In the Matter of Mark Hoover

IN THE MATTER OF MARK HOOVER

COIB Case No. 99-200

October 24, 2000

SUMMARY:The Board also fined HRA First Deputy Commissioner Mark Hoover $8,500 for leasing his own apartments to five ofhis HRA subordinates and to HRA Commissioner Jason Turner, for using an HRA subordinate to perform private, non-City work for him, and for using hisofficial position to arrange forthestate of Wisconsin to loan an employee to HRA and thenhousingthat visitingconsultant inhis own apartment and charging and receiving $500 for the stay, for which the City ultimately paid. Hoover also admitted using City equipment in furtherance of his private consulting business. COIB v. Mark Hoover, COIB Case No. 99-200 (2000). This fine was the largest settlement fine ever obtained by the Board. Like Commissioner Turner, Mr. Hoover violated rules intended to eliminate coercion and favoritism in government and to prevent misuse of governmentworkers and equipment for personal gain.

STIPULATION AND DISPOSITION

Respondent Mark Hoover states the following:

1. I am the First Deputy Commissioner of the New York City Human Resources Administration ("HRA"), and have held this position since March 23, 1998.

2. After I moved to New York City from Wisconsin to work at HRA in early 1998, at various points during 1998, I purchased, for personal use by my family and me and for investment purposes, four cooperative apartments (the "Apartments") in a residential cooperative located in Long Island City, New York. I have since sold one of the Apartments, live in another with my spouse, and sublet the remaining two.

3. In 1998, HRA recruited a number of individuals with experience in welfare administration and policy reform to assist the agency in reforming its policies and practices. Because these employees were not residents of New York, and had few or no personal ties to New York City, they faced an immediate need to find affordable temporary housing until they could settle permanently in New York or, after completing their service in New York, return home. During 1998 and 1999, I invited a total of five of these individuals to stay in one or more of the Apartments, in which I also lived, under an understanding that they would each contribute on a pro rata basis to monthly expenses. In addition, Jason Turner, the Commissioner of HRA, did not have housing when he and I arrived in New York in early 1998, and he likewise resided in the Apartments under the same understanding. Five of the six HRA employees who resided in the Apartments were from Wisconsin.

4. Four of the HRA employees asked me for written leases because HRA's Human Resources Department had advised them that they needed leases to prove residence in the City. Accordingly, I entered into written leases with these HRA employees.

5. Amounts paid to me by the six HRA employees under the above-described arrangement ranged between approximately $400 to $700 per person per month, but some residents made payments only sporadically and some did not make any payments in periods when they were staying elsewhere.

6. Set forth below is a chart listing (a) the HRA employees who stayed in the Apartments and their positions at HRA, (b) the approximate time during which they used one or more of the Apartments, and (c) the terms of the written leases, if any. For reasons of space and personal preference, some of the individuals listed in the chart used more than one Apartment during the relevant period.

NAME AND TITLE PERIOD OF TERMS OF WRITTEN LEASE, IF

USE ANY

Linda Barnett, Executive Assistant, 7/98 to 6/99 $50 per day, not to exceed

Office of New Initiatives $700 per month

Cathryn Hendon, Coordinator, Special 9/98 to 4/99 No written lease

Programs/Childcare

Michael O'Malley, Chief of Staff to 5/98 to 6/99 $16,080 per year, or $1,340

the Commissioner per month (sole occupancy)

Paul Saeman, Director, Work Based 6/98 to 5/99 $50 per day, not to exceed

Systems $700 per month

Jean Sheil, Deputy Commissioner, 5/98 to 7/98 No written lease

Policy and Program Development

Jason Turner, Commissioner 4/98 to 6/99 $50 per day, not to exceed

$700 per month

7. Of the six employees, only Paul Saeman reported directly to me at HRA. Commissioner Turner was my superior. The other HRA employees listed above reported directly to the Commissioner or to personnel reporting directly to the Commissioner. In the HRA organizational hierarchy, all of the above-listed HRA employees, other than Commissioner Turner, held positions of lower rank than mine and were in this sense my subordinates.

8. I represent that the total amounts I received did not suffice to meet my costs of carrying the Apartments during the applicable period. Further, because I had not mortgaged the Apartments during the applicable period, none of the above-described payments added to my equity ownership of the Apartments.

9. During or around the last quarter of 1998, I was advised by representatives of the New York City Department of Investigation ("DOI") that the above- described living arrangements could present an issue for review by the Conflicts of Interest Board (the "Board"), and that I should write to the Board for a ruling on whether the arrangements were acceptable. After consulting with attorneys with the Corporation Counsel for the City of New York, and further discussing with DOI representatives their views of these arrangements, I decided that in addition to writing the Board to disclose the living arrangements, I would also cause the Apartments to be vacated. The last of the six HRA employees moved out of the Apartments in July 1999. I wrote to the Conflicts of Interest Board in July and August of 1999 to disclose the living arrangements and to indicate that I had taken steps to terminate them.

