Bleak House: Finding Two




As was noted earlier, DHCR inherited a 104,000-case backlog from
its predecessor agencies when it assumed responsibility for the
rent stabilization and rent control systems on April 1, 1984.
Many of these cases were relatively easy to resolve, and within
one year the agency reported that it had reduced the inherited
backlog to 35,000 cases.

Complaints persisted, however, about how DHCR was operating, the
speed with which DHCR was reducing the backlog, and the new
backlog which DHCR was accumulating in cases filed subsequent to
the State takeover. The concerns prompted the Legislature, at the
request of the Senate minority, to provide DHCR with a special $2
million additional appropriation in the 1985-1986 budget to
"reduce the rent regulation backlog and aid in the efficient
management of the system."

The appropriation was contingent upon DHCR submitting a plan to
the Legislature for how the agency intended to use the $2 million
appropriation to expedite the processing of the case backlog.
Such a plan was submitted by the division shortly after the
adoption of the budget and projected that by the end of 1986 the
backlog would be eliminated, with the exception of some
"administratively unresolvable cases." DHCR received the $2
million and went to work.

In a February 1986 report to the Legislature, DHCR stated that
the backlog had been cut in half and that only 17,000 cases
remained. The report also revised DHCR's self imposed timetable
for eliminating its inherited workload and promised that with the
exception of 3,000 "administratively unresolvable cases," the
backlog would be eliminated by September 30th, 1986.

Complaints Continue and the Division Responds

Despite the rosy picture being painted by DHCR about its success
in resolving its case backlog, complaints persisted from
legislators, tenants and landlords about the agency's
performance. In response, the Division presented the
Administration, the Legislature and the public with statistics
which seemingly demonstrated that DHCR was doing an efficient
job. Data on the speed with which DHCR was reducing its inherited
case backlog were given particular prominence in reports to the
Legislature and the public about how the rent regulatory system
was working. The reports contradicted the increasingly common
public perception that DHCR was not doing its job properly.

To charges that telephones were not answered, cases were taking
years to process, files and records were being lost and the
agency was in a state of disarray, the Division responded in its
reports with numbers -- thousands of new cases processed,
hundreds of thousands of apartments registered and the inherited
backlog almost gone.

DHCR, by its February 1986 report to the Legislature, was
revising its own processing projections upwards and claiming that
the rent regulation system's administration was at peak
efficiency. As Commissioner Eimicke summarized the situation:
"Overall the performance of DHCR has been outstanding."

Unfortunately, things at DHCR's processing units were not going
anywhere near as well as the projections which had been made by
the division's managers. In the trenches, DHCR was finding it
impossible to efficiently process the tens of thousands of cases
it had to resolve in order to keep the promises DHCR officials
were making. In particular, DHCR was finding it impossible to
meet the projection it considered to be the cornerstone of all
its claims of administrative efficiency, the September 30th, 1986
deadline it had imposed on itself for eliminating the inherited
case backlog. To bridge the gap between projections and reality,
DHCR apparently embarked on two improper courses of action.

First, as documented in this section, the agency began providing
false information to the Legislature and the public about how
many cases it had left to process. Secondly, as detailed in the
following finding, DHCR began to ignore the law and its own due
process procedures in order to speed up the processing of the
backlog cases which actually remained.

Fudging the Numbers

DHCR reported to the Legislature in the fall of 1986 that the
backlog had been reduced to 1,232 cases. In an appearance before
the joint legislative fiscal committees on February 9th, 1987,
Commissioner Eimicke testified:

     "In terms of rent regulation, I'm proud to say
     that we've resolved the entire backlog that we
     inherited from the CAB. There are only 1,000
     rather complicated legal cases remaining from that

At the Assembly's public hearings on March 6th, 1987 Commissioner
Eimicke testified under oath that:

     "When we last reported to you in the Legislature
     in February of 1986 on the status of the backlog,
     we had 17,357 cases then still pending. At the end
     of this month last completed, February 28th, '87,
     there were less than 1,000 cases remaining from
     the initial backlog."

The following week, however, DHCR employees and officials
responsible for processing the backlog, testifying under oath,
presented dramatically different information.

Rent examiner Elliot Vizansky testified that he processed about
two backlog cases a day, that there were about 35 people in his
office doing such work and that they had been processing such
cases since October of 1986, when Commissioner Eimicke had stated
the backlog had been eliminated. A quick calculation showed that
if Vizansky's testimony was accurate, thousands of backlog cases
actually remained at the time Eimicke had told the Legislature
that the backlog had been eliminated. Vizansky also noted that he
presently had 40 backlog cases to process and that additional
cases were in storage. Rent examiner Elsie Carney, who had
recently been transferred out of the backlog unit, corroborated
Vizansky's testimony and stated that she had worked full time
processing backlog cases subsequent to the time Eimicke had
claimed the backlog had been eliminated.

