Luzerne County Government

March 5, 2010

Prothonotary: Cash wasted on sales tax

Carolee Medico Olenginski says county should not have paid 6-percent state tax.

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
Jennifer Learn-Andes on Facebook   |   @TLJenLearnAndes on Twitter

Several thousand dollars of Luzerne County’s shrunken records improvement fund was unnecessarily spent on state sales tax, said county Prothonotary Carolee Medico Olenginski.

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, which was hired to scan records.

Comprehensive had to charge the tax because county Clerk of Courts Bob Reilly opted to pay the company through a middleman, records consultant LRW Solutions Group, Medico Olenginski said.

Comprehensive would not have charged the sales tax if it had directly billed the county, she said.

She had to obtain the invoice on her own because it was not filed in county records.

The fund paid LRW more than $970,000 in record improvement funds since 2005. LRW received most of the money – $734,810 for professional consulting services and $38,700 for mileage, tolls, meals and parking, records show.

About $50,000 went to Barton Weidlich’s company, JPW Construction Management, to build security cages, shred records, paint and complete other work. The work was not bid out as required by the county’s purchasing policy. Weidlich, who was friends with former county commissioner Greg Skrepenak and former chief clerk/manager Sam Guesto, faces attempted obstruction of justice charges as part of the federal corruption probe.

Another $70,000 of the fund was spent on labor to move records. The workers were not identified in the invoices, but LRW and county officials say they included John Hyder, the uncle of furloughed county prison deputy warden Sam Hyder, and Reilly’s son, Kean, who was among several college interns hired by LRW.

A copy of the publicly-filed invoices has been forwarded to federal investigators, according to a well-placed county source.

Reilly could not be reached for comment Thursday on the sales tax issue.

Medico Olenginski, who started looking at the fund after she took office in January, said records on file in the county don’t provide enough information on how the money was spent, so she is trying to obtain all additional invoices and back-up data.

The invoice she secured from Comprehensive indicates that the company charged $1,542 in state sales tax on one of its bills for work performed in 2007.

“This is why we’re asking for receipts from all the vendors. We could be looking at thousands of dollars in sales tax,” said Medico Olenginski, who sits on the records improvement committee that decides how the money is spent.

Comprehensive was paid roughly $42,000 for work out of the fund from 2006 through 2009, which would amount to $2,520 in state sales tax, she said.

The payments to LRW came out of a special records fund built on deed recording fees.

State law established the fund in 1998. The county treasurer, sheriff, register of wills, and clerk of courts also sit on the committee. The committee has rarely met in recent years, though Reilly has blamed the shortage of meetings on a lack of interest from other members.

The committee recently voted to continue paying LRW. However, county Controller Walter Griffith has refused to release the latest $5,200 payment request because he does not believe LRW has a valid contract. Griffith recently asked commissioners to decide if they wanted him to pay the bill, but they have not acted on his request.

Prothonotary Solicitor Sam Stretton recently sent LRW a letter demanding records and instructing the company not to do any work on behalf of the prothonotary’s office.

“There are very serious questions,” Stretton said. “If they provide further documentation, we’ll listen. But without that, we won’t deal with them anymore and will continue with our investigation.”

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