TheBurg Podcast, July 17, 2015

July 17, 2015 | by Admin

Welcome to TheBurg Podcast, a weekly roundup of news in and around Harrisburg.

July 17, 2015: Earlier this week, Pennsylvania Attorney General Kathleen Kane announced a sweeping set of criminal charges against former Harrisburg Mayor Stephen Reed. The 17 charges, approved by an investigating grand jury, encompass 499 counts including bribery, theft and racketeering. The charges mostly surround Reed’s alleged use of public borrowings to improperly divert funds to personal interests, such as acquiring artifacts for a never-realized network of museums. On this week’s podcast, Larry and Paul talk about the charges, what it was like covering Reed’s arraignment and what’s to come in the continuing investigation.

Special thanks to Paul Cooley, who wrote our theme music. Check out his podcast, the PRC Show, on SoundCloud or in the iTunes store.

TheBurg Podcast can be downloaded by clicking on the date above or by visiting the iTunes store. You can also access the podcast via its host page.

In Rent-Free Space Uptown, A “Veritable Treasure House” For a Former Mayor

July 15, 2015 | by Paul Barker

Two Penn Center, a building in an office park uptown, gave former Harrisburg Mayor Steve Reed rent-free storage space for artifacts and other objects.

An uptown office park owned by a pair of Harrisburg lawyers was home to a “veritable treasure house” of artifacts collected by former Harrisburg Mayor Stephen Reed, who stored them there in a kind of a personal museum, according to a grand jury presentment released by the state attorney general Tuesday morning.

A series of ground-floor rooms at the site, which Reed used rent-free for years, contained objects including a life-size sarcophagus, a full suit of armor and “what appeared to be a life-size buffalo head,” according to the presentment, which formed the basis of nearly 500 criminal counts filed against Reed Tuesday morning.

One of the rooms also housed a re-creation of Reed’s city hall office, adorned with civic awards and commendations and various Western items, the presentment said.

Prosecutors have alleged that many of the objects were paid for with city money and that Reed’s personal storage of them amounts to a theft from taxpayers.

The lawyers, Michael J. Daley and Burton D. Morris, would not comment when reached separately by phone on Tuesday.

Morris said he was “not in a position to confirm” either ownership of the building or Reed’s alleged storage of city-bought artifacts there. Daley, who identified himself as a stockholder in the company that owns the property, said he had no comment.

The building in question, though not named in the presentment, is Two Penn Center, a part of the former Polyclinic Hospital campus uptown, which Morris and Daley bought in 2004, according to property records.

An exhibit to the presentment refers to artifacts seized and catalogued at Two Penn Center, and Roxbury News had also previously published footage of investigators delivering artifacts from Reed’s Cumberland street home to the facility.

A spokesman for the attorney general’s office said Tuesday that it was also his understanding that the uptown facility was where artifacts were stored.

The presentment also claimed the building’s owners provided the space for Reed’s “personal and exclusive use” rent-free, as an “accommodation and out of respect for the former mayor.”

Morris is the co-founder of Penncorp Service Group, a downtown firm specializing in document retrieval and filing. He has worked extensively in state government, as counsel for former Gov. Milton Shapp and as deputy state attorney general for major litigation, according to a biography on the company website.

He and Daley told the Patriot-News in 2001 that they planned to purchase the campus from PinnacleHealth, which had acquired it upon merging with Polyclinic in the mid-1990s, and develop it into a business park.

The presentment, which does not name Morris or Daley, described how agents searched the property and “found artifacts and collectibles of every description” along with documents and other objects, “piled from the floor to the ceiling.”

Reed told investigators the stored objects were all his personal possessions, aside from a few that may have been “inadvertently” brought there by city employees, the presentment said.

But prosecutors found that explanation “wholly incredible,” particularly after they started to compare an inventory of city-bought artifacts with the ones recovered from the storage facility and from a raid on Reed’s home.

The inventory process, which prosecutors said is ongoing, has so far identified city-bought artifacts in Reed’s collection with a purchase value totaling more than $120,000.

Jurors therefore concluded that Reed had “created in this suite of rooms a veritable treasure house comprising quite literally thousands of items which belonged to the people of the city of Harrisburg,” the presentment said.

Kane’s Office Releases Criminal Complaint, Presentment

July 14, 2015 | by Lawrance Binda

Pennsylvania Attorney General Kathleen Kane today released both the criminal complaint against former Harrisburg Mayor Steve Reed and the grand jury presentment.

