CITY OF PHILADELPHIA

BOARD OF ETHICS

Contact: J. Shane Creamer, Jr., Executive Director, 215-686-9450

For Immediate Release: May 30, 2017

PHILADELPHIA – The Board of Ethics has approved a settlement agreement with Louis Giorla

resolving a violation of the City’s Ethics Code and an agreement with Manny Morales and Manny

Morales for City Council resolving violations of the City’s Campaign Finance Law. Copies of the

approved agreements are attached.

The agreement with former Prisons Commissioner Louis Giorla resolved a violation of the

2 year post employment restriction that applies to former City employees. As described in

Paragraphs G-J & 1 of the agreement, within 2 years of leaving the City, Mr. Giorla

acquired a financial interest in a contract he had previously awarded and extended as

Prisons Commissioner. Mr. Giorla performed $36,000 worth of consulting work for the

City contractor that was (1) within the scope of the City contract he had previously

approved and extended and (2) paid from the same account into which the City’s payments

were deposited. Mr. Giorla cooperated with the Board’s investigation. He will pay a

$2,000 civil monetary penalty. Mr. Giorla will also terminate his paid consultant work with

the City vendor within 14 days. He will not enter into a paid relationship with the City

contractor for 2 years.

The agreement with Manny Morales and Manny Morales for City Council resolves

violations of the City’s Campaign Finance Law for (1) receiving excess in-kind

contributions, (2) making material misstatements in campaign finance reports filed with

the Board, and (3) using more than one political committee to make campaign

expenditures. The conduct and violations are further described in Paragraphs H-L & 1-6 of

the agreement. Manny Morales for City Council will pay an aggregate civil monetary

penalty of $6,000. Mr. Morales will pay a civil monetary penalty of $750.

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 (“Agreement”) is made and entered into between the

Board of Ethics of the City of Philadelphia, Louis Giorla, and 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, the Board is charged with

administering and enforcing the City’s Ethics Code that imposes post-employment

restrictions on former City employees.

B. Louis Giorla was the Commissioner of the Philadelphia Prison System from 2008-2015.

He currently is a paid consultant for Corizon Health Services (“Corizon”). The City pays

Corizon to provide health services for the Prison System.

C. Section 20-607(c) of the Philadelphia Code prohibits a former City employee from

becoming financially interested in official action they took as a City employee for two years

after leaving City service.

D. Pursuant to Code Section 20-1302, a violation of Section 20-607(c) is subject to a

civil monetary penalty of $1,000 which may be increased to $2,000 if an

aggravating factor is present or decreased to as low as $250 if mitigating

factors are present.

E. In August 2016, Board enforcement staff received a complaint that described a

potential violation by Mr. Giorla of the City’s post-employment restrictions. In response

to the information, enforcement staff opened an investigation during which they

interviewed witnesses and obtained documents. Mr. Giorla voluntarily met with

enforcement staff to provide information related to the investigation.

F. As a result of the investigation, Board enforcement staff learned that every four years the

Prison System advertises and awards a contract for health services. The contract outlines the

contractor’s scope of services for the Prison System. In the intervening three years, the

Prison Commissioner approves one year extensions to the base contract.

G. As Prison Commissioner in 2012, Mr. Giorla awarded a contract to Corizon that provided

for a “Continuity of Care” program, which has also been described as “Release with Care.”

Through this program, Corizon was to provide medical services for inmates who were being

released. Mr. Giorla reviewed Corizon’s proposals and cost specifications, voted to award

the contract to Corizon, and signed the contract with Corizon. From 2013-2015, Mr. Giorla

signed and approved one year extensions of the 2012 contract. The extensions re-authorized

Corizon’s re-entry program.

H. In January 2016, Mr. Giorla left City service. In March 2016, Corizon approached him and

hired him to work for the company as a paid consultant.

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I. Corizon pays Mr. Giorla a retainer of $4,000 per month. To date, Corizon has paid Mr.

Giorla a total of $36,000 to work on Corizon’s re-entry program. The payments have been

made from Corizon’s main account, which is the same account into which the City makes

payments pursuant to its contract with Corizon.

J. Mr. Giorla has acquired a financial interest in the contract and subsequent extensions

because the services he provides for Corizon are within the scope of Corizon’s contract and

extensions with the City and because he is paid from the same Corizon account into which

the City’s payments to Corizon are deposited.

