An official request has been made to the Wayne County district attorney asking her to investigate the alleged changing of loan documents handled by Honesdale Borough.
— An official request has been made to the Wayne County district attorney asking her to investigate the alleged changing of loan documents handled by Honesdale Borough.
The move came during a special meeting of the Honesdale Borough council on Wednesday afternoon and targets the anchor building loan which is handled through the borough.
Councilman Bob Jennings made the motion, requesting District Attorney Janine Edwards "to accept allegations of wrong-doing involving the recent modification of the DCED anchor loan documents, circumventing or countermanding of council action regarding the term of the subject loan, and providing false and/or misleading information to proposed substitute counsel ..."
It further asks the DA to "... immediately refer them to the United States Attorney and the Federal Bureau of Investigation in Scranton, Pennsylvania, for full and complete investigation and, if warranted, prosecution of same."
The issue centers on a recent controversy which was discussed by members of the council where it was alleged that councilman Scott Smith changed the terms of the loan documents from 20 years to 30 years without consulting an attorney.
The anchor loan project is administered by the Pennsylvania Department of of Community and Economic Development. It basically allows an entity like the borough to administer a loan, in this case for $255,000.
As that loan is paid back, the borough can then make loans to other businesses for various improvements.
The motion by Jennings was seconded by councilwoman Juanita Pisano, who said she was concerned about what had taken place.
She said the matter had "painted a bad light" on everyone on the council.
"I had nothing to do with it," said Pisano. "I would like it cleared up."
Council vice-president Jim Brennan, running the meeting in the absence of president F.J. Monaghan, asked if Jennings was alleging "members of the council acted illegally?"
"It's to have an investigation," said Jennings. "It was altered from 20 to 30 years and never brought up to us. It's a serious matter."
Smith said since the motion was "directed at me," he wanted to explain to the council what had happened.
Smith said he did "not remember" if the loan documents were for 20 or 30 years. He claims he attempted to reach borough solicitor Rich Henry, who was in Harrisburg at the time.
However, Smith said he could not reach Henry.
It was around the same time that attorney Jason Ohliger said he was contacted by Smith to look at some paperwork, which he understood were "loan documents."
Ohliger also said Smith had asked him if he were interested in becoming an "alternate solicitor" for the borough.
But when the matter came before the council, the term "substitute solicitor" was on the agenda, something Ohliger said he did not appreciate.
Ohliger came to the last council meeting and during public comments said someone in that position is asked to give an opinion "when you don't like what your solicitor says. That is not a reason to appoint a substitute solicitor."
Henry said at the last council meeting that Smith had contacted him when he was in Harrisburg and the conversation was about the anchor building loan. He said Smith asked him about the loan length, whether it was 20 or 30 years.
Henry said the council had voted to make it a 20 year loan.
"Apparently he did not like that response," said Henry.
In fact, at the last meeting of the council, Henry said the loan documents had been altered without his approval. That alteration was extending the terms of the loan from 20 to 30 years.
That was the basis for the motion which was made by Jennings on Wednesday.
Smith did say Wednesday he had a meeting with Smith and Morris, the company seeking the anchor loan, at around that time and also said he did change the loan documents from 20 to 30 years.
But, said Smith, there was no "malice or aforethought of doing anything wrong."
He said he did not understand the "significance" of having the district attorney and "others" brought into the matter.
Councilman Harry DeVrieze, however, had a different take on the matter.
"You may not have remembered it was 20 or 30 years," said DeVrieze. "But Smith and Morris did. They came to you and asked to change the documents."
DeVrieze went on to say there were other council members available to discuss the matter but nobody was contacted and the documents were changed.
"They approached you to lower the payment," said DeVrize.
"It didn't change the payment," said Smith.
But attorney Henry said during a recent meeting the payment portion of the document was not changed but should have been since the terms were changed.
"I think it should be looked into," said DeVrieze. "It was in the minutes to approve a 20-year loan."
Henry said on Thursday when the documents were altered, "it would have required new documents."
He believes when they were changed it was simply forgotten to change the payment amount.
"They didn't think about that when they did it," he said.
When the vote was taken at Wednesday's special meeting to move forward with the request to the DA, it passed 5-1.
Smith was the only person to vote against the motion.
Voting for the motion were Jennings, DeVrieze, Pisano, Brennan and Mike Slish.
On Thursday morning, Henry said it is his plan to discuss the matter "as soon as possible" with the district attorney.
Henry said they will propose that she follow the motion to refer the case to the U.S. Attorney and the FBI.