Regional News

Pennsylvania AG to Probe Harrisburg Deals

Pennsylvania attorney general Kathleen Kane is examining Harrisburg's incinerator bond deals for possible criminal activity, her office confirmed Friday.

"The Office of Attorney General has received a referral from Dauphin County district attorney [Ed Marsico] regarding the Harrisburg incinerator project," Kane press officer Joe Peters said in a statement, confirming what Kane told the editorial board of the Patriot-News of Harrisburg a day earlier.

Harrisburg, which is under state receivership, owes about $345 million on bonds that it cannot pay, mostly tied to financing overruns to an incinerator retrofit project.

The Securities and Exchange Commission in May accused the city of securities fraud by misleading investors and the public, but settled with Harrisburg without fines or prosecutions.

A message seeking comment was left with Marsico.

Calls for criminal investigations of the bond financing overruns have come from David Unkovic, who preceded William Lynch as Harrisburg's receiver; city councilman and lieutenant governor candidate Brad Koplinski; and former Harrisburg City Council attorney Mark Schwartz.

Lynch intends to file the debt-recovery plan for the city later this month with the Commonwealth Court of Pennsylvania.

"There was enough pressure for the district attorney to send up whatever he had. Attorney General Kane might be independent enough to do it well," Nevin Mindlin said Friday.

Mindlin, who is fighting to remain on the ballot as an independent candidate in the Nov. 5 race for Harrisburg mayor, said the bond deals could be unconstitutional. According to Mindlin, if city officials circumvented state debt limits by determining wrongly that the incinerator bonds were self-liquidating, then voter approval would have been necessary for the issues.

City Controller Dan Miller welcomed the news. He lost the Democratic mayoral primary to Eric Papenfuse, but will run as a Republican in November. Incumbent Linda Thompson finished third.

"I have long called for such an investigation and thought it should be conducted and concluded before the asset is transferred from control of the Harrisburg Authority. That is clearly not going to happen," Miller said, referring to the pending sale of the incinerator to the Lancaster County Solid Waste Management Authority.

"But, learning who knew what and when they knew it, as well as who did what and why they did it, is critical to understanding who bears what share of responsibility."

Schwartz, however, is no fan of Kane.

"Like everything else she does, it's all politics, too little and too late," said Schwartz, who represented the council in its failed attempt to file bankruptcy in 2011. "Given her track record she should be accorded zero credibility."

Kane, a Democrat from Scranton and former Lackawanna County prosecutor, has been busy since taking office in January. In March her office indicted former state Senate Democratic Leader Robert J. Mellow, five former Pennsylvania Turnpike Commission officials and employees, and two businessmen in an alleged bid-rigging scheme.

In addition, she has fought Republican Gov. Tom Corbett over a lottery privatization contract and same-sex marriage, and is investigating Corbett's role as attorney general in the Jerry Sandusky-Penn State child sex abuse scandal.

In the latest chapter in Harrisburg's bizarre saga of political infighting, when Dauphin County Judge Bernard Coates on Thursday ordered Mindlin and Nate Curtis off the mayoral ballot. Coates, acting on a complaint, called Mindlin's failure to specify a "committee to fill vacancies" — a group of people to pick a ballot replacement — a "fatal defect" in his nomination papers.

"It's very arcane and esoteric, and it took a clever lawyer working with the intention of getting my name off the ballot. These are people tied to the old regime and it's tied with the bond folks," said Mindlin, who lost as a Republican to Thompson in 2010. Mindlin planned to meet Friday with his campaign team and discuss an appeal.

Coates said Curtis has not lived in Harrisburg for at least one year.




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