The former chairwoman of the board that oversees the city’s low-income housing is outraged that the current board recently agreed to pay a former director $700,000 in a legal settlement, and wrote on Facebook during the holidays that the public would be “shocked” to find out why the current board did so.
The payout to former Hoboken Housing Authority Executive Director Carmelo Garcia still has to be approved by the federal department of Housing and Urban Development. Garcia was fired in 2014 by a past HHA board, led at the time by Dana Wefer, who wrote the Facebook post two weeks ago. After Garcia’s termination, he and the board both sued each other.
Wefer has since left the board and moved out of Hoboken. She only found out recently that in November, the current seven-member board voted to give Garcia a payout. On Facebook late last month, Wefer wrote that she had told the attorneys that she was willing to testify in the matter, but hadn’t been deposed.
The Hoboken Housing Authority, funded by federal tax dollars, oversees the city’s 21 low-income housing buildings. It’s run by a paid executive director and staff, but overseen by an unpaid seven-member board of local appointees. Often, the majority of appointees are allied with the reigning mayoral administration. In 2014, they were allied with Mayor Dawn Zimmer. Carmelo Garcia, who had worked in City Hall under the administration of Mayor David Roberts, had been hired by a previous board to run the HHA.
The Zimmer-allied board was unhappy with his performance and fired him, saying he had not given out contracts through the proper process. They then filed a suit saying as much.
Garcia had previously filed a lawsuit in 2013 against the HHA, Zimmer, her husband, and then- HHA chair Jake Stuiver, saying Zimmer and her allies were keeping minorities out of important positions in the city and interfering with his job duties.
In the course of litigation, it was discovered that Zimmer’s husband, Stan Grossbard, had had several email conversations with at least one HHA member related to how to terminate Garcia. Garcia cited these details as part of the litigation.
This past Nov. 9, the current HHA board voted to approve a potential settlement of $700,000 to Garcia. The measure passed 4-0-2 with Commissioner Barbara Reyes and Commissioner LaTrenda Ross abstaining.
The settlement must still be approved by the federal Department of Housing and Urban Development.
In December, after the Reporter and other media wrote about the settlement, Wefer – who had been a Zimmer ally in the past — wrote the surprisingly candid post, saying, “Despite the fact that this litigation has been pending since 2013, I was never even deposed in this case.” She added that her deposition was cancelled three times by the plaintiff. “My testimony would have strengthened the HHA’s position even more and in the event this settlement falls through, I am eager to tell the story of what happened there under oath and on the record. Stan Grossbard is a bad person, in my opinion, and the smartest thing I did during my time as an HHA commissioner was staying far away from him until after I ended up being dragged into this lawsuit — a fact I wish I had gotten to put on the record in a deposition because that also protected the agency.”
She ended her post by stating that “The thing that drove this settlement is not on anyone’s radar and must remain confidential for the moment (one of those things that really has to remain confidential because of litigation), but when it comes out, and I’m sure it eventually will, it will shock people.”
In an email on Thursday, Grossbard responded to Wefer’s statement about him, stating, “It is unfortunate that Ms. Wefer, a practicing attorney who ought to know better, has chosen to repeatedly and irresponsibly issue public statements about the subject matter of an ongoing litigation.”
Wefer has been involved in local politics as well in the last few years, having run for 4th Ward Council in 2015 and briefly announcing a run for governor last year.
Garcia had originally filed a lawsuit alleging job discrimination by the Zimmer administration back in August 2013, when he was already at odds with Zimmer-allied board members.
Also named in that suit were Grossbard and Stuiver. The suit was dismissed in December of 2014 with prejudice, meaning that he could alter some aspects and file again. He refiled in January of 2015, stating that he was fired for not supporting the administration’s agenda.
The suit was dismissed again in January of 2016. He filed an amended version in May of 2016.
Around the same time, in April 2016, the HHA filed suit against Garcia, alleging that he violated guidelines by being the only individual to approve or deny procurement contracts, and other matters.
In 2015, the Reporter and other press obtained emails apparently showing that then-HHA Chairman Jake Stuiver had routinely consulted Grossbard on issues concerning the HHA and Garcia’s termination.
