Beaver County has agreed to repay the federal government $430,000 to settle allegations involving conflicts of interest with a grant for the construction of subsidized public housing. The agreement comes after the county had previously refused an offer by the feds to repay just $12,500 to satisfy the alleged conflicts involving a county employee.
An investigation by the Beaver Countian shows that Beaver County Commissioners Sandie Egley, Dan Camp, and Tony Amadio signed a settlement contract with the Federal Department of Housing and Urban Development (HUD) in March of this year, agreeing to repay $405,234.62 in federal pass-through funds it distributed to a local development company; the funds were earmarked for the renovation of a property in Rochester Borough for partial use as affordable housing under HUD’s HOME Program. Under terms of the settlement agreement, the Commissioners also agreed to pay an additional $25,000 administration fee to HUD.
Beaver County had awarded the grant to T. Rose Developers in 2011 for the renovation of a commercial structure located at 262 Connecticut Avenue in Rochester into 36 rental units — 6 of which would be designated as HUD HOME-assisted units. T. Rose Developers was a limited partnership entity consisting of Rosenberger Land Company, Inc. as the general partner, and Greenville Development, LLC. as the limited partner.
Attorney Albert Torrence was the President of Greenville Development. Torrence also works as a Solicitor for the Beaver County Controller’s Office and is a part-time prosecutor for the District Attorney’s Office now serving as Chief Trial Counsel. T Rose Developers is owned by Anthony T. Rosenberger, one of Albert Torrence’s private law clients.
The controversy between Beaver County and HUD began in the weeks leading up to January of 2015, when an audit released by the federal Office of Inspector General (OIG) determined the county did not have adequate “invoices or other documentation” to justify that the costs related to the Connecticut Avenue project were reasonable and justified. Federal auditors also determined the project constituted an “apparent conflict of interest” because of attorney Albert Torrence’s work as an employee of the County Controller’s Office.
Following the report by the OIG, the county gathered further information about expenditures for the project from T. Rose Developers. The county also conducted an internal review of Albert Torrence’s involvement, and on December 16th of 2014 then-Chief County Solicitor Joseph Askar wrote a formal legal opinion determining no conflict of interest involving attorney Torrence existed, because the County Controller’s Office has no involvement in the awarding of grants and no access to inside information related to grant applications.
Beaver County submitted the additional documentation and legal findings to HUD and awaited its response.
The controversy became the subject of extensive reporting by the Beaver Countian in the spring of 2015, as attorney Albert Torrence was making a run for District Attorney. As part of its coverage, the Beaver Countian published a statement released on May 18th by Niki Edwards, Regional Public Affairs Officer for HUD, voicing her agency’s agreement with Beaver County’s conclusion that no conflict of interest existed involving Torrence.
“HUD’s position is that a conflict of interest did not exist because Mr. Torrance did not have a role in the decision-making process,” wrote Edwards on behalf of HUD at the time.
The documentation on spending for the project provided by the County and T. Rose Developers also appeared to satisfy HUD, with the exception of $12,500 that was paid to a contractor named Joe DeMuzio (who is Al Torrence’s cousin) for demolition work at the site. HUD contacted the county telling them if the $12,500 was repaid it would consider the matter settled.
The county ultimately failed to pay back those funds.
“HUD wanted [Albert] Torrence to repay that amount, and we tried to get him to and he wouldn’t do so,” Commissioner Tony Amadio told the Beaver Countian this week. “Our hands were basically tied.”
Albert Torrence disputed Commissioner Amadio’s version of events.
“I never received any formal request to repay the $12,500,” said Torrence. “In fact, what happened when that was being discussed is the decision was made to ask [HUD] for a hearing so we could figure out what they wanted and why. [Then-County Solicitor Andrea Cantelmi] requested a hearing, [HUD] got mad that a hearing was being requested, and as a result of her request it all went crazy.”
The Beaver Countian has obtained a copy of a letter dated September 30th, 2015 sent by then-Solicitor Andrea Cantelmi to HUD’s Office of General Counsel, formally rejecting the repayment offer of $12,500.
