More trouble at Philadelphia School District, exec accused of bid-rigging

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The Philadelphia School District’s chief procurement officer, John J. Byars, has been accused of bid-rigging by a lawyer representing the firm that lost out on a lucrative contract to maintain the district’s Board Street headquarters, and the PHA’s senior management apparently agrees.

Byars was accused of steering a multimillion dollar management contract to U.S. Facilities, Inc. a subsidiary of a minority-owned company run by Willie F. Johnson, a former state and city official, according to a story in the Philadelphia Inquirer.

Former City Solicitor, Carl E. Singley, who represents the firm currently handling the contract, Elliot-Lewis Corp., said that Byars interfered with the competitive bidding process, causing the contract to be awarded to U. S Facilities, Inc. The contract is valued at $2.4 million each year and covers operations, maintenance, and food service at the facility.

Singley’s claims were backed up in a memo written by Jeffrey D. Cardwell, the PSD’s senior vice president for facilities management. The memo called the process “biased” and read in part “the Procurement Office made comments about who they should select.” It said that the intent was clear that U.S. Facilities was the favored vendor.

The school district’s general counsel issued a statement in response to information requests by The Inquirer, saying that PHA lawyers had reviewed the bidding process and “determined that there were anomalies present. Based upon this information and as part of our continued commitment to fairness and transparency in our contracting and procurement efforts, we decided to . . . start the process over.”

A source knowledgeable with the parties said that prior to the bidding process for the contract, Byars made it known that “it was his mission to make sure that Elliott-Lewis did not get the contract. That was a firm statement from him on numerous occasions.”

When Elliot-Lewis made their presentation, Byars was present, which was not typical for such a meeting. The source said that Byars asked “some mean-spirited questions that Elliot-Lewis couldn’t answer. That’s the telltale sign. He was meddling.”

The source went on to say that Byars was making “smart-ass, offhand remarks for the purpose of undermining the process, …and shuffling through (PowerPoint) slides on paper, muttering in an audible voice, ‘Well, this doesn’t make any sense.’ He was definitely there to disrupt things.”

Based on the chain of events, Cardwell suggested that the School Reform Commission, which oversees the district, extend the Elliot-Lewis contract through June, and start over with the bidding process.

The parent company of U.S. Facilities, PRWT Services, Inc. is a politically connected operation that was formed in 1988 by Johnson, a former regional commissioner of the State Office of Social Service. A lobbyist currently under contract with the PSD, Melonease Shaw, was an executive at PRWT for 15 years.

On Dec. 13, Byars and five other PSD executives were suspended over a controversial $7.5 million contract involving the installation of surveillance cameras at 19 of the district’s high schools. The district’s superintendent Arlene C. Ackerman abruptly fired a contractor that had already started services on the project, and awarded it to a little-known minority firm that was not on the state-approved list to handle the work.

The matter is currently under investigation by the state attorney general’s office and the Pa. Department of Education.

The Philadelphia Inquirer

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Investigation widens on Philly Housing Authority contractors and lawyers

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A document circulated the Department of Housing and Urban Development, includes new details about the federal government’s investigation into allegations of financial irregularities in the Philadelphia Housing Agency, while under the direction of its former executive director, Carl R. Greene.

Greene was fired in September, after its governing board learned that the agency secretly paid $648,000 to settle claims of three women who accused him of sexual harassment. One of those women, who settled her claim for $350,000, has since filed another claim for $600,000, alleging further intimidation and harassment after she left the agency.

In the five months since Greene was fired, a total of 10 lawsuits have been filed against the PHA, charging Greene and the organization with sexual harassment, fraud, theft and wrongful termination.

The HUD document, obtained by the Philadelphia Inquirer under the Freedom of Information Act, is a request for bids from auditing firms that it plans to hire, and augment the effort currently in process by its own internal auditors.

