Juvie ‘trade secrets’ suit alive

A controversial 2004 Pittston Township detention center “trade secrets” lawsuit against former Luzerne County controller Steve Flood and two state welfare officials is still alive.

The suit had been inactive for years, but a lawyer for detention center owner Greg Zappala highlighted it in a recently released document about the welfare department’s critical audit of PA Child Care’s detention center in Western Pennsylvania.

Zappala and Butler Township attorney Robert Powell owned both detention centers until Zappala bought Powell’s ownership interest last year.

Attorney William G. Brucker said in a letter to state auditors that a draft audit of the Western Pennsylvania center was “intended to punish the principals” of the center.

Brucker said the state Attorney General’s Office had faxed a letter to PA Child Care’s legal counsel around the time the draft audit was issued requesting dismissal of the litigation against welfare officials Leonard Pocius and Thomas Crofcheck.

Brucker said some of the audit-cited expenses that made headlines were incurred before the time period covered in the audit. Those expenses included a $3,500 custom-made suit for former Hazleton Mayor Mike Marsicano, limousine rides to the King of Prussia Mall and NCAA basketball tournament and a fishing trip on Powell’s yacht.

Brucker alleged that the state “sought out” expenses incurred before the review period “to incite a scandal in an effort to harass and embarrass” Zappala to dismiss the trade secrets suit.

In response, the state said its audit “clearly explained” that the auditors had observed at least $84,000 in “questionable” prior period costs while they were reviewing 2007 expenses to determine which ones fell in the fiscal calendar covered by the audit.

“In addition, disclosure of these questionable costs was particularly relevant as the practice of funding unallowable personal costs with Western Pa Child Care revenues was documented to have continued through the audit period,” the state audit said.

Brucker said the draft audit was released “with great fanfare” to the news media on Feb. 11 before it was received by Zappala, even though the draft contained a warning from the state that its distribution was to be limited.

“The premature disclosure to the media was the initial factor and basis for the original litigation filed by PA Child Care,” Brucker wrote.

State officials have stressed that they did not release the draft audit to the media.

The trade secret suit sought to prevent the release of an audit critical of the county’s $58 million, 20-year lease with PA Child Care to house juvenile offenders at the Pittston Township center. PA Child Care said the suit needed to be sealed because it contained "trade secrets."

Former county judge Michael Conahan sealed the suit, but in an appeal by The Times Leader, the state Superior Court overturned Conahan’s decision.

Attorney Richard Sprague filed a document in February withdrawing from representing PA Child Care in the trade secrets suit, according to the county prothonotary’s office. Brucker filed paperwork in February saying he would be the attorney handling the matter.

Conahan and former judge Mark Ciavarella are both awaiting sentencing on guilty pleas in connection with receiving $2.7 million in kickbacks in exchange for decisions that led to the county’s use of both detention centers.

Powell, who admitted to paying the former judges $772,500 in kickbacks, is also awaiting sentencing on his guilty plea to felony charges for failing to report illegal activity.

The state has subsequently released the Pittston Township audit, which led to the state’s reduction in reimbursement for juveniles lodged in the facility. The state also reduced reimbursement at the Western Pennsylvania facility.

County minority Commissioner Stephen A. Urban said he always believed the trade secrets suit was a “ruse to hide things from the public.”

“Anytime public money is involved, the public has a right to know how the money’s being spent,” Urban said.