Ethics issue?
Housing director gets campaign donations from vendors who did business with his agency
by Dean DeChiaro
Reporter staff writer
May 25, 2014 | 3051 views | 2 2 comments | 62 62 recommendations | email to a friend | print
CONFLICTS OF INTEREST? Hoboken Housing Authority Executive Director Carmelo Garcia (left) defended campaign contributions he received from various firms that do business with the Hoboken Housing Authority. New housing board chairwoman Dana Wefer has raised questions about the matter.
CONFLICTS OF INTEREST? Hoboken Housing Authority Executive Director Carmelo Garcia (left) defended campaign contributions he received from various firms that do business with the Hoboken Housing Authority. New housing board chairwoman Dana Wefer has raised questions about the matter.
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Carmelo Garcia, who last November was elected to represent the 33rd Legislative District in the state Assembly, also serves as the paid executive director of the federally funded Hoboken Housing Authority, which oversees the city’s low-income housing projects. Recently, a new chairwoman of the board that oversees Garcia said that she was troubled by a series of cash contributions made in March to his campaign fund by contractors hired by the Housing Authority.

This past March, Garcia’s campaign fund accepted three contributions totaling $3,100 from two firms contracted to do work for the Housing Authority, according to his campaign’s April filing with the Election Law Enforcement Committee (ELEC). A third contribution of $1,000 came from the owner of another firm with HHA contracts.

The campaign has been over as of November, but the fund can still accept contributions.

According to figures provided by housing board Chairwoman Dana Wefer, those firms – AM Construction, Hauser Brothers Inc., and Haddad Electrical – have billed the Housing Authority over $2.1 million since September of 2011.
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“I have never accepted any gratuity in my capacity as an HHA employee.” – Housing director Carmelo Garcia
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A spokesman for the state’s Election Law Enforcement Commission said that state Assembly races do not fall under the purview of the state’s pay-to-play laws, which govern donations from vendors to candidates in city and county races.

Additionally, state Assembly races are not covered by the HHA’s own pay-to-play policy because that policy was crafted to model a municipal code, according to both Wefer and Garcia.

But a clause in the New Jersey Local Government Ethics Law that is cited in the HHA’s own policies states that “Public housing authority officers, employees or agents shall not solicit or accept gratuities, favors, or anything of monetary value from contractors, potential contractors, or parties to subcontracts...”

Reached last week, Garcia said that because he accepted the contributions in his capacity as a state elected official, and not as an HHA employee, there was no conflict of interest.

“My role as an assemblyman has no bearing on my role as executive director and you can’t intertwine them,” he said on Thursday. “I have never accepted any gratuity in my capacity as an HHA employee.”

Garcia said that all three companies started working for the HHA “long before [he] ever gave a thought to running for public office.”

Fiscal irresponsibility?

Wefer also raised questions about the legitimacy of the contracts themselves. The $2.3 million paid to the contributing firms is part of a larger pot of authority money, totaling nearly $3.5 million, which has been awarded to firms without going through the regular procurement policies.

Authority contracts normally go out to bid in a public process, and the executive director and his staff must choose either the lowest or the best bid.

But none of the contracts that make up the $3.5 million, paid to plumbing, cabinetry, electrical, heating, and kitchen appliance firms, went through that process.

Garcia defended the contracts, noting that there are three provisions set by the authority’s federal overseer, U.S. Dept. of Housing and Urban Development (HUD), that allow the awarding of no-bid contracts: If his staff has compared three competitive prices without formally going out for bids, if there is an emergency situation in which work must be done immediately, or if the purchase cannot be made from another firm.

The entirety of the $3.5 million in contracts was awarded under at least one of those provisions, Garcia said.

He also noted that the Board of Commissioners voted to approve the bills, and that repeated audits in recent years have found no signs of impropriety.

Wefer, who has named fiscal responsibility as her top priority as chairwoman of the seven-member HHA board, said that the contracts represent a poor approach to Housing Authority business. Furthermore, she questioned their legitimacy in light of the contributions to Garcia’s campaign fund.

“You don’t have to be a bidding expert to know that this doesn’t look right,” she said last week. “When you’re handling taxpayer money, the rent money that belongs to the residents, you really want to avoid even the appearance of impropriety, and these contracts and contributions are extremely questionable.”

She added, “On their own both of these occurrences are concerning, but together they’re even more disturbing.”

Politics behind it?

Wefer was named chairman in a reorganization meeting earlier this month. She and other allies of Mayor Dawn Zimmer now hold a 4-3 majority on the Hoboken Housing Authority Board of Commissioners, which provides some oversight over Garcia.

The board for years has been the focus of a power struggle between supporters of Garcia and those, like Wefer, who support Zimmer.

Before this month, Zimmer had three voting members on the board. Another Zimmer ally was appointed this month, swinging the majority in her direction.

The HHA has always been the site of a power struggle in Hoboken politics. It operates on an approximate budget of $16 million per year and is a source of thousands of votes and millions of dollars in contracts.

Asked last week if removing Garcia would be on her to-do list, Wefer said she would talk to a lawyer before making any decisions.

“Right now I’m not accusing the director of anything,” she said. “I’m expressing serious concerns about whether the HHA is following the proper procurement laws or breaking bidding laws, and about whether it’s proper for campaign contributions to come from businesses the HHA is doing business with. But I think it’s very evident that there’s a conflict of interest there.”

Garcia, who filed a lawsuit last year against Zimmer and a former HHA board member for alleged civil rights abuses, said he believed Wefer’s statements are part of a longstanding smear campaign against him.

Wefer denied this. Zimmer and her allies have also denied it in the past.

Haddad Electrical and Hauser Bros. did not return requests for comment. AM Construction did not answer a phone call. .

Dean DeChiaro may be reached at deand@hudsonreporter.com

Comments
(2)
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anonymous
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May 25, 2014
I find it laughable that the hoboken reporter would take a quote from Garcia....this guy is clueless if he thinks he did nothing wrong? Guess he will only have one job paid by taxpayers moving forward
FollowTheMoney
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May 25, 2014
" You don't have to be a bidding expert to know that it doesn't look right."