The audit scope of engagement is to examine the agency for evidence of “fraud, waste, and abuse,” to determine is anyone “misappropriated assets for personal gain,” and whether the agency was overcharged for services, including legal work and tenant services. The HUD audit of the PHA will cover the period from April 1, 2005 through March 31, 2010.

The audit also seeks to determine if all PHA policies and procedures were adhered to, and if legal and accounting standards were followed, including by “non-federal agencies” doing work for the agency.

Auditors are also expected to examine transactions between PHA and related entities. A non-profit, controversial agency called the Pennsylvania Association of Public Service Agencies, was formed by Greene after he left the PHA and has since collapsed under scrutiny by HUD officials.

HUD spokesman, Jereon M. Brown said that the audit assignment is expected to be awarded next month, most likely to a large, national CPA firm with forensic expertise. The last time a full forensic audit was conducted occurred in 2007, when HUD took over the local operations of the Miami-Dade County Housing Authority. There, federal investigators found several developers who were involved in stealing monies from the agency through fraudulent development deals.

The HUD document also disclosed that other agencies, including the Justice Department and the FBI are conducting their own investigations of the alleged corruption in the PHA under Greene.

The U.S. Attorney’s office in Philadelphia recently subpoenaed records from two nonprofits affiliated with PHA. The firms are Tenant Support Services Inc., run by Asia Coney, a public-housing resident leader and an associate of Greene’s, and the Philadelphia Asset & Property Management Corp., which manages 1,600 public-housing units financed via private and public sources.

Under a separate investigation, is PHA’s payment of what many consider to be excessive legal fees paid to outside firms during the last several years. Between 2007 and 2010 alone, $33 million was paid to 20 Philadelphia law firms. Greene got rid of most of the agency’s in-house lawyers, and turned over the legal work to high-priced outside firms. In 2002, HUD questioned the practice, but didn’t take any action.

The inquiry into its legal fees is being headed by U.S. Sen. Charles E. Grassley, the ranking Republican on the Senate Finance Committee.

PHA interim director Michael P. Kelly said the agency will cooperate fully with the finance committee, and asked all the firms to release non-confidential records and information including personnel used, rates and a description of services. He also vowed to bring much of the legal work back into the agency and strike an “appropriate balance” between in-house lawyers and outside counsel. This year, he said, legal fees have been reduced by about 15 percent.

Greene was the executive director of the agency since 1998, previously employed in the same position with the Detroit Housing Commission. Before that, he worked with other major city housing authorities in senior positions, including Atlanta and Washington, D.C. For the year 2010, Greene was to earn $350,000, more than the salaries of the mayor of Philadelphia and the Governor of Pennsylvania, combined.

The Philadelphia Inquirer

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Talk about math problems, Philly’s school admin finds another 25,000 empty seats

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Only two months ago, officials at the Philadelphia School District said that there were 45,000 empty seats in the district’s 248 schools.

On Wednesday, they came up with a slightly different figure: 70,000 empty seats, larger than the number at Lincoln Financial Field, home of the Philadelphia Eagles.

Despite the seemingly impossible number of classroom vacancies, the school district has done little in recent years to downsize the system, even while facing budget deficits such as the $430 million shortfall projected in its next fiscal year. Although some schools are only half-utilized, the school district still needs to staff each one with management, security, utilities and maintenance.

The student population has been shrinking over the years, partially due to the rise of charter schools, and the decline in school-age children as the city’s population has decreased. Even though the growing number of empty seats is not a new issue, the school district is only now looking at doing something about it.

Daniel Floyd, the deputy for strategic initiatives, said that “school closing is one option, but not the only one.” Some others are relocating programs to underutilized schools, offering space to charter schools and repurposing some of the school buildings.

The school district currently has 162,000 students, down 11,000 over the last five years, and expects the number to be at 144,000 by 2015.

The Philadelphia Inquirer

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Philly housing chief handed out $800 Tumi luggage to staffers at conference

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Former Philadelphia Housing Authority head Carl R. Greene was apparently very generous with taxpayer monies until he was fired last September, after its governing board learned that his agency secretly paid out $648,000 in sexual harassment claims brought on by his behavior, and at least three more were pending.

