With her announcement to not press criminal charges or even bring a civil action against those who have abused the Hershey Trust, Attorney General Kathleen Kane, in typically disappointing fashion, fits in perfectly with her predecessors in the office.
Bob Fernandez’s series for The Philadelphia Inquirer on the corruption, self-dealing and profiteering at what is supposed to be a school for impoverished boys and girls, gave the Attorney General’s office a case on a virtual platter. First, there was the purchase of a money losing golf course for $12 million at two to three times market value that bailed out a bad investment of a former chief executive of the Hershey Co and a member of the Trust’s board. The Trust’s Board then agreed to construct with school funds, a $5 million club house largely for their own entertainment. There was the matter of the Inquirer’s report that four prominent Republicans, including former Attorney General Leroy Zimmerman and former Governor. Tom Ridge were paid more than a combined $ 1 million a year for sitting on Hershey trust-related boards. Finally, there was the Trust’s purchase, sale and repurchase of a parcel known as “Pumpkin World” at a multiple fair-market value affording an intermediary purchaser and seller a profit of 50 percent for a four-month investment.
The terms of the Hershey Trust require it to spend money only on the direct care and education of the students. Moreover, as with all charities, board members are to act as fiduciaries, doing what is in the best interests of the mission they have been entrusted, not what is in their own self-interest. Here, the best that the board could come up with in its defense was that the property acquisitions were necessary as a buffer to ensure student safety. Maybe they should have argued instead that impoverished students need to improve their golf game or learn the pumpkin trade.
Unfortunately for us, charities are policed by Pennsylvania’s Attorney General. As “parens patriae” (a fancy term in the nature of parental responsibility) the Attorney General is the only party by law responsible for enforcing the will of those who created public trusts and charities. After all, dead rich guys like Albert Barnes and Milton Hershey can no longer make sure that their property is dealt with as they wanted. Neither taxpayers, nor students, nor public beneficiaries can force a charity to do what it is supposed to do. When alumni of the Milton Hershey School wanted to go to court and take the Hershey Trust to task earlier, Pennsylvania’s courts decided that only the Attorney General could take on the Hershey Trust in protecting a public that the trust is supposed to serve. Fat chance. Pennsylvania is already the laughing-stock of the world when it came to pillaging the terms of the Barnes trust so that a $30 billion collection could be moved to Museum Row in explicit derogation of the terms set forth by Albert Barnes. Now Milton Hershey can join Dr. Barnes when it comes to spinning in his grave.
Mr. Fernandez and the Philadelphia Inquirer’s stories embarrassed then-Attorney General Corbett him into opening an “investigation” on his mentor and Pennsylvania’s first elected Attorney General, Roy Zimmerman, together with others on the Hershey Trust. The problem was that, as with his Penn State investigation, Mr. Corbett was more interested in gathering support for running for Governor. The platter was served up but, no matter, Corbett was already dining with Zimmerman. The “investigation” was then “continued” by Corbett’s handpicked successor with predictable lack of results. Then along came the great white hope, Ms. Kathleen Kane, who ironically enough ran for Attorney General against Mr. Zimmerman’s son- in-law. She won. However, among some of her own supporters and among observers of the Hershey Trust, the writing was on the wall once she selected as one of her chief aides a big law firm insider who was related by marriage to another big political honcho formerly at the same law firm and now employed at Hershey.
What was eventually served up by Kane were some tepid “reforms” masquerading as justice. In retrospect, it looks like Mr. Zimmerman had his bets covered.
When it came to doing her job, Ms. Kane joined her predecessors in terms of fostering and encouraging corruption, placing the interests of political cronies above the interests of the public generally, and in this case, specifically, Milton Hershey. And it’s not like the work was not already done for her. This is how one advances to higher political office in Pennsylvania. The General Assembly would do well to strip the Attorney General’s of its exclusive power to take charities and trusts to court and allow related parties and the taxpayers they serve to enforce the laws not being handled by the Attorney General. But then again, we live in Pumpkin Land.
Mark D. Schwartz, Esquire was consulted on the Hershey Trust matter and attempted to open the decision to allow the Barnes collection to move.
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