K. At all times, Mr. Giorla fully cooperated with the Board’s investigation of the matters

described in this Agreement.

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

herein.

AGREEMENT

The Parties agree that:

1. By acquiring, within 2 years of leaving City service, a financial interest in the Corizon

contract that he previously awarded and extended as Prison Commissioner, Mr. Giorla

violated Code Section 20-607(c) and is subject to a civil monetary penalty of $2,000.

Payment shall be by check or money order made payable to the City of Philadelphia and

delivered to the offices of the Board within 30 days of execution of the Agreement.

2. Mr. Giorla will terminate his paid consultant work for Corizon within 14 days of the

execution of the Agreement.

3. Mr. Giorla will not enter into any paid relationship with Corizon for a period of 2 years

from the execution of the Agreement.

4. If Mr. Giorla enters into a paid relationship with Corizon within 2 years of the execution of

the Agreement, he shall disgorge $36,000 to the City of Philadelphia. Payment shall be by

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

of the Board within 30 days of Board enforcement notifying Mr. Giorla in writing of his

breach of the Agreement.

5. Mr. Giorla 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 the Agreement.

6. In consideration of the above and in exchange for Mr. Giorla’s compliance with all of the

terms of the Agreement, the Board waives any further penalties or fines against him for the

violations described in the Agreement.

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

Agreement.

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is made and entered into between the Board

of Ethics of the City of Philadelphia, Manny Morales for City Council, Emilio Vazquez, the

chair of Manny Morales for City Council, Manny Morales, 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, the Board is charged with

administering and enforcing the City’s Campaign Finance Law, which is found at Chapter

20-1000 of the Philadelphia Code. Board Regulation No. 1 (Campaign Finance) provides a

detailed interpretation of the City’s Campaign Finance Law.

B. Manny Morales was a candidate for Philadelphia’s 7th

City Council District seat in 2015. Mr.

Morales designated the political committee Manny Morales for City Council as the one

committee which would accept contributions and make expenditures for his 2015 campaign

for City Council. Emilio Vazquez is the chair of Manny Morales for City Council.

C. If a political committee coordinates its expenditures with a candidate’s campaign, such

expenditures are in-kind contributions to the candidate and are subject to the contributions

limits of the City’s Campaign Finance Law. See Board Regulation No. 1, Paragraph 1.38,

D. Under the City’s Campaign Finance Law, in 2015, a political committee could not make

contributions of more than $11,500 per calendar year to a candidate for City elective office,

nor could a candidate for City elective office accept such contributions. An excess

contribution violates the City’s Campaign Finance Law and is subject to a civil monetary

penalty of three times the amount by which the contribution exceeded the limit, or $2,000,

whichever is less.

E. Board Regulation No. 1, at Subpart H, sets forth detailed guidance on what constitutes a

coordinated expenditure. For example, an expenditure is coordinated if a political committee

makes the expenditure in cooperation, consultation or concert with the candidate’s campaign

or if the person making the expenditure communicates with the candidate’s campaign about

the expenditure before making it.

F. The candidate’s campaign includes the candidate, the candidate’s candidate political

committee, or an agent of either of the preceding. See Board Regulation No. 1, Paragraph

1.1(e).

G. Additionally, the City’s Campaign Finance Law 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, Paragraph 1.30, it is a violation of the City’s Campaign Finance Law for

a candidate or a candidate’s agent to exercise control over the expenditures of another

political committee.

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H. In early November of 2015, Board enforcement staff received a complaint alleging that Mr.

Morales’ campaign had received excess in-kind contributions from the LUPE PAC and the

7th

Ward/Friends of Angel Cruz PAC and that Manny Morales for City Council had made

material misstatements and omissions in campaign finance reports it had filed with the

Board. Because the complaint stated potential violations of the City’s Campaign Finance

Law, enforcement staff accepted the complaint and opened an investigation. In the course of

the investigation, enforcement staff interviewed witnesses, took sworn statements and

affidavits, and obtained documents, including bank records.

I. LUPE PAC was created in March of 2015. It uses the same name as a larger group created by

community leaders in the 7th

Councilmanic District. State Representative Angel Cruz and

Jose Giral directed LUPE PAC’s activities and expenditures.

