Brian Sharp

@SharpRoc

Federal housing officials are reviewing whether City Councilman Adam McFadden’s appointment to lead the Rochester Housing Authority would violate conflict of interest regulations and, therefore, threaten agency funding.

A similar issue with the U.S. Department of Housing and Urban Development barred former Lackawanna Mayor Norman Polanski from becoming executive director of the housing authority in that Erie County community for one year after leaving office. Polanski ultimately was appointed in January 2013.

“HUD is reviewing the matter and will be working closely with the Rochester Housing Authority to gather all the pertinent information and facts before we make a determination,” HUD spokesman Adam Glantz said Monday from New York City.

McFadden has been named to succeed former RHA head Alex Castro, who was abruptly dismissed last week during a special meeting of the authority’s board of commissioners. McFadden was named 24 hours later. On Monday, RHA vice chairman John Page clarified that McFadden currently has only a three-month contract and is serving as interim director.

“Whether he stays or not, that is really up to the board,” Page said.

McFadden did not immediately respond to a text message seeking comment; his voicemail was full.

Matters could begin sorting out on Wednesday, when the RHA board is scheduled to meet. City Council member Jackie Ortiz and local activists concerned about the recent events have said they plan to attend. Ortiz has called for an independent investigation, and submitted a formal request Monday to the city’s Office of Public Integrity.

The conflict of interest matter arises in at least two key instances.

RHA’s annual contributions contract is the agreement that binds HUD to the housing authority and deals with how a housing authority spends its money. Conflict of interest language in that contract echoes the prohibition, which exists in federal rules as well and prohibits any arrangement with “any public official, member of a governing body, or State or local legislator, who exercises functions or responsibilities with respect to the programs.”

The conflict is particularly apparent when it comes to mayors, who appoint members to the housing authority board. Polanski had asked HUD to waive the rule, telling Buffalo’s WGRZ-TV last year that the rule was not enforced elsewhere.

Mayor Lovely Warren has, over the past 10 months, replaced all five of the mayoral appointees to the seven-member board. The other two are elected by residents.

Once appointed, Warren has said, the board is governed by HUD regulations, not the city. She did remove two appointees before their terms expired, explaining last week that those were discovered to be illegal. One of those removed was former chairwoman Carol Schwartz, who said the snag was that proper paperwork had not been filed with the state.

In her request for an investigation, Ortiz raised questions she said have been brought to her by residents. Those matters include potential conflicts of interest dealing not only with McFadden but also with one of the RHA board members, who is the spouse of McFadden’s legislative aide. She notes that a city Board of Ethics member also serves on the RHA board, which could become an issue depending on how the matter proceeds.

Further issues on which she is seeking review include the time line of events, whether the mayor acted properly in the removal of sitting board members, and if the city attorney serving on the board protected the city’s interests.

McFadden has said that if named to head the RHA, he would not need to step down from council but would have to recuse himself from any discussion or votes that related to the authority. The city’s law department, meanwhile, is reviewing whether a federal law applies barring some government employees from seeking elected office. The common litmus test is whether the workers already held office and how closely they work with federal funds.

BDSHARP@DemocratandChronicle.com

Twitter.com/sharproc