TheBurg

04.16 | theburg | 17 ere are nearly 2,000 such relief associations across Pennsylvania, each of them affiliated with one or more volunteer fire companies. ey pay various kinds of benefits to make volunteering more attractive: medical costs in the event a firefighter is injured on duty and family assistance if the injury is particularly debilitating; a death benefit after a lifetime of service. Most of them don't make grants of half-a-million dollars to help buy trucks, however. at's because most of them don't have resources like Harrisburg's. At the end of 2014, according to federal tax forms, the HFRA had assets in excess of $16 million. at makes it the wealthiest volunteer relief association in the state, in a city that has relied mostly on paid firefighters going back several decades. e HFRA hasn't only lavished money on the city fire department. Since 2004, the tax forms show, it has paid $1 million in salaries to its officers. Such compensation, although permitted by state law, is unusual: most of the state's relief associations pay officers a nominal stipend, if anything at all. e HFRA's wealth is unusual, too, but there are other relief associations with substantial assets whose board members don't seem to require compensation. e volunteer firemen's relief of Lower Paxton Township, for instance, manages a fund of around $2.5 million, and it spends hundreds of thousands per year on equipment and benefits for firefighters. Yet it doesn't pay its officers. In 2002, then-Auditor Gen. Robert Casey, Jr., whose office reviews the finances of every relief association in the state, wrote a scathing report about the HFRA's use of its vast resources. A press release described it as "little more than a secretive social club that exists to compensate the club's top officials and maintain the clubhouse." Firefighters' relief funds, Casey said, "are supposed to provide essential protective equipment and benefits to the volunteer firefighters who bravely serve our communities. ey are not to be used by a select group of individuals as an investment club for their own private benefit." At the time of the audit, the association's president was Henry Young, a former executive editor at the Patriot-News. In a story that ran in the Patriot, Young dismissed Casey's findings. "We have a big bank account. So what?" he reportedly said. "Tomorrow, we could have a fire, and a collapse could kill eight or 10 volunteers. I got to have the money to take care of the families and see the kids all the way through school." Young did not mention that, at the time, there were more board members than there were active volunteers. Nor did he disclose that the association was paying him nearly $50,000 per year. T he Harrisburg Firemen's Relief Association was incorporated in 1897. According to its charter, the organization's purpose was to maintain a fund "for the relief, support and burial of certain of its members, and other beneficial and charitable purposes." At the time, as detailed in David W. Houseal's "History of the Harrisburg Volunteer Fire Department," companies fought fires with steam- powered pumps mounted on horse-drawn carriages. With the exception of the chief and the assistant chief, who were hired by the city, and the paid drivers, the firefighters were volunteers. Over the next century, volunteerism declined. e city government "chipped away at what the companies were responsible for," Houseal writes, gradually taking charge of fire services under a paid Bureau of Fire. By 1980, 14 of the city's 16 volunteer stations had been shuttered or sold. Yet, even as fire duties were assumed under a paid city department, the relief association only seemed to grow. One of the critiques in Casey's audit had to do with the HFRA board members' "questionable appointment and eligibility." In the audit period, the association had paid a total of 29 officers, most of them representing volunteer companies that had long since closed. If volunteerism was shrinking, where did the HFRA get all its money? e theory I heard from most people I spoke to centered on a quirk in the way the state funded relief associations. e money comes from insurance companies doing business in Pennsylvania, which pay a 2-percent tax on their premiums. e tax on "foreign" companies—those headquartered out of state—is remitted to local governments, which then pass the money along to the relief associations. In the days before zip codes, the theory goes, these "foreign" insurance companies mistakenly earmarked some taxes for Harrisburg that should have been going to neighboring suburbs. A homeowner in the 3000-block of Derry Street, for instance, would have listed his address as being in "Harrisburg," though he technically lived in Paxtang. Having the initial seed money is one part of the story. e other part is making smart use of it. Young, who had served as the HFRA's president since at least the early 1980s, was a "very smart financial investor," Chief Enterline told me. rough the '80s and '90s, Young ushered the organization towards a more aggressive investment strategy. "Henry is the one that got them out of the bank account and into the stock market," said Don Konkle, a former city fire chief and the current director of the Pennsylvania Fire and Emergency Services Institute. e strategy extended beyond stocks, too. Konkle's institute, for example, rents office space on State Street downtown—in a building the HFRA owns. e association bought it in 1997, adding to a diversified pool of assets that came to include bonds, stocks, cash and mutual funds. By the time of the Casey audit, the value of the association's cash and investments stockpile was approaching $11 million. Casey didn't take issue with the amount of money so much as what the association was doing with it. In the three-year audit period, between 1998 and 2000, Casey claimed the group had spent less than a tenth of its income on member benefits, equipment and training. A third of the money it spent, if you excluded buying investments, went towards compensation of the association's board members. Based on these numbers, Casey accused the HFRA of an "apparent failure to satisfy the statutory purpose" of relief associations—that is, protecting volunteer firefighters. e audit also spent several pages attacking the association for refusing to provide an up-to- date roster of its members. at was one of the department's "biggest gripes," according to a past senior official there, who spoke on the condition of anonymity, saying he was not authorized to speak on behalf of his former boss. (rough a spokesperson, Casey, now a U.S. senator, declined to comment for this story.) e auditors viewed a complete roster as necessary proof that benefits were being paid to actual firefighters. But the HFRA, alone among the state's 2,000 relief associations, argued they weren't required to provide it. "ey took the position, and it was preposterous, that they had no obligation to ever disclose to us a roster of the members," the official said. "We had no way of knowing how many members there were, whether they were living or dead, whether they were actually engaged in fire service. It would be like someone saying they needed VA benefits but refusing to identify what branch of the service they were in." Casey's audit was highly contested. Before releasing their final report, the auditors went back and forth with the board for a year and a half. e HFRA's attorney challenged the findings in a lengthy letter. e auditors, in turn, replied with a dense counter-analysis, at one point going into a 200- word digression on the meaning of "professional skepticism." When the audit finally came out in 2004, it "was just the crescendo of a long-standing dispute," the former senior official said. Nonetheless, in the years that followed, the association began to make some changes. In the period the Casey audit reviewed, the group spent just short of $60,000 on firefighting equipment; over the next four years, that number climbed to $340,000. e board also slashed its officer ranks, cutting the number by almost two-thirds, to 10 officers by 2009. In the meantime, the relief association's stockpile has continued to grow. "ere's no question Harrisburg's amount is abnormally high," the state's current auditor general, Eugene DePasquale, told me recently. "I don't know anyone that's close." Yet the relief association's last few audits have not been critical. ere is no legal prohibition on a relief association hoarding resources, and compensation of officers is still allowed. e appropriateness of such actions, DePasquale said, was a "policy question" for the state legislature. Chief Enterline, himself a former volunteer, defers to the judgment of the state auditors. "If the AG's office says everything is good with the organization, then who am I to second-guess it?" he said. In his view, Harrisburg and the HFRA had a "great relationship." As for the officers' salaries, he added, "I don't wanna know." T hese days, the relief association board has nine members, representing the three volunteer companies still in existence: Camp Curtin, Mount Pleasant and Riverside. In January, I spoke briefly by phone with the board secretary, Jim Bailey. He disparaged the conclusions reached by the audit under Casey. "Mr. Casey didn't give a shit about anyone in the Commonwealth of Pennsylvania," he said, and "had no clue what he was doing." He suggested Casey's findings reflected nothing more than his ambitions for higher political office. He also pressed me repeatedly for my motive in pursuing the

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