Harrisburg, Pa.’s state-appointed receiver has asked the U.S. attorney and Pennsylvania attorney general to examine the incinerator bond deals that left the capital city with more than $300 million of debt that it can’t repay.
David Unkovic, referencing a forensic audit the Harrisburg Authority public works agency released in January, requested U.S. attorney Peter Smith and state Attorney General Linda Kelly on Wednesday to investigate “possible illegal activities” surrounding the bond deals.
The audit blamed many parties, including the original contractor, bankrupt Barlow Projects Inc., for the project’s failure; public agencies for sloppy due-diligence, including failure to question whether the project was self-liquidating; and financial advisors for fees it considered excessive, and for conflicts of interest.
In federal court last week, Unkovic referred to “corruption” involving the deals. Speaking to reporters in Harrisburg, Unkovic said he meant “in the sense of a body being corrupted, deteriorated. … Just a bad situation.”
The City Council and its bankruptcy attorney, Mark Schwartz, have also made separate calls for federal investigations.
Unkovic’s move comes amid speculation about his own future as receiver. Dauphin County court Judge Thomas Hoover ruled Tuesday that a separate receiver could be named to oversee the daily operations of the trash burner and secure incinerator-related bond payments.
Several creditors, including TD Bank NA, Bank of New York Mellon Trust Co., and incinerator bond insurer Assured Guaranty Municipal Corp., had sought the incinerator receiver.
Unkovic’s proposed recovery plan includes concessions from creditors. He also hoped Tuesday’s court ruling would not impede efforts to sell the incinerator, and sell or lease the city’s parking garage and sewer and wastewater systems.
“That process has to go forward in a way that is not influenced by the creditors at the incinerator and whatever their particular interests may be,” he said. “I’m hopeful that can happen, but I’m very concerned about the developments with this receiver for the incinerator and how that might affect that.”
Messages seeking comment were left with Assured Guaranty.
Unkovic said he has felt pressure from lobbyists and others, including state Sen. Jeffrey Piccola, who authored last year’s takeover legislation aimed at Harrisburg. Piccola has criticized Unkovic for conducting several public meetings about the recovery plan.
“How am I supposed to write a plan without talking to the people in the city that the plan is trying to help?” a visibly angry Unkovic told reporters.
“I’m not interested in being a public figure,” he said. “I wish my name was never out there, that all of you weren’t here, that people wouldn’t recognize me when I walk down the street in Harrisburg. I get no pleasure out of that. That’s not my thing.”
Asked about the effect of Hoover’s ruling on his receivership, Unkovic said: “I don’t know. We’ll find out.”