[UPDATED] Legality of McFadden's appointment to RHA questioned


A statement from the US Department of Housing and Urban Development follows the story. 

Questions are being raised about the legality of Adam McFadden’s appointment last week to lead the Rochester Housing Authority. Former board chair Carol Schwartz says that McFadden, as a sitting member of City Council, is barred from the position by the terms of the authority’s annual contract with the US Department of Housing and Urban Development.

“They have violated this contract,” Schwartz says.

Section 19 of the contract deals with conflicts of interest. It reads, in part:

…neither the HA nor any of its contractors or their subcontractors may enter into any contract, subcontract, or arrangement in connection with a project under this [annual funding contract] in which any of the following classes of people has an interest, direct or indirect, during his or her tenure or one year thereafter…

The section then breaks into three subsections listing what the contract considers conflicts of interest. The third section states,

Any public official, member of the local governing body, or state or local legislator, or any member of such individuals’ immediate family, who exercises functions or responsibilities with respect to the project(s) or the HA.

Schwartz, who was dismissed from the RHA board, says that by allegedly violating the contract, that the Housing Authority is risking its federal funding — millions of dollars annually.

McFadden, however, said in the Democrat and Chronicle recently that he would not need to step down from City Council to take the RHA job, as long as he recused himself from discussion or votes related to the Housing Authority. But it’s not clear if that is sufficient to satisfy the Housing Authority’s HUD contract.

The RHA board and indirectly, the administration of Mayor Lovely Warren, have come under fire for replacing former RHA Executive Director Alex Castro with McFadden. They say it’s cronyism at its worst — a reward for McFadden’s loyalty to Warren and her mentor, State Assembly member David Gantt. They also decry McFadden’s lack of background in housing.

The appointment also seems to be worsening the rift between blacks and Hispanics in the Monroe County Democratic Party.

City Council member Jackie Ortiz on Friday called for an investigation into Castro’s dismissal, calling it mismanaged and inappropriate.

Calls to McFadden, who had long expressed interest in the Housing Authority job, and RHA board chair George Moses have not yet been returned. A spokesperson for Warren referred questions to the Housing Authority.

Also unclear is the status of Castro’s contract with the RHA and whether he will continue to draw a salary or if he would need to be bought out as a result of the abrupt dismissal. Castro was hired in 2010. 

UPDATE (October 20, 3:30 p.m.): Adam Glantz, public affairs officer for Region II of the US Department of Housing and Urban Development, has sent over the following statement regarding the legality of McFadden's appointment to executive director of the Rochester Housing Authority: 

"HUD is reviewing the matter and will be working closely with the Rochester Housing Authority to gather all the pertinent information and facts before we make a determination.”