We do ask that they do they are done by appointment or when we have an open house. One basic housekeeping thing, would you please put your cell phones at least on silent, preferably off. We all know that its irritating when we hear a cell phone ringing in the middle of a speech. Today youre welcoming chris papst, the author of a narrative Nonfiction Book called capital murder which was first released in april of this year. Mr. Papst is currently an Investigative Reporter for abc news affiliate in washington d. C. Before that he spent four years here in harrisburg covering the citys extraordinary financial collapse. Now he has released a book sharing his experiences while detailing what went wrong. Capital murder is a cautionary tale of what can happen when government is not adequately monitored. It portrays in vivid and personal detail how life deteriorates under the inept or dishonest administration. Every municipality in america should understand what happened to harrisburg to avoid a similar fate. As americans, we must insure that what happened to harrisburg does not happen to any other city. That was why the week was written why the book was written. Please join me in welcoming mr. Papst. [applause] thank you. Well, thank you, everybody, for coming out today on what might be the greatest weather day of the year so far. I was hoping for rain. But thank you so much for coming, i really appreciate it. And the reason that i wanted to come here today and the reason that i like to speak about this book is because of the significance of what happened in harrisburg, pennsylvania. Over really the past 30 years. It hadnt been reported. People werent telling the stories about what was going on in this city, how it rose from a really bad decade in the 70s and the 60s before that to becoming a wonderful city that then had to file for bankruptcy. On october 11, 2011, harrisburg, pennsylvania, did something that no other capital city in this country had ever done before. And in doing so, the city recaptured the historical significance that it once had. This is a city right now of about 49,000 people, about 48,000 people. Theres not really that much Big National News that comes out of harrisburg, pennsylvania. And some would say thats a good thing. If no news is good news. But what it also means is that the influence that area has often times doesnt have are the significance that perhaps it would if more news were coming out of that area. Now, harrisburg used to be a very significant city in america. I give a bunch of examples in the book of how harrisburg forged the way that america moved forward with steel and railroads throughout the industrial revolution. This was a very significant city in america. And i tell one story actually, i guess its two where during the civil war general robert e. Lee marched his army of Northern Virginia twice trying to invade the north. First, he was stopped the first time he tried this, he was stopped in ante them. He was coming to harrisburg. This is where he wanted to be because harrisburg was the heartbeat of this country. Like vein ares stretching out veins stretching out around the country, the railroads sent the goods and materials, the products, the soldiers for the civil war. And general lee knew if he could get here and he could disrupt the railroads which are just half a mile from where youre sitting now theyre still here if he could do that, he could suffocate the north. That was the significance that harrisburg once had. Theres not really anybody alive today that saw the significance of the city. But on that cold october night in 2011, harrisburg reclaimed part of that significance when it became the First Capital city ever in america and still the only capital city to file for bankruptcy. This isnt supposed to happen in a capital city. Capital cities are supposed to be recessionproof. Thats why its never happened before. You have 12 million pennsylvanians sending their tax dollars to harrisburg. You have tens of thousands of people coming into this city every day to work for the state. People that are paying taxes, people that are buying parking spots, buying food, buying gas and groceries. Harrisburg, like other capital cities, has this economic driver that is supposed to prevent economic catastrophes from happening. Thats why no capital city has ever filed for bankruptcy except for this one. So how did that happen . How could a city with that type of builtin financial infrastructure have such significant financial problems . Thats why i wrote capital murder. I wrote it because people in america need to learn. We need to learn what happened here so it doesnt happen to more of our cities. If more of our cities go through what harrisburg went through, americas going to be in a lot of trouble. And not just the people that live inside of those cities. It has other effects in the Municipal Bond market with loaning money to other cities. If many cities like harrisburg end up going bankrupt, thats going to affect municipal Interest Rates for many other cities. This is not just about harrisburg. This is not just about pennsylvania. This is about america. So inside the pages of this book, it took me four years to write this as i was a reporter for the local abc affiliate. It took me four years to write this book. And in that time i hope i have captured what this city did wrong so a lot of people can learn from it and other city leaders can learn from it. So as i do these speeches, a lot of people ask me why is it called capital murder . During my four years here as i investigated what was happening to the city, it was clear to me that this city was financially murdered. It was killed. But apparently, nobody caused the death. Because the whole time that i worked here and up until this book came out and of after this book came out, there have been no charges. There have been no indictments, there have been no fines, there have been no restitution. The people that drove this city into bankruptcy faced no accountability. None. I thought that was wrong. The people of this city suffered when their government failed them, and were going to get into a little bit later some of the examples of how people suffer when their government fails them. But the people here suffered, and nobody