Township allegedly fleeced by its own employee sues Spotlight PA to block access to bond claim details

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2 days ago

This story was produced by the State College regional bureau of Spotlight PA, an independent, nonpartisan newsroom dedicated to investigative and public-service journalism for Pennsylvania. Sign up for Talk of the Town, a weekly newsletter of local stories that dig deep, events, and more from north-central PA, at spotlightpa.org/newsletters/talkofthetown.
STATE COLLEGE — A small rural township has sued Spotlight PA to prevent disclosure of financial records as it seeks to recover through its insurer almost $533,000 in public money allegedly stolen by a former employee.
This week, Gregg Township and the newsroom agreed to stay the case in Centre County court until the township's insurance company can make a determination.
In November, Pennsylvania State Police accused Pamela Hackenburg of stealing more than half a million dollars from Gregg Township over five years and charged her with four felonies. The township then officially terminated Hackenburg, who had been on unpaid leave since last May.
In December, Spotlight PA published an investigation into how the alleged theft had escaped detection by elected officials for years. That report was based in part on documents obtained through the state's open records law, including township credit card statements that showed numerous transactions with the sports betting company DraftKings.
Hackenburg is awaiting criminal proceedings in the Centre County Court of Common Pleas, but she has not entered a plea, according to the county prothonotary office. While the criminal case proceeds, Gregg Township hopes to recover the township funds she allegedly stole.
Gregg Township holds a bond policy issued by Travelers Casualty and Surety Company of America, which covers liability on behalf of the former secretary with a limit of $700,000, according to a copy of the renewal certificate Spotlight PA previously obtained.
According to minutes from an Oct. 10 meeting, Township Solicitor David Gaines 'said that he made it clear [to the insurance company] that the township needs the money.' During a public meeting in November, Gaines reported that the insurance company was finalizing its response, and it was unclear how much money the insurer might decide to pay out.
Spotlight PA filed an open records request in December seeking communications between Gregg Township and Travelers Insurance Company, as well as any documents the township had submitted to support the claim.
Gregg Township denied Spotlight PA's request related to the bond claim in late January, saying the requested materials were exempt from disclosure under the state Right-to-Know Law. The newsroom appealed the following month.
In April, the Pennsylvania Office of Open Records, a quasi-judicial agency that adjudicates public records matters, gave a partial ruling. The office ordered the township to provide some financial records related to the bond investigation, but denied Spotlight PA's request to obtain the township's communications with its insurance company.
In a filing to the Centre County Court of Common Pleas a week later, Gregg Township said the decision by the OOR 'was erroneous and violated relevant law.'
Because the bond claim investigation is ongoing, 'among other concerns, the Township does not want to risk upsetting that process at the peril of the Township's bond claim,' the filing said. 'The Township is more than happy to divulge records once Travelers has finalized its review of the matter.'
After being sued, Spotlight PA emailed Gaines and township supervisors to ask about the lawsuit and seek additional clarity on the insurance claim. Gaines asked the news outlet to ask questions during monthly public meetings and not over email.
'Last year, Gregg Township uncovered evidence indicating that one of its employees may have used Township funds as her own. The Township continues to investigate that matter, and the Township has provided routine reports to the community about the status of the investigation, most often through discussion at the supervisors' meetings,' Gaines wrote in an email to Spotlight PA.
Josh Bonn, transparency attorney at Cohen Seglias Pallas Greenhall & Furman PC, is representing Spotlight PA pro bono in this case. He said public access to government financial records, especially when there are allegations of misuse of public funds, is critical.
'The 1976 film All the President's Men popularized the catch phrase, 'follow the money,' as an effective means to root out public corruption,' he said in an email.
Gregg Township and Spotlight PA entered into an agreement Wednesday to stay the proceedings in court, letting the dispute remain in place while the bond company makes its decision on the claim. The township said in its filing that Travelers is expected to render a decision in the next 30 to 60 days.
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