Focus on problems at Hershey

By Pablo Eisenberg

The fervor with which Gov. Corbett and Attorney General Linda Kelley denounced Penn State officials for tolerating the alleged sexual transgressions of assistant football coach Jerry Sandusky stands in sharp contrast to their stance on the long-lasting problems at the Milton Hershey School, the repercussions of which are probably as serious.

For a couple of decades, the Hershey School, established for indigent children by chocolate baron Milton Hershey, has been the focus of continuous scandals. One of the wealthiest nonprofits in the country, with an endowment of about $8 billion, the school and its affiliated Hershey enterprises have been controlled by a cabal of Republican officials more concerned with their own self-interests than the welfare of the children they are supposed to oversee.

I believe the school's board, which also serves as the board of the Hershey Trust, has been responsible for the continuous mismanagement of the school, inappropriate real estate deals, wasteful expenditures, self-dealing, and a flagrant disregard for the safety and well-being of the students. Its powerful chairman, former Pennsylvania Attorney General Leroy S. Zimmerman, has been receiving $500,000 a year for his services to the school and other Hershey enterprises.

Its questionable real-estate deals have drawn the attention of both the media and the state's regulators. The purchase of the money-losing Wren Dale Golf Club at a price that was at least two times the market rate, according to The Inquirer, helped to bail out 40 to 50 investors, some with ties to the school, including one school board member. The deal helped trigger an ongoing investigation by the Attorney General's Office.

Sexual abuses of students enrolled at the Hershey School appear to have been flagrant. Moreover, the school boasts a dropout rate that by any standard is outrageous. From 2003 through 2010, according to the watchdog group Protect Hershey Children, 1,141 children left or were kicked out, well exceeding the 786 who graduated.

During the past two decades, the Attorney General's Office has done nothing to address these problems. In 2002, the attorney general actually overruled his staff's recommendation to introduce comprehensive governance reforms. And what did Corbett do during his six years as attorney general? He looked the other way.

Last month, The Inquirer reported that Zimmerman was going to resign from the board. That is an important first step in addressing the school's problems.

But more stringent measures need to be taken. These should include a total restructuring of the board to include a majority with expertise in education and child welfare and a real concern for the future of the school. A person of high standing with no political agenda should be named chairman, while the current manager of the school should be replaced by a respected educator. And state regulators should impose tight restrictions on self-dealing, conflicts of interest, and compensation.

We are still waiting for the governor and attorney general to apply the same zeal they displayed in denouncing the Penn State events to correcting the continuing injustices and scandal at the Hershey School. It remains a glaring example of the abuses of the public trust that can happen when regulators fail to require integrity and public accountability of a nonprofit organization.