“The County respectfully disputes the conclusion that a conflict of interest as defined by the regulations existed, and thus objects to the requirement that it repay $12,500,” wrote Cantelmi. “Consequently, by this letter, the County seeks to appeal this decision and requests a hearing on the matter.”
By November of 2015, HUD told the county it could now be on the hook for about $900,000, which included the total value of the grant in addition to sanctions and fees in excess of that same amount. Despite HUD’s earlier public statement to the contrary, the agency then also affirmed the initial audit’s conclusion that Albert Torrence’s involvement in the project constituted a conflict of interest.
According to county officials, the new Republican-lead Board of Commissioners approached HUD in early 2016 offering to agree to the original $12,500 settlement they had proposed, but the agency now refused.
“We never got any kind of information as to why the prior Board did not get this settled,” Commissioner Dan Camp told the Beaver Countian. “When I was told about this HUD was prepared to sue the County for about $900,000 for the substance of what the audit found plus associated penalties and fines. That is why we decided to settle. If we would have went to court we would have had to hire legal representation that specializes in the matter, which probably would have been out of Harrisburg. That would have been just an additional expense […] I agreed to repay the money because I think we would have lost in court.”
Controller David Rossi told the Beaver Countian this week he agreed with HUD’s determination from 2015 that there were no conflicts of interest involving his solicitor, and said he has no idea why HUD changed its mind about the issue.
“My office has no say, no authority, and no control over these grant funds,” said Rossi. “[Albert Torrence] has been my solicitor and everyone knows it, it’s not like it was a secret. If this was a conflict how did it get passed by the housing agency, approved by the county’s law department, and ratified as a resolution by the Board of Commissioners? It makes no sense.”
The Beaver Countian spoke with HUD Public Affairs Officer Niki Edwards again last week, asking why the agency had changed its determination. After spending several days researching the matter, Edwards provided the Beaver Countian with the following statement:
“The final determination was that a conflict of interest existed, as the settlement agreement states. HUD’s initial evaluation was not the final decision. HOME program regulations (at 24 CFR 92.356) prohibit any person who is in a position to participate in a decision-making process (or gain inside information with regard to program activities) from obtaining a financial interest or benefit from a HOME-assisted activity or from having any interest in any contract, subcontract, or agreement during his or her tenure or for one year after.”
Commissioner Sandie Egley said the problems with the grant began before she came into office, and that by the time she was in a position to deal with the issue there were not many options left for her.
“The county missed the opportunity to settle this before I arrived for next to nothing,” said Egley. “I then acted on the advice of our solicitor at the time, Andrea [Cantelmi], who said settling for the full amount to avoid paying even greater penalties was the county’s most viable option. This could have been as simple as contacting HUD when they said they would settle for $12,500 and telling them the county would pay it back, we would have been done with it. Instead, the prior Board hemmed and hawed and caused a big old mess and now it’s hundreds of thousands of dollars we are repaying. It shouldn’t have been this way. It shouldn’t have landed on my desk, the prior Board should have dealt with it.”
Commissioner Camp said that although the settlement agreement the Board reached with HUD requires a total repayment of funds, the County was at least able to negotiate favorable payment terms.
“Instead of the money coming out of the General Fund, HUD agreed to withhold payments from future grant years,” said Commissioner Camp.
HUD will be withholding $135,078.21 per year for three consecutive years until the grant is repaid. The county has made a $25,000 payment in the form of a certified check from the General Fund to satisfy an “administrative fee” made payable to HUD under provisions of the agreement.
As part of the settlement agreement the county denied any liability and did not admit to any wrongdoing, but agreed to waive all rights to a hearing on the matter, agreed it would not seek termination or reconsideration of the agreement in the future, and waived any claims against HUD or any of its employees. HUD made a similar agreement with respect to the county, with one notable exception:
“HUD hereby releases and discharges [Beaver County], its former and current elected and appointed officials, officers, directors, employees, successors and assigns, except Albert A. Torrence from any and all claims by HUD [with respect to the grant].”
