Delco Taxpayers Swindled in $200 Million Scheme Devised by Former GOP Councilmembers: Lawsuit

DETERMINED to keep their fortune – former members of Delaware County Council devised a scheme to funnel over $200 million of taxpayer funds to an illegal trust formed with no public accountability or oversight – using the funds for their own enjoyment – and Your Content has exclusively learned the newly elected administration will hold their hand to the fire.

What’s more, the illegal backhanded deal was finalized by three outgoing lame duck councilmembers who made a string of suspicious signatures finalizing the dirty deal days after being handed their walking papers.

The explosive allegations are contained in a lawsuit against adherents of the Delaware County Republican Party – accusing them of creating an “illegal trust in the final days of their terms.”

“This week, we are taking another step to reverse an overtly political and backhanded deal orchestrated by the former Republican majority,” said Brian Zidek, County Council Chair. “I’ve been opposed to this deal from the beginning because I believe taxpayers should be our top priority, not our political allies.”

According to the 101-page lawsuit filed by Delaware County – the Republican-appointed Board overseeing Delaware County’s Regional Water Quality Control Authority – or DELCORA – unanimously approved a $276.5 million asset sale to Aqua ‘using a no-bid process and allowing no meaningful public input.’

“At its regularly scheduled meeting on Sept. 17, 2019, the DELCORA Board unanimously approved a $276.5 million sale to Aqua Pennsylvania Wastewater,” the lawsuit reads.

The money handlers claimed the funds would ‘be used to pay off outstanding debt’ and ‘invest in a rate stabilization plan.’

“DELCORA has publicly stated that the proceeds will be used to pay off outstanding debt and to invest in a rate stabilization plan,” reads the lawsuit, noting the net proceeds could exceed $200 million.

But the complaint declares that the formation was a last-ditch effort to quickly hawk off DELCORA and privatize its operations.

“Because the Trustee has no authority to make any distribution from the Trust without direction from DELCORA, the Trustee is not functioning as a Trustee, but rather as a conduit for the distribution of public assets and monies to Aqua,” the legal filing reveals.

Additionally, in the final days of their terms, the former Republican majority illegally created a trust to distribute assets from the sale directly back to Aqua Pennsylvania, and not to ratepayers.

“The lame duck County Council, having had responsibility for watching over public moneys for generations, should have realized how important it is not to allow such responsibility to be ceded to persons or parties not elected by the citizens of Delaware County,” the lawsuit reads.

“[They] cynically ignored the will of the citizens of Delaware County and decided to use its last few weeks in office to thwart the will of those citizens.”

“As representatives of the people, it is imperative that we put the public’s interest first,” said Councilman Kevin Madden. “When the DELCORA Board and the previous County Council majority cut a deal to sell a county asset without a competitive process or without proper public input, I vowed to reverse that deal. This week is another step forward in accomplishing that.”

THEN on Dec. 27, 2019, lame duck councilmembers approved the creation of the devious trust and crammed it with millions of taxpayer dollars, according to the lawsuit.  

“The County believes, and therefore avers, that DELCORA and the prior County Council approved the Amended Articles to permit creation of a trust or non-profit entity as a political patronage deal to benefit the outgoing members of the County Council and their political supporters, to the detriment of the public at large, as evidenced by the terms of the Trust.”

The lawsuit continues: “In devising a scheme in which the public assets are transferred to the Trust, and then distributed directly to Aqua, DELCORA has exceeded its authority and acted in contravention of the Articles of Incorporation, amended on December 18, 2019.”

“DELCORA has acted in an ultra vires manner.”

However, prominent Philadelphia-based criminal defense attorney A. Charles Peruto, Jr. says the deal is rock solid, reiterating that it was signed by a then-elected council.  

“It appears that a duly elected council voted to approve this agenda,” Peruto told Your Content.

“The fact that a new council would have voted differently, doesn’t change a binding contract.”

“With this week’s action, the County Council is once again putting the interests of taxpayers at the forefront,” said Dr. Monica Taylor, County Council Vice Chair. “Political appointees should not decide how taxpayer money and assets are spent.”

“Political appointees, self-interested management, and their corporate friends cannot be allowed to run roughshod over the democratic process,” said Councilwoman Christine A. Reuther.

“The sale of DELCORA was not transparent, and the creation of the trust was illegal. Our job as elected representatives is to fight for the people of this county, not to protect patronage employees.”

Kevin Madden, one of two Democrats on the five-member Delaware County Council at the time, told the Daily Times the process and sale “represents everything that is wrong about how Delco has been run under corrupt GOP rule” and promises job security for Willert, head of the Ridley Township GOP and a longtime Republican stalwart in the county.

“An important public asset has been handed over to a private company and longtime contributor to the Republican Party, all without any independent analysis of the options available, and without a competitive sales process, even though a competing bidder made their interest available,” Madden said.

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