J. Mr. Giral was Mr. Morales’ campaign manager and an agent of his campaign. Mr. Giral

helped run the Morales campaign and placed orders with vendors and consultants, including

television advertisers, radio advertisers, printing companies, t-shirt companies, and web

consultants.

K. On May 2, 2016, the Board approved a settlement agreement with LUPE PAC, the 7th

Ward/Friends of Angel Cruz PAC, the treasurer of those PACs, and Rep. Cruz and Mr. Giral.

In the agreement, the PACs, their treasurer, Rep. Cruz, and Mr. Giral admitted that:

i. From March through May of 2015, LUPE PAC made expenditures of $22,000 to

influence the 2015 7th

Councilmanic District Primary Election. All of those

expenditures were coordinated with Manny Morales’ City Council campaign because

the expenditures were made in cooperation, consultation, and concert with an agent of

the campaign, Mr. Giral. As such, in 2015, Manny Morales for City Council accepted

$10,500 in excess in-kind contributions from LUPE PAC.

ii. In the first half of 2015, the 7th

Ward/Friends of Angel Cruz PAC made expenditures

of $48,325 in coordination with the Morales campaign to influence the 2015 7th

Councilmanic District Primary Election. These expenditures were coordinated with

Morales’ campaign because the expenditures were made in cooperation, consultation,

and concert with an agent of the campaign, Mr. Giral. As such, in 2015, Manny

Morales for City Council accepted $36,825 in excess in-kind contributions from the

7th

Ward/Friends of Angel Cruz PAC.

L. Manny Morales for City Council filed a 2015 thirty day post primary election (cycle 3)

campaign finance report with the Board. However, Manny Morales for City Council did not

disclose any in-kind contributions from LUPE PAC or the 7th

Ward/Friends of Angel Cruz

PAC.

M. Pursuant to Philadelphia Code §§ 20-1006(4) and 20-1302, 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 and is subject to a civil monetary penalty of $1,000, which may be

increased or decreased depending on the presence of mitigating or aggravating factors.

N. The Parties desire to enter into this Agreement in order to resolve the matters

described herein.

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AGREEMENT

The Parties agree that:

1. By accepting excess in-kind contributions from LUPE PAC, Manny Morales for City

Council violated Philadelphia Code § 20-1002(12), for which the committee is liable for a

civil monetary penalty of $2,000.

2. By accepting excess in-kind contributions from the 7th

Ward/Friends of Angel Cruz PAC,

Manny Morales for City Council violated Philadelphia Code § 20-1002(12), for which the

committee is liable for a civil monetary penalty of $2,000.

3. Because the 2015 cycle 3 Manny Morales for City Council campaign finance report filed

with the Board failed to disclose in-kind contributions from LUPE PAC and 7th

Ward/Friends of Angel Cruz PAC, Manny Morales for City Council violated Philadelphia

Code § 20-1006(4), for which the committee is subject to a civil monetary penalty of

$2,000.

4. Manny Morales for City Council shall pay the aggregate civil monetary penalty of $6,000

for the violations described in Paragraphs 1 through 3 within 90 days of the effective date of

the Agreement. Payment shall be by check or money order made payable to the City of

Philadelphia and delivered to the offices of the Board of Ethics.

5. Within 30 days of the effective date of the Agreement, Manny Morales for City Council will

file an amended cycle 3 campaign finance report with the Board to correct the reporting

failures described in this Agreement.

6. Because an agent of Manny Morales for City Council, Jose Giral, directed expenditures made

by LUPE PAC and the 7th

Ward/Friends of Angel Cruz PAC, Mr. Morales violated Philadelphia Code Section 20-1003, for which he is liable for a civil monetary penalty of

$750, which he shall pay on the following schedule:

6.1 $150 within 30 days of the effective date of the Agreement;

6.2 $200 within 4 months of the effective date of the Agreement;

6.3 $200 within 8 months of the effective date of the Agreement; and

6.4 $200 within 12 months of the effective date of the Agreement.

Payment shall be by check or money order made payable to the City of Philadelphia and

delivered to the offices of the Board of Ethics.

7. Manny Morales for City Council, Mr. Vazquez, and Mr. Morales 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 violations described in the

Agreement.

8. In consideration of the above and in exchange for the compliance of Manny Morales for City

Council, Mr. Vazquez, and Mr. Morales with all of the terms of the Agreement, the Board

waives any further penalties or fines against them for the conduct described in this

Agreement.

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

Agreement.