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The Saratogian Newsroom blog, complete with thoughts and commentary from our newsroom staff and regular posts on happenings around town.

Monday, April 16


John Kaufmann, the man who is responsible for blowing the Saratoga Springs Housing Authority story wide open from the beginning, has been feeding local newspapers and television news stations (including this one) with information on the SSHA for months.

Over the weekend, as every reporter in this area covering the SSHA sifted through the 55 page document from HUD to Sen. Chuck Grassley (available within this story), Kaufmann did his own sifting.

I agreed to let him post his analysis of the information on my blog as a guest blogger. This is a first for me, but given how much Kaufmann has driven this story in every newspaper in the area (with one notable exception) I decided to let him do it. I have personally used Kaufmann's information as a starting point, but he has never made an appearance in one of my stories

Below is Kaufmann's post. I have not changed any of it nor have I confirmed anything within it. Take it as you will.

There are a number of interesting things revealed by the HUD letter and supporting documents that was sent to Grassley:

1. On December 8, 2011 for some reason the Authority bookkeeper wrote to HUD rather than Ed or G. Hawthorne who heads maintenance on the issue of Bed Bugs. In her memo she tells HUD about making the steamers available to the tenants and asks “…BUT legally – are we responsible for more? Between the video and the steamer, are we covered? We thought we were until we read HUD 2011-20 – where it sounds like we might have to do more…BUT this following (sic) paragraph taken from the notice sounds like HUD will pay for it???” Consider this paragraph carefully in light of what subsequently occurred. It appears that they are trying to do is little as possible. She wants to know if they have “covered” themselves by just providing the steamers to the tenants and inquires whether they are legally obligated to do more. The HUD person then refers the issue to the in house engineer. These were not the kind of questions one would ask if one’s priority was the extermination of bed bugs.

2. The engineer advises them that they are indeed obligated to fully address the problem. The engineer goes on to express concern about the danger of having tenants using steamers and expresses grave reservations about the effectiveness of this approach. Further on she advises that “Most other housing authorities I speak to are covering the costs of professional exterminators so long as tenants follow their requirements of the
extermination…” Consider again that this memo to SSHA is dated on December 8.

3. On December 20 (you can see the video in the archive of city council meetings) Ed Spychalski tells the council that “we are all over this.” This is now about two weeks later and he has done nothing in terms of following HUD’s advice to hire a professional exterminator. In fact, it is not until John Frank drags the board in front of the city council on January 31, 2012 that they relent and hire an exterminator.

4. In another supporting document, Spychalski is quoted in the Times Union as saying that HUD would not let them properly address the bed bug issue. He told the same thing to Mark Mulholland in a channel 13 interview. The HUD cover letter specifically states that this is untrue and of course the supporting memos prove this.

5. Senator Grassley asked for the names, titles, and any salaries of the board members of any affiliated not-for-profits related to the Saratoga Springs Housing Authority. He was inquiring about the Saratoga Affordable Housing Group. In a very carefully crafted response the HUD letter says “Enclosed with this letter are copies of the latest available SSHA financial statements, which do not indicate that SSHA has any nonprofit affiliates.” Up until this last week the Saratoga Affordable Housing Group had as its board president, Ed Spychalski and its secretary was Gerard Hawthorn (head of maintenance for SSHA) . It currently has as its treasurer Dennis Brunelle. Sister Charla Cummins serves on both the SSHA and the SAHG. According to the new board president, Rocky Ferraro, the Saratoga Affordable Housing Group has no staff and relies entirely on the Saratoga Springs Housing Authority for its operation. An interesting question to ask is why HUD does not want to acknowledge the existence of SAHG. See item #6 on this.

6. As a private not-for-profit organization, the Saratoga Affordable Housing Group is not covered under the New York State Open Meetings Law and private citizens cannot have access to its documents under the Freedom of Information law. It has no traditional funding source over seeing it. The SAHG receives money from tenant rents and subsidies under the Federal Section 8 program which is administered by the Saratoga Springs Housing Authority. This kind of set up is ripe for abuse and in there are a number of national scandals (most recently LA and Philadelphia) where this has happened. Given the indifference to oversight that Mr. Spychalski’s boards exercise, this has the potential for becoming a convenient slush fund.

