Saturday, May 30, 2015

A look at the Hershey Trust

A look at the Hershey Trust

Milton Hershey with one of his students at the Milton Hershey School. (Hershey Food Corp. Public Relations Office, undated photo)
Milton Hershey with one of his students at the Milton Hershey School. (Hershey Food Corp. Public Relations Office, undated photo)

The Hershey Trust, one of Pennsylvania's wealthiest philanthropies, runs a school for disadvantaged children.


It is financially supported through the profits of the candy giant Hershey Co., and an entertainment and resort company.


But some of the trust's financial dealings raise questions about the management of the core mission: the Hershey School.

Previous coverage

LeRoy S. Zimmerman, the powerful Pennsylvania Republican whose oversight of the sprawling Hershey organization is under investigation by the state Office of Attorney General, is retiring from the charity.


William Charney Jr. was sentenced to more than seven years in prison for possessing almost 700 images and 40 videos of child pornography. A vile crime in any circumstance, it is particularly chilling because for seven years he was a house parent for about a dozen boys at the Milton Hershey School for impoverished children.


Facing negotiations with the Pennsylvania Office of Attorney General after a yearlong investigation, the $7.5 billion Hershey charity for disadvantaged children has hired as its general counsel Philadelphia lawyer John H. Estey, a former chairman of the Delaware River Port Authority and chief of staff for Ed Rendell when he was Pennsylvania's governor.

The U.S. Labor Department said Wednesday that it had opened two investigations into working conditions for foreign cultural-exchange students employed at a Hershey Co. candy warehouse in central Pennsylvania.

When Leroy S. Zimmerman was named in late 2002 to the board of the small state-chartered Pennsylvania bank that managed the assets of the Hershey charity for disadvantaged youth, the post paid about $35,000 a year and came with restrictions. Within four years, changes at the state level allowed him to add more Hershey-related boards to his resume - and increase his annual fees to $500,000.

The Hershey School, whose recent land acquisitions include a golf course and a roadside attraction called Pumpkin World, now has designs on acquiring the world's largest chocolate factory for redevelopment into condos, retail stores, a retirement community, and a boutique hotel.


Just as the legal battle was heating up, a former insider at the multibillion-dollar Hershey charity has withdrawn his court action that claimed the misuse of millions of dollars meant for educating poor children.


Tom Corbett was mere hours away from becoming the 46th governor of Pennsylvania, when he arrived at a celebration dinner at the Hotel Hershey for donors to his inaugural gala. But the charity that owns the hotel was the target of an investigation announced months before by Corbett for possibly wasting millions of dollars meant to finance the Hershey School.

The just-dismissed top executive of the multibillion-dollar Hershey charity for poor children describes in a court filing widespread financial irregularities at the philanthropy, including the use of charitable assets for free rounds of golf, spa treatments, limousine rides, and excessive compensation for board members.


Zimmerman says he won't seek reelection to Hershey board

LeRoy S. Zimmerman, head of the multibillion-dollar charity that controls the Hershey Co., will not stand for reelection to the company's board of directors, according to a regulatory filing by the company.

They are longtime friends and close political allies, Tom Corbett and LeRoy S. Zimmerman. Now that relationship has an added dimension: Gov.-elect Corbett remains, for now, Attorney General Corbett, and his office has confirmed that it is investigating the $7.5 billion Hershey Trust, overseen by Zimmerman, himself a former two-term attorney general.

The Milton S. Hershey School is also the owner of Pumpkin World USA, a roadside attraction north of Hershey where you can buy vegetables, country crafts, and gourds galore. The Hershey Trust bought it for $8.6 million in school money - more than nine times greater than the property's fair-market value, according to the Dauphin County tax office.

The expenditure of $17 million on a golf course and clubhouse by the trustees of the Hershey School - just one of a number of land deals costing tens of millions of dollars made in the last six years - has resulted in an investigation by the Pennsylvania Office of the Attorney General.

The Milton S. Hershey School, the nation's largest residential school for impoverished children, purchased a money-losing golf course at the inflated price of $12 million in 2006, saying it needed the course as "buffer land" for student safety.

Four prominent Pennsylvania Republicans are earning more than a combined $1 million a year as directors on three boards connected with the Milton Hershey School, one of the state's wealthiest charities and the nation's largest residential school for disadvantaged children.

Neither local police nor officials at the Milton Hershey School followed up on a sworn allegation in 1998 that serial pedophile Charles Koons 2d had sexually molested an 8-year-old boy at the school, records and interviews show. Thus, Koons had the opportunity to sexually abuse 17 other boys in the area, until he was arrested in 2008.

The Milton Hershey School, the wealthy and nationally acclaimed free boarding school for disadvantaged children, quietly paid $3 million earlier this year to compensate for the sexual abuse suffered by five former students, The Inquirer has learned.

The Milton Hershey School closes the Springboard Academy, which was high in concept but thin on outcomes. The academy burned through $40 million to $45 million in capital and operating costs.

The Hershey School, the nation's wealthiest boarding school for impoverished children, has scrapped plans to boost enrollment to 2,000 students by 2013 and is seeking other ways to cut its budget.

LeRoy S. Zimmerman, a 75-year-old former Pennsylvania state attorney general, was nominated to a third term as a director of the Hershey Co., even though the firm's governance guidelines state that directors will not be nominated for reelection after their 72d birthdays.

HERSHEY, Pa. - For the 100th time, students will assemble today for the first day of classes at an institution whose promotional literature boasts, "There is no other place like Milton Hershey School."