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Assistant DA admits being plant; prosecutor says it's legal
By DAVID J. RALIS
Press Enterprise Writer
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BLOOMSBURG - Publicly, Bill Kreisher's campaign committee featured a share of Bloomsburg Fair stock when it advertised items to lure buyers to an auction benefiting his re-election run last September.
But behind the scenes, the Columbia County district attorney quietly rigged the sale.
Though he maintains what he did was legal, Kreisher admits planting Assistant District Attorney Rich Knecht in the audience to make sure bidders shelled out the amount he wanted.
It's an example of using a plant to "bid it up," as Knecht describes it, to make sure the seller of an item has an edge over potential buyers.
The result was that Knecht repeatedly bid against others, finally matching bid for bid with a retired doctor's wife who went as high as $6,500 before dropping out.
In the end, audience members were led to believe that Knecht had bought the stock for $6,600.
He didn't.
Kreisher now admits he had made behind-the-scenes plans ahead of time to void the sale if bidding for the share didn't go high enough.
Under state law, that practice is known as holding an auction "with reserve." It is allowed, providing the sale is stopped before the auctioneer's gavel falls.
But in this case, the auctioneer accepted Knecht's final bid and completed the sale.
"They let it sound like a purchase," said Belinda Madden, a county Democratic Party officer who attended the auction. "As far as I knew, it was legit."
Kreisher, a Republican, maintains that it was, in fact, legitimate. The county's chief prosecutor said it was clear to everyone in the audience that Knecht was bidding for him, even though it wasn't publicly announced.
"Nobody was deceived," he said.
And when the auction was over, Kreisher walked away with both his fair share and nearly $1,200 in his campaign committee's coffer.
'SUCCESSFUL EVENT'
To draw a crowd to the auction, Kreisher's campaign committee ran an advertisement in this newspaper on Sept. 8.
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| AUCTION AD - The above advertisement for an auction benefiting Columbia County District Attorney Bill Kreisher's re-election campaign appeared in the Press Enterprise on Sept. 8, two days before the sale. It had only a partial list of the 85 items sold during the auction, but its list of contributors was complete. Admission was $14. To see a larger version of the ad, click here. | |
The ad included a partial list of 85 donated items that would be put on the block two days later. The fair share was first on that list and appeared in capital letters.
Kreisher said he knew from experience that the share could bring in a crowd. In 1991, while he was first running for the top prosecutor's post, the lawyer held a similar sale. But the fair share up for grabs back then didn't belong to him.
"I had a client that had a share that they wanted to have sold and they agreed to donate 10 percent of the sale price to my campaign," Kreisher said.
That sale went through, Kreisher said. It taught him that offering a fair share "generates interest and it helps build up the sale."
But Kreisher said he didn't think most of the 90 people who went to the Sept.10 auction at Magee's 24 West Ballroom were there just for his fair share.
Mostly they were his friends and campaign supporters, he said. With few exceptions, everyone who entered the ballroom paid a $14 donation to the candidate's committee.
The money was used to pay $1,650 in expenses. That covered the cost of dinner and a performance by a local jazz band, Cruel Four Days, according to Kreisher.
Donna Kreisher, Bill's wife, who filled out financial forms for her husband's campaign, called the profit from that portion of the evening "minimal." The committee expected a larger crowd and ordered 140 dinners in advance, she noted.
Still, the committee reaped $1,181 profit from the event, including $300 from the auctioning of a gold coin donated by Kreisher.
He estimated the coin's value at about $450, but still called the auction "A succesful event."
After dinner, Knecht, who was also chairman of Kreisher's re-election committee, gave a speech.
The auction came next, and most folks stuck around for it. "Maybe two people who came to the auction weren't at the dinner," Mrs. Kreisher said.
One of those was Madden, vice chairwoman of the county Democratic Party.
"I wasn't them to donate to the cause," Madden said "I wanted to see what the fair share would bring."
"I own a share. That's why I follow it," she added. "It's my husband's. He's had it about 30 years."
Also interested in the share was Kate Irey, the wife of Dr. Phillip Irey and a neighbor of the Kreishers along East Fifth Street, Bloomsburg.
She said she went to the dinner and auction because "They're close friends and good neighbors."
But she also had hoped to buy the share as a present for her 16-year-old granddaughter. "We wanted one," Mrs. Irey said. "We sold ours the summer before."
Knecht said he too wanted the share, even though he was bidding on behalf of his boss. "He wanted me to bid it up, but I was saying, 'I'd buy it if the price was right,'" the Berwick lawyer said. "I have no fair stock of my own, nor does anyone in my family.
"I think a lot of people covet fair stock," he added. "These things don't come up that often."
In fact, Kreisher was offering the share for sale over his wife's objections.
"I didn't want him to sell it to begin with, no matter what the price," Mrs. Kreisher said. "I want one for all four of our children, and at this point we have three. I would have preferred to buy another one, rather than sell one."
She later said fair shares are "nice to have," but noted shareholders really don't get much out of the stock.
Unlike shares of stock issued by businesses, a fair share does not pay a dividend. The only reward for buying stock in the fair is "free tickets," according to Fred Trump, president of the Bloomsburg Fair Association.