was ever held accountable for that. Now, after this book came out, which well get into a little bit later as well, the historical significance of harrisburg took another giant leap. This just happened a short while ago, and were going to get into that at the end of the book, at the end of the talk here. So the first thing that i want to do is i want to introduce you to the main character in this, in the book and also in harrisburg in general. This is mayor stephen reed when he was inaugurated. Its 1982. He ended up being mayor for 28 years. For seven terms he led this city from 19822010. From the time he was 32 years old, he left office when he was 60 years old. This is a man that took over a city that really nobody else wanted to lead. Throughout the 70s, in the ten years of the 1970s, harrisburg, pennsylvania, lost 25 of its population. And that 20 of 25 of its population is the 25 of people that could afford to leave, leaving behind the 75 of the population that could not afford to leave. And when that 25 left, they took with it their tax dollars. They took with it their resources. They took with it their intelligence. They took with it what would make a city thrive left with that 25 . Now, you combine that with the railroad that had already collapsed, the Pennsylvania Railroad was gone, the Reading Railroad was gone, the manufacturing was gone, and now 25 of your population is gone. In 1982 when he came into office, it was rumored that bankruptcy papers were left on his desk when he took office because the city was, it was dead. And i think if you look at the financials at that time, you would agree it was probably dead. Twentyeight years later hes still mayor. Well, how did that happen . Stephen reeled, i believe, absolutely loved this city. I believe that he wanted this city to thrive, he wanted this city to be great, he wanted the city to reclaim the historical significance that it once had. I compare him to bernie madoff. Bernie madoff wanted his investors to succeed. Bernie madoff wanted his investors to get rich. He wanted them to be prosperous. Stephen reed didnt want to get caught. Bernie madoff didnt want to get caught. They were both willing to do whatever they had to do because they were focused on their objective. It looks line stephen reed has been caught after this like steven reed has been caught after this book came out. Well get to that a little bit later. But what he ended up doing was when he came into office in 1982 as i said, the city didnt really have much of a tax base. He couldnt really get revenue. So he had to use what i call financial tricks, accounting tricks. He had to find ways to get money to the city, and then he would take that money, and then he would reinvest it in the city. Often times he would shuffle it around. He had a bunch of these schemes that he would do that people werent really aware of. Ill give you a couple examples. In the early 80s he borrowed 300 million, a 300 million loan came into this city to build a dam across the susquehanna river a half mile wide, beautiful, giant river. It was a hydroelectric dam. Many of you came in to work today, you may have crossed the susquehanna river. You didnt see a hydroelectric dam. But that money got loaned to the city, 300 million. Stephen reed had no intention of ever building a dam. The people that signed off on that loan, there was no intention of ever building that dam. The intention was to reinvest the money. And as you reinvest the money, there are fees that are paid out. Its called arbitrage. And these fees are paid out. Stephen reed would take the money from those fees, and that is one of the ways that he would get money to funnel back into the city. Now, arbitrage has since been made illegal. You cant do that anymore. So he found more creative ways to get money from the city. And most of it involved the Municipal Bond market. It revolved around him working with wall street, getting wall street, the bankers, the attorneys, the accountants, the consultants to loan the city money, and in the process he would keep scraping off these fees. And he would use those fees to reinvest back in the city. And hed keep he kept taking chances. And as he became more powerful and as he kept getting reelected over and over again, the chances that he would take, the risks that he would take just became greater until there was a final risk that he took that was something that should not have happened, and thats what ended up bankrupting the city. But during his time, during the time that he was mayor, wonderful things were happening in the city. Again, in 1982 when he took over, crime was high, taxes were well, the tax revenue was low. Morale in the city was low. And he was able to turn the city around. He won all sorts of awards. He won accolades. In 2006 the world mayor organization named him the best mayor in america. And the third best mayor in the world. That was 2006. Five years later the citys bankrupt. He was doing all these things, but nobody really understood what was happening to the city. I only met stephen reed three times in the four years that i worked here, as much as i chased him around at his office and his house. I only had three encounters with the man. All three of them are detailed because all three of them led for a better understanding for me of how the city was but also of how he saw his role in the city. And the first time that i met him was in a National Civil war museum for the tenth anniversary of that museum. And he had explained to me his philosophy when he was running harrisburg. And it involved institutions. What he said to me was when i took over harrisburg, it had no institutions. There was nothing here to draw people here. So he created those institutions. And as he created one institution, it would create momentum. And then he could create another. And then another. And then more people move into the city, and it starts this snowballing effect. And that was the way that he operated the city. And during the time that he was here, much of what you see around this city thats beautiful is a result of him. The ark a Baseball Team for the washington nationals, the harrisburg senators. Stephen reed brought them here. All of city island. And city island is this gorgeous maybe halfmilewide island