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Kelly Faced County Inquiry

February 13, 2019
Kelly Faced County Inquiry

Democratic Lackawanna County commissioner candidate George Kelly faced a county inquiry last month about his association with a commercial real estate sales firm and if it conflicted with his duties as county economic development director. Kelly said the inquiry prompted him to submit his resignation from the county job on Jan. 22, before the inquiry began. Kelly, who denies any wrongdoing, said the inquiry surprised him because he told a county official about the real estate sales job last September, the county never objected and allowed him to keep working for the county. He provided the county’s letter giving him notice of the inquiry and a complete version of a county email to him describing the inquiry’s nature, an email the county partially redacted when The Times-Tribune asked for it. In the Jan. 16 letter to Kelly, county human resources Director Justin MacGregor said county officials started the inquiry because they suspected Kelly used his county job “for personal use” to advance his “outside employment” and never reported getting the other job to the county’s chief of staff, according to the letter. They also worried his other job could undermine county interests. Kelly obtained a state real estate sales license in September and Mericle Commercial Real Estate Group in Plains Twp. hired him as an independent contractor. Kelly denies using county resources for his Mericle job and said no county official ever discussed that suspicion with him. He denies any conflict with his county duties because he never sold or even tried to sell for Mericle before resigning the county job. After joining Mericle, he mentioned the real estate job to acting chief of staff Don Frederickson, who never objected, he said. “I’m always above board,” Kelly said. Frederickson said the county would have no comment on Kelly’s departure because it is a personnel matter. In the unredacted email that Kelly provided, MacGregor wrote that neither Frederickson, nor Commissioner Patrick O’Malley, nor county solicitor John Brazil recall Kelly telling them about his outside employment. “It was back in September so he may not remember,” Kelly said of Frederickson. “Unfortunately, I didn’t do it in writing.” The county’s version of the email redacts two sentences. One says Frederickson, O’Malley and Brazil don’t remember Kelly saying anything about the real estate job. The other redacted line says the inquiry was meant to determine why Mericle’s website and marketing literature listed Kelly as a salesman. In response to a Times-Tribune right-to-know request, the county explained the redactions by citing state Open Records Law exceptions that allow keeping criticism of an employee and an inquiry secret to allow for “impartial adjudication.” Rather than fight the inquiry, Kelly said he resigned to avoid damaging his reputation. His resignation took effect Feb. 5. Commissioner Jerry Notarianni introduced Kelly the next day as his running mate for commissioner in the May 21 primary election. Concerns about Kelly’s real estate job didn’t stop the county from offering him a paid part-time consulting job to aid the transition to his replacement, as long as his outside employment didn’t conflict with the county’s economic development department or its working hours, according to the email from MacGregor to Kelly. Kelly offered to help the transition for free. The commissioners accepted Kelly’s resignation “with heavy hearts,” the email says. After Kelly’s resignation became public, O’Malley praised his work in a Times-Tribune interview. “We’re really going to miss George,” O’Malley said. “He’s been part of a lot of really great things.” Kelly said MacGregor initiated the inquiry right after news leaked that he might team up with Notarianni to run for commissioner and while he was out of the country with his wife. He declined to accuse MacGregor or the county with beginning the inquiry because of his rumored commissioner run. The state Real Estate Commission issued licenses on Sept. 11 — with Mericle as sponsor — to Kelly and Brenda N. Sacco, the deputy director of finance and operations in the county planning and economic development, who reported to Kelly. Under state law, a real estate licensee must affiliate with a licensed broker. Kelly said he sought a license to prepare for life after his county job. He said he and Sacco realized the possibility of a conflict when they got the licenses and told Frederickson right after that in a conference call all three were on. Kelly said Sacco would confirm his account. Sacco continues to work in the same job for the county. Efforts to reach her were unsuccessful. Mericle has assigned her to sell two properties, according to the company’s website. Kelly said he won’t sell real estate while he’s running for or serving as commissioner if he’s elected. He asked Mericle to escrow his real estate license. “I have not made a penny on real estate,” Kelly said. “If I am elected, I put my license in escrow and it’s going to stay there.” Jim Cummings, Mericle’s vice president of marketing, confirmed the company asked the state to escrow Kelly’s license, making it inactive. “He no longer has a direct affiliation with us,” Cummings said. Wanda Murren, a spokeswoman for the state Department of State, which oversees the Real Estate Commission, said she could not confirm the request because of a backlog holding up processing more recent requests. In early January, well before the county’s inquiry notice, Kelly showed up at a Jessup council work session and discussed developers’ plans for a proposed senior citizen housing development and a warehouse. Kelly said the developers came to him for help because he was economic development director and his real estate job had nothing to do with his appearance. Over the years, he routinely visited local towns to advocate for projects as part of his county job, he said. “I’ve appeared before half the school boards and councils about LERTAs (tax breaks), several different private partnerships on KOZs (other tax breaks),” Kelly said. “I’ve been doing that for six years, that’s business as usual.” JEFF HORVATH, a Times-Tribune staff writer, contributed to this story. Contact the writer: bkrawczeniuk@timesshamrock.com; 570-348-9147; @BorysBlogTT on Twitter

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