Tuesday, March 19, 2013

Legal conflict versus defensible action? HHA legal contract issue burns...


The HHA Chairman Jake Stuiver requested as allowed under law, an analysis of the awarding of its legal counsel contract last month to the Hoboken Corporation Counsel Melissa Longo.  The memo, subject of much discussion but no public examination is released for the very first time here on MSV.

HHA counsel Charlie Daglian submitted his own memo in reply.  Both are included below.

           City of Hoboken
Office of the Corporation Counsel

To: Jake Stuvier, Chairman, Hoboken Housing Authority Board of Commissioners, Hoboken Housing Authority Board of Commissioners

From: Mellissa L. Longo, Esq., Corporation Counsel, City of Hoboken
March 19, 2013
Hoboken Housing Authority – Meeting of February 7, 2013
We are providing this legal advice pursuant to N.J.S.A. 40A:12A-22(l), which allows housing authorities to “call upon the chief law officers of the municipality, as the case may be, or may employ its own counsel and legal staff.” 

Our office has reviewed the transcripts from the Thursday, February 7, 2013 special meeting (the “Meeting”) of the Hoboken Housing Authority (the “Authority”).  According to the public notice, the new business listed on the agenda is a resolution to award a contract for general legal services for the Authority.  Charles P. Daglian, one of four attorneys/law firms who responded to a request for proposals to provide legal services for the Authority, provided legal services during the Meeting. The first page of the transcript lists Mr. Daglian as “Attorney for the Board.” From our review of the Meeting transcripts, there were two resolutions presented for the commissioners’ consideration; one resolution was to appoint Florio, Perrucci, Steinhardt & Fader, LLC as general counsel, and the second resolution would reappoint Mr. Daglian as general counsel.

From our review of the transcript, Mr. Daglian provided legal advice throughout the Meeting, including on the issue of whether the Board of Commissioners or the Executive Director was the appointing authority for the Authority. Mr. Daglian also discussed information presumably contained in his request for proposal, including the fact that he lowered his price so that he could continue working for the Authority. At no time during the Meeting did Mr. Daglian recuse himself or state on the record that he had a potential conflict of interest.

The Rules of Professional Conduct, specifically RPC 1.7(a)(2), state that a concurrent conflict of interest arises any time a lawyer’s representation of a client creates a “significant risk that the representation of one . . .client[s] will be materially limited . . . by a personal interest of the lawyer.”  Public entities cannot waive such a conflict. See RPC 1.7(b)(1). Mr. Daglian was working as legal counsel for the Authority and his continued representation was among the subjects raised during the Meeting.  An argument can be made that there is a significant risk his representation of the Authority during the Meeting was limited by his interest in remaining the Authority’s attorney.  As noted previously, Mr. Daglian advocated for himself to be reappointed as legal counsel, including discussing his pricing under the request for proposal. 

Because the concurrent conflict of interest existed at the time that the contracts for legal services were discussed at the Meeting, at a minimum, the vote from the Meeting should be invalidated, and the issue should be reconsidered at another Authority meeting.  In addition, when the Authority discusses the contracts for general legal services at its next meeting, Mr. Daglian should not serve as attorney for the Board when the issue is discussed.  He must recuse himself as the Board’s attorney, and the Board should have substitute counsel available when this issue is discussed.

          The next inquiry was whether the Motion to Reconsider was properly brought, and if no, was the revote to reappoint Mr. Daglian valid.  The Amended By-Laws of the Housing Authority of the City of Hoboken, New Jersey state, at Article V, that “Robert’s Rules of Order, Revised, shall be the final authority on all questions of procedure and parliamentary law not covered by the By-Laws of the Authority.”  Furthermore, the procedure for motions, including without limitation motions to reconsider, are not otherwise discussed in the bylaws.  Therefore, a motion to reconsider by the Housing Authority is subject to Robert’s Rules of Order, Revised. 

