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Search Warrants Served In Probe Of State-Created Authority

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County prosecutors executed search warrants Wednesday as part of an investigation into a state-created authority appointed to oversee Pittsburgh's failing finances a dozen years ago.

Allegheny County District Attorney Stephen A. Zappala said detectives rummaged through the Downtown office of the Intergovernmental Cooperation Authority looking for computer hardware, e-mails and paper documents dating back to July 2009. 

Bank statements, cards and information about deposits and withdrawals will come directly from a second search warrant issued to PNC Bank, Zappala said. He said the investigation could eventually result in charges of tampering with records, misapplication of entrusted and property of government or financial institutions, unsworn falsification to authorities, tampering with public records or information, obstructing the administration of law and financial interest violation.

The ICA has been in relative turmoil after a special report released by state Auditor General Eugene DePasquale last November found the agency’s sole employee, Executive Director Henry Sciortino, couldn’t produce more than 90 percent of records of the authority’s contracts and expenses from his 12-year tenure.

“The total lack of substantiation of the transactions of the authority – that was bothersome,” Zappala said. "And the fact that it only came out in a media exposé, basically, by the Tribune-Review – that’s wrong, too.”

A Pittsburgh Tribune-Review investigative report earlier this month revealed the agency failed to maintain many of those records at all, and the auditor general's office has since begun a forensic audit.

"We did know that their recordkeeping was very bad, and a forensic audit is much more expensive, so we didn't dig deeper into the checks and the contracts, et cetera, to try to find out what happened in the missing documents," DePasquale said Monday. "Clearly we're going to be doing that now with these other revelations."

"To me, there's no question right now that any effectiveness of the ICA is tainted," he said, but it's still unclear whether it was illegal activity or incompetence.

“They’re supposed to file financial reports every year, and not one report has been filed,” Zappala said. “You’re not permitted to destroy those types of documents.”

In an April 6 email to several state lawmakers, Sciortino saidhe “never destroyed any documents” or “directed anyone else to do so.” In a prior affidavit filed in March, Sciortino said the ICA “discards” its invoices after annual audits at the close of every fiscal year.

In court documents released Wednesday, former ICA treasurer Ann Dugan described an “extreme lack of organization” during her three-year placement, which ended with her resignation in 2014.

She said the board met “maybe three times a year” and her requests for financial documentation from the ICA were “simply dismissed,” the affidavit said.

"Dugan stated that she never once saw a Treasurer's Report or voted on an ICA budget at any ICA board meeting," the affidavit reads.

“On one occasion, the ICA board met in the basement of a law firm on Second Avenue,” the affidavit said. “During this meeting, Dugan recalled seeing a hotplate and a cot in the room in which they met. Dugan added, ‘I thought Henry (Sciortino) was living there.’”

Court documents cite city officials who called the ICA’s physical address a “Nothing Office,” lacking “phones, computers or any sign of business-related equipment.”

The affidavit also asserts that Sciortino failed to file financial interest statements to a state ethics board. Court records allege Sciortino concealed an $838,000 lawsuit judgment against himself for fear of losing his job.

Last week, the five-member ICA board announced it will not renew Sciortino’s monthly $12,000 contract when it expires May 31.