Since then, 10 lawsuits have been filed against the housing agency and Greene, ranging from sexual harassment to wrongful termination. Greene meanwhile, has fired back with his own lawsuit, claiming he was unjustly terminated.

On Wednesday, The Philadelphia Inquirer reported on Greene’s largess, saying that in 2009 he handed out $800 Tumi duffel bags to 20 staffers attending an annual PHA conference.

After hearing of the gifts, Interim Executive Director Michael P. Kelly sent an email to staff telling them to return the bags on Thursday, unless they wished to purchase them for a discounted price. Even though they are more than a year old, the agency said it will try to return the bags to Nordstrom, where they were purchased.

“Please understand that I am not criticizing you for accepting this item, but I do want to make a statement that the gift was not an appropriate expenditure of PHA funds,” he wrote in the email.  “Whatever money we may get for the bags will go back into the agency’s general fund.”

He also went on to tell them that it was inappropriate for employees to accept gifts of any value as part of their job.

The Philadelphia Inquirer

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Philly schools plan to spend more on lobbyists to “educate” lawmakers

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The Philadelphia School District, facing down a $434 million budget deficit in the coming fiscal year, is in the process of soliciting lobbyists that can explain to state lawmakers, “its innovative reform programs and impressive successes.”

The Philadelphia Inquirer reported on Sunday that the district, led by embattled Superintendent Arlene C. Ackerman, sent out a request for proposals saying it’s “seeking an agency, individual, or organization to support the district’s growing governmental relations operation in Harrisburg . . . and Washington, D.C.”

The district is currently contracting with the consulting firm Maven, Inc. run by Melonease Shaw, to lobby state legislators. The Maven contract started in 2009 and runs through Feb.28. Under the current arrangement, the district may be obligated for up to $234,000 for lobbying work.

The district relies on about 55 percent of its annual $3.2 billion dollar budget from the state. The district’s proposal letter said that the prospective lobbying firm will be responsible for arranging meetings in Harrisburg and Washington, planning events and providing interested parties with updates.

Senate Majority Leader Dominic Pileggi criticized the proposal as misguided, saying “Those funds would be better used to improve educational performance. The city has a large delegation and a mayor, who can effectively make the case for the city’s schools.”

“This shows a fundamental lack of connection with reality,” he added, “considering the financial predicament that the School District finds itself in.”

The district will likely have a more difficult time explaining its problems at the state level, since a shift in power has changed the political environment in Harrisburg. The current lobbyist, Shaw, was closely connected to Dwight Evans, a Democrat in charge of the House Appropriations Committee until Nov. 16, when his fellow Democrats ousted him.

Newly-elected governor Tom Corbett is a Republican, and for the first time in nearly a decade, both House and Senate are both controlled by Republicans. Securing additional funds from the state will be far more difficult, as lawmakers are looking to solve their own budget deficit problems, said to be in the $4 billion to $5 billion.

The head of the House Education Committee, Rep. Paul Clymer said “This is not the time to invest a very large outlay of School District funds to tell many of us what we already know. In this time of fiscal restraint, that money should be used to educate the children.”

One lawmaker critical of Ackerman lately, Rep. Michael P. McGeehan, said he was flabbergasted by the news of the new lobbyist search. “This administration under Arlene Ackerman has exactly zero credibility in Harrisburg,” the Democrat from Northeast Philadelphia said. “The way they’ve handled the South Philadelphia High School crisis, the no-bid contracts, and the suspension of six good School District employees, who may be whistle-blowers, the legislature has serious questions about the conduct of this administration. . . . This is throwing good money after bad.”

Ackerman has been under close scrutiny since November when the Inquirer ran a series of stories detailing how she fired a company that had just started a $7.5 million no-bid emergency contract to place surveillance cameras in area high schools, and abruptly awarded it to a little-known company on the basis that it was a minority operation.

