Hershey Trust probe pits Corbett vs. ally

They are longtime friends and close political allies, Tom Corbett and LeRoy S. Zimmerman, one about to become Pennsylvania's governor and the other a Republican elder who helped the younger man on his long climb from Allegheny County to the pinnacle of the state's political power.

Now that relationship has an added dimension: Gov.-elect Corbett remains, for now, Attorney General Corbett, and his office has confirmed that it is investigating the $7.5 billion Hershey Trust, overseen by Zimmerman, himself a former two-term attorney general.

The issue is the trust's $12 million purchase in 2006 of a money-losing golf course north of Hershey with funds intended to educate impoverished children and increase the enrollment at the acclaimed Milton S. Hershey School. After acquiring the golf course, the charity embellished the Wren Dale course with the construction of a Scottish-style clubhouse and restaurant/bar, at a price of $5 million, again with funds meant for the Hershey School.

Trust officials say the acquisitions of the Wren Dale golf course and the nearby Pumpkin World USA roadside market, even at prices significantly higher than fair-market value, will allow expansion of the school's housing and a larger enrollment. The institution paid the prices at the height of the real estate market boom to gain ownership of the real estate for the institution.

If the attorney general finds the Hershey Trust was not prudent, or did not act in the interest of the beneficiaries, it could remove trustees, seek to have them reimburse the trust fund, or reduce their compensation, trust attorneys say. One former board member may have to return profit from the sale of the Wren Dale course to the Hershey Trust.

Zimmerman declined to be interviewed, but he responded to questions e-mailed to him and has released a public statement saying he believed the Hershey Trust acted properly.

"We have managed the Hershey Trust to be a thriving philanthropy that is growing its fulfillment of its mission," he said in a written response to The Inquirer.

Sources, who requested anonymity because they were not authorized to discuss the case, say Zimmerman lobbied to characterize the scrutiny into the Wren Dale golf course as a "review" rather than a noncriminal investigation. Zimmerman said: "I did not in any way or at any time protest the Attorney General's review of the Wren Dale purchase, nor did anyone on my behalf."