoration and Community Foundation, also referred to as the Cobbs Creek Foundation, did Philadelphia a favor by taking over the golf courses and promising to renovate them using private funds.

Deals like this don’t happen overnight.

Jones said it was in 2008 that he first heard of interest from the group that would form the foundation.

“It’s a miracle that the people from the foundation didn’t take their bat and ball and go home,” he said.

A local foundation is clear cutting trees in Cobbs Creek. Photography by Drew Dennis

Soon after Grid ran its first blog post about the deforestation of the Cobbs Creek and Karakung golf courses, the magazine received a tip pointing out an interestingly-timed donation.

On September 21, 2021, before the lease with the city was signed and while applications for zoning permits to clear the land were pending, the Cobbs Creek Foundation gave $2,500 to Councilmember Jones’ campaign. On September 30, a second donation with ties to the foundation was made, this one for $1,000, by one of the organization’s directors, Amara Briggs. Grid contacted Briggs, who said she was forwarding our inquiry to the foundation, and the foundation has not yet responded to our questions regarding the donations.

Under Philadelphia’s system of “councilmanic prerogative,” district councilmembers wield veto power over projects in their districts. This arrangement gives private parties with business deals at stake an incentive to curry favor with the local councilmember. Jones says that he has a firewall set up between the campaign and his office’s policy operations, but, on the face of it, these donations could be seen as an unethical gesture to influence a powerful public official.

The foundation’s donation in and of itself might be illegal. The Cobbs Creek Restoration and Community Foundation is registered as a nonprofit organization under section 501(c)3 of the Internal Revenue Code. Publication 557, “Tax Exempt Status for Your Organization,” from the IRS states: “Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office.”

“The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations,” drives home the point: “Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.”

Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.”

To translate that, “loss of exemption,” and “revocation of tax-exempt status,” means that donations made to the organization would no longer be tax deductible.

It also would make it much more difficult for other nonprofits, including foundations, to provide funds to the suddenly non-exempt organization. The ability of the Cobbs Creek Foundation to raise the money to renovate the golf course depends on their exempt status.

Sometimes a tax-exempt organization will have a parallel lobbying entity with a similar name but a different organizational status, but Grid was unable to find any other corporation with a name similar to “The Cobbs Creek Restoration and Community Foundation” registered in Pennsylvania.

Update as of March 3, 2022:

Cobbs Creek Foundation cites “error” regarding illegal campaign donation. Additional donations affiliated with foundation identified

A few hours after our March 2 post (and four days after Grid initially emailed asking about the donation), the Cobbs Creek Community Foundation’s communications manager Michael Rodriguez, of Ceisler Media & Issue Advocacy, responded to our inquiry:

“The donation to Councilmember Jones was made in error when it came from the CCF. Both the Foundation and the Councilmember were aware of the error prior to your email and had begun work on having the money returned.”

The donation was made on September 21, 2021, over 5 months ago.

Both Rodriguez and Councilmemeber Jones noted that there were two permit applications that were rejected—both for clearing trees on steep slopes—as evidence that Jones lacked control over the zoning process. Nonetheless, he was actively involved in the overall lease negotiations. Two other permits, for clearing all the land not on steep slopes, were approved.

The foundation applied for the approved permits in June, and paid an extra fee for accelerated review, which should take five business days. The permits were approved six months later at the end of December, an unusual delay in the process.

In the meantime, Grid has received additional tips connecting more September 2021 contributions to Jones’ campaign that are from donors directly connected to the Cobbs Creek Foundation:

Edward J. Hazzouri made a $1,000 donation on September 22. Ed Hazzouri & Associates is listed as “Government Affairs” on the foundation’s organizational structure, included as an exhibit under the lease agreement.

Stradley Ronon Stevens & Young LLP made a $2,500 donation on September 21. The firm is listed as “Legal Counsel” on the organizational structure.

Counting the illegal payment made by the Cobbs Creek Foundation, there are four donations totaling $7,000 received in an eight-day period from people and organizations with direct ties to the project.

Please send tips to news@gridphilly.com

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