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Public Housing Spotlight

Issue 54
Published on April 13, 2000

For a printable (ADOBE PDF) version of any Spotlight articles,
please specify the issue and email us at nychaspotlight@netscape.net

(Click Here for NYNYCHA "preliminary" Audit
by NYC Comptroller Alan Hevesi)

(Click Here for Directory of Issues)

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They should have
gone public!

From the Staten Island Advance,
April 8, 2000, by Ted Montuori (Click Here)

"John Honohan, 39, of Berry Court in Rossville, met three times with a contractor who was awarded a contract to replace doors in city housing developments between December, 1998 and June, 1999, according to the city Department of Investigation (DOI). Honohan allegedly accepted about $5,500 in payments during that time from the contractor after Honohan assured him environmental rules and city housing specifications would not have to be followed during the preliminary construction. Two other Housing Authority supervisors, Christopher Bamberger and Emanuel Lawrence, also pleaded guilty to bribery charges that were the result of a three-year undercover investigation conducted by the DOI's Housing Authority Inspector General, Steven A. Pasichow. The FBI and the Office of the Inspector General for the U.S. Department of Housing and Urban Development also helped in the investigation. All three were arrested last December 14. Honohan pleaded guilty March 30 and is scheduled to be sentenced June 28. Lawrence pleaded guilty yesterday and is scheduled to be sentenced July 14. Bamberger pleaded guilty March 16 and is scheduled to be sentenced June 30. Each faces 10 years in prison."


When City Hall decided it was time for then NYCHA Chair Ruben Franco to go, the NY Post suddenly wrote about Spotty's charges against Ruben. (That came as a total surprise to us!) In short order, and only a week after he stated he had no intention of leaving, Ruben was called into Bruce Teitlebaum's City Hall office and given the boot.

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When DOI wanted to dampen any fires caused by the Spotlight's release of the tape of Tony DiAlto's confession, again the NY Post (on a Saturday) was their venue of choice. In both cases, the Post ran the stories without ever contacting us. (It seems that whatever City Hall wants, the Post will do!)

But when three NYCHA employees plead guilty to bribery while working on Contract inspection for the Contract Administration Department, DOI feels that giving the info to a small newspaper like the Staten Island Advance, and on a Saturday no less, is the preferred venue.

Could it be that releasing that info in a newspaper with a much larger readership and doing so during the workweek, when most people buy and read more news, just might put a little more credence into the allegations made by NYCHA employees through the Public Housing Spotlight?

Of course not! We must just be cynics.

Well, let's forget the Post (PLEASE!) and just add some facts that were left out of the story in the Advance.

Back in 1997, one of the inspectors involved in the (supposed?) corruption investigation came to me with a complaint. He had been directed by Manny Lawrence to okay a Change Order that was obviously falsified. (Change Orders are authorization for "Extra" payment by NYCHA in addition to the contract price to a contractor for work not in the original contract.) This inspector also told me of other abnormalities in payments that were being forced on inspectors by Manny Lawrence and other CAD Supervisors.

One of these decisions by Manny allowed a contractor to gain over $100,000 of taxpayers' funds and there were MANY instances like this that the Inspector wanted to speak with the investigators about.

Even Tony DiAlto pointed to these same scams, and made a point of saying that more damage was being done to NYCHA's funds by the "desk jockeys" pushing through altered papers than by all the crooked inspectors together. Tony made that statement in my presence while he was being interviewed by John Kilpatrick and Steve Gruberger, both of whom were DOI Investigators working out of the NYCHA IG's office.

I, being so naÏve that I now shrink when even thinking about it, passed the inspector's info to John Kilpatrick. NOTHING WAS EVER DONE, AND THE INSPECTOR WAS NEVER ASKED ANY QUESTIONS BY THE IG/DOI.

I passed the same info onto the HUD IG (Click Here), and nothing happened. On February 29, 2000, I even faxed (Click here) the Federal Prosecutor, Mary Jo White, and told her of the inspector who was still willing to come forward with info on the ways that Manny Lawrence had directed him and other inspectors to authorize fraudulent Change Orders and to "forgive" contractual non-compliance that should have caused the contractor(s) to refund large amounts of money to NYCHA, who could then use that $ to benefit the tenants.