7. Most of the release from HUD is made up of the 2011 audit by Dickinson & Company which is a CPA firm with offices in Saratoga Springs and Greenwich. They have been doing the audits for the Saratoga Springs Housing Authority for many years. “Best Practices” used by many non-profits call for routinely changing auditors. The reason for this is that since the non-profit gets to choose its auditors and the fees can be quite substantial, there is the real danger of the relationship between the auditor and the non-profit too becoming too cozy.

8. I ran a non-profit for many years so I am familiar with such audits. I was struck by two things in reading it. First, how boiler plate it was. I highly suspect that if you had access to the previous years’ audits, with the exception of the tables for the expenditures and income and the dates, they would probably read exactly the same. The second and related thing is that there were no audit exceptions. This is a term for areas of problems that need improvement or correction. In the sixteen years I ran the agency I was associated with, I never had an audit that did have at least one exception and having served on other non-profit boards and reviewed audits, having a totally “clean” audit is highly unusual.

9. I believe that the purpose of including this audit by HUD was for filler to make the response seem extensive, to imply that their finances are proper, and to support the fiction that HUD does not know that the Saratoga Affordable Housing Group exists.

10. We know a number of things that should have come up with exceptions or at least questions in the audit. According to FOIL requests I have submitted, there is no record of the SSHA as reporting to the Internal Revenue Service the taxable benefit of the use of an Authority vehicle by the executive editor for his private use. We know that the executive director had his brother repair at least one Authority vehicle on a regular basis. We know that the board chairperson attended conferences in other states that were for four days but that the Authority paid for his room and per diem food expenses for a week. HUD strictly forbids its authorities from subsidizing operations of other entities. I foiled for any documents showing the use of HUD paid staff on work at the Saratoga Affordable Housing Authority. I received copies of the management agreements between SSHA and SAHG along with a stack of work orders for work needed in SAHG apartments. These work orders included no details as to the time the staff devoted to this work nor the materials used to do the work. There were no records as to general maintenance work such as mowing, snow removal, etc. Such records would be essential for insuring that SAHG paid SSHA for the work done on its behalf. In order to be safe, having received these documents, I followed up with SSHA asking if these were all the records they had and they confirmed that they were. I find it very troubling that their record keeping is clearly insufficient and that the auditing firm failed to note this.

11. In a memo from the bookkeeper to Ed Spychalski, she says: “Not that anyone from the city would understand, but as you would understand, the bulk of our travel is booked to the central office with non-federal funds.” She underestimates the people in this city and she surely underestimates the auditors from the Controllers’ office. They think they are being very smart by getting around federal/HUD oversight by using local money which comes from the rent paid by the tenants. This could be interpreted that they knew that the large amount of travel they were doing was excessive and so they thought that by using “non-federal” money they would get around any limits. I will leave it to the auditors from the New York State Controller’s office whether using non-federal money somehow limits their accountability for excessive travel.

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Anonymous Anonymous said...

Lucien! What a mistake this was. Does anyone check facts or grammar whn it comes to this guy? Controllers office? Last time I knew it was Comptrollers office! He doesn't even have the right people involved in those memos. They ere not in house memos that he refers to. Meaning he has the wrong on that second one he mentions. He also left out the part that he ran a non profit. He ran a non profit into the ground is wat he meant to say. He caused so many problems at EOC that Dennis Brunelle had to come in and straighten out the mess he made. He also attacked Brunelle at a meeting about the Anderson project to bring in affordable housing years back. Witnesses had to restrain Kauffman. Brunelle wanted affordable housing and Kauffman wa against it. Just like he is against the new affordable housing now. Not a coincidence! This so called advocate of the poor should be looked into before he is given free reign of the local paper to squash much hard work to help poor people. Even the Adirondack trust Bank had problems with Kauffman years back and they to have been a big advocate to bring in the latest affordable housing with SAHG s their lead agency. Lucien it's time to check this cohort of yours before he does real damage to helpers of the poor.

