Papenfuse: 'Voluminous' files handed over to AG - abc27 WHTM

Papenfuse: 'Voluminous' files handed over to AG

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Harrisburg Mayor Eric Papenfuse hopes a grand jury investigation will give accountability to those who pushed the city into a fiscal crisis and vindication for blowing the whistle years prior.

"Quite simply, this was illegal, criminal," said Eric Papenfuse.

No, they are not words spoken by Papenfuse present day. Rather, that is a quote from the then Harrisburg Authority member in September 2007, blowing the whistle.

According to abc27 News records, Papenfuse said he handed over documents to the state attorney general's office and the Federal Bureau of Investigation that proved former Mayor Steve Reed used city funds to purchase upwards of $30 million of museum artifacts.

During an interview on Sept. 26, 2007 Papenfuse told abc27, "Millions of dollars of funds were diverted from what should've been their purpose of paying down debt."

About a week later, Reed responded and denied any wrongdoing.

"This is a clear cut case as defamation, slander, and libel as I've seen in a long time," Reed said on Oct. 3, 2007.

Nearly five years later to the day, Reed testified under oath to a panel of state senators seeking to figure out how Harrisburg fell into debt by $330 million. This was the day many thought would bring clear answers. Instead, it was a day that reminded many why Reed was mayor for nearly three decades.

On Oct. 4, 2012, State Sen. Mike Folmer (R-Lebanon) asked Reed point blank, "If nobody did nothing wrong … how did the city, authority and the county end up with the huge financial challenges they are now facing?"

"Because the initial cost estimate for the project retrofit and expanding the Harrisburg resource recovery facility was significantly under estimated," Reed replied. "That is the genesis of all this."

Reed answered the barrage of senators' questions with poise and confidence.

According to a source close to the attorney general's investigation, testimonies during those hearings are being examined in comparison to the 2012 forensic audit into the transactions surrounding the incinerator's retrofit.

Harrisburg's first state-appointed receiver, David Unkovic, pointed to the forensic audit and said he was "disturbed" by an embedded culture of criminal activity. Days later, Unkovic resigned unexpectedly with a handwritten letter that reasoned the "political and ethical crosswinds" involved in Harrisburg were too much to continue his post.

The source also said investigators are looking to see if anyone committed perjury by providing false statements to senators.

On that same day, Papenfuse testified as a citizen and former THA member. According to records, Papenfuse testified James Ellison, a THA attorney who acted as a bond advisor to the city government, admitted to Papenfuse he knew 2007 bond borrowings were toxic.

"[Ellison] was going to push through a plan, which he admitted to me was something we could not pay for," stated Papenfuse.

A source said part of the grand jury investigation probes the swap transactions and bond purchases during 2003 and 2007, which the Harrisburg Authority issued millions to.

One source said Papenfuse presented documentation that points to Reed funneling money into his special projects fund, cash Papenfuse once accused Reed of using to buy the artifacts.

Sources tell abc27 a special team of investigators inside the attorney general's office recently confiscated many files hidden inside the Harrisburg Government Center. The files are from Reed's top aides that allegedly detail finances between the mayor's office, the Harrisburg School District, and the Harrisburg Authority.

Over the weekend, a former Harrisburg school board member told abc27 they were involved in the investigation and have since testified to a grand jury.

According to a report by Donald Gilliland, Reed stated he has not testified in front of a grand jury, nor has he been subpoenaed to appear.

Following the story abc27 News jointly broke with Gilliland on Friday, Papenfuse took questions from media on Monday to briefly discuss his involvement with the investigation.

"I'm merely here to confirm the existence of the grand jury," Papenfuse said. "I hope that gives the public hope that we will indeed have accountability."

On Friday, Papenfuse told abc27 he traveled to Pittsburgh within "recent weeks," but would not give an exact date. He said the city has been in full cooperation with investigators.

Papenfuse would not comment on the reported "lost" Reed files directly, but eluded to say the AG's office has possible evidence to help bring criminal charges.

"We have handed over a voluminous amount of material," said Papenfuse. "Presumably, it will be helpful."

Depending on how many and what exactly those documents or files entail could slow down the timeline of the grand jury.

Papenfuse deferred to comment on what he told the grand jury as to preserve the integrity of the investigation. As reviewed in this article, Papenfuse maintained his position is well documented over the years.

What started for him nearly a decade ago is beginning to come to fruition. Papenfuse's harshest critics at the time may be forced to eat crow if criminal charges are handed down. The mayor even said bringing accountability was a key part of his campaign.

So, when asked if he would feel vindication for the years many dismissed his accusations as nonsense, "sure," he responded.


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