Bloomberg-Backed Soda Tax Group Cited for Lobbying Violations

Dark money group made 'material misstatements' on disclosure

Former New York City mayor Michael Bloomberg / Getty Images
July 30, 2018

A group backed by liberal billionaire Michael Bloomberg to promote Philadelphia's soda tax has been cited for lobbying violations.

Philadelphians for a Fair Future, a nonprofit organization that received roughly $1.5 million from the former New York City mayor who tried to ban Big Gulps, was cited for making "material misstatements" and failing to disclose its lobbyists.

The Philadelphia Board of Ethics announced last week the group reached a settlement to pay $8,000 for the violations.

"This agreement resolves violations of the City's Lobbying Law by Philadelphians for a Fair Future for making material misstatements and omissions in a registration and expense report submitted to the Board," the city government said. "The agreement also resolves violations by several lobbyists and lobbying firms for failing to register with the Board."

Philadelphians for a Fair Future was credited as the "dark money" force behind the soda tax by Philadelphia Magazine after the tax passed in 2016.

The group is an ally of Philadelphia mayor Jim Kenney, who pushed the 1.5-cent per-ounce tax on sugary drinks that has made soda more expensive than beer. A Tax Foundation study released last year found the tax had fallen short of revenue projections, cost jobs, and forced some Philadelphians to drive outside the city to buy groceries.

Philadelphians for a Fair Future spent $2.2 million on lobbying for the soda tax before its passage. Several consulting groups and individuals who were paid by the group to lobby for the tax were not disclosed, in violation of the city's lobbying law. Specifically, the group paid Peak Strategic Solutions, Bellevue Strategies, Bellevue Communications Group, and Andrew Dalzell.

Last week, Kenney said it was the "army of unpaid lobbyists" that made the soda tax a reality, after the tax was upheld by the Pennsylvania Supreme Court.

The group also did not disclose its work with Rodney Muhammad, who is the president of the Philadelphia chapter of the NAACP and was a big backer of the soda tax. Muhammad was also not registered as a lobbyist.

Kenney raised eyebrows when he hired Muhammad as a consultant, paying him $25,000 following his support of the soda tax, but under the name "Rodney Carpenter."

Philadelphians for a Fair Future said it is "committed to transparency" in response to the ethics violations.

"We have been in discussions with the Board of Ethics for nearly a year concerning the issues addressed in the settlement," the group said in a statement. "From its inception in 2016, PFF has been committed to transparency in its operations, which is why we consistently disclosed the identity of all our donors as well as the amounts donated to this effort."

"At no time was PFF or its consultants engaged in any effort to hide or obscure its objectives or its strategies for achieving them," the group added. "In our discussions with the city's Ethics Board, we were informed that PFF and its consultants failed to register as lobbyists for our work in 2016. This omission was inadvertent, and we have corrected it."

Though the tax survived a court challenge in the state, it remains controversial. Bloomberg's efforts to push soda taxes have failed elsewhere, including $1.5 million for a measure in Santa Fe, N.M., that was soundly rejected by voters, and $5 million to advocate for a soda tax in Chicago, which lasted just four months.

Cook County repealed the tax, which had added a $1.28 tax for a gallon of zero-calorie iced tea.