PA cities: Closer to bankruptcy?
Harrisburg in court, Scranton on the brink
PA cities: Closer to bankruptcy?
Joseph N. DiStefano
Cash-strapped Harrisburg's former court-appointed financial receiver, lawyer David Unkovic, was expected in Commonwealth Court Thursday for a hearing on the future of the reorganization plan he once led.
It was unclear if the would-be financial czar will be telling details of the political interference he claimed led to his departure to Judge Bonnie Leadbetter, who's asked only for testimony that directly impacts the state's plan to sell city assets.
Before resigning, Unkovic had called for a federal investigation into the bond deals that drove the city to default on its debt.
Meanwhile Bryn Mawr lawyer Mark Schwartz, who has represented Harrisburg City Council and its treasurer and controller, questioned Gov. Corbett's choice of former Air Force Gen. William B. Lynch to replace Unkovic.
Schwartz noted that an audit by former state Auditor General Bob Casey found an abortive training-zone deal signed by the state in 1999 (after Lynch took command of the state's military business as Adjutant General, though his predecessors had scouted the site) to acquire property from Clearfield County mine owner C. Alan Walker contained terms that were "markedly different" from other state land deals and ended up costing taxpayer more than $300,000 before the arrangement was abandoned as unworkable. State officials "mishandled" the sale, Casey concluded. Walker is now Corbett's head of the Department of Community and Economic Development (DCED), which oversees the receiver's office Lynch is supposed to head.
Schwartz questioned whether Lynch, given his history with Walker and his later role as a senior military overseer of U.S. construction projects in Iraq, is the man who the state should "entrust Harrisburg's citizens to."
Corbett has expressed full confidence in Lynch and Walker. The sale, aborted due to local "political opposition," was "in motion before General Lynch became Adjutant General," DCED spokesman Steve Kratz told me. "General Lynch’s experience solving problems and working with people toward a common solution will be his greatest asset."
Read the audit of the Lynch-Walker deal here.
Meanwhile, up in Scranton, Gary Lewis, a Deloitte accountant who is considering a run for Scranton City Council next year, told the Bond Buyer newspaper the city should seek Chapter 9 bankruptcy reorganization as deficits mount amid plans to borrow more money.
Bankruptcy advocates like Schwartz and his Harrisburg clients say Chapter 9 is more likely than state control to allow cities to keep assets like parking garages and avoid layoffs, compared to asset-selling and contract-breaking state-led plans. Harrisburg Mayor Linda Thompson, who has praised Unkovic but also supported Gov. Corbett and previously opposed bankruptcy, told the Patriot-News yesterday she now considers Chapter 9 a "last resort."
Keep an eye on California. It's headed this way real soon.— Wilhelm Von Humboldt- Corbett is rather Bush-like in his appointments.— bobcitydoc
- What does Scranton, Harrisburg, and Philadelphia have in common? They are all controlled by Democrats!! And they are all going bankrupt!! Interesting.....— fafafohi
- Is that a coincidence fafafohi? I think not. Look at all of the Democrat states. There seems to be a common denominator here.— fjarmstrong85
- Um, If you look at the top 20 states with the worst budget deficits, 13 out of those top 20 are conservative led states. Fact. — theromneycult
What does AIG, Bank Of America and GM have in common, they are private companies that all went bankrupt and were rescued by the government!!! Capitalism dead corpse rotting in the street and no money for a decent burial. Failed BANKS this year, 24 and what do banks have in common? They sell debt, apparently to people who can't afford to pay them back. This is the hallmark of a dying system. After decades of bleeding the people and local governments dry, the banks have no business anymore because the customers are underemployed, unemployed, or have been re employed under wage suppression give backs at reduced salaries. But he credit system which stayed intact is now collapsing because the society that it was built up to service has been drained of 99% of its wealth and handed it over to the new super rich 1%. Keep watching governments go belly up, gee, Greece was not run by Democrats and Spain is a Kingdom, maybe the problem in Europe is too many Kings and Queens and Dukes and Earls? HMMMM???- Even by political standards, Corbett has had a bad tendency to eat appoint people who are remotely qualified for their positions.— PhillyGuy77
- Um, Texas, the baston of conservatism, ran up a $6 Billion plus dollar deficit under Lord Perry during the last decade. Republcians are economic failures.— theromneycult
- Um, Texas, the baston of conservatism, ran up a $6 Billion plus dollar deficit under Lord Perry during the last decade. Republcians are economic failures.— theromneycult
- Slash government size & cost at all levels. Much like an out of control cancer....government is destroying this country in all places and at a rapid rate. Our founding fathers are crying & rolling intheir collective graves. Slash government size & spending!!!!— kelprod2
- All of the bankrupt cities and states are run by Democrats. Is there a common denominator here.— pat lynch