        Robert’s Rules of Order, Revised, Article VI Section 36(a) states that a motion to reconsider must be made by a member who was on the prevailing side of the original vote on the matter to be reconsidered.  As such, in the present instance, since the prevailing side was the Nay’s, only Commissioners Mello, Burrell, and Stuiver had the authority to move for reconsideration.  Contrary to Robert’s Rules requirements for a motion for reconsideration, Commissioner Rodriguez, a member on the non-prevailing side made the motion for reconsideration.  Therefore, the motion to reconsider the contract was contrary to the proper procedure under Robert’s Rules of Order, Article VI Section 36(a).

      Consequently, the motion to reconsider the contract was in violation of Robert’s Rules of Order and the By-Laws of the Housing Authority. 

     Should you have any questions or concerns in this regard, certainly feel free to contact me.  Thank you in advance for your anticipated cooperation.


Mr. Charles Daglian replied:

MEMORANDUM TO: Carmelo Garcia, Executive Director

FROM: Charles P. Daglian, Esq.

DATE: February 22, 2013

RE: Response to opinion issued by Mellissa L. Longo, Corporation Counsel City of Hoboken
You have requested that I review the memo dated February 13, 2013 in which Chairman Stuiver had requested Mellissa Longo, who is the attorney for the City of Hoboken, her opinion on the Housing Authority of the City of Hoboken’s meeting of February 7, 2013.

First, while I certainly respect the right of Chairman Stuiver to request legal assistance from any source, it is clear from N.J.S.A.40A:12A-22(l), that a Housing Authority may call upon a chief officer of the municipality for its legal services or may employ its own counsel. I would respectfully suggest to the Chairman that this is an either/or situation and not where both can render legal opinions to the Authority. The Statute contemplates that a small Authority may not have the funds to retain their own attorney and may utilize the municipality’s attorney for its legal advise, otherwise it retains its’ own legal counsel. A Housing Authority is a completely autonomous agency and the City has no direct authority over the agency or its policies. The City appoints the Commissioners and the Commissioners are the sole authority as to policy.

However, I would still appreciate the opportunity to respond to her memo.

The issue she raises that as one of the four applicants for the position of legal counsel, I should have not given any opinion as to the legal aspects of the Procurement Policy for the Hoboken Housing Authority during that meeting. She refers to Professional Conduct Rule 1-1.7. The Chairman and Board should know that Rule is when an attorney represents more than one client. There is an aspect of the Rule that deals with a personal interest of the lawyer but the Rule states that there must be a significant risk that the representation of one or more clients will be materially limited by the personal interest of the lawyer. Clearly, if I advised the Board that they had to vote for my contract, that would be a conflict of interest but as explained below, there was no significant risks that my representation would be materially limited by my statements to the Commissioners and therefore, there is no conflict of interest under this Rule.

As you and the Board are fully aware, this issue of appointment of legal counsel was on the agenda for two prior meetings. In each of those meetings, I, by necessity, was present but did not participate in the discussion. In this meeting however, there were two instances in which I was requested to speak and I only answered the question posed.

Memorandum February 22, 2013 page -2-
Ms. Longo states that I discussed the information contained in my Request for Proposal including the fact that I had lowered my proposed fee. A review of the transcript, proves that this statement is erroneous. The Chairman requested that I advise the Board whether I had been overcharging the Hoboken Housing Authority in prior years since I lowered my fee from $60,000 per year to $45,000 per year. My response was based upon my past practice and not advocating my proposal. In addition, I am obligated, based upon my position as Hoboken Housing Authority Corporation Counsel, to respond to a question requested directly by the Chairman or any other Commissioner.

That was the same basis for my discussion of the Procurement Policy since it was a direct question by Commissioner Lincoln. He requested that I give an opinion as the Procurement Policy of the Hoboken Housing Authority and who was the appointing authority. Again, I was obligated to respond, but, what is not being addressed by Ms. Longo’s opinion letter was the I was not discussing the specific Procurement Policy of the Hoboken Housing Authority as it relates to the appointment of legal counsel. Commissioner Lincoln, on pages 50 and 51 of the transcript, clearly was discussing the overall Procurement Policy of the Hoboken Housing Authority. This has been the issue for the past six months. The appointment of legal counsel is minor compared to the other issues that will result from the settlement of that question. There has been the issue of the appointments of an auditor, public relations specialist, web master, special counsel to the Board, engineers to the Board and all other consultants to the Board. There also is the open discussion as to the creation of an Deputy Executive Director and the appointment and management of all Hoboken Housing Authority employees. My answer to Commissioner Lincoln was my legal opinion as to the Procurement Policy and the appointing authority of the Hoboken Housing Authority. That is the central legal issue that needed to be addressed and as Corporation Counsel to the Chairman and Board, I was obligated to respond. My response was for the issue of the overall Procurement Policy. At no time in my response did I advise that the Board must follow the recommendation of Executive Director Garcia. In fact, on page 54 and 55 of the transcript, I clearly advised the Board that they had the power to reject any appointment, including mine.

