Sibling got DCED grant money at center of Northumberland County controversy
SUNBURY - The brother of a planning department employee had delinquent water and electricity bills paid through a state grant program that is at the center of controversy in Northumberland County.
The state Department of Community and Economic Development (DCED) calls it a conflict of interest, but Kathy Jeremiah, grant writer for the planning department, says that's not the case.
Jeremiah said she had no direct connection to the grant being awarded to her brother, Michael Faust. And, she said the money, which she estimates was about $950, went directly to PPL and Aqua Pennsylvania.
Jeremiah and her siblings own the property at 1766 W. Chestnut St., Coal Township, a property DCED identified in its nine-page letter dated Monday and received Wednesday by the county commissioners regarding the Homelessness Prevention and Rapid Rehousing (HPRP) Program.
DCED officials spent the second half of 2012 reviewing the county's record keeping regarding the grant, and the letter, as expected, detailed how much the county would have to pay back - $215,150 - for allegedly failing to provide proper documentation to determine client eligibility. The county had received $365,361.
DCED grant manager Beverly A. Hutzel used one full page in her letter to detail the policy regarding conflict of interest, then noted how one of the files her department reviewed was for a client living at 1766 W. Chestnut St. She said the renter was the brother of a planning department employee "who has an ownership interest in the property."
Hutzel's letter didn't name the client or the employee, and the three county commissioners on Thursday also wouldn't name who they thought the employee was. But The News-Item was able to determine it was Jeremiah, and she agreed to speak about the situation Thursday evening.
'Absolutely ... no conflict'
Jeremiah said she didn't know how her brother learned about the program, but that she didn't know he applied until after the fact. She noted the grant was publicized in the newspaper.
She couldn't remember exactly when she found out, but did recall seeing his last name on a spreadsheet she dealt with as part of the program.
She stressed that she had nothing to do with his application, its approval or the administration of the money.
"Absolutely, it's not a conflict of interest as far as I'm concerned," she said.
She said she learned about DCED's concern about the relationship in November after DCED contacted Commissioner Rick Shoch.
She said the county's planning and adult services departments, both involved in the grant program, e-mailed someone at the U.S. Department of Housing and Urban Development (HUD) shortly after learning of DCED's concern and were told there was no conflict because she wasn't a supervisor in the program. The matter was also addressed with the county solicitor, who also saw no conflict, Jeremiah said.
She said DCED has since requested information about utility shutoff notices for the property, and when that was provided by the county, DCED then asked for income verification.
She believes DCED may have miscalculated her brother's income, using two paystubs from a job he started in September 2011, but calculating it as if he had the job for 12 months. With that, his income was apparently too high, but if DCED would instead have considered he had eight months of unemployment prior to his new job, the total for the year would have been lower and he would have qualified, Jeremiah said.
She believes the documentation the county is collecting - which it is doing for other disputed grant awards - will show that her brother did qualify.
In her letter, Hutzel said the employee would be covered under the conflict of interest provision because she was "in a position to obtain a financial benefit from the brother's participation in the program."
She said the county was required to follow the outlined provisions and provide information to DCED to determine whether a waiver would be applicable, but the county failed to follow the process.
Hutzel said the conflict of interest provision says that employees of a grantee or subgrantee and their families are not automatically disqualified from receiving assistance as long as they meet the qualifications, such as not being in a position to exercise any responsibilities, make decisions about, gain inside information into or obtain a personal benefit from the grant.
"DCED determined that this applicant is ineligible for assistance due to other reasons, lack of supporting documentation for homelessness status and income qualifications," Hutzel wrote. "However, conflicts of interest are serious issues that when they arise must be addressed in the manner outlined."
Earlier Thursday, each of the commissioners addressed the conflict of interest issue.
"If the employee did anything wrong in the program, let the state prove it," Chairman Vinny Clausi said.
Stephen Bridy believes HUD should investigate - not specifically the conflict of interest, but the whole program.
"If we're doing something wrong, we want to know about it," he said. "If those in the past have done something wrong, we want them to be held accountable."
Bridy, who oversees the planning department but was not a commissioner at the time the application in question was awarded, doesn't believe DCED has proven its case that there is a conflict.
"It's unwarranted," he said. "There aren't any bona fide allegations."
For his part, Shoch said he'll make a motion at the next commissioners meeting to have HUD investigate "so we know our own house is clean."
He said he is not accusing the employee of nepotism or criminal activity, but noted situation should be reviewed.
Shoch said he was told the client used the money to pay utility bills.
"Does that indirectly benefit the landlord? I guess you could argue it does," he said.
'Pile of files'
Pat Mack, planning department director, said he wasn't sure if he was legally permitted to discuss the situation involving a grant, and so he declined comment.
Mack did say the county will continue to work until DCED's Feb. 7 deadline to find documentation to support its grant awards in hopes of reducing the $215,150 payback.
Mack said he has "a pile of files" he and the planning department are going through.
Shoch doesn't think there will be much success.
"I think the chances of substantially reducing that are not good," he said. "We should have been working on this for a long time."
Bridy said he was praying the amount would be reduced.
Clausi, repeating earlier comments that DCED did not provide adequate direction of the grant program, said the county should go to Washington, D.C., to visit HUD to "clear this mess up."