PHA diverted landlord fees to a nonprofit with a lobbying fund

Since early 2008, the Philadelphia Housing Authority has demanded that hundreds of landlords participating in a subsidized housing program pay $200 each to an affiliated nonprofit agency - the Pennsylvania Institute for Affordable Housing Professionals.

The fee was supposed to cover the cost of a mandatory one-day course on being a good landlord.

But apparently none of the $300,000 paid by 1,500 landlords was spent on instruction, documents and interviews show.

Instead, the institute deposited half the money in a lobbying fund and put the rest in a "general account," which was drawn on to pay for PHA employee outings and a variety of other activities.

Federal prosecutors have subpoenaed the institute's records as part of a wide-ranging investigation of PHA's operations.

Donna White, a spokeswoman for the U.S. Department of Housing and Urban Development, said that under federal rules, local housing authorities cannot impose such course fees on landlords.

HUD has its own requirements for property owners participating in the Housing Choice Voucher program - once known as Section 8 - which local authorities cannot revise, she said.

"Housing authorities do not have the authority to create additional criteria that an owner must meet or satisfy in order to participate," she said.

Susan J. Popkin, a housing specialist with the Washington-based Urban Institute, was more blunt.

"That's totally illegal," Popkin said of the payments.

Landlords say the courses were held, and sometimes were helpful. The one-day sessions were taught by a reputable firm, the Philadelphia-area chapter of the Institute of Real Estate Management.

Instructor Marlene M. Scheibe said there were typically 25 to 30 people in each of her classes. Scheibe said PHA had a contract with the organization.

The real estate group's president, Gregory Carbone, said the organization was always paid with checks from PHA. That was confirmed by PHA spokeswoman Nichole Tillman. She said that although the landlords' checks went to the nonprofit, PHA always paid for the courses, which were offered about twice a month.

The Pennsylvania Institute for Affordable Housing Professionals was set up under former PHA executive director Carl R. Greene, who was fired last month by the agency board for secretly settling three sexual-harassment claims filed against him. Two others are pending.

Greene's attorney said last week that his client was not commenting to the media.

The Housing Choice voucher program allows low-income families, the elderly, and the disabled to find their own housing in the private market. The federal subsidy is paid to the owner of either single-family homes or apartments. In Philadelphia, about 15,000 housing units are subsidized.

The written goals of the Pennsylvania Institute for Affordable Housing Professionals were to provide training and support for public-housing employees and lobbying on behalf of public-housing programs.

Apart from the landlord fees, the nonprofit also collected $2.10 a week through a payroll deduction from about 200 nonunion PHA employees. Those contributions totaled about $100,000, PHA says.

Of the total $400,000 collected by the institute, about $300,000 remains unspent. Most of the money spent went to a variety of morale-boosting and social events for PHA employees. An exact accounting is not available.

PHA first began requiring the course in 2003, and initially told landlords to write checks directly to PHA.

But then, PHA changed its rules in 2008 and told property owners to pay the institute.

Tillman said Friday that she was unable to determine who ordered that the money be diverted to the nonprofit group. She said only that "it was a PHA management decision."

PHA stopped the arrangement in August, she said.

Tillman said the course remains required, but landlords will now send their checks to PHA.

The institute - which has halted its activities - has more than $300,000 in its bank accounts, records show.

It was run by PHA executives and associates of Greene. The president, Carolyn Carter, is a PHA assistant executive director. Tillman said Carter would not be available for questions.

The vice president, Asia Coney, also holds a $102,000-a-year job running another PHA-affiliated nonprofit, Tenant Support Services Inc.

Coney, a close ally of Greene, did not respond to requests for comment. TSSI is also under investigation, and federal prosecutors have subpoenaed Coney's e-mail records.

Former PHA spokesman Kirk Dorn, who was secretary of the Institute of Affordable Housing Professionals until January 2009, said he was not aware that the $200 fee was going directly to the institute.

"I was not asked to sign off on the change," Dorn said Friday. "Obviously, that change was made without the benefit of [an institute board] resolution or action."

When the board may have met to approve that change is unclear. Although the nonprofit's bylaws require annual board meetings, Dorn said he did not recall that happening.

"We did not meet regularly," he said.

By the time Dorn left PHA, landlords had already paid nearly $100,000 in fees to the institute. Dorn said he believed "the change was ill-advised. . . . I really don't understand why the change was made."

Dorn said HUD had been notified in a 2003 report that PHA was charging the $200 and did not object.

PHA has provided documents showing that about $160,400 of the money went to the "lobby account" and an additional $170,000 went to the "general account." Tillman said the lobbying money had never been spent.

Besides the landlords, two unions contributed money to the institute's general fund.

The Metropolitan Regional Council of Carpenters gave $3,000 on Dec. 18. The institute records included a "membership application" for the institute in the name of Edward Coryell, the union's business manager.

Coryell did not respond to a request for comment.

That same month, the institute got a $7,500 check from the "Job Recovery Fund" of Local 98 of the International Brotherhood of Electrical Workers, records show.

Local 98 said it was asked to contribute the $7,500, presumably to be used for Christmas gifts for impoverished children, a spokesman said.

"To the best of our recollection, and given the December date of the check, we believe the money was intended to buy Christmas gifts for the children of PHA tenants," the spokesman, Frank Keel, said.

Landlords, meanwhile, gave mixed reviews to the usefulness of the $200 training program.

Evelyn Simpson, 74, who rents an apartment in Mount Airy under Housing Choice, attended a session in August and said she "learned a lot of things I didn't know before." She said it was worth $200.

But when told Friday that PHA records showed that her $200 check had been deposited into a lobbying fund, Simpson said, "That's not right."

Howard Dunetz, who took the training class this summer and now is renting a house under the Section 8 program, said he got little from the course.

His $200 also went into the lobbying fund, records show.

"It doesn't surprise me," Dunetz said. "It's a $200 tax. It's a way of getting $200 from landlords."