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Response to Don Gilliland
of pennlive.com
Reader Steve Todd asked me to respond to comments made by reporter Don Gilliland for his Patriot-News/Pennlive article, "Uber-lobbyist Stan Rapp would have incentive to work to Harrisburg's benefit under city's debt plan," published September 6, 2013.
http://www.pennlive.com/midstate/index.ssf/2013/09/uber-lobbyist_stan_rapp_would.html
Mentioned is my article "Tom Corbett's $50 million parking space?," published on yardbird.com on July 29, 2013.
http://www.yardbird.com/tom_corbetts_50_million_dollar_parking_space.htm
I should start off by saying that my article appeared almost a month before the receiver published the "Harrisburg Strong" bailout plan and its specifics, on August 26, 2013.
The aim of my article was to give readers an overall sense of what this plan was shaping up to be. I think the article remains on the mark, and obviously resonates with readers.
Trying to cover this big and complicated story has been a challenge not only for me, but I suspect every writer/reporter trying to write cogently about it.
It's worthwhile for readers to consider the "inside baseball" of this story, involving those of us attempting to write about it.
For almost 18 months there was an official blackout of information; the parties involved essentially had a nondisclosure agreement not to talk about the plan, or its specifics. This obviously created a challenge for those of us who believed the taxpayers and citizens of central Pennsylvania deserved to understand what was going on, and indeed had to understand if the plan ultimately is to work.
So no hard information was officially released. I had to rely on other published documents, such as the minutes of the Lancaster County Solid Waste Management Authority (LCSWMA), which pretty much, it turns out, spilled the beans in 2011.
Part of covering this story lo these many months was what I can only describe as an "insider's game" with officials involved.
Whenever anyone cast a critical eye on what was obviously transpiring, officials in Harrisburg and Lancaster would derisively say, as here, the critic didn't know what he or she was talking about, and "didn't have a clue." (Indeed, Gilliland in his comments writes of me, in a rather broad brush, "I can only conclude he understands nothing.")
When Moody's investment service questioned the evolving incinerator bailout in February of this year, Harrisburg and Lancaster authority officials said Moody's "didn't have a clue" about the deal.
When accountant and city controller Dan Miller recently questioned the numbers and wisdom of the plan, Harrisburg officials said Miller "didn't have a clue."
Obviously, if you don't give the pubic a clue, the public will remain clueless.
A Lancaster Intelligencer Journal reporter complained to me about this too. The Lancaster newspaper reported several months back on the pending "$130 million" incinerator deal, only to have LCSWMA's CEO Jim Warner tell the reporter he didn't have a clue, and that "$130 million" was an inaccurate number.
If the actual sales price was $129 million, or $135 million, I'd say the $130 million was a fairly accurate sense of the sales price.
What was really going on, of course, was that these officials are attempting to spin the story their way, and don't want others, and the public, involved.
As for me, I relied on LCSWMA's and Warner's own minutes.
In LCSWMA's July 22, 2011, minutes, for example, Lancaster authority CEO Jim Warner told his board that the original $45 million price tag of the incinerator had swollen to $124 million at the behest of none other than the Dauphin County commissioners, acting on behalf of bond insurer AGM.
"(T)hat is how the $124 million offer was determined," board minutes report Warner told the LCSWMA board. "The Harrisburg Authority is not pleased that the County negotiated a sale price for their asset. The County did this to attempt to enhance the value and to try to develop a plan with the debt guarantor (AGM) in Act 47."
Warner went on to say here that incinerator operator Covanta would also be bailed out by the coming bond deal.
All this turns out to be accurate. Of course, we now know that Dauphin County for some reason is guaranteeing another $25 million in this crazy new deal, meant to bail out the previous ill-considered county guarantees.
Elsewhere, in LCSWMA's own minutes, Warner explains the backroom deals involving Dauphin County commissioner Jeff Haste, bond insurer AGM, and lobbyist Stan Rapp.
