While James Finnucan was in charge of the Ansonia Housing Authority, his family also collected rent from tenants in a Section 8 apartment the Finnucans owned, the Valley Independent Sentinel has learned.
The arrangement was a conflict of interest and Finnucan should have resigned or sought a waiver, according to the regulations of the U.S. Department of Housing and Urban Development.
However, Finnucan never sought a waiver and he didn’t resign until Dec. 28, 2011 — 17 months after Ansonia Housing Authority employee Gwen Archer first complained about the situation.
Finnucan was Archer’s boss at the Ansonia Housing Authority.
Documents obtained by the Valley Independent Sentinel show that Archer allegedly complained about the conflict of interest on several occasions, starting in July 2010.
She resigned in August 2011 amid frustrations that her complaints were being ignored. Her resignation letter is printed below.
In addition, the Valley Independent Sentinel has learned that Gary Merlone, a former member of the Ansonia Housing Authority Board of Commissioners, was also collecting rent as a Section 8 landlord.
The two conflicts call into question whether the Ansonia Housing Authority had a basic understanding of HUD’s ethics policies, which clearly state employees can not profit from the programs they administer.
Article continues after Archer’s letter of resignation.
After the Valley Indy began questioning HUD officials in Boston and Washington, D.C. about the local conflicts, HUD said they will write a letter to the Ansonia Housing Authority Board of Commissioners regarding the issue.
The letter, which as of Friday afternoon had not been sent, will notify the Ansonia Housing Authority Board of Commissioners that it should not place new Section 8 tenants in either Finnucan’s or Merlone’s apartments for at least a year after they left their respective roles with the authority. Merlone resigned from the board in September 2011.
“During this time frame, the housing authority should not place residents in properties which have a conflict of interest nor should the landlord with a conflict of interest accept new residents with vouchers from the Ansonia Housing Authority,” Rhonda Siciliano, New England HUD spokesman, wrote in an e-mail to the Valley Indy Feb. 3.
Finnucan, a former Ansonia mayor, was making $104,978 a year as the Ansonia Housing Authority’s executive director. He has not returned numerous calls for comment.
Under a separation agreement with the Ansonia Housing Authority, he will continue to be paid through Feb. 29, 2012.
Section 8 is a federal housing assistance program that helps low-income individuals and families by providing money for rent.
HUD pays a percentage of the tenant’s rent directly to the landlord.
The Ansonia Housing Authority processes paperwork for Section 8 vouchers in the city — and determines how much money the landlords get paid.
Property records in Ansonia City Hall show that Finnucan and his wife, Eileen, have owned a multi-family house on North Main Street since 1982.
An apartment in the house has tenants who receive Section 8 assistance — money that goes to the Finnucans.
When landlords sign up to accept Section 8 tenants, they receive a contract from HUD spelling out the federal regulations, advising them a landlord can’t be employed by the housing authority administering the money.
The idea is that the Section 8 landlords be removed from determining how much rent they get paid.
The contract and a HUD ethics manual further state that immediate family members can’t profit from the programs.
“The parties in decision making capacities should not derive any financial benefit from the programs,” Siciliano said in an e-mail. “Decisions with regard to rent and physical condition (of living spaces) could also be compromised.”
Article continues after the ethics manual, which is publicly available on HUD’s website.
Finnuncan resigned in December.
Earlier that month, the Ansonia Housing Authority Board of Directors also fired Tiffany Reeves, a compliance coordinator.
Officials have not disclosed any information about Finnucan’s resignation or Reeves’ termination, citing “personnel” matters.
Since the Ansonia Housing Authority is funded by taxpayers, the Valley Independent Sentinel has several Freedom of Information requests pending to the authority to find out more information.
The requests seek information on how much money Finnuncan received in rent payments from the Housing Authority and for how long.
Archer resigned in August, after working for the Ansonia Housing Authority for 18 years. She has not returned messages left by the Valley Indy.
However, after resigning from the Ansonia Housing Authority, she applied for unemployment benefits.
The Ansonia Housing Authority fought the claim — prompting two hearings before the state Department of Labor.
Documents introduced during those hearings were obtained under the state’s Freedom of Information Act.
Those hearing documents outline Archer’s complaints, and her attempts to get Finnucan to deal with the conflict of interest.
Click play on the video at the top of the story to hear a portion of Archer’s testimony. Click play on the video at left to hear statements from Archer’s attorney and an attorney representing the Ansonia Housing Authority during the same hearing.
Gnawing At Her Conscience
Archer started at the housing authority in 1993 as a receptionist, and worked her way up to a public housing manager in 1996. In 2008 she became the director of housing authority programs.
