Sunday, July 26, 2015

The Harrisburg Mayor's Corruption Trial is a Potential Game Changer

Sorry, still haven't gotten those Cleveland posts up. Hope to soon.

The trial of long time Harrisburg Mayor, Reed in Pittsburgh, will likely reveal a circus of spending on pet projects like a National Civil War Museum and later a planned Wild West Museum.

What seems different is that unlike most corruption trials, there are few accusations the ex- mayor personally stole money or was even motivated by financial gain. (Although many around him may have been)

Instead, one sees a pervasive use of any means, honest or fraudulent to funnel money into pet projects- he may have actually believed were realistic.

A few examples from, Penn Live

Friday, October 3, 2003: School directors say city misled them on artifacts money

"A total of $77 million was earmarked to renovate Harrisburg's aging schools.
So how did $471,000, part of the fee used to float the $77 million bond issue, end up being spent on Western artifacts for one of Mayor Stephen R. Reed's planned museums?
The answer, city officials say, is the difference between the principal amount the city school district borrowed and the fees it paid to a city agency to finance the deal."

Harrisburg corruption charges portray former mayor Stephen Reed as unhinged from normal checks and balances

  "Former Harrisburg Authority Chairman Trent Hargrove on the transactions that swept millions into its special projects fund, which Kane has called an illegal diversion of public funds to pay for Reed's personal interests:"No major decisions were made, no major bonds were issued, no financial transactions occurred, nobody was appointed as a contractor, advisor or counsel without Reed's expressed or tacit approval. If Reed did not want it to happen, it would not have happened."
* Former Council President House, on his position as director of community relations for the Senators:
"(Reed) offered me that position because therefore he knew he could control me and he could get me to get all the votes he needed for his projects.".......
 "Among the charges in Tuesday's filing are allegations that Reed tapped the city's general fund, the baseball team and various sweeps from bond issues to pay for the artifacts and his expenses on those trips."

What was it that motivated Stephen Reed? It appeared to be power, not greed

"It paints Reed as a dictator who made decisions on his own and fired people who dared to stand in his way, who created funds to hide money so he could spend it on what he wanted – and what he wanted was artifacts.

Out of all the nuggets in the grand jury report, the one that strikes me the most, that makes me wonder about his mental state, is when investigators said that he rarely if ever checked on all the artifacts he bought. They went into storage. Some of it deteriorated. ......

These aren't the actions of a man with a vision. They are the actions of a man with an obsession."
In the private sector, using false claims and accounting sleight of hand to obtain funds is pretty clearly seen  as fraud, but the political world has always been seen as different. If voters buy it, or elected the guy, almost anything he may do outside of murder and personal theft is rarely prosecuted.

Who are they to dispute the "will of the people"- even if the voters were lied to. If the program projected to cost millions, ends up costing billions.. oops

SEC charges Harrisburg with fraud; settled case puts all municipalities on notice

"In an information vacuum caused by Harrisburg’s failure to provide accurate information about its deteriorating financial condition, municipal investors had to rely on other public statements misrepresenting city finances," said George S. Canellos, Co-Director of the SEC’s Division of Enforcement."

One can hope this trial may be the start of a trend towards holding  politicians to a new standard. 

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