The Deputy Director of the Backlog Unit, Gene Kelly, testified
that although he did not have precise figures, he estimated that
there were 5,000 to 6,000 backlog cases remaining in March of
1987 and that there had been an additional one to two thousand
pending in October of 1986. Backlog Unit Director Joseph Cordero
testified that there were presently 7,500 cases remaining from
the inherited backlog. He also stated that he had been keeping
Deputy Commissioner Manuel Mirabal (the DHCR official in charge
of administering the rent regulatory system) apprised of the
status of the case backlog on a regular basis.

Truth or Consequences?

Following the sworn testimony of these DHCR officials and
employees, Deputy Commissioner Mirabal admitted that the
information which had been provided to the Legislature and the
public about the case backlog had omitted approximately 10,000
cases. According to the March 22, 1987 edition of New York
Newsday "(Commissioner) Eimicke said Mirabal never told him about
the other cases." Thus, the official agency position apparently
is that everyone at DHCR but Commissioner Eimicke knew how many
cases were left to process.

Written memorandum from Deputy Commissioner Mirabal to
Commissioner Eimicke on the status of the case backlog, however,
stated that there were backlog cases in addition to the ones
which DHCR had been reporting to the Legislature. On September
4th, 1986, Mirabal wrote to Eimicke that: "[S]ome cases over the
number counted in the statistical reports to the Legislature back
in June of 1984, were added to the workload during the fall of
1984 and have been in the backlog file room since then."

On October 7th, 1986, Mirabal wrote to Eimicke that, since the
backlog which had been reported to the Legislature had been
largely resolved, the backlog unit would "work on those cases
that we have been carrying in the backlog workload but which were
never included in the reports to the Legislature."

Given the facts presented in sworn testimony and the
documentation described above, one would have to construct a
fantastic scenario to believe DHCR's assertion that Commissioner
Eimicke never knew there were far more cases left to process than
DHCR had reported to the Legislature. First, one would have to
accept the proposition that Commissioner Eimicke does not read
important memorandum from his direct subordinates. Even more
improbable, one would have to believe that Deputy Commissioner
Mirabal, who had no hesitation about telling Commissioner Eimicke
the truth about the backlog in two written reports, lied to him
about the same issue in every other communication he had with

DHCR's official position would support the conclusion that
Mirabal and other DHCR officials deliberately prepared false
testimony for presentation by the Commissioner, sat with him at
budget hearings while he delivered such false information,
allowed him to swear, under oath, that information they knew was
inaccurate was correct and never told him that the numbers he was
giving out were wrong. Essentially, DHCR's position is that with
the exception of the two memos noted above, there was a mass
conspiracy of silence at DHCR -- everyone at the Division knew
how many cases there were but collectively decided to keep the
figures secret from Commissioner Eimicke.

If this is true, Deputy Commissioner Mirabal and other DHCR
officials are guilty of serious misconduct in the performance of
their duties. But there may be a simpler explanation -- that
Commissioner Eimicke knew the numbers were wrong all along and
decided to present them anyway in order to meet his self-imposed
deadline for resolving the case backlog. It would not be the
first time that an agency headed by Commissioner Eimicke
improperly overstated its statistics in order to disguise

In a highly critical audit in 1982, the New York City Comptroller
found that the Office of Property Management (OPM), headed by
then Deputy Commissioner Eimicke, had improperly overstated the
rent collection rates of HPD's "In Rem" program in order to
present a misleading picture of the Department's efficiency in
collecting rental payments. The City's In Rem program is
responsible for managing buildings which the City has taken over
because of owner failure to pay City property taxes. The rent
collection rates in the program are important because they are
used by the Mayor's office and other agencies to gauge program

The Comptroller's audit presented a number of examples of
statistics reflecting "inappropriate adjustments and arbitrary
calculations" to exaggerate the effectiveness of OPM's central
management program. The audit concluded that the agency:

     "arbitrarily inflates its adjustments to the total
     amount of rent billed when the actual rate of
     collection falls too far below the projected

This is precisely the same type of deliberately inflated
adjustment which might account for the false information provided
by DHCR about the size of its outstanding case backlog and the
speed with which it is being resolved.