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New details in FBI probe of huge Pa. pension fund


A daily newsletter by Spotlight PA
Your Postmaster: Colin Deppen
May 17, 2021
PSERS subpoenas, MOVE twist, crisis care, mask questions, voter vision, another 'New Deal,' and exploding cicadas. It's Monday and Primary Day eve.

New details about a federal probe of Pennsylvania's embattled, $64 billion public school pension fund have prosecutors looking for evidence of kickbacks or bribery as they explore why the plan exaggerated investment returns and spent heavily on Harrisburg real estate.

Government subpoenas reviewed by Spotlight PA and The Inquirer demand information from the PSERS fund itself, its executive director, and at least three other senior officials. The documents lay bare the scope of the probe for the first time and show prosecutors and the FBI are investigating possible "honest services fraud" and wire fraud.

Also on the table: A possible cover-up and "benefiting from the cooperation of an insider," sources say.

THE CONTEXT: The FBI probe follows a controversial vote by the Pennsylvania Public School Employees’ Retirement System or PSERS board, which adopted an inflated number for its investment performance in December, months after the state treasurer questioned the math.

The swirl of scandal soon loomed large enough to demand the full attention of the system's chief investment officer, who's also the highest-paid employee of Pennsylvania government. 
The Inquirer reported in April that federal authorities were focused, in part, on the fund’s authorization of $14 million in spending to purchase and demolish buildings near its Harrisburg headquarters.

This week's new reporting by Spotlight PA and The Inquirer provides greater insight into the possible offenses being eyed against the backdrop of an ongoing investigation.

The pension fund is one of the nation’s largest, sending more than $6 billion in pension checks to 265,000 retired teachers and other former educators each year.

Asked about the probe, PSERS spokesperson Evelyn Williams said it would have no comment, staying silent to protect the secrecy of its own internal inquiry and the federal one. 


WE DID IT! Together, over the course of the past two weeks, we raised more than $30,000 in support of Spotlight PA's vital investigative journalism. We now have more than 2,000 members in all corners of Pennsylvania who care about the truth, the facts, and holding the state government accountable.

If you didn't get around to joining our spring campaign but are moved by the support of your friends and neighbors and want to do your part, it's not too late. You can make a contribution of any amount now and join the effort.

Your support will help power more of our investigations and public-service programming — such as our civic education events, voter guides, redistricting coverage, newsletters, and more. When we launched Spotlight PA, we were testing the premise that people across Pennsylvania want and will pay for independent, non-partisan journalism that they can't get anywhere else.

And in gift after gift, message after message, you — our readers — have responded these past two weeks with a resounding YES! We are so grateful.

The support of our members allows us to provide Spotlight PA's investigative journalism at no cost, because we believe everyone in Pennsylvania deserves access to this kind of reporting regardless of what they can afford.

Thank you again for your trust and confidence. Now back to the hard work.

— Christopher Baxter, editor in chief

"For individuals in the hardest-hit industries, the federal PEUC program will provide assistance as businesses continue to recover."

—Jennifer Berrier, acting secretary for Pennsylvania's Department of Labor and Industry, on the end of the state's extended unemployment benefits

VACCINE UPDATE: The CDC will probe "breakthrough" COVID-19 cases after nine New York Yankees tested positive post-vaccination, most without any symptoms. Meanwhile, Pennsylvania wants 70% of its population fully vaccinated, with occupancy limits for indoor and outdoor events easing today before lifting altogether on May 31. For vaccine providers, check Spotlight PA's map and county-by-county listing.
» BE PREPARED: Everyone — regardless of political affiliation — can vote May 18 (that's tomorrow!) on four ballot questions. Here's a breakdown of each one. Plus, WHYY has a great primer on the appellate court judge candidates. We'll have more resources in the days and weeks ahead.
Thanks, Tracy W., for this shot of the Flight 93 memorial in Somerset County. The memorial commemorates Flight 93, which was one of four aircraft hijacked in the September 11 attacks. Send us your hidden gems, use the hashtag #PAGems on Instagram, or tag us at @spotlightpennsylvania.