The criminal complaint lists the charges against Reed, while the presentment provides tremendous detail on the allegations against him, including many issues never before discussed publicly. Click here to read the complaint and presentment: 2015_07_14_Reed_Presentment

Reed was arraigned today on 17 criminal charges, with a total of 499 counts filed against him.

Kane Releases Statement, Details Charges Against Reed

July 14, 2015 | by Lawrance Binda

Former Harrisburg Mayor Steve Reed (right) as he stepped up to the mic following his arraignment today.

The following is a statement by Pennsylvania Attorney General Kathleen Kane on the charges filed today against former Harrisburg Mayor Stephen Reed:

HARRISBURG — Attorney General Kathleen G. Kane today announced the arrest of Stephen R. Reed, the former Harrisburg mayor now charged with various crimes, including using public money while in office to illicitly obtain artifacts and other memorabilia.

“This is one of the most disturbing cases of public corruption this office has investigated,” Attorney General Kane said. “Mayor Reed used taxpayer money to further his own interests. His conduct is at the root of the fiscal issues that continue to plague the City of Harrisburg today.”

The Criminal Prosecutions Section of the Office of Attorney General presented evidence to a statewide investigating grand jury, which recommended the charges filed against Reed, 65. He was elected Harrisburg mayor in 1981 and held office until early 2010.

The grand jury found several instances in which Reed used money available in the municipal debt market to create opportunities to raise money and divert funds.

The grand jury alleges this practice of using the expenditure proceeds from public debt touched several entities, including the Harrisburg Authority, the Harrisburg School District, the Harrisburg Civic Baseball Club and the Harrisburg University of Science and Technology, among others.

Over time, Reed, who had a hand in all of these entities while mayor, allegedly used this public money at his discretion partly to obtain thousands of artifacts, which was a violation of Pennsylvania’s Criminal Code. The artifacts — which include such items as a life-sized sarcophagus, a full suit of armor and a “vampire hunting kit” — were bought as Reed made several trips throughout the country allegedly at taxpayers’ expense.

The artifacts and other memorabilia purportedly were destined for several museums Reed planned for the city. Investigators with the Office of Attorney General recovered many of these city-owned items as they executed search warrants at Reed’s office and home, the grand jury presentment states. Many of the artifacts were reported to be in poor condition because they were improperly stored.

Evidence presented to the grand jury also showed Reed made attempts to sell at least 20 city-owned firearms on consignment. Reed allegedly made trips to Gettysburg for this purpose after investigators conducted the search of his office. The weapons have since been recovered.

Furthermore, evidence presented to the grand jury showed Reed allegedly offered to bribe at least one city official, a former City Council President, by offering him a yet-to-be-created position with the Harrisburg Senators. Testimony before the grand jury alleged the exchange was a “quid pro quo” designed to control City Council votes.

Reed also collected money from the Harrisburg University of Science and Technology through a contract he signed to serve as a guest lecturer and fill other functions, but testimony indicated he performed very few of the services for which he was being paid, the grand jury alleges.

Attorney General Kane stressed the investigation of Harrisburg’s finances is ongoing.

“In order for the City of Harrisburg to continue its financial recovery, it is imperative that its citizens have a clear picture of the past,” Kane said.

Reed, 212 Cumberland St., Harrisburg, is charged with the following crimes:

2 counts of corrupt organizations (F-1).

2 counts of dealing in proceeds of unlawful activities (F-1).

2 counts of theft by deception (F-1).

20 counts of theft by receiving stolen property (F-2).

20 counts of theft by unlawful taking or disposition (F-2).

1 count of theft by deception (F-2).

7 counts of bribery in official and political matters (F-3).

29 counts of theft by receiving stolen property (F-3).

29 counts of theft by unlawful taking or disposition (F-3).

3 counts of theft of services (F-3).

1 count of theft by deception (F-3).

110 counts of theft by receiving stolen property (M-1).

110 counts of theft by unlawful taking or disposition (M-1).

158 counts of misapplication of entrusted property and property of government or financial institutions (M-2).

1 count of deceptive business practices (M-2).

3 counts of criminal solicitation (M-2).

1 count of tampering with or fabricating physical evidence (M-2).

Reed was expected to appear this morning for his preliminary arraignment in district court.

The Office of Attorney General started its investigation of Reed after receiving a conflict referral from the Dauphin County district attorney’s office.

Attorney General Kane thanked the attorneys prosecuting the case and agents with the Office of Attorney General’s Bureau of Criminal Investigations, who spent weeks collecting and cataloging the artifacts and other memorabilia seized as part of the investigation.

The case is being prosecuted by Deputy Attorneys General Clarke Madden and Rebecca Franz of the Criminal Prosecutions Section.

