Rhynhart vs. Kenney: Inside the Most Contentious Relationship in City Hall

Inside the contentious Rhynhart Kenney relationship. Photograph by Colin Lenton

Let’s start at the top: If age generally moves politicians to the right, Mayor Jim Kenney seems utterly determined to stand that notion on its head as he ticks off his 60s by leaning further leftward. Of course, a mayor needs help, especially in this city. It arrived in late 2017, two years into Kenney’s mayoralty, when new progressive playmates were delivered on Election Day: District Attorney Larry Krasner and City Controller Rebecca Rhynhart. It appeared to be a leftist’s dream-come-true: Two long-standing messes — our judicial system and the city’s finances — were about to enter the 21st century.

Krasner has the sexier position as D.A., and he’s gotten national attention for his aggressive reforms. Yet it may very well turn out that Rhynhart’s initiatives will be more important to this city in the end. As the controller — the city’s financial watchdog — Rhynhart is tasked with poking into all sorts of ways the city conducts business. This looked like a good thing, a collaborative endeavor, when she hit the ground running in early 2018, given that she’d worked under Kenney during the first year of his administration, overseeing 11 city departments with the goal of making them more modern and efficient. And if you listed the top bona fides of a progressive’s to-do list, Kenney and Rhynhart would be checking off the same boxes on education and LGBTQ rights and poverty and violence and on down the list. They’d work together, in other words; Rhynhart would help the Mayor put the money where his priorities lay.

This is where things immediately got a little … complicated, and Rebecca Rhynhart admits now that she was, maybe, a bit naive in what she expected to happen.

Early on, Rhynhart audited the city’s finances, and what she found astounded her, she says: There was $33 million missing, plus almost $1 billion in accounting errors. She took her findings to the finance director, Rob Dubow; his response didn’t satisfy her, and Rhynhart told Dubow’s people to take another pass — to come up with a plan and a timeline to correct the problems. But it didn’t happen, at least not fast enough for Rhynhart, so she held a press conference in the spring of 2018 and went public with the ugly numbers.

The Mayor called her.

“He was angry,” Rhynhart says. “He got personal.” That’s all she’ll say about that call, but it was the beginning of the end between them.

As of mid-September, Mayor Kenney had canceled a year’s worth of once-a-month meetings with his controller — a stonewalling that a high-level mayoral administrator defends by calling Rhynhart’s tactics hair-trigger and overtly political and vindictive toward former colleagues in the administration.

So much for a sweet collaboration. But this isn’t to say that Rhynhart won’t have a big effect as she delves into various issues. She’ll just have to go at it in a different way now — not by partnering with Kenney and his office, but by taking them on. And she’s fine with that, she says, if that’s the way it has to be.

Philadelphia’s controller is mandated, per the city’s charter, to audit every city department each year. Rhynhart says that wasn’t happening under her predecessor, Alan Butkovitz, who served for a dozen years; it is now. But it’s more than that: The controller is a sort of watchdog to make sure the city is playing fair. “I had this vision coming into office,” Rhynhart says in her office in early September, “to use the audit function to really root out waste and fraud and abuse. And the Mayor would say, ‘I’m going to implement your reforms,’ and he would implement them, and it would be a win-win.” Rhynhart smiles. “It hasn’t worked out that way.”

Rhynhart takes on issues where it appears money is being wasted or that the public seems particularly frustrated over. When she ran for controller in 2017 (she upset Butkovitz in the primary), she says, voters asked her constantly about whether the soda tax would really be used for pre-K and the other two programs for which it was earmarked; Rhynhart has challenged the Kenney administration over dumping the tax into the general fund instead of creating a transparent escrow account. Tips on problems flow into her office. She’s pushing now for complete transparency on what the city spends, and where, in real time, which the Kenney administration is theoretically behind but taking too long to set up online for the controller’s taste. Administration foot-dragging is a problem in a lot of areas, and it frustrates Rhynhart no end; she says she’ll start posting all current city expenditures if the Mayor doesn’t make that happen soon. “Sometimes people in the political world here don’t understand me,” she says. “They say, ‘What are you doing?’ When there is an issue, I lean into it. If people elected me to represent them, I’m going to have a voice.”

Rhynhart has taken a circuitous route to city political life. She grew up in Abington and majored in environmental studies and English at Middlebury, got a job back in Philly selling science and business textbooks and then a master’s from Columbia in public administration, and ended up in her late 20s working for Bear Stearns, dealing with municipal derivatives. If that last one in particular seems like a bit of a left turn, Rhynhart loved the juice, the competitive challenge, of Wall Street, and had realized that with public policy, whoever controls the money has a big say on what gets done. But she began to feel that the way Wall Street hotshots (like her) took advantage of cities’ less sophisticated finance departments was unconscionable. A lot of people thought she was crazy to go to the other side, but in 2008 she became city treasurer under Mayor Michael Nutter. She took, he told her, the biggest pay cut of anyone who came from the private sector to his administration.

