Bleak House: Finding Five

FINDING FIVE

THE MANAGEMENT SYSTEMS NECESSARY TO EFFICIENTLY OPERATE A LARGE
ORGANIZATION ARE ABSENT AT DHCR. PERSONNEL RECEIVE NO TRAINING
PRIOR TO ASSUMING IMPORTANT CASE-PROCESSING DUTIES. NO WRITTEN OR
STANDARDIZED PROCEDURES EXIST FOR CARRYING OUT KEY TASKS.
DIRECTIVES. WHEN THEY ARE COMMUNICATED AT ALL. FLOW BY WORD OF
MOUTH. OFFICIALS MAKE POLICY DECISIONS ABOUT WHICH THEY HAVE
LITTLE KNOWLEDGE WITHOUT CONSULTING AGENCY PERSONNEL WITH
EXPERTISE IN THE AREA.


Learning by the Seat of Your Pants.

Rent examiners Elsie Carney and Elliot Vizansky testified that
they received no training whatsoever prior to assuming their case-
processing duties. Rent examiner David Saphire testified that he
had received a comprehensive two-month training session when he
was first hired in June of 1984 and that these sessions were
standard procedure until September of that year. Subsequent to
that time, however, Saphire testified that new examiners no
longer received any training prior to assuming their duties. DHCR
officials admitted that the agency no longer provides training
for rent examiners other than an "orientation session" which
usually lasts only a fraction of one day.

How do examiners learn to process cases which require them to
make complex legal judgments that are sometimes worth tens of
thousands of dollars? As Elliot Vizansky testified about his
first day on the job, "An individual was transferred to a
different division and I was handed his desk and his caseload of
45 cases and told 'well, you will learn by the seat of your
pants.'"

The Division appears to rely almost exclusively on word-of-mouth
communications with direct supervisors to train rent examiners.
Both employees and officials of DHCR acknowledged that examiners
receive no detailed written procedures or work training manuals
for how cases should be processed, and no standard written
instructions on policy issues they confront in their daily work.

The result, as was noted in the previous section, is that tenants
and landlords receive decisions in their cases based on
completely random variables -- which examiner they have
processing their case, the particular rules that examiner chooses
to follow or has been told to follow and how much pressure the
examiner is under to close cases using only information already
in the file. As Grace Liotta, a long time owner activist, posed
the problem:

     "There is nothing in print. . . . there is no
     order. By word of mouth. How do you operate an
     institution like this, a multi-million dollar
     operation on word of mouth?"


Who Knows What Is Going On At DHCR?

In the course of the investigation, we came across examples of
important policy decisions which had been made by DHCR officials
without consulting any agency personnel who had expertise in or
were responsible for the policy area affected by the decision.
Such lack of consultation appeared to be more serious because
some supervisors and DHCR officials, like the employees that work
for them, do not have training or expertise in the subject areas
for which they are responsible.

One such case was the memorandum written by Gene Kelly, the
Deputy Director of the Backlog Unit, which improperly changed the
legal base dates used in processing pre-April 1st, 1984
overcharge complaints (see Finding Four). The correct legal base
dates in such cases are not mysterious -- they are well defined
by law and well understood by attorneys who handle
landlord/tenant cases, legislators with expertise in housing
issues and owner and tenant organizations. That Mr. Kelly could
have issued a memorandum which mistakenly directed rent examiners
to process such cases illegally is surprising. What is even more
surprising, however, is Mr. Kelly's testimony that he never
consulted with the Division's legal counsel or any other DHCR
attorney prior to issuing the directive nor did he send a copy of
his memo to DHCR's legal department subsequent to its issuance.
(Mr. Kelly acknowledged that he had no legal training.)

As was noted earlier, the effect of bypassing the legal
department, which almost certainly would have noticed that the
memo was incorrect, was that a substantial number of cases may
have been processed in violation of the provisions of the Rent
Stabilization Law. Yet such lack of consultation does not appear
to be unusual at DHCR.

