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Iowa senator seeks probe of Saratoga Springs Housing Authority

Saturday, February 18, 2012
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— Problems at the Saratoga Springs Housing Authority have attracted national attention, with a U.S. senator asking the federal government to investigate allegations of irregularities in salaries, conflicts of interest and possible fraud.

Sen. Charles E. Grassley, R-Iowa, said in a letter to U.S. Department of Housing and Urban Development Secretary Shaun Donovan this week he wants a full investigation after reading media reports about a failure by managers to deal promptly with a bedbug problem at Stonequist Apartments and generous pay increases given to Housing Authority Executive Director Edward Spychalski, among other issues.

“While Mr. Spychalski’s salary was doubling year after year, his board of directors was apparently not providing much oversight,” Grassley said in his Feb. 16 letter.

Spychalski was hired in 2006 at a salary of $74,777 and is currently paid nearly $152,000.

“Instead, members of the board and Mr. Spychalski reportedly flew around the country on the taxpayer’s dime,” he wrote.

He quoted newspaper reports that Spychalski and board chairman Dennis Brunelle charged taxpayers for trips to Las Vegas, New Orleans and Florida, billing the Housing Authority nearly $32,000 in 2011 for travel, lodging and training costs.

Grassley is a longtime senator who is a ranking member of the Senate Judiciary Committee. A profile of Grassley on his web page says that his “whistle blower laws have become the federal government’s number one anti-fraud tool and returned $22 billion to the Treasury that would otherwise have been lost to fraud.”

“Sen. Grassley’s overall goal is to ensure that HUD conducts adequate oversight of the local housing authorities around the country and that local housing authority boards of directors do their job of performing good governance and stewardship of tax dollars,” said Jill Gerber, a spokeswoman in the senator’s Washington office.

“I invite the senator to visit the housing authority. We have nothing to hide,” Spychalski said Friday.

He said the authority has been a “high performer for years. Our finances are in order.”

The Saratoga Springs Housing Authority is responsible for 377 federally subsidized living units — the 176-unit Stonequist Apartments on South Federal Street and a block of apartments for low-income residents on Jefferson and Vanderbilt terraces.

Lisa M. Pugliese, HUD’s administrator of public housing for 48 counties in New York state, said Friday she has seen Grassley’s letter. Her office is in Buffalo.

“This office in conjunction with [HUD] headquarters is looking into all the issues,” she said.

Pugliese said her office has already investigated the Saratoga Springs Housing Authority’s finances and found that no federal dollars have been misappropriated by the authority.

In fact, she said, the authority was “one of the high performers” in the state.

Pugliese said Grassley’s letter was addressed to HUD headquarters in Washington, and that office will respond to his requests.

In his letter, Grassley mentions housing authority problems in other states, including Pennsylvania, California and Massachusetts. He cites problems in Chelsea, Mass., where the housing authority was forced into receivership because of financial problems.

The Chelsea Housing Authority “has been rocked by revelations that former director Michael McLaughlin was receiving a $360,000 a year salary when it officially listed the salary at $160,000,” said a Nov. 17, 2011, story in the Chelsea Record newspaper.

The Saratoga Springs Housing Authority’s board of commissioners agreed this week to review Spychalski’s compensation. The commissioners had strongly defending his pay increases in recent months.

“Let them do the study,” Spychalski said about his salary review.

 
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