Defiant Former Mayor Reed Faces Charges for Theft, Bribery

July 14, 2015 | by Paul Barker

Attorney Henry E. Hockeimer, Jr., left, and former Mayor Stephen Reed outside a district courtroom Tuesday.

Stephen Reed, Harrisburg’s seven-term former “mayor for life” who oversaw a renaissance of the Pennsylvania capital as well as its descent into an all-consuming debt crisis, was arraigned Tuesday morning on criminal charges resulting from a long-running state grand jury probe.

Reed, 65, arrived at the Linglestown offices of Dauphin County District Judge William C. Wenner around 8 a.m., wearing a dark suit and glasses. He was accompanied by attorney Henry E. Hockeimer, Jr., who leads the white-collar defense practice of the Philadelphia firm Ballard Spahr.

The pair pulled into the parking lot a few seconds behind Clarke Madden, the prosecutor in the attorney general’s office who is said to be leading the probe.

“Surreal,” Reed said in response to a question about how he was feeling, as he crossed the lot and entered the court building. When asked if he had done anything criminal, he replied, “Not that I know of.”

Less than an hour later, Judge Wenner read out a list of 17 charges in the criminal complaint against Reed, encompassing more than 400 counts that included theft, bribery, and evidence tampering.

The counts covered actions related to the Harrisburg Parking Authority and the Harrisburg School District, as well as actions connected to city government. Several of them also name Richard Pickles, a former Harrisburg police detective, whom the complaint alleges was involved in criminal solicitation and theft of service.

Wenner said that accompanying the complaint was a “voluminous” grand jury presentment that more specifically detailed the individual counts, and referred to a set of exhibits that would outline the individual claims of receiving stolen property.

After reading the charges, Wenner said he would set bail at $150,000 unsecured, meaning that Reed would not have to post bond. He also said he would ask Reed to forfeit his passport and would restrict his travel to within state boundaries.

Following the arraignment, Hockeimer and Reed each read from prepared statements outside the court building defending Reed’s motives and integrity.

“For 28 years Steve Reed served the people of Harrisburg with energy, commitment and love for the city,” Hockeimer said. “He loved his job as mayor and he poured his heart and soul into it. Mr. Reed also had a deep respect for his position as a public servant and carried out his role with dedication and integrity.”

Hockeimer said Reed would be fighting the charges, which he suggested were “inspired more by political agendas than by anything else,” and said the former mayor “looks forward to his day in court.”

He also expressed concern about how media initially learned of the charges, saying it was information the grand jury process should have protected.

Reed also spoke briefly, saying that “misperceptions and politics are very much intertwined” in the accusations against him. “I regarded service as mayor to be a sacred trust and a calling to a high and noble purpose.”

He went on to compliment the staff that worked with him and to point to the city’s progress as his administration’s legacy. “I devoted my life to the city of Harrisburg, and I look forward to waging a vigorous fight against these charges,” he said.

Neither Hockeimer nor Madden gave any statement in the courtroom. A press release from the office of Attorney General Kathleen Kane said there would be a “major announcement” about the grand jury investigation at 11 a.m. Tuesday at the state capitol, but did not provide further details.

Reed had been presumed to be a target of the probe since its existence was first confirmed in 2013. The grand jury has reportedly been investigating the origins of a debt crisis tied to a city incinerator that nearly pushed Harrisburg into bankruptcy.

Past reports suggested the probe may have expanded into other areas of governance under Reed, a mayor who has been both praised for his vision and work ethic and criticized for reckless spending and an autocratic governing style.

In particular, investigators were said to have taken an interest in how Reed used the Harrisburg Authority, a municipal financing entity, as a kind of checking account for pet projects, such as acquiring artifacts for a hoped-for network of museums.

In early June, investigators raided Reed’s home on Cumberland street in Midtown, hauling away boxes and numerous Western-style artifacts, including saddles, barrels and a stuffed coyote. Reed later told reporters that the artifacts removed were all his personal possessions.

Former Harrisburg Mayor Reed To Be Criminally Charged

July 14, 2015 | by Paul Barker

Former Harrisburg Mayor Stephen Reed, left, at a Senate hearing on the incinerator financings in 2012.

A state grand jury has approved criminal charges against Stephen Reed, the former Harrisburg mayor who left the capital city with hundreds of millions in debt after 28 years in office, according to sources familiar with the investigation.

Reed, 65, was expected to be arraigned Tuesday before a Dauphin County district judge, the sources said. The charges are not known.

Reed has been a presumed target of the grand jury’s probe since its existence was first confirmed in 2013. It is reportedly investigating the origins of a debt crisis tied to a city incinerator that nearly pushed Harrisburg into bankruptcy.