Another example occurred in the allocation of monies appropriated
by the Legislature for DHCR's Enforcement Bureau/Harassment Unit.
In April of 1986, at the request of the Assembly majority, DHCR
was given a special $350,000 appropriation to hire additional
attorneys and support personnel for this unit which processes
complaints by tenants that they are being illegally harassed by
their landlords.

The chief of the Enforcement Bureau, Victor Braunstein, when
questioned about the appropriation stated that while he had
"heard" about it, neither the appropriation, the manner in which
it could best be utilized, the staffing needs of his bureau, or
any other matter related to the funds targeted by the Legislature
to his office had ever been discussed with him by any DHCR
official.

Often there seems to be mass confusion about exactly what jobs
DHCR personnel are assigned to perform. One supervisor at the
backlog unit, Ed Rasquin, denied that he had any role in
performing the duties which both rent examiners and his unit
director testified he performed.

According to the director of the Backlog Unit, Joseph Cordero,
Rasquin "took care of the default cases, which were the simpler
cases. Those are all strictly computer cases, which is just
default cases." According to rent examiners Elliot Vizansky and
Elsie Carey, Rasquin supervised their case work, and was brought
into the Columbus Circle office specifically to speed up the
processing of the backlog. In his "default unit", cases were
closed without waiting for any further information from owners or
tenants. As Elsie Carney testified, Rasquin told her: "[T]hey had
eight thousand cases to get rid of in four months."

Rasquin's name appears on DHCR rent orders as a District Rent
Administrator. Yet he denied that his job included case
processing at all, as in the following exchanges with Assemblyman
Grannis:

     Chairman Grannis: What were your job responsibilities
     while you were at Columbus Circle?

     Mr. Rasquin: Basically, it was time and attendance,
     making sure that proper work was out, workload. I
     distributed workloads, I have a reputation for being a
     disciplinarian.

     ...

     Chairman Grannis: The hearing examiner, rental examiner
     staff are people under your direct supervision; Is that
     correct?

     Mr. Rasquin: In terms of time and attendance, that is
     correct.

     Chairman Grannis: Only in terms of time and attendance?

     Mr. Rasquin: Yes, there were some of them that were
     assigned to me, but basically all I did was time and
     attendance.

     Chairman Grannis: Were you responsible for assigning
     any orders?

     Mr. Rasquin: No, sir, not at 10 Columbus Circle. I did
     so at Gertz Plaza.

     Chairman Grannis: But as far as rent overcharge orders
     at Columbus Circle, you were not responsible for
     assigning orders?

     Mr. Rasquin: No, sir.

     ...

     Chairman Grannis: The only reasons you were assigned to
     the office at 10 Columbus Circle was to worry about
     whether people clocked in on time and got their proper
     vacation schedules and were actually showing up for
     work?

     Mr. Rasquin: That they were doing their jobs, they were
     not somewhere socializing.

     ...

     Chairman Grannis: Can you tell me what you considered
     your job responsibilities to be at the office at 10
     Columbus Circle? What were you assigned to the office
     to do?

     Mr. Rasquin: I was the floor manager in a way. I was
     trying to get people to do their work, to make sure
     they were at their desks and performing their duties.


Unit Director Cordero, who supervises work at the Columbus Circle
office, noted that Rasquin's testimony about his job
responsibilities "confused" him. The testimony also was puzzling
to the joint committees -- Mr. Rasquin seemed to be the only one
at DHCR who was unaware of what his job responsibilities at the
Columbus Circle office were.

DHCR rent examiners testified that morale is extremely low and
working conditions poor in their offices. Several also complained
privately that they believed many employees had been hired
because of their personal, political or family connections with
DHCR officials, or supervisors or with public officials.
Employees and DHCR officials hired in this fashion, it was felt,
often either received favorable treatment or were given
responsibilities for which they were not qualified. The hiring
practices of the Division are an issue which could be the subject
of further investigation.