In that position Archer said she saw that the Ansonia Housing Authority was cutting checks to the Finnucans through the Section 8 program, according to her testimony at an unemployment hearing in December 2011.
Archer said Finnucan’s wife owned the property on North Street that had a Section 8 tenant. Public records in Ansonia City Hall list Finnucan himself as the owner.
Archer told a Department of Labor referee that she first brought up the conflict of interest about his property to Finnucan in July 2010.
“He didn’t believe at the time that it was a conflict of interest,” Archer said, according to audio recordings from the hearing. “I said to him if you can research that and let me know. I believe it is a conflict of interest.”
Archer waited and heard nothing back from Finnucan on the topic, according to her testimony.
In October 2010, the Ansonia Housing Authority, apparently in an attempt to address the issue, started trying to transfer Finnucan’s paperwork on the North Main Street home to a consulting firm that works with the Housing Authority of New Haven, according to Archer’s testimony.
The Housing Authority’s lawyer, in the unemployment hearing documents, said Finnucan’s property was “ported out” to the consulting firm J. D’Amelia & Associates.
“Mr. Finnucan tried to resolve the issue,” the lawyer, Lisa Grasso Egan, said during a hearing in August, according to the documents.
Calls to the consultant — J. D’Amelia & Associates — were not returned Thursday. Grasso Egan declined to comment.
However, Archer said in the spring of 2011, she found out Finnucan’s house on North Main Street was still under the Ansonia Housing Authority’s jurisdiction.
The news prompted her to do more research into HUD’s regulations on conflicts of interest.
The research isn’t difficult. The HUD regulations about conflicts of interest with Section 8 landlords are posted all over the Internet. There is even a 22-page HUD Powerpoint presentation online that reads like “Housing Authority Conflicts for Dummies.”
In March 2011, Archer e-mailed Finnucan, directing him to sections of the HUD regulations that spell out the conflict of interest.
By July 2011, Archer was frustrated that nothing had changed.
So, on July 21, 2011, she sent a letter of resignation to the Finnucan, outlining her concerns again and saying her last day would be Aug. 5, 2011.
“At that time (I was hired), I mentioned that for me certain things ‘were not negotiable,’” Archer wrote in her letter of resignation.
The conflict of interest “has been pressing upon my bible trained conscience and I had to make a personal decision so that I would continue to have true peace of mind,” she wrote.
The Department of Labor denied Archer’s request for unemployment payments, saying she should have gone to someone other than Finnucan about her concerns.
Finnucan was not the only person in Ansonia who was involved in the Housing Authority while renting out apartments under the Section 8 program.
Gary Merlone, a former member of the Ansonia Housing Authority Board of Commissioners, is also a landlord through the Section 8 program.
Merlone is the husband of Ansonia Schools Superintendent Carol Merlone. On Wednesday he said he has rented out an apartment on North Street through Section 8 for 20 years.
He had been a commissioner for about two years before stepping down in September 2011.
Merlone said he stepped down because he was named chairman of the Water Pollution Control Authority in Ansonia. He said he was never given a policy nor any notice that he couldn’t serve on the board while being a Section 8 landlord.
“When I went on that board, no one made mention of any prerequisites that you couldn’t own Section 8 property,” Merlone said Feb 1.
“If there was, I would have certainly gone with the regulation and not ever even gotten on the board,” Merlone said.
Merlone said he couldn’t recall having any conversations with Finnucan or Archer about his apartment. During her unemployment hearing, Archer said she spoke directly to Merlone about the conflict.
Merlone continued to get checks from the Ansonia Housing Authority after he started volunteering on the board.
But it didn’t occur to him that it might be a conflict of interest, he said.
“I never really thought about it,” Merlone said. “And the reason why I didn’t think about it is I’ve been getting that check for about 20 years.”
James Finnucan could have requested a waiver for his North Main Street apartment in an attempt to comply with HUD regulations.
However, he never tried, according to Rhonda Siciliano, the spokesman for the New England HUD office.
Regional HUD officials first found out about Finnucan’s conflict of interest in September 2011 — a month after Archer resigned in protest.
The Ansonia Housing Authority Board of Commissioners notified HUD officials at that time.
HUD does not plan to take any other action against Finnucan as a result of the conflict of interest, Siciliano said.
Siciliano said HUD recommends local housing authorities train board members and employees on the rules about conflicts of interest — but they leave it up to the local authority to make sure that happens.
Ansonia’s Board of Commissioners chairman James Tyma did not return a call for comment Thursday.
Siciliano said HUD will also provide “technical assistance” and training for Ansonia employees and board members in the wake of the problems there.
Jimmy Miller, the Deputy Executive Director for the New Haven Housing Authority, has been hired on an interim basis as Finnucan’s replacement.