ELECTION RUN: At least 25 Pennsylvania elections directors left their jobs after November's "nightmare" balloting. Now, Spotlight PA reports on the crop of replacements preparing to helm this week's primaries under the hawkish gaze of skeptical Republicans and with no formal or standardized training to fall back on. "We’re not provided with a handbook or how-to guide when we start this job, which would be great," one explained.

MOVE REMAINS: Philadelphia says it has found the remains of MOVE bombing victims days after the city's top health official resigned because he ordered their disposal without notifying the family. The city says a subordinate disobeyed Dr. Thomas Farley's 2017 directive and that the remains were found in a basement office on Friday, per The Inquirer.

REPEAT OFFENDER: The Lehigh Valley-area addiction treatment center with the most violations is part of a nonprofit led by former aides to Pennsylvania governors Tom Wolf and Ed Rendell, the Morning Call reports. The revelation follows Spotlight PA reporting on dangerous gaps in Pennsylvania's oversight of the addiction treatment industry.

MASKING RULES: Pennsylvania's COVID-19 mask rule matches new federal guidance issued last week that allows fully vaccinated people to shed theirs in most cases. But that's raising questions for some businesses with their own mask rules in place. It's also raising doubts about the trustworthiness of the honor system, TribLIVE reports.

KEY VOTES: Voters in 17 Pennsylvania counties will vote for district attorneys in tomorrow's primaries. (Find out if you're one of them with a sample ballot here.) At a pivotal moment for criminal justice reform nationwide, the stakes couldn't be higher. A survey by The Appeal outlines the reform vision Pennsylvanians are taking to the ballot box.

GREEN MAN: A trashed Philadelphia newspaper box was remade as a Shrek-themed "little free library" and promptly packed with onions, DVDs, and fan art by passersby. It also went viral on TikTok. "When I did it, I had no idea," the creator told Billy Penn.

DOG SHOW: Pennsylvania's "Puppy Mill Capital" distinction was solidified on Oprah Winfrey's show and countered with new rules for kennel owners in 2008. But the Bureau of Dog Law Enforcement tells the Courier Times present-day funding shortages threaten the progress they've made.

ICE BOX: A new "community fridge" in Ambler invites community members to take the fresh food they need and leave the fresh food they can. PhillyVoice explains it's part of a growing trend in Philadelphia, where more than 257,000 food insecure people lived in 2018.

HYPE TRAIN: If you aren't already amped about the emergence of cicadas that spent the last 17 years living under our feet, CBS21 says the arrival will start as "a trickle over the next couple of days, followed by a steady stream late week, with an explosion (!!!) next week." (Emphasis and exclamation points all mine.)

ART WORK: Pennsylvania artists and craftspeople have less than two weeks left to enter work for this year's juried "Art of the State" exhibit. Apply here, get more information here, and take a virtual tour of last year's show here.
Unscramble and send your answer to scrambler@spotlightpa.org. We'll shout out winners here, and one each week will get some Spotlight PA swag.

Friday's answer: Finesse

Congrats to our weekly winner: Elaine C.

Congrats to our daily winners: Mary Ellen T., Irene R., Myles M., Neal W., Mark O., Susan D., Becky C., Craig W., Beth T., Russellen C., Joyce D., Bill C., Fred O., Kevin H., Dixie S., Bob R., Patricia M., Kim C., Mary Kay M., Bruce B., Mark C., Michelle T., David I., Meg M., Sue B., Mike B., Ben S., Bruce T., Steve D., Clark C., Suzanne S., Elizabeth W., Karen W., Al M., Christine M., Vince C., Jill A., Carol S., Augusta R., Bette G., Carol D., Chandra D., Kenneth J., Ken S., Chris M., Joyce O., Brandie K., Don H., Joan S., Jill K., Diane P., Susan R., George S., Anne R., Betsy R., Jackie S., Dennis M., David S., Bruce B., Geoff M., Janet T., Guy M., Jimmy N., Sherri A., Joel S., Lance L., Karen M., Patty K., Johnna A., John H., Debra K., Dianne K., Doris B., Johnny C., John A., Rick D., Patricia R., F. Emmet C., David W., Tish M., Theodore W., Christine M., Susan W., Jeff M., Catherine J., James B., Skip B., Lex M., Jenn R., Linda H., Helen G., Eddy Z., Alice B., Brian B., and Ann and John P.
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