Forced Donations Alleged at City Housing

PHILADELPHIA (CN) - The Philadelphia Housing Authority forced employees to contribute money and gifts for "lavish" parties where attendance was mandatory, workers say in a federal class action. Lead plaintiff Jenelle Scott claims the PHA also deducted money from employees' paychecks to support a nonprofit that lobbied for federal funds.

The class claims that when PHA Chief of Police Richard Zappile was organizing a 10th anniversary party for PHA Director Carl Greene, he sent out invitations asking guests to donate $1,000 to $5,000 to Tenant Support Services (TSSI).

"Soon after plaintiff began working as defendant Greene's administrative assistant, she was compelled to contribute money and gifts to defendant Greene for parties she was required to attend," according to the complaint.

Any organization that receives federal funding must disclose its lobbying activities, but the PHA has not disclosed lobbying activities since 2002, the class claims.

"But the money TSSI received from defendant Zappile's solicitation went towards a lavish 10th anniversary party for defendant Greene," according to the complaint. "Defendant TSSI received more than $38,000. Approximately half of the money went to pay for the party, 'which left TSSI with a $21,934 profit.'"

The PHA has an annual budget of $345 million, funded by the U.S. Department of Housing and Urban Development through the Moving to Work Demonstration Program and Annual Contributions Contract, according to the complaint.

"The PHA is prohibited from using any federal funds for lobbying activity or to influence or attempt to influence the awarding of any federal contract and it must certify that no federally appropriated funds have been used for that purpose and it must disclose if any funds other than federally appropriated funds were used for that purpose," according to the complaint.

About 300 people belong to the class, which is suing the PHA, the Pennsylvania Institute of Affordable Housing Professionals, PHA-Tenant Support Services, Greene, Zappile, PHA assistant executive director Diane Rosenthal, PHA communications manager Kirk Dorn and PHA-Tenant Support Services director Asia Coney.

"In addition to money demanded for gifts and parties for defendant Greene, plaintiff Scott was forced to donate a portion of her paycheck to a nonprofit corporation defendant Greene created - defendant Pennsylvania Institute of Affordable Housing Professionals (PIAHP)," according to the complaint.

The class claims that PHA representatives told employees that PIAHP exists solely to lobby HUD for funds that would prevent cuts and layoffs. Deductions from paychecks continued from 2006 to September 2010, according to the complaint.

"The PHA required employees to contribute a portion of their weekly paycheck or make a lump sum annual contribution to defendant PIAHP to fund the aforementioned lobbying activities," according to the complaint. "However, based upon the fact that defendant Greene never disclosed any lobbying activities for HUD funding, it appears that defendant PIAHP's stated purpose is questionable. This is further supported by the fact that it laid off 22 percent of its workforce. Yet, defendant PHA continued taking money from employees' paychecks that went to defendant PIAHP."

PIAHP president Dorn claimed that the contributions were voluntary, according to the complaint.

The class seeks an injunction and punitive damages for civil rights violations and conversion. It is represented by Michael Pileggi.

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