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Pennsylvania Prosecutor to Probe Incinerator, Paper Says

Aug. 15 (Bloomberg) -- Pennsylvania Attorney General Kathleen Kane is planning a criminal probe into activities surrounding the Harrisburg trash-to-energy plant, the local Patriot-News newspaper reported.

Kane wouldn’t discuss specifics in a meeting with the paper’s editors, according to the report. Dennis Fisher, a spokesman for Kane, said in an interview today he couldn’t comment on a possible investigation.

Harrisburg, with about 50,000 residents, has been grappling with a financial crisis caused in part by $300 million in debt tied to expansion of the incinerator system, which doesn’t produce enough revenue.

State receiver William B. Lynch was pushing for tax increases in a city with a 30 percent poverty rate. He also planned to sell municipal assets, including the incinerator.

Harrisburg tried to restructure its debt under Chapter 9 of the U.S. Bankruptcy Code, which covers municipalities. Its case was thrown out in November 2011 after a federal bankruptcy judge found the filing wasn’t authorized under state law.

The receiver case is Walker v. Harrisburg Authority, 569-MD-2011, Pennsylvania Commonwealth Court, Pennsylvania (Harrisburg).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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