The 25-page report says Brown ordered former campaign manager John McDaniel - who now earns nearly $90,000 a year at Philadelphia International Airport - to use committee funds to repay a $3,300 personal loan from Chaka "Chip" Fattah Jr., son of the East Falls congressman.
Instead of disclosing the December 2010 payment to Fattah Jr., whose office was raided by the FBI last year, McDaniel listed a "fictitious expenditure" in that amount to a printing company, according to the settlement.
Brown declined to answer questions Monday, but she released a statement saying that she takes "full responsibility for an error in judgment" involving the loan repayment and has taken "corrective steps to ensure that future reporting is clear and accurate."
The settlement says that Brown needed the money to avoid a home foreclosure and reached out to her mentor, Congressman Fattah, who said that he would help. Shortly after that conversation, Fattah Jr. called and said he had a check for her, the report says.
During the 2010-11 school year, Fattah Jr.'s consulting firm, 259 Strategies, was paid $450,000 with school district funds through a minority-participation subcontract. City Council votes to approve city money disbursed to the school district.
Neither Fattah responded to requests for comment Monday.
The FBI is investigating payments made to Fattah Jr. Agents have also been asking questions about Brown and McDaniel, according to sources familiar with the probe.
This is not the first trouble for McDaniel as a city employee.
McDaniel worked for the Mayor's Office of Community Service from May 2000 to July 2003, when he was promoted to deputy city managing director. But he was forced to resign in July 2005 after being suspended for violating a city-charter ban on political activity. He was also accused of stealing $13,000 from a nonprofit.
McDaniel is now director of volunteer programming at the airport, where he is paid $87,125 per year. Records show that McDaniel was paid $7,630 by Mayor Nutter's campaign in 2011, plus $3,600 in reimbursements. One payment listed him as "field director."
Nutter spokesman Mark McDonald said the mayor has known McDaniel for "a number of years" and hired him for the airport job in January 2012. "The Mayor was completely unaware of the allegations cited by the Ethics Board," McDonald said. "He takes them very, very seriously."
McDaniel did not respond to messages from the Daily News.
Brown said in May that she was "exploring" a run for mayor in 2015, but she was concerned about the requirement to quit Council to run. Brown, separated from her husband, was supporting her elderly mother and a teenage daughter in private school who was expected to start college in 2014.
- Staff writer Jan Ransom contributed to this report.
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