Attorney General Kathleen G. Kane Tuesday announced the arrest of Stephen R. Reed, the former Harrisburg mayor now charged with various crimes, including using public money while in office to illicitly obtain artifacts and other memorabilia.
"This is one of the most disturbing cases of public corruption this office has investigated," Attorney General Kane said. "Mayor Reed used taxpayer money to further his own interests. His conduct is at the root of the fiscal issues that continue to plague the City of Harrisburg today."
The Criminal Prosecutions Section of the Office of Attorney General presented evidence to a statewide investigating grand jury, which recommended the charges filed against Reed, 65. He was elected Harrisburg mayor in 1981 and held office until early 2010.
The grand jury found several instances in which Reed used money available in the municipal debt market to create opportunities to raise money and divert funds.
The grand jury alleges this practice of using the expenditure proceeds from public debt touched several entities, including the Harrisburg Authority, the Harrisburg School District, the Harrisburg Civic Baseball Club and the Harrisburg University of Science and Technology, among others.
Over time, Reed, who had a hand in all of these entities while mayor, allegedly used this public money at his discretion partly to obtain thousands of artifacts, which was a violation of Pennsylvania's Criminal Code.
The artifacts — which include such items as a life-sized sarcophagus, a full suit of armor and a "vampire hunting kit" — were bought as Reed made several trips throughout the country allegedly at taxpayers' expense. The artifacts and other memorabilia purportedly were destined for several museums Reed planned for the city.
Investigators with the Office of Attorney General recovered many of these city-owned items as they executed search warrants at Reed's office and home, the grand jury presentment states. Many of the artifacts were reported to be in poor condition because they were improperly stored.
Evidence presented to the grand jury also showed Reed made attempts to sell at least 20 city-owned firearms on consignment. Reed allegedly made trips to Gettysburg for this purpose after investigators conducted the search of his office. The weapons have since been recovered.
Furthermore, evidence presented to the grand jury showed Reed allegedly offered to bribe at least one city official, a former City Council President, by offering him a yet-to-be-created position with the Harrisburg Senators. Testimony before the grand jury alleged the exchange was a "quid pro quo" designed to control City Council votes.
Reed also collected money from the Harrisburg University of Science and Technology through a contract he signed to serve as a guest lecturer and fill other functions, but testimony indicated he performed very few of the services for which he was being paid, the grand jury alleges.
Attorney General Kane stressed the investigation of Harrisburg's finances is ongoing.
"In order for the City of Harrisburg to continue its financial recovery, it is imperative that its citizens have a clear picture of the past," Kane said.
Reed, 212 Cumberland St., Harrisburg, is charged with the following crimes:
— 2 counts of corrupt organizations (F-1).
— 2 counts of dealing in proceeds of unlawful activities (F-1).
— 2 counts of theft by deception (F-1).
— 20 counts of theft by receiving stolen property (F-2).
— 20 counts of theft by unlawful taking or disposition (F-2).
— 1 count of theft by deception (F-2).
— 7 counts of bribery in official and political matters (F-3).
— 29 counts of theft by receiving stolen property (F-3).
— 29 counts of theft by unlawful taking or disposition (F-3).
— 3 counts of theft of services (F-3).
— 1 count of theft by deception (F-3).
— 110 counts of theft by receiving stolen property (M-1).
— 110 counts of theft by unlawful taking or disposition (M-1).
— 158 counts of misapplication of entrusted property and property of government or financial institutions (M-2).
— 1 count of deceptive business practices (M-2).
— 3 counts of criminal solicitation (M-2).
— 1 count of tampering with or fabricating physical evidence (M-2).
Reed was expected to appear today for his preliminary arraignment in district court.
The Office of Attorney General started its investigation of Reed after receiving a conflict referral from the Dauphin County district attorney's office.
Attorney General Kane thanked the attorneys prosecuting the case and agents with the Office of Attorney General's Bureau of Criminal Investigations, who spent weeks collecting and cataloging the artifacts and other memorabilia seized as part of the investigation.
The case is being prosecuted by Deputy Attorneys General Clarke Madden and Rebecca Franz of the Criminal Prosecutions Section.A person charged with a crime is presumed innocent until proven guilty.
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