, Port Arthur, Texas

Local News

October 31, 2012

Whistleblower files suit against PA Housing Authority

PORT ARTHUR — The Bernsen Law Firm in Beaumont filed a lawsuit Tuesday against the Port Arthur Housing Authority for firing Joseph Guillory in retaliation for reporting to the Department of Housing and Urban Development alleged illegal activities committed by the executive director and the housing authority staff.

The suit was filed under the Texas Whistleblower’s Act in the Jefferson County District Court.

Guillory, who was the director of property services at the housing authority for 10 years, claims he was fired April 17 for reporting “various illegal activities” committed within the authority. He reported these activities to the HUD Office of Inspector General. The OIG has conducted two audits of the PAHA, one in January 2011 and the other in June.

Executive Director Seledonio “Cele” Quesada said he could not comment on the lawsuit but that he had been expecting it.

Frank Calvert, the authority’s attorney, said he could not comment either, but he said he would file a response to the lawsuit soon that would include the housing authority’s stance on the situation.

“The answer will speak for itself,” he said.

Concerned by the “illegal and unethical activities of” the executive director and others, Guillory contacted OIG special agents on numerous occasions, the suit states.

He provided the OIG with “voluminous information concerning” Quesada, his staff and some board members, the suit says.

Some of the activities Guillory reported to the OIG included thousands of dollars spent on “unnecessary equipment for commissioners, parties, excessive travel, local restaurant charges and gifts,” according to the lawsuit.

The Bernsen Law Firm demanded a jury trial in the suit and that the housing authority pay Guillory for damages incurred as a result of his termination, such as back pay, front pay, attorney fees, mental anguish and other costs of the suit.

After being fired, Guillory invoked the housing authority’s grievance procedure on April 27 to determine why he had been terminated, according to the suit.

Quesada met with Guillory on May 4 as a part of the grievance procedure, and Guillory told the director then that he believed his termination had been in retaliation for working with HUD auditors and reporting “unethical and illegal activities” that had been going on within the housing authority, the suit states.

The executive director informed Guillory May 11 that his request for employment reinstatement had been denied, so Guillory took the grievance process to the next step and contacted the director, the chairman and the mayor May 18 to request an additional grievance hearing be put on a public meeting agenda of the board, the suit states. The board set the meeting for June 12.

At this meeting, Guillory informed the board why he believed he was fired. He “candidly and forcefully confirmed to the board that the OIG audit report findings were not only true but were ‘the tip of the iceberg’.” Linden appointed two board commissioners, Bart Bragg and Clonie Ambroise, to conduct a “fact-finding mission” to get to the bottom of Guillory’s accusations for his reason for termination and the alleged illegal activities occurring within the PAHA.

Guillory waited almost three months before delivering another letter to the director, the chairman, board commissioners and the mayor, inquiring about the status, protocol and timeline of this so-called fact-finding investigation, according to the suit. He asked for a response within 10 business days, or by Sept. 18.

He received no response, his requests “denied and/or purposefully ignored,” the suit states. At its Sept. 24 meeting, the board did not get a written report from the two commissioners who were assigned to research the matter further, just the comment that no further action was necessary.

The board officially and finally terminated Guillory’s employment and grievance procedure at its Oct. 22 meeting. The board sidestepped an Oct. 11 court appearance with this decision, for Guillory’s attorney had filed a temporary restraining order and injunction hearing Oct. 3 to resolve Guillory’s grievance procedure.

While there was no evidence of error or fraud, the PAHA audit performed by the Regional Inspector General for HUD states that the housing authority did not cooperate with the department during the audit and failed to establish policies and procedures for its financial operations, putting it at risk for fraud, errors and improper payments.

The audit states that the PAHA did not enact formal control over its financial operations while simultaneously neglecting to create an environment of integrity and accountability. Throughout the auditing process, the PAHA prevented auditors from having full, open access to its staff, records and data, providing incomplete information in most cases — a violation of its annual contributions contract — which resulted in costs being deemed unsupported. In its findings section, the audit supports this statement by showing how funds were spent from Jan. 1, 2009, to Dec. 31, 2010.

HUD requires certain safeguards to ensure the proper use of charge cards — safeguards the PAHA did not implement — and the audit states that the authority “incurred unreasonable, unnecessary and imprudent charges, and charged excessive and unsupported travel costs.” The PAHA charged more than $199,000 to its American Express charge card account, $23,205 to its gasoline charge card account, and $5,352 to its Lowe’s charge card account during the audit time frame — charges that “appeared to benefit the authority’s commissioners, management, employees and contractors.” The audit could not support some charges, for the PAHA did not provide documentation or receipts for some purchases.

The American Express charge card statements showed how the PAHA spent thousands of dollars on groceries, gasoline, grilling supplies, party supplies and local restaurant charges, according to the audit. At least $66,000 was spent on travel for PAHA commissioners, management, employees and contractors. And in 2009, the housing authority paid $688 in “cancellation” and “no show” fees for luxury hotel rooms for the executive director and board chairman, which “showed the board’s and management’s lack of regard for responsible fiscal administration” and “disregard for their fiduciary duties.” The PAHA did not provide adequate documentation to support the purpose of the travel or the reason for not canceling the reservations on time.

The PAHA also violated its own personnel policy by paying the executive director $51,821 for accrued sick leave from August 2010 through December 2011, according to the audit. The executive director’s total compensation and benefits for the year were $237,156, which does not reflect the sick leave compensation. Payroll documents did not show the payment as sick leave, and the housing authority did not reduce the executive director’s accrued leave balances. The audit recommends that HUD determine whether the payments were valid.

The housing authority violated state and HUD requirements as well by allowing an ineligible person to serve as resident commissioner and doling out compensation to commissioners, according to the audit. The resident commissioner had to be a recipient of housing assistance in the voucher program or a public housing resident, and state law dictates that at least one commissioner be a tenant of a public housing project over which the PAHA had jurisdiction. Compensation for service as a commissioner is forbidden by state law, too.

The PAHA resident commissioner was ineligible to serve because the commissioner was not directly assisted, according to the audit. The resident commissioner had been a public housing tenant but had moved out without notice in August 2004, owing the PAHA $1,692 that was not paid as of December 2011. And the resident commissioner received a $200 monthly stipend from April through November 2010 — another violation of state law. The authority also supplied its commissioners with mobile phones, wireless aircards, laptop computers, netbook computers, wireless printers, software and other devices costing more than $36,000. Five people constitute the board of commissioners, yet the PAHA purchased 14 laptop computers and 5 netbook computers for the board during the audit period.

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