Conflict of interest found in housing agency’s leadership appointment

ROCHESTER — The U.S. Department of Housing and Urban Development has advised the Rochester Housing Authority to terminate its contract with its interim director.

The recommendation was issued in a Dec. 11 letter written by Lisa M. Pugliese, director of HUD’s Buffalo office, to George Moses, the RHA’s board chairman. In the letter, she states that the RHA failed to follow proper procurement methods in naming City Councilman Adam McFadden as interim director in October.

McFadden’s hiring followed the sudden ouster of Alex Castro as the agency’s executive director on Oct. 14.

The agency also failed to follow the procurement-related conflict-of-interest provisions of the annual contributions contract, according to the letter, which prohibits entering into a contract with a member of the governing body "who exercises functions or responsibilities with respect to public housing and who has an interest, whether direct or indirect."

"We find that there is a conflict of interest … in the appointment of Mr. McFadden because he his serving as a City Councilman and has been awarded a contract as Interim Director," the letter states.

The letter also warns that the RHA must reimburse any funds that HUD finds are being spent in violation of "contractual and regulatory parameters" as it continues its investigation.

Castro’s attorney Jules Smith has previously stated that he also is looking into whether the RHA violated his client’s employment contract. The RHA had approved a five-year extension of Castro’s contract at the beginning of this year.

Public outcry about Castro’s removal led to the creation of a campaign called Justice for Rochester. The group called for HUD and the state attorney general’s office to investigate the RHA board and questioned whether the entire board should be removed. City Councilwoman Jackie Ortiz also sought a review of the RHA board’s decision by the city’s Office of Public Integrity, Board of Ethics and its legal counsel.

"The HUD letter completely validates our campaign," said Anthony Plonczynski, legislative aide for Ortiz. "It was a fair and just response."

Earlier this week, the Board of Ethics issued a ruling that there was no conflict of interest with McFadden serving on the city council and as the RHA’s interim director. Plonczynski said that the two rulings speak to one another.

"We believe that the ethics board ruling from the city of Rochester looked at a very narrow scope of the complete issue here, looking at how this all affected city government," he said. "In their narrow review, their ruling uncovered serious questions and implicated the RHA board and the councilman (McFadden) in violating federal law."

The HUD ruling is not the end of the issue, he added, as questions remain about the RHA board’s ability to conduct a "fair and transparent process" in choosing a new executive director, he added.

"We will continue to push the attorney general for a full review of RHA’s board and the actions of the mayor … in her connection with the board’s appointments and interactions during this process," Plonczynski noted. 

Requests for comment from Mayor Lovely Warren and George Moses, RHA board chairman, were not returned as of press time Dec. 12. Following a Dec. 8 presentation to the Rochester Latino Rotary Club, Warren said she had been surprised by the firing when it happened and hoped to move forward in working with Latino community leaders on improving the city.

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