Lawmakers Comment on Arrest of Former Harrisburg Mayor Reed

HARRISBURG, July 14, 2015 — State Sens. Rob Teplitz, John H. Eichelberger Jr., John Blake, and Mike Folmer issued statements today on the arrest of former Harrisburg Mayor Stephen R. Reed.

In December 2012, the four lawmakers referred to law enforcement the findings of public hearings held by the Senate Local Government Committee regarding the Harrisburg financial crisis. The hearings, which were held in the fall of 2012, revealed insufficient oversight of the deal attempting to modernize and expand Harrisburg’s incinerator. The lawmakers were concerned about possible criminal activity and referred the matter to the Dauphin County district attorney, who in turn referred the matter to the Office of Attorney General, which convened a grand jury and announced today’s arrest.

In addition, the four senators have drafted and have been pursuing a bipartisan package of bills (Senate Bills 340-344) to prevent the events that led to Harrisburg’s financial crisis from happening again either in the capital city or elsewhere. They held a hearing on these bills in September 2013, and the bills are currently pending in the Local Government Committee. In the last legislative session, the package was voted out of both the Senate Local Government and Appropriations committees unanimously.

Sen. Teplitz (D-Dauphin, Perry), Democratic chairman of the Senate Local Government Committee, who represents the City of Harrisburg: “The city’s financial crisis could have been the result of criminal activity, bad government, bad lawyering, all of the above, some of the above, or none of the above. We referred the matter to law enforcement to finally get an answer to that question, and we are grateful that the district attorney, the attorney general, and the grand jury have taken our concerns seriously.

“Mayor Reed and anyone else implicated in this matter is entitled to a presumption of innocence, but today’s news is an important first step towards providing answers to the taxpayers and residents who continue to pay the price for the city’s financial crisis. They deserve to know what occurred and why, and for those responsible to be appropriately held accountable.”

Sen. Eichelberger (R-Blair, Fulton, Huntingdon, Franklin, Cumberland), former Republican chairman of the Senate Local Government Committee: “Our committee hearings provided the foundational work necessary for law enforcement to investigate the tangled web of financial misrepresentations and redirection of public money. In addition to the charges in the presentment, millions of taxpayer dollars were spent on fees to legal and financial professionals who should have prevented the transactions from occurring in the first place. I hope the ongoing investigation by the grand jury uncovers and addresses all of the questionable conduct that enabled this scheme to continue for so long.”

Sen. Blake (D-Lackawanna, Luzerne, Monroe), former Democratic chairman of the Senate Local Government Committee: “I appreciate the ongoing work of the Attorney General in this matter. The citizens of Harrisburg certainly deserve a clear explanation about the decisions and the conduct of local elected and appointed officials that resulted in hundreds of millions in public debt. Perhaps the only means to obtain that explanation is through proper legal proceedings. I also hope this will serve as an impetus to move the legislative package of bills that my colleagues and I crafted in the wake of our Harrisburg Incinerator hearings in 2012.”

Sen. Folmer (R-Lebanon, Dauphin, York), chair of the Senate State Government Committee: “The Senate hearings demonstrated how the financial transactions of the City of Harrisburg were not open, transparent, or accountable. They relied heavily upon so-called ‘swaps’ that grew riskier and riskier, ultimately gambling with taxpayers’ moneys. These charges highlight the need to restrict ‘swaps’ as proposed by my Senate Bill 342.”