On April 28, 1905, the Pennsylvania Department of State issued a charter creating the Hershey Trust Company, which was incorporated by Milton S. Hershey, Harry Lebkicher and John E. Snyder.[2] It provided banking services and mortgages to residents of Hershey and the surrounding Derry Township.[3] In 1909, when Hershey founded the Milton Hershey School, he appointed Hershey Trust as administrator of the school trust.
In 1925, Hershey Trust established Hershey National Bank as a subsidiary to handle its commercial banking business, allowing the parent company to focus on the growing demands of managing the school trust.[3][4]
Milton Hershey died in 1945 and bequeathed the stock of Hershey Trust to the Milton Hershey School Trust.[5]
Hershey Trust began growing its private wealth management business in the 1980s, eventually gaining 500 clients with $1.1 billion of managed assets.[3][7] The wealth management business was sold to Bryn Mawr Trust Co. in 2011 for $18 million.[8]
2011 investigation of the Hershey Trust Company
In February 2011, Robert Reese (grandson of H. B. Reese the inventor of Reese's Peanut Butter Cups),[9] a former board member and president of the Trust,[10] filed a lawsuit against the Hershey Trust Company alleging that board members had been improperly using the Trust's money.[11] One particular issue was the purchase of the Wren Dale Golf Course, in which the Hershey Trust overpaid for the property, to the benefit of board members who were both owners of the Wren Dale Golf Course and on the Hershey Trust board.[12][13] Reese withdrew the lawsuit in April 2011, due to deteriorating health. Reese suggested the Pennsylvania Attorney General had enough cause to investigate the Hershey Trust.[14]
In 2013, Kathleen Kane,[15] the Pennsylvania Attorney General, announced the conclusion of a two-year investigation into the operations of the Hershey Trust Company, in which the Office of Attorney General and the Hershey Trust Company agreed that there was a finding of no wrongdoing, but reforms were required of the trust company.[16][17]
2016 developments
In May 2016, the state attorney general asked the company to remove three members from the ten-person board. The attorney general said that the three had allowed "apparent violations" of the 2013 agreement. At about the same time, in an unrelated investigation, John Estey, former chief of staff to Governor Ed Rendell and a high-ranking executive of the company, was charged with wire fraud, having pocketed $13,000 that an FBI sting operation had given to him in an investigation into illegal lobbying of legislators.[18][19]
Trusts
Milton Hershey School Trust
Hershey Trust serves as the trustee of the Milton Hershey School Trust. The trust provides the funding for the 2,000+ student Milton Hershey School, which provides education for lower-income children.[20] As of 2021, the trust had $17.4 billion of assets.[21] Its assets include Hershey Entertainment and Resorts Company, a controlling stake in the Hershey Company, and ownership of the Hershey Trust Company itself.
The trust was created in 1909 by a deed of trust from Milton and Catherine Hershey, granting 486 acres (197 ha) of land in Hershey for the establishment of the Milton Hershey School.[22][23] In 1918, Milton Hershey quietly donated to the trust the bulk of his fortune, $60 million of stock in Hershey Chocolate Company (now the Hershey Company).[24]
Milton S. Hershey Foundation
The company administers the Milton S. Hershey Foundation, which operates:
Hershey Trust also serves as trustee of the Hershey Cemetery Perpetual Care Maintenance Trust.
The company was trustee of the Milton S. Hershey Testamentary Trust until 2012.[25] This trust was established in 1945 upon Milton Hershey's death, endowed with his remaining fortune of $900,000, for the benefit of the Derry Township School District.[26] The trust assets grew to $24 million as of 2012, supporting an annual payment to the school district of $1.8 million.[26]
^In re Milton Hershey School Trust, 807 A.2d 324, 328 (Pa. Cmmw. Ct. 2002) ("By his Will, Mr. Hershey gave the stock of the Hershey Trust Company to the School Trust.").
^"Hershey Charity Scandal: Robert Reese, Ex-Hershey Official, Claims Wrongdoing". The Huffington Post. 11 February 2011 – via The Associated Press. A former official involved with the multibillion-dollar charitable trust that controls the Hershey candy company is claiming in a court filing that board members used the trust's considerable assets to pad their bank accounts and treat themselves to luxury hotel stays, limousine rides and free golf.
^Fernandez, Bob (5 April 2011). "Court action against Hershey is pulled". The Philadelphia Inquirer. Retrieved 13 November 2015. Just as the legal battle was heating up, a former insider at the multibillion-dollar Hershey charity has withdrawn his court action that claimed the misuse of millions of dollars meant for educating poor children. Robert Reese, a former Hershey trustee and president of the Hershey Trust Co., took the action Monday, saying deteriorating eyesight made it impossible for him to pursue the case. He added that he believed the Attorney General's Office would investigate his claims, which were filed Feb. 8 in Dauphin County Orphans Court.
