Pennsylvania Attorney General Kathleen Kane’s office expects to finish its investigation of possible criminal activity in the Harrisburg incinerator bond financing fiasco “in the very near future,” Kane told a legislative panel.
“No stone will be left unturned,” she told the state Senate appropriations committee in Harrisburg on Tuesday. Kane launched the investigation in August 2013.
Bond financing overruns to an incinerator retrofit project accounted for much of Harrisburg's more than $600 million of debt and pushed the 49,000-population state capital to the brink of bankruptcy. Harrisburg late in 2013 crafted a recovery plan -- which a state court approved -- that included the sale of the trash burner and a long-term lease of parking assets.
Harrisburg last month also restructured $42 million of back-loaded debt related to the downtown Verizon Tower building under a settlement with the commonwealth and bond insurer Assured Guaranty Municipal Corp.
The Securities and Exchange Commission in May 2103 accused Harrisburg of securities fraud by misleading investors and the public about its deteriorating finances, but settled with city officials without fines or prosecutions.
Senate local government committee hearings in September 2012 focused on whether city leaders and other parties connected with the bond deals fraudulently categorized the financing as self-liquidating, to enable Harrisburg to circumvent debt limits.
“It’s critical and I see this every day when I’m out in my community, that the community have an understanding as to whether that debacle was the result of criminal activity on the one hand, or just bad government or bad lawyering on the other hand,” said state Sen. Rob Teplitz, D- Susquehanna Township, whose district includes Harrisburg. “I think that they’ll accept either conclusion as long as they feel that that conclusion was made in a process through good faith. “
Teplitz is minority chair of the local government committee and serves on the appropriations committee.