She served under Nutter for eight years, and then for one year for Kenney as chief administration officer. By the end, she was getting highly frustrated. Rhynhart would call Richard Vague, the Philly-based former banker who’d brainstorm with her about getting the city’s IT department modernized, and kvetch about how nothing gets done in city government. She had access to Kenney but was still filling a lane, and waiting or filling a lane is certainly not Rhynhart’s style. Finally she called Vague in early 2017 to see what he thought about her running for controller. “It took me about a nano-second to say, ‘Do it,’” says Vague.

There’s an inside joke that it’s very easy to catch City Controller Disease — you start looking across the street from the controller’s office to City Hall and think, I could do a better job there. It’s roundly assumed now that Rhynhart wants to be mayor, and she’s coy on that front — “I’ve heard people say that,” she says, and smiles. History isn’t on her side: Tom Leonard, Jonathan Saidel and Butkovitz, her most recent predecessors, all had mayoral ambitions that went nowhere. Rhynhart is 45, and she’s still young, politically, with a sort of no-holds-barred view of what should get done in her city.

I share a quick story with her that makes her seem even younger: A certain longtime leader in the city’s Democratic Party told me a year ago that he thinks Jim Kenney is doing a terrible job as mayor. This mover and shaker also said he would support Kenney for reelection. Why? “Because he’s my friend.”

“That’s just wrong!” Rebecca Rhynhart fairly bursts. Of course it’s wrong. “It comes up with me all the time,” she says, “that I’m breaking the code of conduct between electeds.” And her native energy for doing just that answers the question of whether she’s ready to upset the apple cart of political allegiances that have ruled her city more or less forever.

This is how it’s going between Rebecca Rhynhart and Jim Kenney.

The audit her office did of city finances in early 2018 that highlighted those two big problems — the missing $33 million, which had come to light earlier, and some $900 million in bookkeeping errors, given that the city hadn’t reconciled its main cash account for three years — exposed Philadelphia as the worst of the country’s top 10 major cities in accounting practices. As a gut check, Rhynhart asked two private accounting firms to look at a summary of the audit — pro bono — and they confirmed what her office found: The finances were a mess. But there was no urgency in the city’s response to this news, Rhynhart says, and there was no timeline for straightening out the books, even as Philadelphia was exposed to possible fraud and our financial rating was at risk. Rhynhart felt she had no choice but to go public with the problems in June of last year.

A high-level Kenney administrator says those accounting problems were six or seven years in the making and would naturally take time to fix. Moreover, problems in account reconciliation are common; Butkovitz, controller from 2006 to 2018, says there was as much as $5 billion in errors at one point during his tenure, and he didn’t make much noise about it because it would have been construed as a much more serious problem than he believed it really was. What’s more, Kenney and Rhynhart could have worked together: He invited the controller to join a task force to clean up the mess, which she declined to do because, in her view, she would be crossing a line, as an independent auditor who no longer works for the Mayor and our financial watchdog to boot.

The Kenney administrator has another, more incriminating criticism of Rhynhart: “She was budget director when all of this was happening to begin with. A member of the finance cabinet, if you will. There is the finance director, and two people under him: the city treasurer and the budget director, and they are talking regularly.”

So why didn’t she blow the whistle then? Rhynhart says it’s because she didn’t know there was a problem: “I wasn’t involved with or in the room with accounting control weaknesses. That had nothing to do with what I was charged with.”

There’s one more card to play on the Kenney side: “She’s vindictive.” The city administrator says Rhynhart has it in for Rob Dubow, her longtime boss under Nutter and still the finance director, and that going public over the financial problems was meant to embarrass him.

Rhynhart is flabbergasted by the attacks on her: “Why put all this energy into me instead of fixing the problem?” She rejects it all and seems most bothered by the notion that she speaks out to score political points.

There are some critics outside the Kenney administration. Donna Cooper, who was a longtime acolyte of Ed Rendell, thinks that Rhynhart’s harping about putting the soda tax into the general fund “raised the red flag that it was being used for other purposes” than the pre-K program it was primarily designated for. And there’s no evidence of misuse of those funds. “But Rhynhart was looking for something to get her in the public mix,” Cooper says.

Enough, says the guy Rebecca Rhynhart (and Rob Dubow) worked under for eight years; Michael Nutter will have none of the sniping about her motives.