In the September 16, 2011 LCSWMA board minutes, Warner told his board:
"On Monday, September 12, Covanta representatives, Chuck Zwally (Council for Dauphin County), and Mr. Warner met with Governor Corbett in Philadelphia. The meeting went extremely well. The message for the Governor was that there is a unified team between LCSWMA, Covanta, and the County of Dauphin ready to come in and execute the transaction."
Other state documents explain how lobbyist Rapp repeatedly met with Corbett and the governor's staff to influence the receiver's plan, and how Rapp's firm over the years gave Corbett more than $55,000 in political contributions, as this article explains.
As for Gilliland's vague criticisms of my "$50 million dollar parking space" piece, I think he's splitting hairs, and he knows it.
I've thought for the last several years that the state should and must ultimately bailout out Harrisburg (and perhaps other distressed Pennsylvania cities) in an honest and straightforward fashion.
Unfortunately, with the "Harrisburg Strong" plan, Harrisburg is being bailed out in a dishonest fashion, with hidden and ridiculously complicated subsidies designed, as I quote Dan Miller, to confuse people that it's not a bailout.
The subtitle of my article is, "Hidden state subsidies involve inflated parking leases, electricity purchases, fire protection payments and lax environmental enforcement." This is obviously accurate too.
This plan clearly would not fly without the state's leasing of thousands of parking spaces.
Interestingly, Don Gilliland wrote several weeks before the plan's release that 3,000 parking spaces were involved. Officials told me at the time this was an inaccurate number.
It turns out Gilliland's number was in the ballpark: but when you add in the spaces already leased by the state, there's almost 5,000 parking spaces involved.
Forget for a minute what this is going to do to an already poor parking situation in Harrisburg.
The plan as it now stands contemplates the state paying $7 or $8 million a year for parking spaces (plus more in out years), in addition to $5 million for fire protection.
Dan Miller's concern, and the rightful concern of others, is that future state administrations and legislatures could easily renege on this plan.
Many of us remember, going back to the 1960s, what a fight it has been over the years to get the state to pay even $1 million a year in fire protection. Now we're supposed to believe future administrations will faithfully pony up $13 million, $15 million a year, or more, to make this plan work in the out years.
Many observers who've been to the rodeo before are skeptical of this.
As for Gilliland's unfriendly, nitpicky criticisms of my piece, such as whether this deal should be called a swap, etc:
I think the public is aware that this deal is swapping old debt for new debt. Whether you want to call this a swap, or a refinance, is up to you. Clearly the plan involves several complicated bonds deals that, like previous bond deals, leave the public out of the loop.
As for Don's criticism of my calling Steve Goldfield "the receiver's economist," I think reviewing Goldfield's stellar testimony before the state senate last year shows him acting as an economist, and a financial advisor, and a rather good one at that. He attempts to clearly explain to the public swaps, "scoops and tosses," and false voodoo economics of past deals. To my ear he's discussing economics and acting like a much-needed economist here, not a lawyer who is only interested in existing law.
Watch Goldfield's full testimony here and judge for yourself:
http://www.youtube.com/watch?v=1i_gj9g2-Lo
The irony of Don Gilliland's rather unfriendly criticisms of me is this: I'm largely a fan of Gilliland's, and read his reports, and enjoy, as now, watching him disappear down Alice in Wonderland's rat hole covering this story.I often remind myself of the adage, "If you're not taking flak, you're not flying over the target."
My article resonates with readers, and provides a counter-narrative to Don's and the Patriot's narrative.
That I'm now attacked by Don and Pennlive is somewhat amusing to me.
As my readers know, I've published more than a dozen books since 1980. My books are popular, and often influential.
Yet, since 1980, my hometown newspaper, the Harrisburg Patriot-News, has chosen to almost completely ignore me, until now.
In all these decades, I have received only one notice of my work in the Patriot: a 1980 book review by the late Paul Beers. Other than that, a reader of the Patriot's back issues would not know I ever lived.
Like many others in central Pennsylvania, my voice has been almost totally ignored by the Patriot over the years. I've come to see myself as something of a voice for the voiceless.
