FBI probe lurks over Scranton

Bonds

As the cloud of an FBI investigation hangs over Scranton, council members in the northeast Pennsylvania city want answers from Mayor Bill Courtright.

Bureau personnel conducted raids on Courtright’s office and home on Jan. 9, an FBI press officer confirmed without elaborating.

“I would fully encourage the mayor, his cabinet, and any other government officials to fully cooperate with the FBI and Justice Department in their investigation,” City Council member Bill Gaughn said at Monday night’s regular meeting, where a code of ethics for municipal employees and elected officials was on the agenda.

Scranton is the latest Pennsylvania city under a corruption cloud.

A message seeking comment was left with Courtright.

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“FBI personnel were at those locations last week, carrying out court-authorized law enforcement activity,” said Carrie Adamowski of the bureau’s Philadelphia office. “As that activity relates to an ongoing matter, no additional information can be released at this time.”

Related court documents are sealed.

Local television station WNEP reported that the FBI agents focused on the city’s office of licensing, inspection and permits.

Courtright, a second-term Democratic mayor, told the Times-Tribune newspaper that he hired local attorney Paul Walker. “I know there’s a rumor I’m resigning. I’m not,” he said, while not discussing the raids.

The news cast a cloud over a city that is looking to exit state oversight this year from Pennsylvania’s Act 47 workout program for distressed communities. Scranton has been under Act 47 since 1992.

Scranton, the 77,000-population seat of Lackawanna County in northeast Pennsylvania, has struggled financially with budget imbalance and unfunded pension liability. Its credibility in capital markets plummeted in 2012 when it missed a bond payment to the local parking authority amid a political dispute.

The city’s bonds are junk. S&P Global Ratings, the only agency that rates the city, assigns its BB-plus rating, one level into speculative grade. S&P in August 2017 upgraded the city from BB after it sold its sewer system and earmarked a majority of sale proceeds to retire more than $40 million in high-coupon debt.

Pennsylvania Auditor General Eugene DePasquale said last month that the city is improving the funding levels of its three employee pension plans.

The council, which held a second reading on the ethics code, expects to hold a final vote on it at its Jan. 28 meeting. If it passes, a board to oversee and enforce ethics.

“Give the board teeth,” Gaughn said.

Corruption scandals have beset Pennsylvania municipalities in recent years.

Federal juries convicted Ed Pawlowski and Vaughn Spencer, the former mayors of Allentown and Reading, respectively, in pay-to-play corruption trials last year.

Pawlowski in October received a 15-year sentence for his conviction in a pay-to-play corruption scheme. The federal case was part of an overall corruption sweep in Pennsylvania that included Reading, 40 miles southwest of Allentown.

Spencer’s sentencing is scheduled for March 15.

Steven Reed, mayor of capital city Harrisburg from 1982 to 2010, pleaded guilty in 2017 to 20 counts of theft by receiving stolen property, Wild West artifacts. He received two years’ probation but no prison time.

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