“Rebecca is the most honest person I know,” Nutter says. “She gives it to you straight, no chaser. And she’s not political in the way she conducts the office.” Nutter is clearly being loyal to one of his protégés. Still, it’s pointed praise: He’s not saying Rhynhart is devoid of political ambition, but that her integrity trumps whatever office she might want next. And that she desperately wants to fix what’s wrong with the city.

As for Rhynhart, what has surprised her most about being controller, she says, “is the level of pushback from people in power, especially the first six months in office. Why are these people so upset with me? All I’m doing is what makes sense. I didn’t start out wanting to upset anyone.” She laughs. “I really like to get along with people.”

Rhynhart ran into administration roadblocks with another big issue, one that’s particularly important to her: how the city deals with sexual harassment. After an audit of the process, she recommended that complaints from all departments be handled by one centralized unit and investigated the same way, by a single investigatory team. That way, individual department politics and self-protection can’t be factors.

She and the Mayor seemed sympatico on this one and even held a joint news conference in the summer of 2018, with Kenney on board with full centralization and recommending a discipline schedule to make sure that punishment was uniform for all city workers.

Then what happened?

“Nothing,” Rhynhart says.

She pressed, suggesting a budget of $400,000 to get the idea rolling. “We met last fall — it was a testy meeting. I asked where the transfer ordinance was [to get funding]. Kenney said to a staffer, ‘Where is it?’ The staff person said, ‘Oh, I think I sent an email.’” It was, Rhynhart says, typical Kenney-led slow motion: “That’s when I realized he wasn’t doing it.”

Rhynhart wrote a piece for the Inquirer in March pressing her case. Still, there was little progress. Then, this past summer, when sexual harassment problems in the police department hit the press, she went public again with the same demand: that complaints and investigations be centralized. Kenney wasn’t with her this time.

The Kenney administrator hits the same recurring theme: Rhynhart, when she worked for a year under Kenney, oversaw the employee relations unit and was responsible for receiving sexual harassment complaints. But she didn’t bring up the need for change. “She abdicates responsibility for every decision that was made before the time she was sworn in as city controller,” the administrator says.

Rhynhart says problems with sexual harassment became more apparent in 2017, while she was running for controller; there was a $1.25 million payment to the sexual harassment victim of a cop who’s still on the force as well as problems with Vince Fenerty at the Parking Authority and Sheriff Jewell Williams. Plus, the #MeToo movement was gaining footing. Anyway, the Mayor was on board. What happened?

The city now has centralized reporting of claims, the Kenney administrator says. Rhynhart says this isn’t so­ — that raw data going into a system isn’t the same as centralized oversight, and that many complaints still get stalled within departments. She says there’s still not a separate unit that handles everything.

Her frustration boils over, as it did in phone calls to Richard Vague when she was working in Kenney’s administration and not nearly enough was getting done to suit her: “If they really, truly wanted to do it, they would,” she says. “The city has some of the biggest surpluses, the highest cash levels, we’ve had in over a decade. They just need to be bolder about it, to be like, We need to do this.”

So where does it lie now?

“That’s a very good question,” she says.

There is another question still lingering: How much of the freeze-out of Rebecca Rhynhart by Mayor Jim Kenney really can be pinned to her political ambition? Ed Rendell, who had his own battles during eight years as mayor with controller Jonathan Saidel, has a blunt answer to that: “By pointing out what she believes are the necessary controls needed and areas of fiscal mismanagement,” he says in an email, “Rebecca is doing her job, not politically grandstanding. It is what the controller is supposed to do.” Further: “In the early days of her tenure she levied some mild criticism against the Mayor which most elected officials would have shrugged off, but the Mayor is (in my judgment) overly sensitive to criticism.”

So the better question all along seems to be: What’s up with the Mayor?

Rhynhart herself may have the best answer to that: “Someone who has more political knowledge than I do said to me, ‘Of course Jim Kenney is going to view this as a betrayal. You worked for him, he brought you up, and he views this just like he was brought up by Fumo. He thinks that you have betrayed him.’” Longtime state Senator Vince Fumo was, of course, Jim Kenney’s mentor from a very young age, and what we’re witnessing is the collision of old-school Philly politics with the new. We’re still stuck in the notion that drives Rhynhart crazy: I support him because he’s my friend.

But Rhynhart isn’t going away or changing her method of exposing problems that aren’t being solved. Is her message being received?

“I think so,” Rebecca Rhynhart says. Then again: “I think so. I just have to watch my back.”

And she laughs.

Correction: Due to an editing error, the last name of city finance director Rob Dubow was misspelled in an earlier version of this story.

Published as “The Kenney Watcher” in the November 2019 issue of Philadelphia magazine.