If the Housing Authority followed Ms. Longo’s opinion as to potential conflicts of interest, no legal business would be conducted. As I am sure Ms. Longo would advise you, many times attorneys must answer questions that would have a direct impact on their positions and financial dealings with the governing body. Any time Ms. Longo issues an opinion that is favorable to the Mayor and is disputed by the City Council, someone could point to a conflict of interest since she is appointed by the Mayor and she is only giving her legal opinion because she is afraid of not being reappointed by the Mayor. Another example that illustrates this point is when an attorney advocates litigation to a governing body. It could be stated that advocating litigation was only based on the fact that the attorney would profit from the extra legal billings that would be generated by that litigation.

The problem that has developed at Hoboken Housing Authority meetings, is that the messenger is being questioned because the message is a controversial one. Interestingly, in Ms. Longo’s opinion, she never addresses the fundamental question of who is the appointing authority for the Hoboken Housing Authority. No matter who gives that opinion, that is the issue that must be resolved. I would submit to the Chairman and the Board that if my opinion is wrong, then that would be addressed by legal counsel of the Department of Housing and Urban Development. It is my understanding that at the request of the Chairman and Executive Director and pursuant to the Rules and Regulations of HUD, that before the contract for legal services can be signed, it is being reviewed by legal counsel for HUD. It is my further understanding that review is ongoing at the present time.

Memorandum February 22, 2013 page -3-
As the funding authority, HUD has the ultimate power over the policy and procedures of a Housing Authority. This is based on Federal Law and Regulation. The decision of HUD as to who is the appointing authority will have the legal effect of settling this issue.
I would respectfully request that this memo be distributed to the Chairman and Board of Commissioners. 

Talking Ed Note: On the matter of the HHA counsel contract, the process to rebid will commence anew, begun almost eight months ago for the fourth time.

The matter was settled by the federal agency with oversight authority, HUD.  It deemed the awarding of the HHA counsel contract to Mr. Daglian as legally flawed.  No local editors even addressed this and other serious problems outlined in the process as detailed extensively in HUD's letter. On the contrary they sought to portray the differences in awarding the counsel contract as nothing more than competing political factions.  

This is a serious breach of journalistic norms.  That a major federal agency's scathing assessments over a local institution the size and scope of the HHA was given but scant to no attention in the local media is a serious betrayal of the public trust.  MSV is exempting the Jersey Journal because it covers Hoboken part time.  Hoboken Patch's stories have been cartoonish in its bias and the editors of the Hudson Reporter, Caren Matzner and Gene Ritchings sat on the HUD memo during the week, flagrantly ignoring the clearcut seriousness of its contents.

This is clearly the narrative preferred by HHA Executive Director Carmelo Garcia who has described the serious flaws in the HHA procurement process as nothing more than simply "perfecting" its operations.  That local editors allow such slipshod antics with no scrutiny whatsoever is absolutely deplorable.

A journalistic critique is incomplete without mentioning a vulgar screed in the form of an anonymous letter in the Old Guard rag last weekend.  This dog whistle at the Hudson Reporter raises serious questions how an anonymous letter headlined and reeking with an out and out anti-Semitic punchline was published.  We're not even sure the Beth Mason sponsored Hoboken411 would dare venture this deep into the gutter and that's saying something.

The barbarians are truly at the gates.  Without a vigilant reform community led by its de facto leader in the form of Mayor Dawn Zimmer, this town would descend to viral corruption in a heartbeat.  At the HHA, the Old Guard with the help of the Hoboken Sopranos is fighting to keep it that way.

Bring in the Feds!