21 months after then-Executive Director Carmelo Garcia was fired, the Hoboken Housing Authority and the former Assemblyman have filed dueling lawsuits telling two very different stories about what led to Garcia’s termination.
By John Heinis/Hudson County View
HHA vs. Carmelo Garcia
In a suit filed in Hudson County Superior Court on April 29th, the agency alleges that Garcia overstepped his boundaries by being the only individual responsible for approving or denying procurement contracts – a violation according to the U.S. Department of Housing and Urban Development, they claim.
“The Defendant willfully and intentionally deceived the Board which resulted in expenditures of millions of dollars to contractors who were chosen by the Defendant,” the lawsuit says.
The HHA cites a June 26, 2014 audit performed by Fallon & Larsen, LLP, for the year ending September 30th, 2013, that said none of the submissions for payment included a detailed invoice, five vendors exceeded contracts above the $17,500 bid threshold (two over the federal threshold of $100,000) and one contractor was paid $753,315 by the board.
Similarly, the Newark Field Office of HUD issued a procurement and public housing assessment system physical sub-standard review to the authority.
Garcia addressed the HHA in person at their first meeting after the report was released, disputing the claims made in the report and having it out with nemesis Dana Wefer – the chairwoman of the HHA board – who said Garcia was spreading misinformation.
The report identified eight contractors that violated procurement procedures, who are all mentioned in the suit:
1. Haddad Electric, LLC – $450,000 contract
2. Hauser Brothers Mechanical, Inc. – $459,600 contract (two-year)
3. Alamo Insurance – amount not given
4. Millennium Leasing Consultants – $47,735.55
5. River West Plumbing Supplies – $80,573 in invoices since 2011
6. Central Wholesalers – $435,762 in invoices since 2011
7. EW Berger & Brothers – $124,426 in invoices since 2011
8. Appliance Brokers – $430,762 in invoices since 2011
For contractors five through eight on the last, the HHA alleges that no state contract or no bid award existed.
Additionally, contractors one, two and four, on the list, as well as another contractor, made contributions to Garcia’s Assembly campaign in March 2014:
1. Hauser Bros., Inc. – $2,600 on March 11, 2014
2. Haddad Electric, LLC – $1,000 on March 11, 2014
3. All Risk, Inc. $2,600 on March 11, 2014
4. Alamo Insurance Group – $500 on March 24, 2014
The situation regarding HHA vendors contributing to Garcia’s Assembly campaign was detailed by News 12’s Kane in Your Corner in July 2013.
Garcia was never charged with any sort of wrongdoing, nor has he faced any sanctions from the New Jersey Election Law Enforcement Commission (ELEC), as of this writing.
The authority also said in the suit that Garcia failed to ever supply a vendor history report, maintain all required documentation in public housing and Section 8 HCV resident files, maintain an adequate computer system for annual inspections, among several other things.
Furthermore, the HHA says that Garcia’s contract was improper since anyone without at least five years of experience as an executive director should only be awarded a one-year contract, as opposed to the five-year contract he had.
In short, the HHA alleges Garcia engaged in breach of employment contract, breach of covenant of good faith and fair dealing and breach of fiduciary duty.
They are seeking liquidated and compensatory damages, costs, reasonable attorney’s fees and such other and further relief as the court deems equitable and just.
Wefer declined to comment on the specifics of the lawsuit, but still told Hudson County View “this housing authority is troubled, it’s been in sub-standard condition for six years … we had our audit tonight and it’s a significant improvement from the last two years.”
“This housing authority has really struggled. There is literally nothing in this housing authority, that when our new director Marc Recko came in, was running well. So we have a very big hole to dig ourselves out of and it’s unfortunate that we have to engage in this litigation because frankly, we need to be focusing on more important things.”
The HHA is represented in the suit by Manfredi and Pellechio, of Hoboken. The HHA attempted to hire Joseph Manfredi as special counsel in July 2014, but HUD shot down the idea.
Wefer said that the authority has went out to bid for special counsel twice since then, which then went to the special professional procurement committee before Manfredi and Pellechio was selected as the HHA’s special labor and litigation counsel.
Carmelo Garcia vs. the HHA et. al
Filed in Hudson County Superior Court on May 6th, the third of it’s kind, names Mayor Dawn Zimmer, her husband Stan Grossbard, ex-HHA Chair Jake Stuiver, Wefer and HHA Commissioners David Mello, James Sanford, David Denning and Judy Burrell individually.
