Posted on 12/06/2003 5:35:21 AM PST by randita
Posted on Sat, Dec. 06, 2003
Lawsuit alleges abuses at PHA
A housing agency staff lawyer contends law firm contracts violated policy . By L. Stuart Ditzen
Inquirer Staff Writer
A staff lawyer at the Philadelphia Housing Authority has accused the agency of attempting to bypass federal contracting rules in awarding hundreds of thousands of dollars in legal work to private law firms.
George V. Troilo contends in a federal lawsuit that the Housing Authority's acting general counsel, C. Marc Woolley, repeatedly ordered him last year and this year to violate federal rules in extending contracts to favored Philadelphia law firms.
Among other things, the suit alleges that contracts were extended for $99,000 to avoid scrutiny by the U.S. Department of Housing and Urban Development.
In all, Troilo alleges that agency brass showed favoritism to four of the biggest law firms in Philadelphia. Those firms have been major campaign contributors.
After Troilo, 37, wrote a letter to HUD in August reporting "fraud, waste, and abuse of federal funds," he was transferred from the authority's legal office to a desk at an East Falls housing project.
In the four months since then, Troilo says, he has been given almost no work while being paid his $74,000 salary.
Authority spokesman Kirk Dorn said the allegations in Troilo's suit - both of agency contracting practices and of Troilo's job transfer - were baseless.
"A lot of companies would fire a guy who makes serious allegations that turn out to be unfounded," Dorn said. "George Troilo is still doing legal work. He has the same title and the same pay."
In a written response to questions, Dorn denied that there were any contracting improprieties at the Housing Authority, saying: "All PHA actions regarding contract amendments were in keeping with HUD regulations. HUD routinely audits the PHA. We operate with the knowledge that we are always open to HUD oversight and review."
A spokesman for HUD's regional office in Philadelphia declined to comment when asked whether Troilo's accusations were being investigated.
Woolley, who resigned last week as the authority's top lawyer, also declined to comment on Troilo's accusations, except to say that his departure was unrelated to the suit.
Troilo contends in his suit that he has been "constructively terminated for whistle-blowing." The suit seeks unspecified monetary damages.
The Housing Authority has filed a motion to have the suit dismissed.
The authority has paid $11.9 million for outside legal services to 16 law firms in the last two years, and its contracting practices and relationships with law firms have attracted the attention of HUD's regional office and of the FBI.
The authority was criticized last year by HUD for paying large fees to the politically powerful law firm of Ballard, Spahr, Andrews & Ingersoll to defend against lawsuits involving relatively minor employee disputes.
HUD regional counsel Ann E. Harrison notified the housing agency that its legal costs appeared to be unjustified. The agency insisted in its reply that all costs were necessary.
Ballard Spahr, according to the authority, has been paid $3.1 million in the last two years under four contracts.
Ballard, one of Philadelphia's major law firms, is the former firm of Gov. Rendell. Ballard's chairman, Arthur Makadon, is a legal adviser and political adviser to Mayor Street. The firm and its lawyers were the third-biggest contributors to Street's reelection campaign, giving $461,433.
The relationship between the Housing Authority and the law firm of Ronald A. White is under scrutiny in the federal pay-to-play probe of Street's administration. In October, investigators subpoenaed authority records relating to contracts with White.
Troilo's lawsuit accuses the agency of a pattern of abuses in extending and amending four legal contracts.
The suit, filed by lawyers Michael Pileggi and James A. Bell, contends that Woolley directed Troilo five times to extend existing legal contracts by $99,000, thereby sidestepping the need to rebid the contracts and avoiding a $100,000 threshold that would require HUD review and approval.
The lawsuit identified only one such contract, which was awarded to Montgomery, McCracken, Walker & Rhoads.
(Pileggi is a former Housing Authority lawyer who was fired and also is suing the agency.)
Dorn, the Housing Authority spokesman, denied that any other contracts were extended for $99,000. He confirmed that the Montgomery McCracken contract was so amended. That amendment, Dorn said, was granted to cover final legal work as the firm's $830,000 contract was winding down.
Troilo also contends in his suit that he was ordered to extend some legal contracts by exercising two annual renewal options simultaneously, an alleged irregularity that allowed funds intended for two years' worth of legal services to be spent in one.
Dorn confirmed that, in one contract, two renewal options were exercised simultaneously. He said this involved a $750,000 contract with Ballard Spahr for real estate work.
Dorn said the contract allowed for double-option renewal.
Troilo contends in his suit that the renewal of two options at once violated HUD regulations and the specific language of the contract.
The suit also alleges irregularities in contracts awarded to the firms of Blank Rome, and Wolf, Block, Schorr & Solis-Cohen.
Troilo's suit, however, makes no claim that any of the law firms did anything improper in the contracting process. No law firms are named as defendants in his suit.
In sum, the four firms have given more than $800,000 to Street's mayoral campaigns. More than half of that giving came from Ballard.
On Aug. 4, Troilo wrote to Daniel Temme, regional inspector general for audit at HUD, reporting that his boss, Woolley, repeatedly had ordered him to "act in contravention of the federal regulations" in handling legal-services contracts.
"I have no place to turn for help," Troilo wrote. "... Mr. Woolley is well-aware of my reluctance to carry out his orders. I told him on numerous occasions that his requests were in direct violation of the federal guidelines. Mr. Woolley responded that 'You worry too much.' "
Troilo sent copies of that letter to Woolley, Housing Authority executive director Carl R. Greene, and other authority officials.
The day the letter arrived at the Housing Authority, Troilo says, he was reassigned from the agency's headquarters at 12 S. 23d St. to the Abbottsford Homes housing project in East Falls. He filed his lawsuit Aug. 18 in U.S. District Court in Philadelphia.
Dorn said Troilo was reassigned because his conduct was considered "disruptive."
"I'm still barred to this day from entering the building at 23d Street," Troilo said in a recent interview. He said he has a desk, a phone and a computer in a corner of an office at the housing project, but added: "I don't have any productive work to do at all. I don't hear from anybody in the legal department, even people I was friendly with. It's as if I fell off the face of the earth."
Troilo said he felt compelled to write to HUD. Asked whether he would do it again, he said:
"I think about that every day. I just wanted to put a stop to what I thought was waste, fraud and abuse. I was trying to do the right thing."
Contact staff writer L. Stuart Ditzen at 215-854-2431 or sditzen@phillynews.com.
© 2003 Philadelphia Inquirer and wire service sources. All Rights Reserved. http://www.philly.com
Somebody's acting guilty.
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