On many occasions, the contractors saved hundreds of thousands of dollars that should never have been paid. If the DOI/IG had listened to these inspectors, the resulting charges would make bribes of less than 5 figures seem ridiculous. But as Manny was far from alone in this scam, any trial would undoubtedly force any investigation to go higher into the NYCHA tree. And we all know that investigating the real powers at NYCHA is NOT something DOI will do!

When Tony and I had another meeting with Kilpatrick and Gruberger, Tony told them how James Gleba, then the NYCHA/CAD Asst. Director for Mechanical Contracts, had himself told Tony how he'd gone on a golfing vacation in Florida paid for by a contractor. Tony gave the info to these DOI guys, and told them the contractor's name. A few weeks later I called Kilpatrick about something else. I happened to ask about the Gleba stuff, as Gleba had been trying to set me up for dismissal since word of the IG investigation had leaked out. (About a day after it began!!!) Kilpatrick told me that because the golfing trip was outside NY State, his office couldn't look into it. I found this excuse stunning, and I asked him what State lines had to do with this. He told me "Our budget wouldn't cover sending anyone to Florida." I asked if he couldn't just call the Housing Agency in Florida and have them check the receipts at the hotel, as we had even gotten the hotel info for them. He said that "things don't work that way." (More on this, below)

Of course, there is still the uninvestigated matter of large bribes going from a NYCHA supplier to a Design Dept. executive. In the Special Corruption Issue on the web site I explain that DOI has refused for 3 years to talk about that, although I complained about it directly to Steve Pasichow, the NYCHA IG. His office REFUSED to even interview the inspector who stumbled across those payoffs. But that's old news now, I guess.

Manny Lawrence treated those under him with respect and he was always a gentleman. If, as I believe, the reason that DOI used such low money bribes (+/- $5,000) in order that these 3 can be offered probation or light sentences and NOT be forced to answer questions at a trial (God forbid!), most of the honest inspectors involved in the investigation will still be happy. I've talked with some of them, and we all agree that our anger is towards DOI and their continuing mission of hiding corruption if it gets anywhere near the real powers-that-be*. While we all wish that Manny, John and Chris would have told DOI that they refused to accept a deal that continues to let the big thieves go free, having DOI hold the key to your freedom can make it hard to just say NO to them. (But I can't fathom how Steve Pasichow, Steve Gruberger and John Kilpatrick can face their reflections in the mirror each morning!)

Maybe we all should have listened when other NYCHA people told us that there are just too many important figures that would be facing juries if any true investigation were to be carried out. But many of us are still optimists. We still believe that IF ENOUGH PRESSURE is brought to bear, an investigation will be forced to begin.

In that vein, I'll be doing an interview with one of the CAD inspectors who didn't have to leave NYCHA back in 1997. He will update us on those old schemes, and he'll be giving us an update on CAD's more recent problems.

For now, let's assume, as hard as this may be, that the HUD IG, the NY Attorney General (Eliot Spitzer) and the FBI were just fooled by DOI. That DOI used smoke and mirrors to get these government agents to lie down and play dead. And, if you'll bear with my rant for a few more moments, I think we might have a way to get the attention of those other investigative bodies.

Since beginning this rag, we haven't received a single note from a NYCHA employee saying that they don't believe even a word of the Corruption Issue. In fact, some notes scoff at that issue, and the writers go on to tell stories of corruption and cover-up that sometimes put ours to shame. And these writers come from NYCHA AND other City Agencies.

We get many letters and email from people who have recently retired, or are counting the days to their freedom. These folks tell me that NYCHA was always a haven for political hacks that, for varying reasons, the Mayor couldn't unload elsewhere. But, these same folks tell me that under this administration things have gotten out of control.

When the Mayor lets the NYCHA Chair (Franco) give his mistress the job of running NYCHA's Office of Equal Opportunity, something's wrong! (And she's still the Director of OEO, even after we published the facts that led to Franco's ouster.) When the Mayor lets his appointee (Kalman Finkel) force the resignation of Myrtle Whitmore in order that his friends (Ruben Schron and company) can lease a condemned, structurally flawed building to NYCHA for $100,000,000, that's wrong. When the same people use the fact (or, in their case, an opportunity?) that the warehouse is falling down to force NYCHA to now pay double the rent at Bush Terminal, something is wrong! When the arrogance of corrupt power allowed a serial sexual harasser/assaulter like Bruce Gatewood to hold the title of Director of Computer Services long after numerous complaints against him had been made to NYCHA's OEO, that's wrong.

