Philadelphia Housing Authority settlement in 2004 skirted agency rules, Street says

The Philadelphia Housing Authority settled a sexual-harassment claim against Executive Director Carl R. Greene in 2004 by contributing $99,000 to the payout, just under the ceiling that would have required notifying the board, according to its chairman, former Mayor John F. Street.

The arrangement was made with an insurance carrier for what ended up being a $200,000 settlement. It was one of four settlements reached with women whose allegations are at the center of the troubles facing Greene and the housing agency.

Street, serving a second term as PHA board chairman, said the policy was to notify board members of any payment over $100,000. In that 2004 case, the insurance carrier contributed $101,000 and the PHA paid the balance.

"I think it may very well have been a complete and total violation of the board regulations," Street said. "Someone in the authority took the position that it therefore did not have to come to the board."

He declined to say who might have made that decision, or whether it would be cause for dismissal. In the sexual-harassment cases, the total of payments made or under negotiation is approaching $900,000.

How the agency negotiated the payments - and who was involved in the decisions - has not been revealed. The PHA's insurance contract has a $150,000 deductible for claims against the executive director.

Street shed some light on the process Thursday, after the board suspended Greene. He said the agency's practice apparently was to pay the deductibles by reimbursing the insurance carrier, rather than by making payments to the person receiving the money.

"The authority would write a check to the insurance carrier, as opposed to writing a check to plaintiffs. This may have been a way of getting around the board regulation," he said.

The harassment claims and reports of other questionable actions by agency staff have prompted a federal investigation involving the U.S. Attorney's Office and others.

The PHA was served with a subpoena Thursday requesting the preservation of a wide range of internal documents. A copy obtained Friday by The Inquirer specifically cites the e-mails of the agency's public safety director, Richard Zappile.

Zappile has publicly acknowledged that he routinely asked vendors and staff to attend and pay for dinners honoring Greene.

In the four sexual-harassment complaints filed against Greene with the Pennsylvania Human Relations Commission, two women received payments in 2004; one got $200,000 and the other $98,000, which would not have required board approval.

In 2008, a third woman received $350,000. The fourth case is near settlement for $250,000.

The PHA's insurer is the Housing Authority Insurance Group, a nonprofit in Connecticut that insures housing authorities throughout the nation. A spokesman for the nonprofit could not be reached for comment late Friday.

Greene's attorney, Clifford E. Haines, said he was unable to comment because he was not involved in the sexual-harassment claims. Greene is receiving medical treatment out of state and is unavailable, Haines said.

"I've tried to keep my conversation with Carl about what's going on here to a minimum," Haines said. "When you are undergoing medical treatment, responding to what is an unending stream of bullets . . . doesn't help you get better."

PHA retained outside attorneys to handle the sexual-harassment cases. In the 2004 cases, it hired Mark J. Foley of Cozen O'Connor, according to PHA documents. He did not reply to telephone and e-mail messages left at his office late Friday afternoon.

In the 2008 case, Foley's co-counsel was Elizabeth A. Malloy of Buchanan Ingersoll.

In the most recent case, the attorneys for PHA are Malloy and Leigh Poltrock, a former general counsel with the housing agency and currently with the firm Cohen & Grigsby in Pittsburgh, according to the biography listed on the firm's website.

Kirk Dorn, a longtime PHA spokesman, said in an e-mail that he had no information about how the $200,000 settlement in 2004 was handled.

Shelley James, a lawyer and Greene's chief of staff, was not available for comment, a spokeswoman said.

Frederick Pasour is the agency's current general counsel.