“Beginning in 2012, Director Garcia’s employment was threatened and later terminated by the HHA because he vocally refused to participate in and repeatedly objected to Mayor Zimmer’s unlawful efforts through her political supporters on the HHA Board of Commissioners, to advance her political agenda and discriminatory policies within that organization,” the suit says.
The court document alludes to Garcia’s infamous “ethnic cleansing” lawsuit, the first variation of this legal matter that accused Zimmer and Grossbard of attempting to force “Old Guard” residents from Hoboken – most of whom are of Hispanic or Italian descent.
The suit claims this allegation was proven when a Hudson County Superior Court awarded former city Public Safety Director Angel Alicea over $1.2 million in an unlawful discrimination case – which Hoboken appealed and eventually settled for $700,000.
After noting growing tension with Zimmer beginning in May 2012, Garcia says in the lawsuit that Grossbard began to scheme with then-Chairman Jake Stuiver to have Garcia fired from the board throughout 2013.
In late October of last year, about two weeks before the November 3rd municipal elections in Hoboken where Garcia was running for 6th Ward council against incumbent Jen Giattino, a Zimmer ally, hundreds of HHA emails were released – many of which included Grossbard interacting with Stuiver.
Garcia alleges in the suit that he repeatedly felt pressured and threatened by the board to give contracts to vendors politically connected to Zimmer.
Hudson County View was the only media outlet that published any of the emails, including a March 11th, 2013 email where Grossbard drafted a resolution to terminate Garcia and sent it to Stuiver.
However, Garcia wasn’t fired until Wefer was the chair of the board in August 2014, which saw a protest earlier in the day before the board approved a measure firing Garcia at a raucous meeting at City Hall that required a heavy police presence.
In the suit, Garcia accused Wefer of repeatedly harassing, intimidating and threatening him regarding his work performance, claiming she made quotes to the media during this time that gave the appearance Garcia had committed criminal wrongdoing – even though no such improprieties had occurred.
Garcia alleges that Mello, the vice chairman of the board, furthered the aforementioned behavior, noting the July 2014 attempt to hire Manfredi as special counsel as a clear example of this.
“The real purpose of the hiring the above special counsel was to trump up false and misleading allegations against Director Garcia as a means to fire him for cause,” the lawsuit claims.
” .. The special counsel was widely known to have filed a lawsuit against a Guttenberg Housing Authority employee for reporting public corruption in the agency. The Defendants expected the same retaliatory legal strategy against Garcia.”
Additionally, the suit says the HHA board eventually decided Garcia had to be fired since he work not go along with the mayor’s directives to give out contracts to politically connected vendors.
Furthermore, Garcia, through the suit, identifies Sanford, Denning and Burrell as supporters of Zimmer appointed to the board to carry out her orders, noting that Denning was the treasurer for Giattino’s 6th Ward council campaign.
Finally, Garcia’s termination is characterized as “a political charade orchestrated by the Defendants to limit public speech and controversy” since it violated the Open Public Meetings Act due to insufficient notice, Garcia was never issued a Rice notice regarding his employment and said it was “unlawful” to hold the meeting at City Hall.
The lawsuit also criticizes the authority for appointing Richard Fox as the acting director, given that he abruptly left a Connecticut housing authority in 2012 after the agency was unable to account for $17.7 million in losses between 2008 and 2010, per The Stamford Advocate.
Garcia is suing on two counts of violation of his civil rights, three counts of discrimination, breach of contract and two counts under the Racketeer Influenced and Corrupt Organizations (RICO) Act (one for conspiracy).
He is seeking trebled, compensable and punitive damages, attorney’s fees, interest and costs of suit and such other and further relief as the court deems equitable.
“This [HHA] complaint is entirely frivolous. To suggest Carmelo Garcia was overpaid makes no sense given that the board and their counsel approved his contract. This is a politically motivated lawsuit, using taxpayer funds to go after a whistleblower,” said Louis Zayas, Garcia’s North Bergen attorney.
“The complaint is really a vehicle to legally defame a whistleblower without consequences. By making these allegations, which are false and defamatory, Carmelo Garcia cannot sue since they’re protected by litigation privilege.”
Zayas also questioned why the HHA didn’t file a lawsuit sooner given that the allegations in their suit date back at least three years ago in some instances.