The Commonwealth Court of Pennsylvania will hold a confirmation hearing Thursday morning on Gov. Tom Corbett’s nominee for Harrisburg receiver, retired Air Force Major Gen. William Lynch.
While Judge Bonnie Brigance Leadbetter has ordered former receiver David Unkovic to appear before the court, she also said any questioning of him must pertain to Lynch’s nomination. That could handcuff those, including Harrisburg City Council attorney Mark Schwartz, who want Unkovic to clarify his reference to “political and ethical crosswinds” that triggered his abrupt resignation on March 30.
Unkovic had asked federal and state authorities to investigate the incinerator bond deals that left Pennsylvania’s 49,000-population capital city crippled with more than $310 million in debt that it cannot repay.
Lynch, 69, whose confirmation is expected, must pick up where Unkovic left off and continue a financial recovery plan hinged on the sale of assets, including the incinerator, parking garages and water and wastewater systems.
Unkovic last winter issued requests for qualifications regarding the sale or leasing of those assets.
Lynch must also win over receivership critics, including a majority on the council and the city’s controller, Dan Miller, who say Harrisburg is better off preserving its assets by filing for Chapter 9 bankruptcy. A state law prohibiting cities of Harrisburg’s size from filing for Chapter 9 protection expires July 1, though some state lawmakers are considering extending it.
The council filed a bankruptcy petition last fall on behalf of the city, but a federal judge invalidated it and appeals failed.
Schwartz, meanwhile, intends to question Lynch, 69, about his ties to C. Alan Walker, chairman of the state Department of Community and Economic Development, the agency overseeing Harrisburg’s takeover.
Audit documents from 2001 that Schwartz produced reveal an aborted sale in 1999 by Walker, once a top political contributor to former Gov. Tom Ridge, of family land in Clearfield County to the state Department of Military and Veterans Affairs for a National Guard tracked-vehicle maneuver training site. The Walker family owned three mines at the site.
The audit, conducted by then-state Auditor General Robert Casey Jr., in conjunction with the Department of General Services, said that although the commonwealth scuttled the deal, the Walker family pocketed $326,000, based on an agreement that the deposit money paid by the state was nonrefundable.
The audit said that by the time Pennsylvania backed out of the no-bid transaction, taxpayers had lost nearly half a million dollars.
Casey’s audit also cited “significant, acid-mine drainage” on the Walker property that, according to the report, the state’s Department of Environmental Protection had chronicled since 1979.
Lynch was an adjutant general handling the state’s military business at the time as secretary of the DMVA, appointed by Ridge, although his predecessors conducted the search for available land.
“This speaks to the supposed business acumen of someone entrusted to oversee Harrisburg’s finances, and to his assertions that he is nonpolitical,” said Schwartz, a former bond banker. “What was the purpose of putting a training site on top of the mines, anyway, to see how high the tanks bounced?"
Steve Kratz, a spokesman for the DCED, said the deal pre-dated Lynch. “Essentially, this is a non-issue that attorney Schwartz is raising,” he said. “Looking for the land was something put in motion before Mr. Lynch became adjutant-general.”
Lynch retired from the military in 2004 to run for Congress. After that he worked for four years in Iraq, helping coordinate its rebuilding.
Harrisburg Mayor Linda Thompson, who opposes bankruptcy, said Lynch represents “just the kind of strong leadership the fiscal recovery of our city needs at this time.”
City Council member Brad Koplinski, who has fought receivership and supports a bankruptcy filing, said: “I have always said that we need a warrior to join the City Council to fight for the people of Harrisburg. I hope that Major General Lynch will serve as one.”