“Perpetrators swim like sharks, claiming to be victims”, Part Three of Watershed Series

Part Three in a RealReporting.org/NewsLanc.com series

By Bill Keisling

The city now is now like a broken, grinding machine, attempting to run without lubricant, cash, or a political boss. Meanwhile, the buzzards and the bottom feeders circle.

In this grinding machine of fractured politics, organized high finance, and mountains of debt, the once all-powerful state-appointed receiver in four months time was himself ground down to an exhausted pile of rubble.

In the early months of 2012 the once feared and all-powerful receiver acknowledged several telling things:

1)    On March 6, 2012, the receiver revealed he had been approached by five corporations very much interested in buying, leasing, or otherwise managing the city’s infinitely valuable water system.

2)    For the first time, Harrisburg’s water supply was officially placed on the creditors’ table.

3)    These private companies then are pushing for a fire sale, and hope to pick up Harrisburg’s water system for pennies, or fractions of pennies, on the dollar.

A week later, on March 15, 2012, the receiver announced the city would default on several outstanding general obligation bonds, seemingly unconnected to the troubled incinerator, and its long-defaulted bonds.

About two weeks after that, on March 28, the receiver referred the aforementioned forensic audit report to the local U.S. attorney.

“I view what happened at that incinerator as being a joint venture among three parties,” the receiver said at a news conference. “One party was (former Mayor) Stephen Reed, who controlled the city and the Authority.” The other two parties, he said, were Dauphin County, and a bond insurer, Assured Guaranty Municipal Corp.

The last two parties — the county and the bond insurer — ironically are the loudest in the room claiming to be the victims of the unpaid debt. When, clearly, they are among the beneficiaries, and perpetrators.

All around the receiver these perpetrators swim like sharks, claiming to be victims.

“I’m very concerned about the environment.  I am trying to get this recovery plan done in,” the receiver intimated on March 28, with nervous sweat beading his brow.

The receiver had by this time about him that deer in the headlights look.

Two days after referring the Forensic Audit Report to the U.S. Attorney, Harrisburg receiver David Unkovic hurriedly scribbled out a curious, handwritten resignation letter to Commonwealth Court.

“I have done my best to use my powers as receiver to bring fiscal stability to the city of Harrisburg,” he told the court on March 30. “However, I find myself in an untenable position in the political and ethical crosswinds and am no longer in a position to effectuate a solution.”

With that the exhausted receiver packed his bags and beat it out of town.

He had only been on the job for four months before he’d burned out, and bailed out.

I telephone Bill Cluck, a lawyer. Cluck is a somewhat recent appointee to the board of the troubled Harrisburg Authority, which commissioned the aforementioned forensic audit report, and the issuer of the debt, at the center of all this.

“What about the water system?” I ask him. “What do these companies want with it?”

Cluck says he doesn’t exactly know. He’s not even allowed to see their proposals, he tells me.

“I believe the goal is to get management control of the water and sewer from the city,” he tells me. But he doesn’t sound so sure.

“Then public ownership and control of the water supply is safe?” I ask him.

“No comment,” he tells me.

With that Bill Cluck begins to complain. Why doesn’t the U.S. Attorney investigate this? Why doesn’t the legislature investigate? Where are the investigations?

Why, after twenty years of monumental mismanagement, outrageous conflicts of interest, and obvious fraud, will no one investigate? he asks.

“Don’t you know?” I tell him.  ”  ‘It’s Chinatown, Jake.’  ” (To be continued)

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Updated: April 20, 2012 — 9:48 am
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