10. I acknowledge that my conduct in having these financial arrangements with my superior and subordinates of HRA violated New York City Charter § 2604(b)(14), which states:

No public servant shall enter into any business or financial relationship with another public servant who is a superior or subordinate of such public servant.

11. I do not believe that the above-described financial and living arrangements caused an adverse effect on the workplace environment at HRA or on any HRA employee, but I recognize that the purpose of § 2604(b)(14) is to address potential conflicts in the superior/subordinate relationship and that the above-described financial and living arrangements implicate such concerns. [FN1]

12. In my capacity as HRA First Deputy Commissioner, I signed a Memorandum of Understanding ("MOU") between HRA and the State of Wisconsin Department of Workforce Development ("Wisconsin") on May 19, 1998. That MOU provided that Paul Saeman, who was an employee of Wisconsin's Department of Workforce Development at the relevant time, would serve as a consultant to HRA for one week per month while he was still an employee of Wisconsin. He was assigned to HRA to assist HRA in the selection, installation, and implementation of a work program tracking/case management system. The MOU further provided that HRA was obligated to reimburse Wisconsin for Paul Saeman's salary, fringe benefits, and expenses relating to his work for HRA, including travel and lodging. This MOU was effective for the period May 25, 1998 through July 31, 1998, but was superseded in June 1998, when Mr. Saeman became an employee of HRA.

13. During the period May 25, 1998, through May 30, 1998, Paul Saeman served as a consultant to HRA in New York City pursuant to the MOU that I signed. At the same time, for those five days in May of 1998, Paul Saeman stayed with me in one of the Apartments. I charged Mr. Saeman $100 per day for his room and board. Through my private company, Fountainhead, LLC ("Fountainhead"), [FN2] I issued a "bill for lodging" to Paul Saeman, dated June 10, 1998, for the five-nights' stay at a cost of $100 per night, in an amount of $500.

14. Paul Saeman paid this bill by personal check in the amount of $500, made payable to Fountainhead, LLC. Mr. Saeman then submitted an expense voucher to Wisconsin, in which he sought reimbursement for his expenses relating to his work pursuant to the MOU, including his lodging expenses. Wisconsin reimbursed Mr. Saeman, and submitted a bill to HRA for Wisconsin's expenditure relating to his work for HRA. Pursuant to the MOU that I signed in my official capacity, HRA paid Wisconsin for its expenses.

15. I acknowledge now, but did not realize at the time, that my conduct in causing the City to pay for the room and board I supplied to Mr. Saeman, and my receiving $500 for those room and board expenses, under the MOU that I signed in my official capacity, violated New York City Charter § 2604(b)(3), which provides as follows:

“No public servant shall use or attempt to use his or her position as a public servant to obtain any financial gain, contract, license, privilege or other private or personal advantage, direct or indirect, for the public servant or any person or firm associated with the public servant.”

16. Prior to becoming HRA Commissioner, Jason Turner was a principal in The Center for Self-Sufficiency ("CFSS"). Fountainhead and CFSS are consulting firms. In 1997, CFSS entered into an agreement with Fox Systems, Inc., whereby CFSS was retained to work as a consultant to the Arizona Works Procurement Board, which was seeking assistance in the preparation of a request for proposals ("RFP") for vendor-administered welfare-to-work programs. Fox Systems, Inc., in turn, held a contract with the State of Arizona for work with the Arizona Works Procurement Board (the "Arizona Works Procurement Board Project").

17. In 1997, through Fountainhead, I entered into an agreement with CFSS (the "Fountainhead-CFSS Contract"), whereby I was to provide consulting services pursuant to the agreement between CFSS and Fox Systems, Inc.

18. Before deciding to come to work at HRA, I discussed with Mr. Turner our mutual, pre-existing commitment to complete work on the Arizona Works Procurement Board Project and learned from him that the City would permit me to complete the project on my own time. On or about March 23, 1998, I became First Deputy Commissioner of HRA. During the period May 1998, through at least July 1998, while I was serving as HRA's First Deputy Commissioner, I continued to work on the Arizona Works Procurement Board Project pursuant to the Fountainhead-CFSS Contract. During this period, I provided approximately 141 hours of service pursuant to the Fountainhead-CFSS Contract. I performed this work on my own time, including during my annual leave allotment and on weekends and during the evenings. CFSS paid me $75 per hour for my time.

