In 2003, PHA planned to solicit big contractors

Posted: August 25, 2010

Before she became a part of Mayor Nutter's cabinet, Melanie Johnson worked for the Philadelphia Housing Authority - and was a key player in a plan to hit up agency contractors for charitable donations.

Documents obtained by The Inquirer show that Johnson, now Philadelphia city representative, was a leader in a 2003 proposal by PHA staff to solicit donations from corporations, businesses and law firms.

She distributed a "call list" of target firms to a team of PHA staffers, explaining: "Everyone on this list has received more than $1 million in contract fees from the PHA in the past year."

Ultimately, the move to solicit the vendors was squelched amid a legal debate over whether it was permissible. But in the years that followed, PHA officials embraced this very same aggressive approach to fund-raising again and again.

In an interview Wednesday, Johnson said she was merely following instructions from supervisors and had raised her own concerns about the plan. As a member of Nutter's cabinet, she said she would now oppose any such effort to solicit city contractors for charitable donations.

Even though the 2003 fund-raising initiative was shut down, top agency officials have since repeatedly hit up contractors, senior PHA executives and even middle-level workers bureaucrats for donations - charitable giving that in some cases raised money to salute Carl Greene, the agency's chief.

Consider these fund-raising programs, news of which has surfaced in recent days:

Despite the qualms in 2003, PHA later went onto solicit contractors for a 2008 dinner "to celebrate Mr. Greene's 10th anniversary at PHA." As The Inquirer has previously reported, vendors were asked to put up as much as $5,000 apiece for this.

The money was funneled through the same nonprofit, known as Tenant Support Services Inc., or TSSI, that was to receive the 2003 charitable donations.

As the Philadelphia Daily News reported this week, the agency has also told some contractors who were falling short in meeting minority-participation goals that they could satisfy requirement by giving money to TSSI.

Top Greene aides put the squeeze on other PHA executives to donate as much as $150 at a shot to pay for other dinners to celebrate Greene's work. This happened as many as four times a year in recent years.

PHA put into effect an automatic deduction for mid-level managers under which $110 yearly was taken out of their pay, to pay for what Greene says were "team-building" events on PHA time - bowling trips, visits to the zoo, barbecues.

In the interview Wednesday, Johnson, who worked at PHA from 2002 to 2007, said she was "just an employee at the time" she developed the list of vendors to be solicited for donations - for amounts up to $15,000.

She said she didn't remember the fund-raising plan in detail, but did recall raising concerns with others about the plan. As city representative, she is responsible for promoting Philadelphia and burnishing the city's image.

In 2003, the pitch was that donations would buy holiday toys for the needy. But the money was to be routed through the TSSI nonprofit - an organization with a record of spending most of its money on its own staff salaries and benefits, IRS nonprofit records show.

In fiscal year 2003-04, for example, it took in $914,000, but spent $850,000 of that on payroll, benefits, administration and travel.

Greene, in an interview given before he went into seclusion as controversy grew around him, defended the solicitation practices within the agency he has run for the dozen years.

"What's wrong with businesses and wealthy folks giving contributions to TSSI?" he said. "None of it goes to me, none of that goes to Carl Greene."

PHA officials have said the fund-raising for the Green fetes helped rise scholarship money for youngsters who lived in public housing. They also said that Greene was given personal gifts, too - a CD player, theater tickets and the like.

Of the deduction from some 300 staffers' paychecks to finance the "team-building" activities, Greene said, "We don't require staff to contribute to it."

The programs helped PHA staff work better together, he said.

However, Alphonso Jackson, the former U.S. secretary of the Housing and Urban Development who has long been a strong critic of Greene's, said he found it troubling that contractors had been solicited.

"No, I never did that and I think 98 percent of housing executives never did that," Jackson, who formerly headed up public housing in Dallas, said in an interview Wednesday.

In Philadelphia, a former junior executive at PHA also had a negative view.

She said she resented being asked to give money for the quarterly dinners that honored Greene, but paid anyway.