She later suspended six district employees, suspected of leaking information to the media about her controversial handling of the contract.

Critics say that Ackerman rushed to install the expensive surveillance systems in 19 area high schools after learning a state agency was about to release a highly-critical report saying the schools were dangerous. School district sources said that Ackerman wanted to install the cameras on an emergency basis to show that the district was on top of the situation, hoping to blunt adverse publicity against her and her staff.

The Philadelphia Inquirer

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10th lawsuit filed against Philly Housing Authority after exec director Greene fired

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A former employee of the Philadelphia Housing Authority has filed a lawsuit in federal court claiming he was fired for reporting that others in the agency were involved in waste, fraud and theft. John Tatum, a former assistant general manager who supervised 400 employees, was terminated after telling his superiors that employees were using the agency’s Home Depot credit cards to steal building materials.

Tatum was head of maintenance for thousands of freestanding houses scattered through the Philadelphia area. According to The Philadelphia Inquirer, after informing his supervisors about his suspicions, he was demoted and then reassigned to managing two people at an apartment complex in North Philadelphia.

The lawsuit said that Tatum began suspecting employees were stealing building materials in 2007. In July 2008, police raided a North Philadelphia “chop shop” and recovered a large amount of building materials stolen from the PHA.

During the subsequent police probe, Tatum told investigators and his supervisor, Daniel Quimby, that he had information and documents detailing how the thefts were being carried out. Shortly thereafter, Tatum was demoted and reassigned. On Jan. 5, 2009 he was fired.

In September, the Philadelphia Daily news reported that the FBI was conducting an investigation of a major theft ring at the Housing Authority.

Tatum also alleged in his lawsuit that former PHA executive director Carl R. Greene falsified his performance reports to increase his annual bonus by downplaying the amount of work orders on scattered housing sites. Requests for repairs were often recorded as “closed” and subsequently moved to other departments where they were handled by non-agency subcontractors, making it appear that Greene was managing the department more efficiently.

Besides the Housing Authority, Greene, Quimby and Diane Rosenthal, head of finance at PHA, were named in the lawsuit.

Greene was fired in September after the PHA board discovered he had been concealing a number of sexual harassment lawsuits and settlements. Since then, nine other lawsuits have been filed against Greene and the agency.

The Philadelphia Inquirer

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Philadelphia Housing Authority snags another lawsuit, thanks to former head Carl R. Greene

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Getting rid of executive director Carl R. Greene in September apparently hasn’t relieved the embattled PHA of continuing fallout from his time there. Now it’s been learned that one of the woman who settled a sexual harassment claim for $350,000 with the agency in 2008 over Greene’s unwanted advances, has filed a lawsuit in Common Pleas Court charging PHA employees with intimidation and harassment after she left the agency.

The lawsuit asks for damages of $600,000 for PHA’s failure to adequately discipline Greene.

Greene can't be happy about all the harassment lawsuits that he and PHA have attracted.

Moneke Thomas, 38, claims that current and former PHA employees inflicted emotional distress to keep her silent and to frighten other women in the organization so they wouldn’t speak out about the goings on inside. Thomas said that she was followed while driving in her car, had her mail tampered with and flowerpots were turned over in front of her home.

While the lawsuit does not specifically name Greene, in an interview with The Philadelphia Inquirer, Thomas said that she believe Greene was behind the activities. “He will do everything in his power to keep me from speaking,” she said.

Thomas’ earlier sexual harassment settlement specifically includes a non-disclosure provision, preventing her from discussing the alleged sexual harassment, and the current lawsuit sidesteps that matter.

Greene was fired in September when the PHA board learned the agency had secretly paid $648,000 to three female employees to settle sexual harassment complaints, and that a fourth woman was pursuing the same claim against the agency. Since Greene was fired, three more women have filed lawsuits in state and federal courts against Greene and the agency for sexual harassment.

Greene has denied wrongdoing in all the previous sexual harassment complaints.

The Philadelphia Inquirer

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