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July 11, 2016

Critics Question Whether AG Office Demands Will Reform Hershey Trust

Critics are wondering whether voluntary demands made by Pennsylvania’s Attorney General’s office will lead to reforms at the embattled Hershey Trust, or if they will be as ineffective as previous attempts to rein in questionable spending at the $12 billion charity, according to the Philadelphia Inquirer

The attorney general’s office reached a settlement with the charity in 2003 to limit self-dealing and made another agreement in 2013 to limit board pay. But, in both instances, questionable spending continued, critics say. 

“Fifteen years later, where are we at? We’re right back where we started,” said Joseph Berning, a Milton Hershey School alumnus who has advocated for reforms at the charity. 

In February, Mark Pacella, the official who oversees nonprofits for the attorney general’s office, demanded in a letter to the trust, which funds and operates the Milton Hershey School for at-risk children, that it remove three board members, including its chairwoman, Velma Redmond. Mr. Pacella also asked for the board to personally repay hundreds of thousands of dollars in legal fees for internal investigations that it has ordered and to reduce board pay. The letter said there had been “apparent violations” of the 2013 agreement. Mr. Pacella threatened to pursue litigation by July 31 if the trust did not meet some of his demands.

Pennsylvania’s Solicitor General Bruce Castor, who has final say in the state’s legal matters, has said that he considers litigation to be an option, according to the Inquirer, which cited unnamed sources. Legal action could open the trust’s spending and behavior to the public and might lead to court-imposed penalties and changes, the Inquirer noted.

The charity recently came under fire when it was revealed that it paid directors $6.9 million collectively over the past three years and had paid for costly travel, meals, and hotels. 

A spokesman for the trust said it has a history of working with the agency and he expects it “to appropriately resolve outstanding concerns.”