The email exchanges start in October 2012 and extend into July 2013. Many of them deal with the removal of Garcia and HHA Attorney Charles Daglian, also include other public officials and, in at least one case, politically involved people without government positions. Mayor Zimmer was copied in a number of emails to her personal email account.
One Grossbard email dated Feb. 26, 2013 talks about three possible options to resolve the conflict between the board and executive director, including Garcia leaving. Grossbard suggests offering Garcia terms of reemployment that he would not likely accept and recommends moving to terminate Garcia.
“Unless and until you move to terminate, Carmelo has all the leverage, and he will never believe you actually are willing to terminate unless and until you actually do it,” wrote Grossbard.
A follow-up email on March 7 talks about the city’s labor attorney and hiring another attorney. A third email dated March 11 offers a suggested resolution that might be passed to accomplish this.
The week that the emails hit various press outlets in 2015, two Hoboken residents who were critical of the administration began to speak about the issue of Grossbard’s emails at a City Council meeting. They were removed from the meeting by then-Council President Ravi Bhalla (whom Zimmer recently endorsed as her successor in this past year’s mayoral race). Bhalla won the race and took office on Jan. 1. The two ejected speakers sued the city about their removal from the meeting. One of the suits was settled last year, with $50,000 going to the ejected speaker. A resolution about the other has not yet been made public.
Thus, the matter ultimately may end up costing more than three quarters of a million dollars.
For our previous story about the emails go to https://tinyurl.com/ybspyf6h.
‘Sunshine is the best disinfectant’
Many settlements include confidentiality clauses.
Former Mayor Zimmer said last week she did not want to comment on the issue.
Several other officials involved also declined to comment.
In Wefer’s Facebook post, she wrote, “I learned so many lessons through my time at the Housing Authority and since. One of them is that the intersection of the public agency insurance industry, public agencies, and machine politics is a cesspool of perverted motivations, conflicts of interest, and, sometimes, outright corruption.”
She noted with some surprise in another post that when Garcia’s lawyer, Louis Zayas, posted about the $700,000 settlement on Facebook, a previous HHA lawyer commented under it, “Merry Christmas.”
In a phone interview last week, Wefer would not elaborate further on her Grossbard statement. She also said she has not seen the settlement agreement.
She said, “My experience in this litigation and other litigation against public entities is [that] the way it’s resolved is not by the merits of the case, but it’s done by the consideration of the cost of litigation.” In other words, it’s less expensive to settle than litigate.
“In my view, the insurance company doesn’t care about a case’s merits,” she said. “They are just looking to minimize the cost…. They are trying to mitigate their losses, which I feel is an inherent conflict, and the lawyers are paid by the insurance companies… This isn’t the only case they might get from the insurance company, so lawyers want to stay on their good side. It’s a fundamental conflict.”
Garcia did not respond to phone calls last week. His lawyer had said in a December interview, “Mr. Garcia and his family are happy and humbled to put this behind them as an amicable and favorable resolution has been reached.”
While Wefer’s Grossbard comment may seem surprising since Wefer was once a Zimmer ally, several prominent allies of Zimmer’s were critical of her administration over the past year, speaking out publicly after she held a surprise press conference to endorse Bhalla to succeed her as mayor. Several of them endorsed other candidates.
A revolving door
Unfortunately, the Hoboken Housing Authority, an agency charged with helping the city’s poorest residents, has been prone to politics and scandals for decades. Some Hoboken politicos have seen an appointment to the board as a way to influence the thousands of voters who live in the 21 HHA low-income and senior buildings. In the 1990s, an HHA commissioner was taken out of a meeting in handcuffs by county prosecutors. Two directors have left allegations of mismanagement in their wake.
Across the country, “housing authorities” were installed in the 1960s to oversee public housing and later, Section 8 vouchers. But over the years, HUD left more power in the hands of local governments and directors. Some housing authorities have been well run, but others across the country have become mired in scandal and had to be “taken over” by HUD.
The Reporter has covered many of these past issues in Hoboken. The stories can be found at hudsonreporter.com or email us at firstname.lastname@example.org and put Hoboken in the subject head.
Marilyn Baer can be reached at email@example.com.