That doesn't mean a share is worthless. Only 1,850 fair shares exist, with a limit of one per shareholder, Trump said. The fair's bylaws do not set a price on the shares. Instead, each shareholder decides how much it's worth and keeps the proceeds when it's sold.
According to the fair's list of 1996 shareholders, Mr. and Mrs. Kreisher each own a share, as does their daughter, Marianne. Knecht's name does not appear on that list.
Kreisher said he and his wife purchased their family's third share three years ago for about $5,000.
He also said he watched another share bring $6,000 at an estate auction a week before his campaign committee held its auction.
The attorney said he was at the earlier auction on behalf of a client, who was a beneficiary of the estate.
As for the share Kreisher himself put up for sale a week later, said, "I was hoping to sell it for substantially more than that so that I could make some money for the campaign, rather than just exchange one asset for cash."
About midway through the hour-long auction, the share was put on the block.
Knecht said Kreisher, who was sitting next to him, leaned over and asked him to "bid it up."
ON THE BLOCK
Auctioneer Gele Derr of Fernville didn't make the announcement himself.
However, he said he's positive one of the other seven auctioneers stated publicly that the fair share was to be sold with reserve.
Auctioneer George "Bud" Henry of Cleveland Township was equally at a loss, but said he too remembers the announcement.
Each of the eight licensed auctioneers volunteered time and took turns at the podium, Henry said. When the fair share came up, it was Derr's turn to grab the gavel.
Everyone agrees the bidding was swift and the price soared. They don't all agree on how it occurred, though.
Kreisher said he could remember no other bidden besides Knecht and Irey.
But Madden said, "A third bidder dropped out at about $5,090, I think."
Knecht and Irey both said they couldn't recall any other bidders besides themselves, but both said they weren't sure.
Irey also said she had no idea that Knecht was bidding for Kreisher "I knew he was assistant district attorney. He has every right to have a fair share."
Since the auction, Knecht said, he's heard his name mentioned in rumors, noting, "I seem to have been dragged into a vortex of controversy and I don't know how."
But he acknowledged he could see how his role at the auction "may not look right to the average guy."
Recollections of the final bid are cloudy.
Irey said last month she decided not to big again after Knecht offered to pay $6,700 for the share.
"It seemed to me around $7,500," Knecht said.
During a Feb.27 interview, Kreisher said Knecht's last bid was "$5,900 or $6,000."
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RIGHT: Donna Kreisher, wife of the district attorney, is shown at Friday's meeting with election officials. Mrs. Kreisher is the bookkeeper for her husband's law firm and filled out his campaign expense reports.His wife immediately contradicted him.
"The highest bid, from other than Rich, was Kate's bid, and I don't think that was over $5,700," she said.
Before checking the auction's records, Kreisher said he was hoping "we could get somebody to bid it higher than $6,000. I think if I would have gotten a bid higher than $6,000, I would have probably sold it."
Later, he said every item auctioned off was recorded by one of the auctioneers, or one of their wives, on a sheet of tickets.
Copies of each ticket were handed out to the highest bidder for each item. That way bidders could collect their merchandise and pay up at the end of the auction. The auctioneers kept a duplicate set.
Kreisher offered to let a reporter review the duplicate tickets during an interview.
"I have no objection to letting you read them," the district attorney said.
"I do," Mrs. Kreisher said. "I know you're the candidate, but I do."
She walked out Kreisher's law office, a file containing the tickets tucked under her arm. However, she relented about 10 minutes later, walked back in and agreed to make the tickets public.
One of the tickets listed the high bid on the fair share at $6,600. An additional note at the bottom of the ticket said the price did not include tickets for the 1995 fair's night shows, which the Kreishers intended to use themselves.
When the bidding for the share ended, Derr banged the gavel. He said he was unaware that Knecht was bidding on behalf of Kreisher.
"I have no idea who was bidding for whom." he added. "I don't know if they completed it or not."
Both he and Henry said that when an auction with reserve is held, the highest bidder and the seller typically meet afterward to see if they can come to terms.
"That happens many, many, many times," Derr said. "The buyer and the seller will figure it out."
State law requires the item to be pulled off the block before the hammer falls if the seller is not satisfied with the final bid. But, like Derr, Henry didn't know that. "No, no, no, if it's announced (with reserve), it's not necessary," Henry said.
A reporter read him a passage that contains that portion of the law.
"That's a real shady area there," he responded. "You're telling me this and I didn't know and I didn't want to know."
Because the sale was completed, Knecht could legally have demanded that Kreisher go through with the sale.
"I've always wanted a fair share," Knecht said. "But if it meant saying to Bill, 'You have to sell it to me,' I wouldn't do that. I work with Bill. We get along."
After the bidding was over, Knecht said he offered to buy the share from Kreisher at the final bid price and joked about paying for it on an installment plan.
But Kreisher turned him down.
"He wasn't happy with the price," Knecht said. "It was my impression that he wanted to keep it in the family."
He later added, "I think the people there realized it wasn't sold. But I think, with hindsight, there probably should have been some public notification in case anybody was unclear."
Kreisher said the price was the only reason he didn't sell the share.
"I was hoping somebody would maybe offer me a profit on it," he said. "Or at least higher than its fair market value."
Saturday, March 16, 1996