19. In June of 1998, I asked a subordinate, Paul Saeman, to type my comments to a proposal for an RFP relating to the Arizona Works Procurement Board Project. I understand that this work occurred on one day, and was intended to be done on Mr. Saeman's lunch hour, but took longer. Mr. Saeman worked late that day to make up the City time he had spent on my personal work. I did not pay Paul Saeman for his work. That matter was not City business. Paul Saeman used an HRA computer to type that Arizona proposal. I also may have made a few long distance telephone calls in 1998 to Arizona regarding the Arizona Works Procurement Board Project using City telephones. I believe that I have reimbursed the City for the calls I was able to identify as mine.

20. At the time, I viewed Mr. Saeman's typing work as the help of a friend and did not consider his status as an employee of HRA. I recognize now that because he was an HRA employee at the time, Mr. Saeman's efforts provided me a "private or personal advantage" within the meaning of Charter § 2604(b)(3), and could also be seen as a "financial gain" to the extent that his work advanced my paid work for CFSS, although I represent that I did not bill CFSS for his time. I also recognize that Mr. Saeman's use of an HRA computer at my behest to perform the typing of my work, even on his own time, constituted a use of City equipment for a non-City purpose within the meaning of Board Rules §§ 1-13(b) and (d).

21. I acknowledge that my conduct in using City personnel and resources, even on a limited basis, violated New York City Charter § 2604(b)(2) and Board Rules §§ 1-13(b) and (d), as well as Charter § 2604(b)(3), quoted above.

Charter § 2604(b)(2) provides:

“No public servant shall engage in any business, transaction or private employment, or have any financial or other private interest, direct or indirect, which is in conflict with the proper discharge of his or her official duties.”

I do not dispute that by causing Mr. Saeman to type my editorial changes to the RFP, I engaged in a prohibited "transaction" under this section.

Board Rules §§ 1-13(b) and (d) provide, in relevant part:

(b) ... it shall be a violation of City Charter § 2604(b)(2) for any public servant to use City letterhead, personnel, equipment, resources, or supplies for any non-City purpose.

(d) It shall be a violation of City Charter § 2604(b)(2) for any public servant to intentionally or knowingly induce or cause another public servant to engage in conduct that violates any provision of City Charter § 2604.

22. In recognition of the foregoing, I agree to pay a fine of $8,500 to the New York City Conflicts of Interest Board upon signature of this Disposition.

23. I agree that this statement is a public and final resolution of the charges against me. Furthermore, I agree to provide a copy of this Disposition to any City agency where I might apply for employment upon the request of such agency or in response to any City inquiry calling for such information, and, in any event, prior to accepting employment with the City.

24. This agreement constitutes a waiver by me of any rights to commence any judicial or administrative proceeding or appeal before any court of competent jurisdiction, administrative tribunal, political subdivision or office of the City or the State of New York or the United States, and to contest the lawfulness, authority, jurisdiction, or power of the Conflicts of Interest Board in imposing the penalty which is embodied in this agreement.

25. I confirm that I have entered into this agreement knowingly and intentionally without coercion or duress, and after having been represented by an attorney of my choice, that I accept all terms and conditions contained herein without reliance on any other promises or offers previously made or tendered by any past or present representative of the Conflicts of Interest Board, and that I fully understand all the terms of this agreement.

26. This Disposition shall not be effective until all parties below have affixed their signature.

27. The New York City Conflicts of Interest Board accepts this Disposition and the terms contained herein as a final disposition of the above-captioned matter only, and, accordingly, affirmatively states that no further enforcement action will be taken by the Conflicts of Interest Board against Mr. Hoover based upon the facts and circumstances referred to herein.

Mark Hoover

Dated: November 24, 2000

City of New York Conflicts of Interest Board

Benito Romano

Acting Chair

Dated: October 24, 2000

FN1. I have been advised that the legislative history of this law indicates that the purpose of this provision is to eliminate coercion and favoritism from the superior/subordinate relationship:

Paragraph fourteen contains a new prohibition against public servants engaging in business or financial relationships with superiors or subordinates. The [Charter Revision] commission added this prohibition in recognition of the potential for coercion or favoritism that exists when co- workers who occupy different positions in the hierarchy enter into business or financial relationships. Thus prohibited are jointly-run business ventures, and financial relationships such as loans. The prohibition is not intended to prevent public servants from loaning each other insignificant amounts of cash, as occurs often in normal daily events.

Vol. II, Report of the New York City Charter Revision Commission, December 1986-November 1988, at p. 180.

FN2. Prior to moving to New York City to work at HRA in early 1998, I had served as an employee of the State of Wisconsin for 33 years. In the process of retiring from public service in or around 1996, I formed the company called Fountainhead, LLC, and through that company made investments and built houses on specification. Prior to becoming HRA's First Deputy Commissioner, I was President of Fountainhead.