The beverage industry has remained unusually quiet since authorities alleged the source of the city’s sweetened beverage tax rested with indicted labor boss John Dougherty.
That silence is over — only months before the primary elections.
“The people of Philadelphia never got the honest debate about the beverage tax that they deserved,” said Anthony Campisi, a spokesman for the anti-beverage tax lobbying group and coalition Ax the Bev Tax.
The first comments from the coalition, which is backed by the American Beverage Association, on Tuesday came two weeks after Dougherty, the business manager of the International Brotherhood of Electrical Workers Local 98, Councilman Bobby Henon and six others were indicted on a total of 116 counts of embezzlement, fraud, bribery, falsifying financial documents and more.
The indictment, Campisi said, revealed that Mayor Jim Kenney’s 1.5-cent-per-ounce tax on sweetened beverage sales was passed under false pretenses. He added that City Council ought to repeal it because “this tax is impossible to separate from John Dougherty.”
“At no point during the debate over this tax was it revealed that the biggest supporter of this tax, John Dougherty, was pushing it as a revenge plot,” Campisi said.
Mike Dunn, a spokesman for Kenney, rejected the idea of repealing the soda tax, adding that the mayor had no knowledge of Dougherty’s alleged effort to support the tax in order to seek political revenge against another union.
“We are not surprised that the beverage industry, which has devoted millions of dollars to a failed legal challenge and public relations effort to fight the beverage tax, has decided to seize on this purported linkage to the federal probe,” Dunn said in an email.
In addition, Dunn said no one who developed the soda tax legislation had any knowledge of the alleged conversations outlined in the indictment.
Funds from the soda tax go toward Kenney’s $500 million plan to offer universal pre-kindergarten, pay for Community Schools, and renovate parks, libraries and other public spaces.
If the soda tax is repealed, the funding for those programs goes with it, Dunn said.
The future of the soda tax, Kenney’s signature accomplishment, is fast becoming the hottest issue in the upcoming primary elections, when the mayor’s office and all 17 seats on City Council are up for election.
Kenney’s only challenger in the Democratic primary to date, former City Controller Alan Butkovitz, has come out against the soda tax.
Dunn said the indictment does not change the political landscape for preserving the soda tax. The mayor continues to support the tax and applauds the City Council members who have remained behind it, Dunn said.
Asked in a follow-up email whether the coalition will spend any money in the upcoming City Council and mayoral elections, Campisi declined to comment.
The beverage industry spent millions attempting to defeat the tax in 2016, but City Council approved it with a 13-4 vote.
Dougherty, known as “Johnny Doc,” and Henon were instrumental in advancing the soda tax legislation through City Council, according to the indictment. In addition, Dougherty heads a union that has spent heavily in local and statewide elections.
Dougherty allegedly pushed the tax to exact revenge on the Teamsters, whom Dougherty had accused of funding a negative political commercial about him in 2015, according to the indictment.
While speaking to Brian Burrows, who is president of IBEW Local 98 and also named in the indictment, Dougherty said, “Let me tell you what Bobby Henon’s going to do, and he’s already talked to [elected local public official]. They’re going to start to put a tax on soda again and that will cost the Teamsters 100 jobs in Philly,” according to prosecutors.
Dougherty and Henon went on to discuss how they could get the soda tax legislation passed, and the labor leader instructed Henon on what steps to take, according to the indictment.
In February 2016, when a member of Kenney’s administration tried to explain the benefits of the soda tax to Dougherty, he replied, “You don’t have to explain to me. I don’t give a f---. Listen, my goal is to make sure you are alright, that’s all,” according to prosecutors.
The tax went into effect in 2017, but the Kenney administration put some of the tax’s revenues on ice while the beverage industry challenged it in the courts.
A final ruling upholding the tax came from the Supreme Court in July 2018.
In recent months, scrutiny of the tax has been growing.
In November, the Rev. Jay Broadnax, president of the Black Clergy of Philadelphia and Vicinity, called for repealing the tax, saying it has a regressive and disproportionate effect on African Americans and the poor.
Jeff Brown, who owns multiple supermarkets in the city and region, last month blamed the soda tax for the planned March closure of his ShopRite supermarket at 67th Street and Haverford Avenue.
At-large Councilman Allan Domb also has called for a City Council committee to hold a hearing on the tax.