TheBurg reported in April that records of a $33,000 reimbursement, paid to Reed in 2003 for artifacts he ostensibly bought for city archives, were among the materials presented to jurors.

In early June, investigators raided Reed’s home on Cumberland street in Midtown, hauling away boxes and numerous Western-style artifacts that Reed later told reporters were all his personal possessions.

The grand jury was most recently confirmed to have been extended by court order another six months to early January of next year. It is not known whether the investigation is ongoing or the filing of charges means the jury’s work is concluded.

Jeffrey Johnson, a spokesman for the office of Attorney General Kathleen Kane, which is overseeing the investigation, declined to comment Monday but said that more information may be available Tuesday.

Market Board Elects Joshua Kesler, Millworks Developer, as New President

July 13, 2015 | by Paul Barker

The Broad Street Market.

The Broad Street Market board of directors has elected Joshua Kesler, a local developer who most recently opened the Millworks farm-to-table restaurant in Midtown, as its new president, the market manager said Monday.

Kesler, 39, took over at the beginning of this month for Jonathan Bowser, who announced his resignation in May. Kesler was elected at the board’s June meeting and agreed to succeed Bowser for a two-year term, said interim market manager Ashlee Dugan.

The announcement comes on the heels of the release last week of a 13-page report by the Broad Street Market task force, which was appointed in early 2014 by Mayor Eric Papenfuse to examine the market’s operations.

Among other things, the report urged the market to shed its current management structure, which involves a private corporation owned by the non-profit Historic Harrisburg Association, in favor of a single, independent non-profit that might be better positioned to solicit grants and donations.

A market press release cited this recommendation Monday, saying that Kesler planned to oversee the transition to non-profit status during his term.

Kesler, who once described himself for a story in this magazine as a “serial risk-taker,” has been active in a number of Harrisburg ventures in recent years.

He was a founding partner of Savannah’s on Hanna, a club off South Cameron Street that opened in 2009, but is no longer involved. Earlier this year, he completed the renovation of the Millworks building next door to the market into a farm-to-table restaurant adjoined by a suite of artists’ studios.

He was also a co-founder, along with Dugan and Julia James, of the Broad Street Market Alliance, which called for the market to revise its structure and improve its offerings in the fall of 2013.

James and Kesler are now two of seven members on the market board, which is looking to fill two vacancies, Dugan said. In addition to Bowser, board member Bret Kiesling gave up his seat at the start of July.

TheBurg Podcast, July 10, 2015

July 10, 2015 | by Admin

Welcome to TheBurg Podcast, a weekly roundup of news in and around Harrisburg.

July 10, 2015: This week, Larry and Paul talk about a task force report on the Broad Street Market, some new regulations on mobile food vendors, the latest tools in the city’s fight against blight and a new chief recovery officer for the Harrisburg School District.

Special thanks to Paul Cooley, who wrote our theme music. Check out his podcast, the PRC Show, on SoundCloud or in the iTunes store.

TheBurg Podcast can be downloaded by clicking on the date above or by visiting the iTunes store. You can also access the podcast via its host page.

Task Force Releases Report on Broad Street Market

July 8, 2015 | by Lawrance Binda

The interior of the brick building at the historic Broad Street Market in Harrisburg.

The Broad Street Market Task Force last night released a long-anticipated report on how to improve the condition, the management and the overall operations of the historic Midtown market.

Reading from the task force report, Chairwoman Jackie Parker told Harrisburg City Council that the market’s two buildings are in decent condition, but that they will require “large capital investments” over the next decade. In particular, gutters, downspouts, ventilation systems, fire suppression systems, plumbing and electrical systems are “functional yet antiquated,” she said.

More immediately, the report strongly recommended changing the market’s management structure.

Currently, the Broad Street Market Corp. operates the market, with the Historic Harrisburg Association as its sole shareholder. The task force advised separating from HHA and transitioning to a new nonprofit entity, which could better pursue grants and other funding.

“It would be a newly established nonprofit that is dedicated to full-time fundraising for the market,” said Harrisburg Mayor Eric Papenfuse, who announced the 10-member task force early last year as one of his first acts as mayor.

The transition to a nonprofit could take the better part of two years, said Parker, who also is director of the city’s Department of Community and Economic Development.

Under the new structure, the market’s two buildings would remain owned by the city, but ongoing repair and maintenance would shift to the nonprofit, which would be overseen by a board of directors composed of market stakeholders and volunteers from the community.

