The Magazine

The Streets of Philadelphia

Will the mayor's race be a Dinkins-Giuliani replay?

Oct 27, 2003, Vol. 9, No. 07 • By HARRY SIEGEL
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AT FIRST GLANCE, we know how the story goes: A big-city black mayor risen from the clubhouse ranks of the longtime ruling party, after four years of presiding over his city's decline, takes on a white Republican reformer in a rematch of their bitter, close-fought first contest. But no matter the parallels with the Dinkins-Giuliani race a decade ago, today's Street-Katz fight in Philadelphia is not New York circa 1993, and here the story may end with renewed disappointment, not urban renewal.

Almost a century after the crusading muckraker Lincoln Steffens described Philadelphia as "corrupt and content," the city still seems enthralled by low expectations. After more than a half century of one-party rule by an increasingly sclerotic Democratic party, the city has a real chance for change--but may settle yet again for corruption.

It says something about Philadelphia that no one who has been paying attention was surprised when, on October 7, Mayor John Street discovered an FBI bug in his office. There are any number of potential scandals the feds might be investigating. There are the Mercedes-driving black Muslims receiving over $4 million from the city to run schools where pipes freeze and unpaid teachers quit mid-year. There is the widespread and openly acknowledged patronage and nepotism (Street's brother received a $1.1 million maintenance contract for the city's airport, revoked after a public outcry). Or perhaps the bug was there to investigate some scandal not yet known--theories abound. The mayor, meanwhile, has made much of being a subject, not a target, of the investigation and of the timing of the bug with the election--insinuating that the Bush White House is out to destroy a black mayor.

It says a lot about Philadelphia that the discovery of the bug seems to have given Mayor Street a boost in the polls.

In such an atmosphere of victimhood and paranoia, is there still a chance for challenger Sam Katz to repeat the Giuliani revival in Philly?

Katz, who made his fortune as a financial consultant for cities, including Philadelphia, has some serious prescriptions for the city's troubles. Mainly, he wants to arrest widespread expectations of decline and mediocrity. "The perception is that big cities have to lose their populations," he notes, "but every top city in America except two--Philadelphia and Detroit--has gained population in the 1990s." He points to three key problems--the city's high crime rate and low quality of life, the consequent flight of the young and college educated, and a tax system that leans heavily on businesses. The flight of businesses and upwardly mobile young people effectively serves the interests of the worst elements of the local Democratic party, creating a self-selecting electorate in which those who don't like how the city is run leave, while the rest are willing to lump it.

"Just look at City Line Avenue," says Katz. "Stand on one side, the city side, where there is the business-privilege tax and the wage tax"--city surtaxes on business and personal income. "You have 200,000 square feet of offices. Now go to the other side, where there is no business-privilege tax and wage tax, and you have 2.6 million square feet of office space. These are the businesses that left Philadelphia. . . . Our tax structure created [satellite cities] Cherry Hill and King of Prussia." One recent study found that 60 percent of those considering leaving the city listed the tax burden as their main motivation.

In a city where many fear their arm might fall off if used to pull the lever for a Republican, Street has tried to run against Bush as much as Katz. In the last debate, he used the word Republican more than 30 times before I lost count ("My Republican opponent with a very Republican plan"). To quote Frank Keel, a Street campaign spokesman, "Pennsylvania is critical to Bush's reelection hopes. . . . So is it inconceivable that something like [the FBI bug] could be triggered by the Republicans, in an effort to win Philadelphia, in an effort to help George W. Bush get reelected? I don't know. I would speculate that it's possible."

Ironically, Street catapulted to public notice in the late 1970s as a councilman who kept his hands clean during Abscam, the FBI investigation into corruption best remembered for agents dressed as Arab sheikhs offering bags of money to local politicians. After the arrest of three councilmen and two Philadelphia congressmen, Street formed an ethics committee dedicated to cleaning up the city's political culture.