TribLIVE

| Opinion/The Review

 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

The SEC & Harrisburg: A sad fraud

Email Newsletters

Click here to sign up for one of our email newsletters.

Letters home ...

Traveling abroad for personal, educational or professional reasons?

Why not share your impressions — and those of residents of foreign countries about the United States — with Trib readers in 150 words?

The world's a big place. Bring it home with Letters Home.

Contact Colin McNickle (412-320-7836 or cmcnickle@tribweb.com).

Daily Photo Galleries

Tuesday, May 14, 2013, 9:00 p.m.
 

Long our Commonwealth of Corruption's nexus, Harrisburg has settled a first-of-its-kind Securities and Exchange Commission fraud case based on former Mayor Stephen R. Reed's administration misleading investors.

Required financial filings for 2007 omitted $4 million paid to guarantee bond debt related to a municipal-incinerator boondoggle that drained city coffers. A 2008 filing claimed “a high degree of uncertainty” about the city's incinerator authority making debt-service payments — when Harrisburg knew those payments couldn't be made for 2009 and later.

After that, Harrisburg stopped filing required documents with the SEC. That left investors looking to the 2009 city budget, which portrayed Harrisburg's credit rating as higher than it was, and Mr. Reed's 2009 “State of the City” address. He knew — but didn't mention — that the city likely was on the hook for $260 million total, instead discussing an “additional challenge” that could be “resolved.”

Mayoral successor Linda Thompson's administration was cited for additional filing failures. It cooperated with the SEC probe and has implemented reforms; she's pleased that the settlement precludes further litigation or fines.

But it doesn't preclude criminal prosecution, which is needed to deter further public corruption — and to reinforce what's widely seen as the settlement's broader purpose:

Putting municipal officials nationwide on notice about making statements that amount to securities fraud.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Editorials

  1. Sunday pops
  2. The Solyndra scandal: Government culpability
  3. The Box
  4. Pittsburgh Tuesday takes
  5. Alle-Kiski Tuesday takes
  6. Greensburg Tuesday takes
  7. The Pa. pensions debate: Union hypocrisy
  8. Sunday pops
  9. Laurels & Lances
  10. President Carbon: Hypocrisy’s trip
  11. Hogtying a terrorist: Heroes step up