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Pennsylvania

Estey firing from Hershey Trust quickly followed criminal revelations

Tom Fontaine
| Monday, May 2, 2016, 4:21 p.m.

The revelation Friday that a senior executive swindled undercover FBI agents out of $13,000 prompted the $12 billion Hershey Trust Company to convene an emergency meeting to fire the employee on the same day, a trust spokesman said.

John Estey, 53, of Ardmore, a former executive vice president at Hershey Trust Company, has agreed to plead guilty to federal wire fraud charges in connection with an FBI investigation of Harrisburg lobbying activities.

“The charge is not related to the Hershey Trust Company. The company had no prior knowledge that Estey was a target of a federal investigation,” said Kent Jarrell, a spokesman for the Hershey Trust Company's board of directors.

The trust's 10-person board moved quickly to fire Estey after federal prosecutors in the Harrisburg-based Middle District of Pennsylvania revealed the plea deal. A federal tax filing showed Estey earned $735,919 in compensation from Hershey in the 2013 tax year.

Estey could not be reached. Ronald H. Levine, an attorney representing Estey in the federal case, did not return a message but said Friday that his client was “sorry for his mistakes. He has resolved this matter with the government and he hopes to move on with his life.”

According to federal court documents, Estey, a onetime chief of staff to former Gov. Ed Rendell, took $20,000 in May 2011 from an undercover business created by the FBI. He promised to use the money to make campaign contributions to state lawmakers who could take — or not take — legislative action that would benefit the business.

By the end of June 2011, Estey “conveyed the impression that the $20,000 had passed through or would be passed through” to the lawmakers, but the court documents said Estey had already “converted $13,000 of the $20,000 to his own use.”

In late September 2011, Hershey Trust Company hired Estey, then a partner at the powerful Philadelphia-based law firm Ballard Spahr, as general counsel. Candy magnate Milton Hershey and two other men created the trust in 1905, and today, its enormous assets help fund the Milton Hershey School, a boarding school for economically disadvantaged children.

At the time of Estey's hire, the state Attorney General's office was investigating the activities of the trust and related entities.

In May 2013, Attorney General Kathleen Kane said her office's investigation revealed no wrongdoing and that it negotiated a deal in which Hershey Trust Company and related entities would implement a series of reforms aimed at preventing trust assets from being misused “for excessive board compensation and benefits, questionable land purchases and unnecessary facility upgrades.”

At the time, Adrian King — Estey's brother-in-law, who served as a former Rendell deputy chief of staff under Estey — was Kane's first deputy attorney general. King left Kane's office in mid-2014 as a grand jury investigation hung over the office and went to Ballard Spahr to run the firm's government relations, regulatory affairs and contracting practice group.

The Philadelphia Inquirer, citing unnamed sources, reported that Estey has cooperated with the FBI probe since 2011.

Tom Fontaine is a Tribune-Review staff writer. Reach him at 412-320-7847 or tfontaine@tribweb.com.

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