A report commissioned by one of the Johnstown Redevelopment Authority Board members found a lack of proper internal controls and a deeper investigation is needed into the governance systems that allowed a former executive director to extort contractors for his personal gain.
“We cannot keep running this as it is,” said JRA board member Mark Pasquerilla following the release Tuesday of his report produced by the law firm of K&L Gates. “As Johnstown moves into the new century and tries to get things done, we have to represent a progressive attitude on governance.”
In July, former JRA Executive Director Ron Repak was found guilty of federal charges that he solicited bribes from contractors and extorted those that wanted to do business with the tax-supported JRA. Testimony in the trial revealed that Repak improperly asked for goods and services from at least two vendors.
Pasquerilla, who joined the board in January, said he has recommended that the board launch further investigations and policy reviews but has not received any support.
“That’s why I’ve had to turn to the bully pulpit,” Pasquerilla said. “I’m not going to keep silent here, so I have to do what I can to protect the public’s interest.”
None of the other members of the JRA board could be reached for comment. Pasquerilla said he gave his report to those members and city officials but did not get much reaction.
Also included in the recommendations from K&L Gates is a call for the implementation of a “multi-stage approval process for work orders and payment of invoices appropriate for the amounts at issue,” and an update of JRA policies to better define inappropriate relationships between employees, financial reporting and record keeping and how to disclose conflicts of interest. It also calls for the creation of a “whistleblower” policy.
“Nobody knew who to go to raise complaints, to raise issues, about the former executive director,” Pasquerilla said. “This is not brain surgery.”
Pasquerilla said he's concerned his fellow board members are too quick to move on thinking that this was just one clever employee. He said instead the board needs to find out why there was a governance system in place that allowed for the fraud to happen. Such a review will help to rebuild public trust, he said.
The report found that there was no wrongdoing among other JRA employees or the board.