The report also praised the market’s “current management,” including market Manager Ashlee Dugan for “adequately recruiting new vendors, retaining current vendors in good standing and maintaining the facilities.”

Parker said that vendor capacity in the circa-1878 brick building was at 90 percent with the addition of several new prepared food businesses in recent months, including Elementary Coffee Co., Soul Burrito and the just-opened Evanilla doughnut stand.

Infrastructure problems have made vendor recruitment more difficult in the old stone building, according to the report, which calculated occupancy there at 40 percent. Market manager Ashlee Dugan, however, later said that figure was incorrect and that eight out of 12 stalls were currently filled.

The task force report, however, also had its detractors, who aired their concerns during the public portion of the council meeting.

Sylvia Rigal, a task force member, said she had been asked to attend in support of the report but instead came to tell council she was “appalled” by its conclusions. She said she was surprised to see the report presented now, since it was her impression the task force had been disbanded months ago.

“I’m a lifelong resident, and the market is dear to my heart,” she said, warning council members to “be careful” implementing any recommendations.

Parker said that, indeed, the task force had been disbanded, but the report was being discussed publicly now because it took while to get on the council’s meeting agenda.

Mary Hess, a former market vendor, said she was dismayed to learn the report’s recommended changes would preserve the corporate board currently managing the market, albeit in a new, nonprofit form.

“This constant recycling of these two entities has poisoned the market,” she said, referring to the market board and HHA. “Thank you to the task force, but you’ve reached the wrong conclusion.”

After the meeting, Papenfuse said that the nonprofit, after separating from HHA, would have new membership from the current market board.

The task force report recommended a number of other improvements to the operations of the market, including free WiFi, greater recycling efforts, extended hours, a greater diversity of food options, a marketing budget for the market and better litter management.

The report also disclosed the results of a poll conducted last year during a public meeting at the market. In that poll, residents suggested that the market should focus on food items, on extended hours and on serving the needs of people throughout the greater Harrisburg area.

This story has been updated with information from the Broad Street Market manager about correct occupancy figures in the stone building.

State Names New Recovery Officer for Harrisburg Schools

July 6, 2015 | by Paul Barker

Cougar Academy, an online school within the Harrisburg school district that has been expanded under the state’s recovery plan.

The Pennsylvania education secretary today appointed Dr. Audrey Utley, a Middletown native and a former acting Harrisburg superintendent, to oversee the Harrisburg school district’s state recovery plan.

Utley replaces Gene Veno, a Harrisburg-based consultant and lobbyist and the district’s first recovery officer, who announced his resignation in May.

Utley, who the education department said has worked in schools for more than 40 years, taught elementary school in the Steelton-Highspire school district and went on to serve as a superintendent in both Middletown and Steelton-Highspire.

She led the education transition team of former Harrisburg Mayor Linda Thompson after Thompson’s election in 2009, the Patriot-News reported.

Utley later served briefly as Harrisburg’s acting superintendent in 2010, in the midst of a power struggle between the city’s elected school board and a mayor-appointed board of control whose authority was set to expire that year.

“In addition to Dr. Utley’s experience as a superintendent, she also comes to this position with firsthand knowledge of the unique issues that fiscally distressed school districts face due to her time working to improve other struggling schools,” state education secretary Pedro Rivera said in a prepared statement Monday.

He went on, “I have complete confidence that under Dr. Utley’s guidance, the Harrisburg School District will continue on the path toward financial stability, which will allow the district’s leadership team and educators to focus on the goal of ensuring every student graduates college- and career-ready.”

The state appointed Veno as the district’s first recovery officer in December 2012, after declaring the district fiscally distressed under a law passed earlier that year.

Veno’s recovery plan, approved by the state in May 2013, described a district in rapid decline, with test scores significantly below state and county averages and budget deficits that threatened to put it out of business within a few years.

The plan set new targets for academic performance, sought to expand Harrisburg’s in-house options for online education, and called for two years of pay cuts followed by a wage freeze, among other recommendations.

Many proposals were controversial, and though Veno’s plan is generally viewed as having stabilized district finances, Veno himself has faced no shortage of opposition, particularly from critics who believe he has done little to improve academics.

In early 2014, Mayor Eric Papenfuse asked the state to replace Veno following a meeting in which he allegedly told the mayor he believed his plan was unlikely to succeed, a claim Veno subsequently disputed.

By some measures school performance has worsened since the plan was enacted, with state test results last November showing Harrisburg schools had universally failed to meet the plan’s academic goals by substantial margins.

“It was time,” Veno said on May 8 in reference to his resignation earlier that day, noting that he was leaving the district in a “good financial position” from which it could focus on academic improvement.

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