By Richard L. Gaw
Staff Writer

From the time the Kennett Township Board of Supervisors were first made aware of suspicious transactions in the township's bank accounts in late April, township residents have clung on every word of fact that's been made public in this investigation -- which has led to the dismissal of former township manager Lisa Moore and to twin investigations by the Chester County District Attorney's Office and a forensic auditor that has been hired by the township.

Since early May, every sliver of an update has been funneled down from the DA and delivered to the public in the form of written statements, delivered by board chairman Scudder Stevens at the beginning of every board meeting, and followed by a question-and-answer period.

While these ongoing investigations into potential wrongdoing enter their seventh month with still no hardened facts, however, several residents have shared their frustration that the details of Who, What, When, Where, Why and How Much have taken too long to be revealed.

At the board's Oct. 2 meeting, they aired out their frustrations in front of the supervisors.

In a heated series of exchanges that led off the meeting, a few residents expressed their distaste for how the township has handling the dissemination of updates related to the investigation. What resulted in a near shouting match between board chairman Scudder Stevens and residents began quietly with an opening statement from Stevens, who told the audience that the township is “anxiously awaiting word that the Chester County District Attorney’s report is complete and that they will be reporting their findings,” he said. “When we have news to report to you, we will absolutely do so.

“As I mentioned two weeks ago, in anticipation of the completion of the investigations, we are planning to issue a report from the township and hold a public meeting to discuss that report and provide additional information about what happened and what we are doing to fix it,” Stevens said. “The timing of all that is dependent on the District Attorney’s Office first announcing their conclusions. After the DA schedules a date for their findings, we will schedule a date soon thereafter for our meeting and the public will be invited.”

News of a township meeting in the near future that proposes to spell out the entirety of the investigation was not good enough for a few in the audience. They said they want details and they want them now.

Early in the back-and-forth discussion, resident Gene Pisasale read from a statement.

“It’s been almost six months since the township was first embroiled in scandal,” he said. “Financial irregularities were discovered, a criminal investigation has begun and a township manager has been fired. Yet, we have had almost no information released by this board specifically about what happened, who did what, the amount or nature of the financial irregularities – nothing.

“I have read the township reports. They release almost nothing about the investigation. This in all fairness is unacceptable. The hard-working taxpayers of this township deserve better. They deserve complete transparency from this board.”

Pisasale then referred to Stevens’ 2012 campaign, when as a candidate for supervisor, Stevens criticized the Republican-led board for their lack of providing full and complete transparency.

“Scudder, you first campaigned for the board espousing financial transparency and complaining about what you felt was the lack of it, but we haven’t gotten any transparency on this matter from this board,” Pisasale said.

Pisasale then directed his criticism directly at supervisor Dr. Richard Leff, who is currently campaigning for re-election to the board against challenger Hunter Tower.

“Richard, this happened on your watch,” Pisasale said. “I received a flyer in the mail from you recently asking for my vote on Nov. 5. You want me, and all township residents, to trust you with our vote, but you haven't kept your promise to us on financial disclosure. Taxpayers have the right to know exactly what kind of financial shenanigans have you been dealing with, and what is going on here.”

“Are you finished?” Stevens asked Pisasale.

Pisasale said “Yes.”

“I’m answering because I am the one charged to do that at this meeting,” Stevens said. “You can rant and rave about this as much as you want...but we've already explained to you for the past six months that we are not able to talk about these things,” Stevens said, speaking for Leff. “So it's not as if we are hiding things. We have been transparent to the absolute extent...Actually, we've gone further than we were supposed to on several occasions, and there have been times my colleagues have grabbed me and told me in subtle ways to shut up, because I was going too far.

“We are limited as to what we can say,” Stevens added. “We've said this now about 15 times tonight. So you can point your hand at us and say that we've not been transparent, but we are being transparent, and when the time comes when we are allowed to disclose, then we will disclose. Up until that point, we can't. We’ll sit here and let you tell us that we’re in the wrong, but we’re not doing it wrong. We’re doing what we have to do.”

 

Fiduciary responsibilities

 

Township resident Chris Burkett then responded to Stevens's comments to Pisasale. Earlier, Burkett said that the board had failed at their fiduciary responsibilities.

Referring to Stevens’ response to Pisasale, Burkett said “You can take that position, Scudder, but I mentioned the fact that you've failed at your fiduciary responsibilities to protect this township from these types of events, and you want to tell me that I have a faulty premise, and I don't have a faulty premise.

“You won't accept the responsibility that you guys have been up there for years looking over what's been going on in this township,” Burkett added. “You have a fiduciary responsibility that you failed at, and you won't accept responsibility for that. That's the problem that I have. You want to skirt it off and say 'We can't talk about that now because there's an ongoing investigation, and you want to tell that person that he has no right to ask these questions --”

“I didn't say that to him,” Stevens responded to Burkett.

“I just want to say that you can say what steps you’ve taken to correct this failure and fiduciary responsibility, and you won’t tell us about that, either,” Burkett said. “I hope the day comes when we can hear all about all of the steps that you took before this happened and all the safeguards you had in place and how this freakish accident happened, that just so happened to have happened on your watch,” Burkett said.

“I have no idea what you're talking about,” Stevens said. “Freakish accident? Nobody except you has used that phrase.”

