A street light shaped as an Hershey Kiss candy is silhouetted along a street in Hershey, Pennsylvania (AP Photo/Carolyn Kaster)
With Matt Stroud (@ssttrroouudd on Twitter), a freelance journalist based in Pittsburgh.
Milton and Catherine Hershey signed the deed of trust establishing the Milton Hershey School as an orphanage in 1909, funding it with revenue from the famous candy company. Since then, the school has officially been dedicated to “the purpose of nurturing and educating children in need.” Because its founder gave MHS Trust a controlling interest in the Hershey Company, today it boasts a massive $8.5 billion in assets and also owns Hershey Entertainment & Resorts (operating hotels and an amusement park). In keeping with its mission, the Milton Hershey School serves about 1,800 students from pre-kindergarten through twelfth grade, who study in state-of-the-art school buildings in Hershey, Pennsylvania.
What the charity also does, of late, is shovel money and favors to a coterie of prominent Pennsylvania Republicans. MHS’s alleged wrongdoing is pervasive and well documented, but thanks to the GOP’s grip on power in the state—most crucially its iron lock on the attorney general’s office—the charity has never been effectively called to account. With the first real possibility of the attorney general’s office shifting to the Democrats since it became an elected position thirty-two years ago, all this may change come November.
For a sense of MHS’s alleged misdeeds and the culture of impunity surrounding the charity, consider how, in 2006, board members of the school allowed the trust fund to purchase a failing luxury golf course called Wren Dale. The $12 million investment was two to three times the appraised value of the course and bailed out as many as fifty prominent local businessmen and doctors—including a former Hershey Company CEO who also sat on the MHS board. These investors stood to lose tens of thousands of dollars if the course closed. With the purchase, the investors turned their potential losses into profits of between $15,000 and $100,000. MHS’s board then sank another $5 million into a swanky, Scottish-themed clubhouse for the money-losing course, all paid for by the charity. The charity explained the purchase as necessary to create a “buffer” between MHS students and the community, and later claimed the land was for future MHS expansion.
By the fall of 2010, mounting questions and a probing Philadelphia Inquirer series pressured then–Attorney General Tom Corbett, now the state’s Republican governor, to launch an investigation. Since then, the attorney general’s office has confirmed only that an investigation is ongoing, without releasing any further information about its progress. “Normally, an investigation like this would never take that long,” said Randall Roth, a charitable trust and legal ethics expert at the University of Hawaii, who has written extensively on a parallel case in Hawaii involving the Bishops Estate trust. “It’s very surprising that it’s taking longer than two years.”
The ties between the charity and state Republicans go way back. In 2002, when Republican D. Michael Fisher was Pennsylvania’s attorney general, reform advocates (including myself) were pushing for an investigation of the charity. As Fisher’s subordinates were sitting down for a key Hershey meeting, Fisher was reportedly at Hotel Hershey—wholly owned by the charity—passing the hat among executives associated with Hershey for contributions to his gubernatorial campaign.
Fisher lost the election to Democrat Ed Rendell. But before leaving office to take a federal appellate judgeship handed to him by President George W. Bush, Fisher used the attorney general’s position to set in play a Republican takeover of the already dysfunctional charity organization.