Monday, September 27, 2010

MEMO: Conflict of Interest Allegations at Los Angeles Housing Department (City Council WAITING for City Attorney's LATE Report On This Issue)

THIS IS THE MEMO CITY HALL DOESN'T WANT YOU TO SEE...even if your typical NC member doesn't care. 

LETTER FROM (ALLEGEDLY) FRUSTRATED L.A. HOUSING DEPT STAFF ON RENT ESCROW CONFLICT OF INTEREST as addressed by Council, currently awaiting a (delayed) report from the City Attorney's office:

Dear Sir,

We are a group of Housing Department employees who are too intimidated to disclose our identities, yet are troubled enough to address some of the recent conflict of interest allegations pertaining to the Rent Escrow Account Program (REAP).

We would like to thank you for speaking up during the July 21st Council meeting and bringing to light the fact that the Housing Department’s REAP contractors are under a cloud of serious conflict of interest allegations (July 21, 2010 Council Session, Item 

You were absolutely correct in your observation that some REAP contractors may have abused their roles and turned their LAHD contracts into a revolving business by playing on both sides of the proverbial fence.

As we understand, during the July 21st session the LAHD and the City Attorney’s Office were tasked with investigating the aforementioned conflict of interest allegations and submitting a report to the City Council on their findings.

We would like to inform you, however, that as far as REAP is concerned, there exists an appearance of impropriety within the Housing Department itself. As things stand now, the LAHD is not in a position to conduct a fair and impartial investigation, and it should be precluded from investigating its REAP outreach contractors. It is an open secret that some member(s) of the LAHD executive team have a private and personal interest in this matter that may influence the objective exercise of their official duties. This, at the very least, smacks of blatant conflict of interest.

Specifically, the LAHD Assistant General Manager in charge of overseeing REAP, Roberto H. Aldape, was previously employed by and had a business relationship with one of the outreach contractors in question – the Los Angeles Housing Law Project.

To place the subject matter in a broader context, Roberto H. Aldape was hired by the LAHD in late 2006, having neither led large organizational units nor having worked in the public sector in his prior employment history. His appointment is yet another of a series of questionable and arbitrary actions that over the years the LAHD has become infamous for. Stated another way, the LAHD hired one of its contractors’ representatives (if not the contractor’s principal agent) and placed him in charge of overseeing the same contractor.

Mr. Aldape is a fervent adherent of the kiss-up-kick-down school of management, and his foul mouthed, bullying management style demands not merely obedience but also obeisance. He mercilessly and relentlessly goes after all those who dare to contradict him or question his tactics and management style. As time passed, somehow his interim AGM position was eased into a permanent one. Also noteworthy is the fact that nowadays the LAHD has four AGMs, whereas in the past it had only two or three.

The person directly in charge of REAP, Compliance Division Director Roya Babazadeh, is not about to challenge or express opinions contrary to Mr. Aldape’s. Suffice it to mention that Ms. Babazadeh’s appointment to her current position was not without controversy itself: she was promoted over more qualified and experienced female and minority candidates, and her promotion was in direct violation of class-specific preconditions and requirements.

Assistant General Manager Roberto H. Aldape’s relationship with one of the REAP outreach contractors, the Los Angeles Housing Law Project, is of such opaqueness that it definitely should raise a red flag. In the past decade or so the Los Angeles Housing Law Project has been awarded hundreds of thousands of dollars in City contracts, yet one may never find out how many side lawsuits this contractor has initiated from information gained through REAP outreach contacts.

Curiously, in various documents and websites, Mr. Aldape’s law office and the Los Angeles Housing Law Project had been listed under the same address.

For example, in the City of Los Angeles Compliance List For Equal Benefits Ordinance database, the Law Offices of Roberto H. Aldape and the Los Angeles Housing Law Project share the same address: 1125 West 6th Street, Los Angeles, CA 90017 (EXHIBIT 1 and EXHIBIT 2).

In addition, various websites also convey the same information: the Law Offices of Roberto H. Aldape and the Los Angeles Housing Law Project had the same address and conducted their business from the same physical location (EXHIBIT 3 and EXHIBIT 4).

Mr. Aldape’s relationship with the Los Angeles Housing Law Project is a murky one at best and raises numerous ethical questions: What exactly was his relationship with the Los Angeles Housing Law Project that he was allowed to operate his own law practice from the same address?

Were the Law Offices of Roberto H. Aldape and the Los Angeles Housing Law Project actually the same entity and different in name only?

Did the Law Offices of Roberto H. Aldape at one point in time morph into the Los Angeles Housing Law Project, or was it the other way around?

Were these two business names used interchangeably, depending on convenience and expediency?

Did Mr. Aldape conduct a separate law practice while simultaneously working with the Los Angeles Housing Law Project? If so, how many of his private practice cases originated from the Los Angeles Housing Law Project?

Another potential red flag arises from the fact that the name of the Los Angeles Housing Law Project cannot be found in the California Attorney General’s database listing of nonprofit organizations. Interestingly enough, among the five REAP outreach contractors, the Los Angeles Housing Law Project is the only one that is not listed in this database.

All nonprofit groups are under strict registration and annual reporting requirements, and as a nonprofit corporation, the Los Angeles Housing Law Project cannot be exempted from such rules.

It remains to be seen whether this is an omission by the California Attorney General’s Office or the Los Angeles Housing Law Project. If a nonprofit corporation fails to register, the nonprofit is in violation of the California Nonprofit Integrity Act.

A failure to register would also violate the City of Los Angeles contract provisions, where a “good standing with any regulatory agencies” is one of the requirements.

It is unquestionable that, at the very least, Mr. Aldape has had a pivotal business relationship with the Los Angeles Housing Law Project.

The idea that somehow he could be impartial enough to oversee an objective and fair investigation of the Los Angeles Housing Law Project is laughable, if not outright illegal. Should Mr. Aldape nominally recuse himself from this investigation, it would be equally questionable to assume that any of his subordinates would be brave enough to come up with evidence potentially incriminating the Los Angeles Housing Law Project.

Needless to say, those brave and ethical enough to do so would incur Mr. Aldape’s full wrath and fury, while having no place to hide.

After the expiration of the current REAP contracts, a new RFP will go out inviting submission of proposals for outreach services. The Los Angeles Housing Law Project will undoubtedly be one of the bidding contractors. Again, it would strain credulity to assume that anyone inside the LAHD could be in a position to objectively evaluate the proposals and act contrary to Mr. Aldape’s interests.

The Law Offices of Roberto H. Aldape/Los Angeles Housing Law Project arrangement has been a winning one for Roberto H. Aldape. He has managed to parley this curious business deal into a high-paying government job, thus completing the circle fully and gaming the system in its entirety.

The losers in all these, however, have been the taxpayers of Los Angeles and the employees of the LAHD. The former have been kept in the dark and are clueless about the machinations taking place inside LAHD; the latter, while mostly aware of these shenanigans, are too cowed and helpless to do anything about them.

The overwhelming majority of the LAHD employees conduct themselves in an ethical manner day after day, yet over the years this department has been marred by allegations of impropriety and conflict.

And almost without exception, high ranking members of the LAHD have been the source of these transgressions. Time and again, the LAHD has proven that it is not capable of self-policing, and that its internal control mechanisms do not work.

An investigation of the Rent Escrow Account Program is long overdue. The program desperately needs bright sunlight to be shone on its numerous dark corners. We hope the City Council will take the lead on this matter.

[Will try to post the PDF attachment of Exhibits 1-4, documenting how Mr. "Two Hats" has been using both addresses as referenced above. But you can clearly see both addresses being used in the Exhibits.]