And when the people who are supposed to guard against the corruption so endemic at NYCHA suddenly "forget" to follow-up on leads or, as is the current case, DOI closes fruitful investigations in order to put together a sting wherein they assure that no NYCHA higher-ups and certainly no contractors get caught, that's wrong.

The investigation chronicled in our Corruption Issue DID lead to NYCHA execs, at levels well above the 3 mentioned in the Staten Island Advance story. And it DID lead to corrupt contractors, unlike the supposed "cooperating" contractors that DOI congratulates.

And we'll try to prove it. Only this time, it won't be Spotty telling you of the endemic corruption. We won't be the ones to complain about NYCHA Execs either. It will be members of DOI, working on the IG's staff, who will do it for me.

I mentioned that we were warned by long-time NYCHA folks to NEVER trust the IG's office. But, with nowhere else to turn (read the NYCHA regs), we had to go against that advice. But, some of us took precautions. We tried to tape anything of importance, so we could verify our story if DOI turned out to be useless. So, I have many audiotapes, and copies of them spread all over. Some of these tapes contain further conversations with Tony, while some cover DOI investigators talking to me about the investigation. I hope that by sporadically releasing these tapes, the words of the DOI investigators themselves will make the extent of NYCHA corruption more believable to any doubters.

The first taped conversation is between John Kilpatrick and myself. John is telling me of his having to attend a wake for a Mafia-connected contractor. While there, he hears that William Russo and Anthony (Kenny) LaBarca had just left. You'll hear Kilpatrick explain how this connection between Bill Russo and the mob contractor caused John's bells to start ringing. And you'll hear what John concluded from this and other information he had on Mafia connections within CAD.
(Click here for the taped conversation.)

Other tapes will point to problems these DOI investigators had conducting even a simple surveillance without putting their primary informant in mortal danger.

Until now, much of the tape info and almost all documents related to the corruption investigation have been purposely held back, as I hoped they would be useful when HUD, the NY Attorney General and/or the FBI began an independent investigation. As each of those investigative bodies has now made it clear that they won't get their hands dirty with NYCHA, there is no need to hold back any longer.

Remember the Gleba-Contractor vacation mentioned above? Well, I guess every crook at NYCHA knows about DOI's skimpy travel allowance, as going out of State is still popular with Jimmy Gleba. According to one of our CAD sources, this was another example of Gleba's coziness with the contractors and suppliers that he is supposed to maintain a distance from. But luckily, no golf this time. Over the March 24 weekend, three or four NYCHA personnel (Low level Execs.) went on a contractor/manufacturer paid weekend get away to Michigan and Ottawa, Canada. The stated "purpose" of their trip was to look at the new boilers that would soon be used to replace ailing NYCHA plants.

The unit manufacturer, Johnston Boiler, paid for all plane tickets, meals and lodging for these three carefree junketeers. Gleba was joined on the trip by two other (non-CAD) NYCHA employees Alireza Vedavarz and Anthony Richiusa. My source said that he's aware of other Gleba trips, and that if he can get more info on them Spotty will be able to show that it ain't just the Navy where government funds pay for someone to "see the World!"

Poor Nora Reissig-Lazzaro.

She received her promotion, but nobody thought of giving her a party.

So Nora has dropped to a new low. She's asking her staff to chip in and throw her a promotion party. She believes rank has its privileges!

But as Nora has banned radios and walkmen from her people's cubicles, nobody feels like partying with her!

© 2000 Public Housing Spotlight and John Ballinger. All rights reserved.
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Contact Jack Ballinger at nychaspotlight@netscape.net
for a Real Audio sound clip containing a
conversation wherein DOI Investigator
John Kilpatrick discusses how he learned
that 2 NYCHA execs attended
a Mafia connected contractor's funeral .

Contact Jack Ballinger at nychaspotlight@netscape.net
for a Real Audio sound clip containing
the (3 Meg) confession of Tony DiAlto.
Tony was a member of a group of
corrupt Contract Inspectors working at NYCHA.
Neither Tony nor the person he confessed to
sharing his bribes with (Richard Penesi)
were ever charged, let alone prosecuted, by DOI.

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