Attorney Torrence continues to insist he did nothing wrong and believes the county had a “knee-jerk reaction” to an “overzealous newly hired staff attorney at HUD” that is now needlessly costing the county hundreds of thousands of dollars.
“I didn’t do anything wrong, there was never a conflict of interest, and every penny for that project went where it should have,” said Torrence. “All three of the County’s Solicitors formally concluded there was no conflict of interest, HUD formally concluded that. The county never even called me and asked me about what I thought before agreeing to settle, I heard about it after the fact. They shouldn’t have settled this.”
As the Beaver Countian first reported in May of 2015, the complaint against Albert Torrence’s involvement in the Rochester Borough property was originally filed by then-Aliquippa Finance Administrator Cheryl McFarland. McFarland wrote to the Beaver Countian at the time identifying herself as the “whistleblower,” saying she originally filed her complaint against Torrence with the FBI which then directed her to the HUD Office of Inspector General — she never explained how she originally became aware of Torrence’s involvement in the Rochester property. McFarland had made other complaints against Torrence as well, including ones involving his role as a landlord for the Beaver County Head Start program.
In turn, Torrence had previously accused Cheryl McFarland of retaliating against him in conjunction with former County Solicitor Myron Sainovich, who is Solicitor for the City of Aliquippa where McFarland worked. In his capacity as Solicitor for Controller Rossi, attorney Torrence had filed a high profile lawsuit against Sainovich for improperly billing taxpayers — a case Torrence fought all the way up to the Pennsylvania State Supreme Court and won — ultimately recovering tens of thousands of dollars in taxpayer monies which Sainovich had illegally billed the county.
Albert Torrence and Anthony Rosenberger made similar claims about false allegations and political retribution during a meeting arranged with Congressman Timothy Murphy in November of 2015, asking that he intervene on their behalf in his role as a Chairman of a Congressional Oversight and Investigations Committee. Following the meeting, Rosenberger sent Congressman Murphy a letter alleging that HUD had “allowed itself to be publicly utilized as a political tool in the area” and “allowed itself to be manipulated in a most disgraceful way.”
It is unclear what actions were taken within the federal government, if any, in response to the meeting. Rosenberger said in his letter that development of the Connecticut Avenue property had been completed and the building now houses tenants, although sources tell the Beaver Countian that the building did end up in receivership by the bank.
“I always said this is wrong, this makes no sense, let [HUD] file what they were going to file and we would deal with it,” said Torrence. “This is not a conflict of interest, everybody knows that, but somebody somewhere in some little room kept pushing it, and pushing it, and pushing it.”
Commissioner Egley told the Beaver Countian she will now be the one pushing the issue, and will be asking her fellow Commissioners to vote on taking action in an attempt to recoup the money from Torrence.
“I am in favor of considering options to recoup this money and those options could including filing legal action against the person who caused the county to have to pay back this money, which would be Al Torrence […] Now that I’m here I’m not going to ignore it, I’m going to face it. I’m going to deal with it, and if it means suing somebody that’s exactly what I’m going to do because the taxpayers don’t deserve paying for this mess.”
Commissioner Camp told the Beaver Countian that he is also in favor of litigation in an attempt to recoup the monies, although he wants to discuss the matter with the county’s law department before making a final determination on how to proceed.
Commissioner Amadio said he is also prepared to have that dialogue, “We haven’t discussed possible litigation yet as a Board, so I think we should at least have those discussions before I make my final decision.”
Commissioner Egley described controversies involving the HUD grant as just the latest in a series of issues she has faced which were left unresolved by the prior Board of Commissioners.
“This is yet another mess that I didn’t cause but am trying to clean up,” said Egley. “I am getting really tired of cleaning up these messes that cost the taxpayers millions of dollars in total all because of laziness and a lack of ambition to make county government better […] It is unbelievable the lack of responsibility these people feel, I just don’t know how they can walk around and show their faces and be OK with this. This kind of thing should never have happened, but with every major issue it’s the same thing over and over again and its the taxpayers who are left holding the bag, and I am one of them. It’s infuriating.”