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.

But as mayor, he has skillfully manipulated the system of pay-for-play politics. This came out in a series of George Washington Plunkitt-like remarks during the last debate, which aired on a morning radio show, with breaks on the twos for traffic and weather. The mayor cheerfully agreed with Katz that contributors to the Street campaign "have a greater chance of getting business from my administration," going on to explain that "there are these rules that have been informally accepted in this country for as long as there's been government, as long as there's been patronage. . . . That's how the game is played--with qualified firms getting deals."

Or, as Plunkitt, the great practitioner and chronicler of Tammany politics, put it: "I've been readin' a book by Lincoln Steffens on "The Shame of the Cities." Steffens means well but, like all reformers, he don't know how to make distinctions. He can't see no difference between honest graft and dishonest graft and, consequent, he gets things all mixed up."

In a similar spirit, Street labeled Katz a "hypocrite" for taking him to task for such favoritism. Later in the debate, he mocked his opponent's refusal to accept clubhouse realities in a schoolyard-like singsong--"You're innocent? You're just a man running for mayor, and you haven't done anything? These big bullies are pushing you around?"

THOSE BIG BULLIES may have stolen the last election--and they may be trying to do it again. In 1999, Street won by 7,000 votes in perhaps the only city in America to have a roughly one-to-one ratio of registered to eligible voters. Lest anyone confuse Philadelphia with a bastion of participatory democracy, as many as 100,000 of the registrations are thought to be falsified. Two homeless men I talked to, one of them a Democratic operative before becoming a drug addict, told me that the Street campaign in 1999 had rounded up homeless men and ne'er-do-wells, driven them to the polls, and paid them $10 to $15 for their votes.

This year, the mayor's election team organized for a far right candidate in an effort to siphon votes from Katz (the candidate was thrown off the ballot for phony signatures). And the potential for fraud is rife, as always. As John Fund pointed out in a recent Wall Street Journal piece, the Democrats control the poll machinery in most precincts, and the city has a system in which people "who have not voted in the last two general elections are marked with an asterisk on the official voter rolls for each precinct. This is a roadmap for people who want to arrange for others to vote in their place."

Still, Street has real vulnerabilities. He has taken little more than baby steps to deal with crime. Imagine Giuliani boasting that because he responded to open air drug markets, "the drug dealers have had no choice but to go inside." When Katz pointed out that rape, murder, and aggravated assault are up sharply in West and North Philly over the last year, Street sneered, "Sam, you aren't out there enough to know if people feel safe in these neighborhoods. The only time you show up there is when it's time to run for mayor."

Part of the problem voters face is that neither candidate is very likable. Street comes off as private, harsh, and contentious, while Katz often seems too wonky for public life. His campaign team plied me with quality research--with bombshells deeply buried in dull-as-dirt language--much of which had failed to gain traction in the local press. In the radio debate, which allowed for direct responses, Katz spent far too much time complaining about the format and Street's incivility.

Katz is hoping that his ace in the hole is the union endorsements he's received this time around (he was practically shut out by the unions in 1999) combined with a much stronger focus on his get-out-the-vote operation. Last time, he says, "I lost because I failed to mobilize people." This time he's hired Daryl Fox, who worked extremely successful Election Days for New York mayors Giuliani and Bloomberg, to run his turnout effort.

Mostly, though, Katz has to hope that the bug doesn't become an excuse for voters to bear out Lincoln Steffens's analysis in the 21st century, as they did in the 20th. "The Philadelphia machine isn't the best. It isn't sound, and I doubt if it would stand in New York or Chicago," said Steffens. "The enduring strength of the typical American political machine is that it is a natural growth--a sucker, but deep-rooted in the people. The New Yorkers vote for Tammany Hall. The Philadelphians do not vote; they are disfranchised, and their disfranchisement is one anchor of the foundation of the Philadelphia organization."

Harry Siegel, a Brooklyn-based journalist, is writing a book on gentrification in New York.

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