right in the middle of the half mile long, i should say, right in the middle of the susquehanna river. Its gorgeous. It has this beautiful baseball facility that looks over the city, it has football fields, soccer fields, a train that goes around it for the kids. It has miniature golf, it has batting cage, boat rentals, us cream. That really is harrisburgs playground. Stephen reed built that. The harrisburg hilton, beautiful harrisburg hilton. The Whitaker Center for the performing arts. The civil war museum. The Pennsylvania National firemens museum. Harrisburg university. He created all of these institutions. Using a lot of these financial tricks, reinvesting that money back into the city that he was getting through the Municipal Bond market, most of it with the lawyers and wall street that he was getting very, very cozy with. And they were more than happy to loan him this money even if a certain percentage of that money that was being loaned wasnt going to the project that it was originally loaned for. Downtown harrisburg, second street, restaurant row. Block after block of restaurants and bars. All of that was steven reed. People started coming back into the city. As i said, in the 1970s 25 of the population left this city. Two decades after he was the mayor, the population started going up again. A remarkable turn of events. And thats why he was winning all these accolades, and thats why nobody was even running against him when he was up for reelection. Multiple times he would get the republican and the democratic nomination. I say in the book and i firmly believe stephen reed became a dictator. Nothing in this city could get done without steven reeds blessing on it. If you wanted to be a member of city council, youre not going the get on city council unless mayor stephen reed, the mayor for life, unless he supports you. If youre on city council and you dont do what he says, he doesnt support you for reelection, and you lose. If you want to be the treasurer, if you want to be the controller, you dont get to those positions unless he sports you supports you. If you want to open a business in harrisburg, you cant open businesses without his support. You cant do anything in this city without stephen reeds support. And the people allowed it to happen, happily allowed it to happen. He was winning reelection by incredible margins, especially when nobody was running against him. The people saw what he was doing. They saw these institutions, they saw what the city was in the 70s and early 80s, and they just believed in him. And they believed that everything that he was going to do was in the best interest of the city. The news media allowed it to happen, news media was not holding him accountable. And that was one thing that really troubled me when i got here as a member of the cbs affiliate. The television stations and the newspapers here just let him do whatever he wanted. And people knew what he was doing. It was no secret. People knew what he was doing with the bond market. Im sure a lot of you have heard about the artifacts he was buying and selling. Those werent secrets. That was just stephen reed. Hes got the best interests of the city at heart. Stephen reeds not going to do anything to hurt this city. Hes going to help this city. And thatsnr the way that ac lf people here looked at it. So to give you a little bit of background, im from pennsylvania. I grew up about an hour east of here, about 45 minutes, 50 miles west of philadelphia in a little town called halverson. And when i was growing up, harrisburg was this was not a city that you came to. Throughout elementary and middle school a lot of times when youre kids, you go to the local capital to learn about government, to learn about how the municipal processes work, to meet your legislature. We never did that when i was a kid. This was a city that you just avoided because of the crime and because of the blight. It wasnt a place that you would bring kids. So in september of 2010 when i came to harrisburg to work, i went from i got, i graduated from university of pittsburgh, got my masters at temple. I flew out to wyoming, i worked in wyoming for two years, i worked in madison, wisconsin, for three years, and then i moved back to harrisburg. And when i came back here, i couldnt believe what i saw. I saw a thriving city. Again, this is in 2010, a year before the bankruptcy. Thats how fast this entire thing imploded. But i saw a thriving city. I saw Young Professionals walking around, i saw new buildings, new highrises, a bunch of new businesses, trendy shops. None of this was here when i was growing up 20 years earlier, none of it. I couldnt believe it. It was great for me to see. I mean, pennsylvanias my home state. I wanted to see pennsylvania do well. I still do. I wanted to see harrisburg thrive, and it looked like it was thriving. Now, when i got here, my news director had said to me that it looks like harrisburg is going through some financial issues. We dont know what those issues are yet, we dont know how bad its going to be, but i had been a reporter in madison, wisconsin, which is another capital, and i had done a lot of capital reporting, and he said i need someone here just in case. I said, okay. It was like a homecoming for me too. Few nobody knew what was going but nobody knew what was going to unfold over the next three years. And it was, it was something that i could never have predicted, and i dont think anybody could have ever have predicted what was really going to happen. And after four years and more than 2300 reports on 200 reports on city, i decided that i was going to write book the try the teach people what happened in harrisburg in the hopes that other places, other cities wont go down same path. So this is a picture of Young Stephen reed. Hes probably about early 30s here. This is soon after he became mayor of harrisburg. And you can tell its the early 80s with the glasses and the haircut. [laughter] and he was ambitious. People loved him. Hes a guy that when you meet him, hes a very friendly guy, very warm. The type of guy that in a Group Setting he can make you feel like hes having a oneonone conversation with you. Hes incredibly articulate, very nice guy, very nice smile. Just a very warm way about him. And this p