April 16, 2012 at 4:52 PM 
Anonymous Anonymous said...

I would like to know What Mr. Kauffman's motivation is. He has never made a statement concerning the tenants quality of life so obviously this is a personal issue. Who is he after and why?? Why wasn't that question brought up. He has nothing to gain and I refuse to believe he is a do-gooder. Is it Dennis?? Is it Ed?? Is it the Mayor??? If he was truly concerned abotu tax dollars he would be attacking the State and federal Government as well. If his motivation could come to light than we might really know what drives this man. he came out of the shaows and will return to the shadows. Is it the sign on the building???

April 16, 2012 at 7:46 PM 
Anonymous Anonymous said...

Guttless to post that comment Lucien? You to are part of the problem this town.

April 16, 2012 at 8:14 PM 
Anonymous Anonymous said...

If I am reading this correctly Mr. Kauffman in Sections 5 and 6 is accusing HUD of being complicit to fraud by stating HUD memo reflects no financial dealings with another non-profit are apparent in the financial statements. Tha's an interesting accusation.

April 17, 2012 at 6:35 AM 
Anonymous Anonymous said...

Based on review of date of 2012 Council Meetings there was no meeting refenced by Mr. Kauffman on January 31, 2012. Looks like the time line has been generated without regard to fact.

April 17, 2012 at 6:40 AM 
Blogger Lucian said...

To Anonymous at 8:14 p.m., if you are referring to the comment that I did not post that simply said "John Kaufmann is a_____." That space wasn't blank, and while not profanity, I still didn't think it had a place on this site.

And as for the last Anonymous who attacks Kaufmann's grammar, you are welcome to do so, but my name is spelled Lucian.

April 17, 2012 at 3:51 PM 
Anonymous Anonymous said...

Why the constant atacks on the SSHA?? This is old news and has been discussed three times at Council meetings. Now the vehicle service again. How many times do we need to go over this. It was three visits while Mr. Spykalsky lived in Watervliet. There was a waiver from HUD. The information has been foiled time and time again and has been mentioned and verified on another blog. It has been looked into by the Board and no wrong doing was found. Are we lost for nes articles here??

April 19, 2012 at 1:01 AM 
Anonymous Anonymous said...

John Kauffman's gang of his wife and Remiga Foy (the rabble rousers)as you once called them, will not let this situation allowed to run it's proper course. They never know when it's time to end the drama. The bed bugs have been eliminated, the Mayor has put yet another one of his appointments on the Board and we now know that the City should do it's job and use their oversight so a situation like what happened never gets to the point that these have. John, Bonnie and Remiga, it is time to let it go.

April 19, 2012 at 4:21 PM 
Anonymous Anonymous said...

1:01AM More than 3 visits to J&M and continued into 2011-last one was Dec 2011 long after Ed had moved from Watrervliet. Shall we go into theabsurdity of leaving off a vehicle at closing time and picking it up in the morning as ed describes? Or does his brother run a 24/7 operation?Or is his brother working overtime on these vehicles and does that account for the pricey bills? ANd the waiver from HUD--no one seems to be able to find it--not HUD nor the SSHA. Sorry I missed the time the Board looked into this. Doyou have the minutes of the meeting when this was discussed??

As to the Adirondack trust reference was that the time they exercised the baloon payment clause in mortgages that they had assured customers would never be exercised? I think a number of people in the community were put in precarious positions by this. Adirondacktrust backed off as I recall after a number of community actions in which Kaufmann was fortunately involved.

April 19, 2012 at 10:18 PM 
Anonymous Anonymous said...

4/17 at 6:40AM Look under SSHA Workshop minuteson the city site. You'll see the workshop was held on 1/31. This was not a regular City Council meeting. Check your facts.

April 20, 2012 at 12:23 PM 

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