Sep 29, 2002 By Paul Sunyak 7 min read

Fayette County Housing Authority board Chairman Kenneth L. Johnson says it’s premature to comment on the authority’s recent response to a federal monitoring letter, as the U.S. Department of Housing and Urban Development has not yet made it a board issue. But board member Angela M. Zimmerlink maintains that the fancy wording of the response doesn’t neutralize the fact that favoritism was shown to two companies that employed relatives of Executive Director Thomas L. Harkless.

While Johnson is mum on the issue for now, biding time until HUD notifies the board of any concerns, Zimmerlink remains unswayed by the authority’s response as crafted by the Cohen & Grigsby law firm of Pittsburgh.

Zimmerlink said the authority administration essentially bent, ignored or broke the rules to help telephone system vendor Chestnut Ridge Communications Services Inc. and computer system vendor Niche Networks Inc. obtain a “get your foot in the door” position.

In its monitoring letter, HUD determined that Harkless violated the authority’s procurement policy by doing business with firms that employed his relatives. Niche was paid $15,270 and Chestnut Ridge was paid more than $83,000, although $48,481 was awarded the latter firm through a competitive bid process.

HUD’s review also found violations of federal regulations in the manner in which the authority dealt with both firms.

The HUD letter required a response from the authority that was completed Sept. 17, a response that Zimmerlink found lacking in persuasion.

“With respect to my comments to the FCHA response to the HUD findings, overall my opinion is that it is a C-Y-A letter having carefully crafted words,” Zimmerlink said. “With respect to Niche and Chestnut Ridge, it is still apparent to me that the HUD regulations and FCHA policies were not followed and that these contracts were given without fair, competitive bidding and with conflicts of interest. I would think that Pittsburgh HUD comes to the same conclusion.”

Johnson said he’s sticking to his original position, bolstered by a discussion with a key HUD Pittsburgh official, that the response was requested from Harkless as the authority’s chief administrator. Johnson said he’ll speak out after HUD makes a final determination on the matter, which could occur in a week or two.

“It’s not a board problem. I can’t comment on any of that until it becomes a board issue,” Johnson said. “Until (HUD Pittsburgh official James) Cassidy reads it over and makes a decision, (that’s when) I’ll be able to comment on it. …I hope that if they send a response that’s negative, that they’ll tell us how we should react to it (as a board). I think I’m being fair to both sides. I don’t want to say a lot on how I feel about it at this time.”

Basically, the authority’s response to HUD, which Zimmerlink said was accompanied by a stack of attachments 6 to 8 inches thick, amounts to a reinforcement of explanations and justifications previously laid out by Harkless.

Niche Networks

Regarding Niche Networks, the response notes that the firm initially was hired to perform a computer system assessment after it was discovered that the authority’s computers had been “compromised” by someone who was downloading pornography from the outside.

The authority response states that Niche got the job after submitting a written proposal to do the work at $100, less than the $140 an hour charged by H.J. Financial Services, a company that had an existing contract with the authority that included computer consulting services.

“Price quotations were obtained from qualified sources and the services were procured,” says the authority’s 10-page response. “Additionally, the authority asserts that this procurement procedure may also be explained as a procurement by noncompetitive proposals based on the emergency need for the assessment.”

The response also notes, “The purpose of the authority is to provide decent, safe and sanitary housing and to protect the public interest. This purpose cannot be fulfilled if an unknown third party accesses (hacks) the authority’s system.”

Niche was then selected to perform emergency consulting services, and to provide hardware and software, after the firm determined that internal security on the authority’s computer system was “almost non-existent” and “very much exposed to the outside.”

The authority’s response notes that Bridget Robeson, Niche’s owner, is the niece of Harkless’ wife. “However, Niche was not selected by the authority to perform the assessment and consulting services based on Ms. Robeson’s status as Mr. Harkless’ relative,” says the response. “Niche is a Washington, D.C., area firm with an excellent reputation and impressive client list.”

Zimmerlink said she’s not buying that explanation, particularly since it took 27 days for Niche to respond with a firewall-building solution to the “emergency” the firm was called in to assess.

Zimmerlink also questioned why the authority sought out a price quote from Niche when it admits that it already had an existing contract with H.J. Financial to provide computer consultation services.

“This was a ‘get your foot in the door’ scenario for Niche Networks with non-competitive bidding under the guise of an emergency,” Zimmerlink said. “Basically, the FCHA’s response is that because pornography was downloaded on the system, there was a ‘possibility’ for ‘hackers’ to access other files from the system; therefore, the FCHA decided it needed a ‘computer assessment’ performed.

“Even to a novice computer user, a firewall or other protector is the answer (from the start). But instead, under a premise of ’emergency,’ Tom Harkless contacted his niece’s company. …My first question is why not go to H.J. Financial if the FCHA already had a contract with them?”

Chestnut Ridge Communications

Regarding Chestnut Ridge Communications, the authority’s response states that initially, the authority obtained price quotes from two sources, Chestnut Ridge and Lucent Technologies, for $7,459 worth of phone systems at three authority offices.

Afterward, the authority routinely went back to Chestnut Ridge for a single price quote when expanding this telephone system to other sites. In its response, the authority notes that it should have obtained three price quotes instead of only one or two.

“The authority realizes that while such procurement did not violate HUD’s rules, three quotes should have been obtained as required by the authority’s internal policy. In the future, three quotes will be obtained in compliance with the authority’s internal policy,” says the response.

In addition, the authority notes in its response that it purchased some telecommunications services for less than $10,000 using non-HUD funds, which means that federal rules do not apply. The most likely source of those funds is the authority’s self-operated State Housing Program, a source of money for such things as cell phones and country club dinners in the past.

On another telecommunications system matter, the authority says it committed an “oversight” in not performing a required cost estimate before soliciting sealed bids for that $48,481 contract, which was awarded to Chestnut Ridge as low bidder. The authority vows to correct this problem in the future.

The authority’s response also notes that Harkless recused himself from a procurement involving Chestnut Ridge because the firm employed his brother-in-law Tim Sheehan. But, it notes that he did not recuse himself when the firm was awarded the aforementioned $48,481 contract in June 2001 because a sealed bid process was used, which means the selection was not subject to any personal bias.

“The authority does not believe it has acted inappropriately. Unfortunately, the authority must improve its record keeping so that in the future the documents required will be readily available. In the future, not only will the authority follow all procedures, we will also perform all necessary record keeping to document our compliance,” the response concludes.

Zimmerlink said Chestnut Ridge’s introduction to the authority as a vendor also amounts to a “get your foot in the door” scenario. She said the authority response notes that a “standardization committee” wrote the specifications for the telecommunications system, using knowledge learned from “interacting with vendors of such systems.”

“First, Tom Harkless said he did not know who wrote the specs, but now the FCHA response is that a ‘standardization committee’ wrote the specs,” Zimmerlink said. “Who makes up this standardization committee and why didn’t Tom Harkless know (before) who was on it?”