I should add that two or three years after Paul Beers reviewed my first book in 1980, Beers wrote a column comparing Mayor Steve Reed favorably to Abraham Lincoln, Winston Churchill, and Ronald Reagan.
The Patriot, readers know, was an uncritical cheerleader of Reed for almost 30 years, and as such is largely complicate with what happened here.
I'd put my years of writings on the growing problem of Pennsylvania bond underwriting toe-to-toe against the Patriot's any day of the week.
What essentially has been going on since Reed became mayor is a simple attempt to cut the public out of the loop. This continues to this day with the "Harrisburg Strong" plan. It is too complicated (by design I suspect) for the public to understand, or to get behind. This may cause it to ultimately fail, I fear.
It wasn't always this way.
I don't know Gilliland's age, or how long Don's been around Harrisburg.
As a teenager in the 1970s, I helped construct the architectural models for Harristown, and Strawberry Square.
I also helped with a documentary film produced in the early 1970s explaining the Harristown revitalization plan to the public of Harrisburg.
It was always important, before Steve Reed came along, that the public understand what was going on, so that the public could get involved.
To hear Reed and the Patriot tell it, nothing was done in Harrisburg before Steve Reed. Reed took credit for Harrisburg's revitalization, when really he was standing on the shoulders of people like Mayor Harold Swenson, Harrisburg Redevelopment Authority head Lou Milan, my father (who founded Harristown and built Strawberry Square and 333 Market in the 1970s and 80s, before he tired of Reed and left), and many, many others.
Reed ended up mortgaging Strawberry Square to the hilt, after its original (and prudent) bonds had been completely paid off in the 1980s.
Incidentally, Strawberry Square was a true "public private partnership," involving the city, state and the telephone company, and was considered at the time to be one of the first of its kind.
Strawberry Square was not a cash-and-carry artificial parking scheme bailout like we now see with the Harrisburg Strong plan, which only pretends to be a "public private partnership."
Study up on it Don, if you care to.
What is saddest of all to me about Gilliland's article, "Uber-lobbyist Stan Rapp," is that Don shades it to make fun of David Unkovic, and to praise insider lobbyist Stan Rapp.
In Gilliland's article, Unkovic "self immolated."
No, that's wrong. Unkovic did something that's not understood in these parts. He refused to go along. He blew the whistle.
Instead, Gilliland writes that lobbyist Rapp is "powerful."
This is the same baloney that these insider bond advocates have been pulling since the mid-1980s, ever since the Zappala brothers' bond company (Russell, Rea & Zappala) got the inside track on state bond business thanks to their brother sitting on the state supreme court. (Incidentally it was the Zappalas' firm that floated Steve Reed's first bond issue in the 1980s, for the never-constructed rubber dam across the Susquehanna.)
It's easy to confuse insider largesse and fat contributions with being "powerful."
Like the Zappalas before him, Rapp is being characterized by some in the state press variously as "powerful," brilliant," and "bold," when really they all simply got an insider's handout.
What Gilliland is doing here is practicing insider access journalism. For good reason he apparently feels he must kiss some backside of those in power if he wants to get the inside track on tidbits for his stories. Good luck with that, Don.
As my readers know, I've tried always to side with the dispossessed public, not the insiders.
I've always thought it was the job of the writer to give succor to the powerless, and make insiders feel uncomfortable.
The Patriot, for years, as now, takes the opposite tack: Stan Rapp is made to feel comfortable, and powerful, and the public is left to feel stupid, uncomfortable, and left out.
The problem with insider, access journalism like Don's piece above was stated by the great independent journalist I.F. Izzy Stone, who said:
"If you're one of the crowd, you find yourself at dinner parties agreeing with people, a lot of half-baked nonsense, you shake your head very wisely and people see you shaking your head wisely, and pretty soon, you know, you're caught up in the God-damnedest mess of crap anybody ever got caught up in."
-- Bill Keisling
posted September 7, 2013
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