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Trade group defends credit union's acceptance of cash from former police Chief Nate Harper

| Friday, March 29, 2013,

The Greater Pittsburgh Police Federal Credit Union was correct in accepting money that the FBI alleges former police Chief Nate Harper tapped for personal purchases, a credit union trade group said Thursday. But city officials say the credit union should have at least questioned whether Harper had authority to oversee the deposit of city money into two accounts that figure prominently in the FBI investigation.

“We know that was not an authorized bank account,” Controller Michael Lamb said. “If they were accepting checks payable to the city, you would think that would have raised some red flags with someone at the credit union.”

Mike Wishnow, spokesman for the Pennsylvania Credit Union Association, said the credit union would have no reason to question Harper. Credit Union CEO Karen Janoski did not return a phone call.

“Frankly, I'm not aware of a financial institution that would refuse to open an account for any legitimate entity that came to them,” Wishnow said. “It happens all the time. As long as the account holder is a legitimate signatory, which the police chief is, then you do what your account holder directs you to do.”

The FBI charged Harper last week with diverting more that $70,000 into two accounts at the credit union and using more than $31,000 to buy such things as booze, meals and a television.

Harper's indictment lists 14 checks from businesses that employed police officers for off-duty security. The checks went to credit union accounts labeled “Special Events” and “IPF.” It says Harper, who was listed as the account holder, directed police employees to open the accounts and deposit money in them.

Sandy Lazzara, who retired as CEO of the credit union last year and serves on its supervisory committee, said the checks were accepted because they were made out to the police bureau and deposited by those who opened the accounts.

“It was not an illegal deposit for us,” she said. “You had these checks coming in for the police department that were deposited into the police account. For us, it's logical.”

City Councilman Bill Peduto, who is running for mayor and previously chaired council's finance committee, said the credit union should have checked to make sure Harper was authorized to open the accounts.

“I, as a member of council and as an elected representative, cannot walk into a bank and deposit checks that say ‘The City of Pittsburgh' on them, and a police chief shouldn't be able to, either,” he said. “I just don't get how that would be a generally accepted practice.”

Wishnow said the credit union, which exclusively serves police officers, would have a long-standing trust in the police bureau.

“You have an organization that owns the account, and you have an individual who is authorized as the account holder to transact business,” he said. “That's essentially what happened here.”

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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