LOS ANGELES (CN) — A housing authority director whose whistleblowing cost the city of Port Hueneme a $2.4 million federal fine claims in court that the city fired him illegally, for reporting its “major fraud.”
Port Hueneme, pop. 22,000, is in Ventura County, southwest of Oxnard and south of Ventura.
Port Hueneme hired Joseph Gately as its Housing Authority director in 2007. In 2012, he noticed that the city appeared to have overcharged the Housing Authority for more than a decade, illegally putting money earmarked for low-income housing into its general fund.
A co-worker showed him that the city had charged the Housing Authority $35,000 for landscaping that should have cost about $10,000, Gately says in his June 6 complaint in Federal Court.
So, Gately says, he went on the hunt, and found “many more irregularities as well as plainly illegal charges.”
He says he found $108,000 in questionable charges, including some problems with City Council salaries. In July 2013 he provided a list to the city manager, and also sent the list to the Los Angeles office of the Department of Urban and Housing Development.
In September 2013, the city hired Cynthia Haas as its city manager. Gately says when he told her of the problems she was not receptive, but said she would talk to Finance Director Robert Bravo.
Gately says in the lawsuit that the previous city manager had warned him that Bravo was “pissed off” at him and wanted to eliminate the Housing Authority and combine the city office with the county’s, and put a woman Bravo was having an affair with in Gately’s role of overseeing city-owned properties.
On March 1, 2014, Gately says, Community Development Department Director Greg Brown told him he was being demoted, was no longer a member of the city’s executive committee because he wasn’t a team player, and that he’d be working for Brown.
Gately says that while he was still in control of the Housing Authority’s accounts, he contracted with Borrell Technology to do an audit of the Housing Authority. After the audit, he says, the HUD office called to ask about it and Gately told them the city was using Housing Authority money “like a personal piggy bank.”
On June 5, 2014, HUD informed the city by letter that it was investigating it.
Gately says he told the city manager about the Borrell audit and was told to hide it, but he refused. He says that Brown, now his direct supervisor, asked him to sign a letter to HUD stating that $220,000 taken from Housing Authority funds in 2011 was legitimate, but he refused.
A month later, HUD sent a “cease and desist” letter to the city regarding overcharges to the Housing Authority. The city tried to explain the charges, but “HUD’s response was to reject all of Port Hueneme’s justifications for its allocations and ended the communication with the following statement, ‘In summary, we find the City’s explanations and documentation to be wholly unacceptable,'” according to the complaint.
On March 2, 2015, with HUD scrutiny growing, the city manager asked Gately to show her his original request for funds for the Borrell audit. As he could not provide it, Gately says, he was placed on administrative leave and was fired on Oct. 1.
Soon after, HUD made the $2.38 million demand on the city for misusing funds.
Port Hueneme is still cleaning up the mess. A new city manager and finance director were named late last year and the city is still trying to reach a settlement with HUD over the $2.38 million.
The entire Port Hueneme budget is $50.8 million for 2016-17, with the general fund at $15.8 million, and budget problems this year led the city to cancel its annual beach festival and other city-sponsored recreation programs, according to the Ventura County Star.
Police officers also gave up benefits and salary amounting to $6,300 per person, management gave up $7,100 per year and staff gave up $3,500 per person.
Ironically, among the actions the City Council took in March was to contract out it landscaping and maintenance. The council also eliminated its own health insurance.
City Manager John Baker said he could not comment on active litigation.
Emails sent to each City Council member were not returned.
Gately seeks reinstatement with a clear record, lost wages, and damages for whistle-blower retaliation, discrimination and emotional distress.
He is represented by Samuel Galici of Westlake Village, who did not return an email seeking comment.
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