Feds look at county payments to firm

The U.S. Secret Service is “aggressively investigating” Luzerne County’s payment of nearly $1 million to an outside records consultant, an agency official confirmed Wednesday.

Most of the payments to Wayne, Pa.-based LRW Solutions Group came from a special record improvement fund. County Clerk of Courts Bob Reilly heads the committee that oversees the fund. Reilly has not responded to several messages in recent weeks about the fund.

Robert Slama, special agent in charge of the Secret Service’s Philadelphia branch, said his agency’s Scranton office is working closely on the investigation with the U.S. Attorney’s Office and Federal Bureau of Investigation.

The Secret Service recently obtained records from the county courthouse about the payments to LRW. Slama said he cannot provide further details about the ongoing investigation.

LRW, also known as Little Red Wagon, received at least $970,800 since 2005 to help organize and purge county records.

County Controller Walter Griffith has refused to release the latest $5,200 payment to LRW because of issues with the contract and authorization.

Commissioners had originally voted in June 2005 to pay LRW up to $107,000, but payments ballooned. The commissioners extended the contract a year later, agreeing to continue paying $1,050 per day plus expenses. However the extension did not set a new cap or timeline on specific tasks that would be completed, and it was never signed to become official, Griffith said.

County minority Commissioner Stephen A. Urban said the payments to LRW far exceeded the amount publicly authorized.

County Prothonotary Carolee Medico Olenginski started questioning the payments to LRW shortly after she took office in January, pointing out that LRW hired employees and contractors without a public vote or bids.

For example, LRW forwarded around $50,000 of its payments to Barton Weidlich’s company, JPW Construction Management, to build security cages, shred records, paint and complete other work – all without bids as required by the county’s purchasing policy.

Weidlich, who was friends with several high-ranking former county officials, faces attempted obstruction of justice charges as part of the federal corruption probe.

LRW spent another $70,000 on labor to move records, and the workers included Reilly’s son, Kean, and John Hyder, the uncle of furloughed county prison deputy warden Sam Hyder.

Another $42,000 was paid to a company with a family tie to Reilly’s wife. That company, Comprehensive Microfilm and Scanning Services in Wilkes-Barre, is owned by James Wasilewski, a cousin of Reilly’s wife, according to another relative. Wasilewski has declined to answer questions.

The lion’s share – $734,810 – went to LRW for professional consulting services, according to a Times Leader review of invoices. The company also received $38,700 for mileage, tolls, meals and parking, records show.

Medico Olenginski said she discovered that roughly $80,000 of the payments to LRW came out of the general fund, contradicting the contention of some county officials that taxpayer dollars weren’t involved.

The special records fund comes from a fee on deeds recorded in the county. State law says the fund must be spent “consistent with regular county budgeting, contracting and procurement practices.”

The three commissioners, sheriff, prothonotary, clerk of courts, register of wills and treasurer must sit on the committee overseeing the fund, the law says.

The committee has rarely met in recent years to discuss how the fund was being spent. Reilly has blamed the shortage of meetings on a lack of interest from other members.

Medico Olenginski has also pointed out that the payment of outside contractors through LRW unnecessarily cost the county thousands of dollars in state sales tax.

The county is not supposed to pay the 6-percent tax as a government entity. She discovered the 6-percent sales tax on an invoice she obtained from Comprehensive Microfilm and Scanning Services Inc. in Wilkes-Barre. Comprehensive had to charge the tax because it was paid through a middleman – LRW – rather than directly billing the county, she said.

Medico Olenginski has been demanding additional information from LRW and its president, Eric Coombs. LRW sent her a letter, through Weintraub Legal Services in Valley Forge, indicating that the company has performed requested work with “professionalism and diligence.”

LRW also presented a March 2010 letter from Reilly to Coombs, saying the company’s work was performed to “full satisfaction.”

“Not a single complaint was raised concerning any work performed by LRW. Further, LRW properly invoiced for the work and expenses, in accordance with procedure set by the county,” Reilly wrote.