“We don’t have any information, Scudder,” Burkett said. “You possess the information on what happened. And knowing that, you can look at the audience and say ‘I don’t know why you’re using those terms, because I know what happened and you don’t, and so it wasn’t a freakish accident.’”

“I told you that we will have a complete and open meeting about everything that has gone down when it is freed up by the DA,” Stevens told Burkett. “Up until that point, I can’t tell you. I can start to tell you pieces, and that just snowballs into going into the details and speculation and that is something that we are forbidden to do.”

“I understand that you can’t divulge that kind of information, but there is an extreme amount of frustration out here among the citizens –“

“Up here, too,” Stevens responded.

“When I said to you that you failed in your fiduciary responsibility and you said to me that you don't agree with that premise, it tells me that you're not willing to take any responsibility for the events that transpired leading up to now,” Burkett responded. “I have a problem with that, because obviously, something could have been done.”

“I know very well the fiduciary responsibility that we all have up here,” Stevens said. “No question about that. You say that we have a fiduciary responsibility and that we have failed. I took the premise that it has not been established that we have failed, and that's what's going to have to be dealt with when we get to the DA's report. We know that there is a fiduciary responsibility, and we have been dealing with that fiduciary responsibility from the very beginning.”

Former supervisor Michael Elling criticized Stevens and the rest of the board for not openly showing their frustration at the lack of news coming from the DA.

“I think they do show it,” said township solicitor David Sander. “Every single time Scudder sits in front of a meeting and reads that statement, he’s not laughing about it. He’s not saying ‘Ha-Ha’ about it.

“It is of the utmost importance, and I think they take it very seriously. They would tell you more but they can't because they don't want to screw up a criminal investigation on going by the DA. How much more clear can Scudder be, meeting after meeting after meeting, about what he can and can't say?”

Pisasale continued to press Stevens for answers.

 

A complex scenario

 

“Are you, Scudder, or any members of this board, overseeing any parts or any related parts of this investigation?” he asked.

“I don’t understand the question,” Stevens said. “If you are asking us if we are involved in the investigation by the DA? Absolutely not. Are we running the township while that’s going on? Yes, we are. I’m not sure if that fits with your question, but that’s what’s happening.”

Pisasale continued.

“Aside from standard operational type issues that you need representation from, has an attorney or any law firm been contacted by you or any member of this board for the benefit of the township, potentially to be used to represent the township, related to the criminal investigation? Has that happened?”

Stevens mentioned the vote that was taken at the board's Sept. 4 meeting that authorized the execution of an engagement letter hiring the Philadelphia law firm of Blank Rome as special counsel to pursue any civil liability and recoup any losses that the township may suffer as a result of these suspicious transactions.

“In relation to the criminal [investigation]? No,” Stevens said.

“How about in relation to a potential pending lawsuit against the township?” Pisasale asked. “Has that happened?”

“I know of no pending lawsuit against the township,” Stevens, who mentioned that he had recently been served a lawsuit from a disgruntled taxpayer who was concerned about paying his taxes. “If you're asking if there are lawsuits, there is that one, and it will be served to me on Monday.”

One resident asked about the status of the forensic auditor's report. Stevens said that it is being conducted parallel to the DA's report.

“I am trying to explain what's going in there without talking about time frames, because whenever I had accidentally talked about time frames in the past it's come back to bite me,” he said. “My understanding is that the forensic auditors' report will be linked by about seven days – I'm guessing a short period of time – to the DA's report. So when the DA's report comes out, you can anticipate the forensic auditor's report will follow in close proximity.”

“The board simply has no control over the investigation and its outcome and the timeliness of it,” said Police Chief Lydell Nolt. “I have been involved in this situation since the beginning, and this is a very ongoing, active investigation scenario, and there are times when there are repeated contacts daily, and there are times when we don't hear about anything for a few days, but as with any active investigation, as these things unfold, news either picks up or slows down based on what is occurring.

“In my opinion, has the District Attorney's Office themselves from the township? Absolutely not.”

One resident asked about the timeliness of the investigation being done by the forensic auditor.

“The township is paying the forensic auditor. Can't you get them to get this work done?” he asked.

“We don't control the forensic auditor,” Stevens answered.

“But you're paying the bill.”

“The auditor has been given the assignment to do what his forensic auditing requirements are, and he's working steadily at it,” Stevens said. “We're not controlling him in any way. He has to do what he has been required to do. You will hear about it when we finally are able to have a public meeting when we can explain all that has happened, but this has been a very complex and deep process.”

As the end of the half-hour discussion, Nolt told the audience that the DA and the forensic auditor must be allowed time to complete their work, in order to better assure the accuracy of their findings.

“What we’re doing is assuring that the forensic accountant and the DA can complete their tasks,” he said. “In time, you will have full transparency from two separate agencies – one that is completely not associated with the township and the second, who is being retained by the township.

“I am trying to make it clear,” Nolt added. “You do not want a work product that is incomplete. If this was not a complex scenario, this would have been done months ago, so obviously, the time frame isn’t because people are sitting there not doing work. This is a complex scenario that involves a lot of moving parts and a lot of pieces. If you want a complete work product, patience is important, and there is value to that patience at the end of the day.”

 

To contact Staff Writer Richard L. Gaw, email [email protected].