In the end, the many employees of DHCR who are honest,
hardworking and qualified to carry out their jobs probably
receive a bum rap from the public for factors beyond their
control. It is often impossible, for the many reasons noted in
this report, for DHCR employees to do their jobs properly. It is
clear, however, that there are many DHCR personnel who do an
excellent job under the circumstances. These employees should not
be uniformly classified in a negative way because of the
management and oversight failures of DHCR officials.


$59,782.72 -- For Oral Advice?

DHCR has made use of outside consultants to do some of the work
of the rent administration program. In one instance, the Division
hired an outside contractor/attorney and paid him at the rate of
$80-an-hour plus expenses, for a total of $59,782.72, to analyze
and produce various written materials on rent regulation issues.

The Division at the time had a number of attorneys on staff who
were widely recognized as leading experts in the field, including
Martin Schlufman who had worked for DHCR as a rent regulation
counsel for many years, Nathaniel Geller who had been a top
counsel at the Conciliation and Appeals Board prior to DHCR's
takeover of the rent system and Howard Malatsky, a former City
Housing Department Counsel who was later appointed a Housing
Court Judge.

DHCR determined, however, that an outside consultant contract was
necessary in order to have various written materials prepared
because, as DHCR told the State Comptroller's office:

     "The scope of services to be performed by the
     Contractor is of such technical complexity that it
     is not possible to have the services performed by
     existing State employees."

Among the materials required to be produced under the consultant
contract were written comments on the Division's draft Rent
Stabilization Code, a strategy paper analyzing property tax
exemption programs, an option paper outlining steps which could
be taken to influence the costs of new housing construction and
proposed legislation on rent regulation issues. DHCR paid the
contractor in accordance with the terms of his contract, which
ran from October 1985 to October 1986, but later submitted sworn
court papers which stated that the contractor had never produced
any of the materials called for in the contract.

The court case involved a suit by William Rowen of the New York
State Tenant and Neighborhood Coalition to obtain various
documents under the Freedom of Information Law from DHCR which
the agency had refused to produce. One set of documents requested
was the written materials produced by the outside contractor DHCR
had hired to prepare the materials described above.

In an affirmation submitted to the State Supreme Court in the
case, DHCR stated that it could not provide Mr. Rowen with the
materials he had requested regarding the contractor because
"[T]he contractor reports orally on his activities for the
Division and {that} there are no written records which respond to
his request."

In sworn testimony before the joint committees, Commissioner
Eimicke directly contradicted the court affirmation submitted by
DHCR's own counsel and maintained that the contractor had
"contributed" to some of the written documents he had been
required to produce and had "drafted proposed legislation" on his
own. When confronted with the legal affirmation to the contrary,
Commissioner Eimicke acknowledged that his testimony contradicted
it but could not explain the discrepancy. The one thing that is
clear is that, like the earlier case of the fudged backlog
numbers, either Commissioner Eimicke or the DHCR attorneys
responsible for submitting the papers on the court case described
above submitted false information under oath.

The services DHCR received in accordance with the consulting
contract remain unclear. Commissioner Eimicke and DHCR now claim
the contractor wrote or contributed to various written materials.
Vouchers submitted pursuant to the contract show he attended
various meetings during the contract period. The vouchers also
show that DHCR paid the contractor $960.00 per day plus expenses
on at least 26 separate occasions for day trips to Albany. The
vouchers do not describe what activities the contractor performed
while there.

A formal request to DHCR for copies of the appointment calendars
which recorded meetings which Commissioner Eimicke, Deputy
Commissioner Mirabal and other DHCR officials had with the
contractor was responded to by DHCR's counsel with the statement
that Commissioner Eimicke and Deputy Commissioner Mirabal had
discarded all of their appointment records for the calendar years
1985 and 1986.