February 7, 2014

Via Electronic Transmission The Honorable David A. Montoya Inspector General Office of the Inspector General Department of Housing and Urban Development 451 7th Street SW Washington, DC 20410 Dear General Montoya: In February 2012, I sent a letter to HUD regarding possible financial and administrative mismanagement at the Saratoga Springs Housing Authority (SSHA). I also sent a copy of that letter to your office. While I received a response, HUD failed to provide travel, legal or professional service documents and bills. Recently, I received additional documents from John Kaufmann, a resident of Saratoga Springs, who has been raising concerns about questionable spending at SSHA. I have attached scanned copies for you. According to both Mr. Kaufmann and an article in the Saratogian, SSHA awarded a second contract for legal work to Scott Peterson. Mr. Peterson is also the son of Kathy Peterson, longtime secretary of [SSHA] Executive Director Ed Spychalski. The two year contract provides Mr. Peterson with a base pay of $37,500 while the other lawyer, John P. Hicks has a base pay of $25,000, both well over the amounts spent for legal services by nearby housing authorities. And, while SSHA Board Chairman Eric Weller stated that that Mr. Peterson was the most cost-effective bidder, records show he was the only bidder.1

Caitlin Morris; Saratoga Springs Housing Authoritys legal low bidder was only bidder, records show; http://www.saratogian.com/general-news/20131125/saratoga-springs-housing-authoritys-legal-lowbidder-was-only-bidder-records-show.
1

HUD Office of the Inspector General February 7, 2014 Page 2 of 2

Mr. Kaufmann raises concerns about other questionable spending and conflicts of interest. Construction work was awarded to a pool installation company owned by the nephew of the executive directors wife. The housing authority spent over $46,000 for travel, $12,000 of which was deemed improper by the New York State Comptroller. Due to illness, the executive director is working part-time but may still be receiving his full salary and benefits, including three weeks of vacation in October. And just recently, the Board hired an assistant director, with a starting salary of $89,500, who will be elevated to executive director when Mr. Spychalski retires in 2014.2 Mr. Kaufmann has raised these concerns in good faith, to protect taxpayer dollars. Therefore, I would appreciate your review of the activities at SSHA and the SSHA Board to ensure that taxpayer dollars are used most effectively. Thank you in advance for your prompt attention to this matter. I would appreciate receiving your response to this information as soon as possible. Should you have any questions regarding this matter, please do not hesitate to contact Janet Drew of my staff at (202) 224-5225. Sincerely,

Charles E. Grassley Ranking Member

Cc: The Honorable Shaun Donovan Secretary U.S. Department of Housing and Urban Development

Caitlin Morris; Saratoga Springs Housing Authority OKs $90K job without council not;http://www.saratogian.com/general-news/20131208/saratoga-springs-housing-authority-oks-90kjob-without-council-nod
2