"If I had said, 'No, I'm not going to go to that party, I'm not going to contribute $100,' would I have been fired? Probably not," she said. "But I felt intimidated."

The ex-manager, who asked not to be identified, and other have said that the deductions program was a subject of some in-house dismay.

"There was a collective discomfort on the part of people with conscience," she said.

A key leader in some of the solicitations was Richard Zappile, PHA's public safety director and a close Greene aide.

In an interview Wednesday, Zappile again elaborated on his role in collecting money in-house from top managers for the dinners in honor of Greene. Zappile was frank about his approach

"Some people would dig in their heels and absolutely say no," he said. "And I would pressure them."

However, Zappile said the pressure consisted of verbally demanding that people kick in money. There was no retaliation if workers refused, he said.

"Nothing ever happened to them," he said, referring to those who would not contribute.

Zappile said it was no fun making the rounds, seeking the payments.

"I would collect the money," he said. "Which was the worst part. People would stiff me."

Some staffers, he said, would complain about having to attend parties on their own time, to salute their boss.

Zappile said some attendees at the bashes would be non-PHA people, such as lawyers who had contracts with the agency. And at time, others would complain that they had not been contacted to attend.

"We would get calls afterward from lawyers - 'Why didn't we go," he recalled.

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The agency's culture of aggressive outside fund-raising is clearly on display in the 2003 documents.

They show that Johnson and about a dozen other PHA officials worked to put together that year's December TSSI fund-raiser, a holiday party to be held at union hall.

The record show that in October 2003, the planners wondered if it was appropriate to go after agency contractors for donations.

Minutes from an Oct. 8, 2003 planning session show that planners decided to seek legal guidance on this question: "Can PHA employees contact PHA vendors, partners, unions, etc., to solicit funds or items for a fund-raising event on behalf of TSSI?"

According to one PHA document, the team planned to seek the legal advice from agency general counsel Marc Woolley. The records don't say what advice, if any, Wooley gave.

(Now of counsel to the Ballard Spahr firm, Woolley said Wednesday he did not recall being asked for his opinion or giving it. In late 2003, he was about to leave PHA and perhaps the issue was never taken to him for assessment, he said.)

In November 2003, Johnson distributed the "call list" divvying up contractors and assigning various workers the task for calling them to seek donations. Johnson put herself down to call two law firms and a business.

But three days after that, Zappile sent out a mass e-mail putting an end to the "call list" approach.

Neither Johnson nor Zappile could recall precisely why he put a stop to the campaign.

Said Zappile: "I would like to say I stood up and said, 'This is not ethical.' But I can't remember."

In general, Zappile said, his view is that while it was problematic to solicit money from PHA contractors, it was permissible to dun PHA staffers.

"I didn't want to get involved with the vendors," he said. "The employees are different."

Kirk Dorn, a spokesman for PHA, said Wednesday that the fund-raising holiday party continues to be the biggest event of each year for TSSI.

According to Dorn, staffers of the nonprofit provide most of the labor preparing for the holiday party, though PHA workers do provide some support.

"We felt was a great cause," Dorn said. "The whole point of the party was to raise funds for public housing children."

He added, "This was not a huge undertaking by the PHA staff."

According to the group's most recent available public tax return, it raised $905,625 in revenue for the year ending June 30, 2008. About $400,000 were federal funds from PHA.

As in 2003, the bulk of its spending went to employee and administrative costs.

Asia Coney, director of TSSI and public housing tenant, did not return a call Wednesday seeking comment. She is paid over $100,000 to head the nonprofit.

No one appeared to be there when a reporter stopped at the group's West Philadelphia offices on Wednesday.

Whatever time PHA officials put into such fund-raising in the past, Dorn said the current practice is that only workers from the nonprofit may solicit money. PHA workers don't do it, he said.


Contact staff writer Christopher Hepp at 215-854-2208 or chepp@phillynews.com.

Staff writers Nancy Phillips, Mark Fazlollah and John Shiffman contributed to this article.

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