Tuesday, November 14, 2017

Fixed price

Yesterday we took you through the saga of the never formed Trenton Employment Commission and the money spent ($23,000+) on Hill Consultants to coordinate Mayor Jackson's invisible Local Employment Initiative. There is so much wrong with that situation that we neglected to include one other little tiny problem that needs to be addressed.

On July 8, 2015 then director of Housing and Economic Development for the City of Trenton Monique King-Viehland prepared and sent a memo to city Business Administrator Terry McEwen. In that memo she recaps the legislative history behind the implementation of the Trenton Resident Employment Policy. She mentions the request for proposal from parties interested in serving as a coordinator for the development and implementation of the program and that Hill Consultants was the only respondent to the RFP. King-Viehland then goes on to recommend awarding the one year, $50,000 contract to Hill Consultants.

There is another document that may have been attached to that memo (the docs as received from the clerk's office were somewhat disorganized). It's a tally sheet of sorts summarizing the results of the RFP process.

The document shows there was only one response to the RFP, that of Hill Consultants. Further down the page, there is a line for "Hourly rate" and that rate is clearly entered in as $100.00.

Interestingly, on the six invoices Charles Hill submitted to the city, the rate is posted as $125.00 per hour.

Nowhere in any of the documents provided in response to our OPRA request is there anything indicating a change in the hourly rate, up or down. Or a correction to the rate published on the tally sheet.

So what happened? How did the rate jump from $100 per hour to $125 per hour?

Was it a clerical error made while the purchasing department was preparing the RFP evaluation sheet? Was the rate always $125 an hour or did the consultant just arbitrarily and unilaterally increase his rate?

In an administration where financial missteps seem to occur with regularity, why would we be surprised if this friend and supporter of the mayor felt comfortable in increasing his billing rate and nobody questioned it.

Maybe if the city council decides to take this up with Mayor Jackson, they can find out why the hourly rate changed between the July and November of 2015.

Monday, November 13, 2017

Whatever happened to the City of Trenton's Resident Employment Initiative?

Trenton Mayor Eric Jackson not only rates a failing grade with regards to the management and reporting of his campaign finances (3 years of past due filings) and his Moving Trenton Together private foundation, he’s earns a big fat zero for his Trenton Resident Employment Initiative.

In September of 2014 Trenton City Council passed ordinance 14-42 and created the Trenton Employment Commission. This was done to support the administration’s new policy of seeking at least 25% local employment by contractors on government funded/sponsored projects. The Trenton Employment Commission was to be comprised of the Mayor or his/her designee, a representative from the City Council, a representative from a labor union and four residents of Trenton (the labor rep and the four residents to be appointed by the Mayor).

The stated purpose of the commission is to "meet monthly to oversee the implementation, enforcement and monitoring of the Trenton Resident Employment Policy."

The ordinance was introduced by the Council President (we assume on behalf of the Administration) in August of 2014 just over a month after Jackson took office. The introduction and the adoption by council a month later were both unanimous.

It wasn’t until 13 months after the adoption of the ordinance that the city council approved resolution 15-463, a one year, $50,000 contract with Hill Consultants LLC to coordinate and implement the Trenton Resident Employment Initiative. Hill Consultants was the only respondent to the city’s RFP.

Not surprising for Trenton’s local government, there was some controversy at the time. The contract was pulled from consideration in July of 2015 because ofquestions from the city overseers at the Department of Community Affairs. 

When the resolution awarding the contract finally came before council in October of 2015, mention was made of the fact that Charles Hill, the consulting firm’s principal, had contributed $500 to Eric Jackson’s campaign in 2013. While this did not violate the city’s Pay-to-Play law, it was enough to make South Ward councilman George Muschal vote against the contract. {And it should be remembered that we cannot tell if Mr. Hill made any subsequent contributions to Eric Jackson’s campaign because of the latter’s failure to file reports for the past three years}. North Ward councilwoman Marge Caldwell-Wilson abstained from voting.

It has been two years since Hill Consultants was retained. What has happened since?

Very little, it seems.

Records obtained via OPRA request from the city show that $23,000 of the approved $50,000 was paid to Hill Consultants between December 2015 and June 2016. After May of 2016, Hill Consultants stopped billing the city. There is no documentation as to why and very little in the way of work product to show for the time and money spent.

And when asked, the city replied that the Employment Commission never met nor was anyone even appointed to serve on it.

As noted above, Hill Consultants was the only respondent to the city’s RFP for the Trenton Employment Policy coordinator. The firm’s principal, Charles Hill, is credited with “over 10 years of experience in both the government, not for profit and private sector” in the documents included in the proposal to the city.

Reading through the proposal and researching the firm reveals a couple of ironies. First, Hill Consultants lists an office address in Trenton. According to forms included in the proposal, Charles Hill lists an out of state home address. In a form required under the very initiative he was being hired to coordinate, each contractor or subcontractor must report to the city the number of Trenton residents hired. In this case, none. Not that it was required but the consultant hired to coordinate this local employment initiative was himself not a city resident at the time he was awarded the contract!

The proposal also states that Hill Consultants is a subsidiary of Falcon Ventures, a private equity firm. The website for Falcon lists the same West State Street address as Hill Consultants. New Jersey business records show that in July of 2016 Hill Consultants lost its business status for failure to fileannual reports for two consecutive years. (Sound familiar to anyone?) FalconVentures and Falcon Investments (all part of the series of companies created by Charles Hill) lost their business registration status in June of this year. 

That’s right, the non-resident business consultant failed to file and not just for the consultant company but for the other LLC’s he was a part of. More irony.
An aside: During our records search we also discovered Trenton Partners for (Economic) Development was formed between Charles Hill, Anthony Stewart and Carmen Melendez (she of Tony Mack fame) in February of 2009. That company has also had its business status revoked for failure to file annual reports. And its IRS tax exempt status. The pattern continues.

Next we looked at the invoices submitted to the city by Charles Hill for his services. There are six of them, one for each month, November 2015 through April 2016.

Most of the items listed are for meetings or conference calls with Diana Rogers, the director of Housing and Economic Development for the city. There is one, one hour meeting with Mayor Jackson. There are several blocks of time charged for “Meeting with Hill Consulting Team”, which is a little odd because as far as we can tell, Hill Consultants is a one person shop. (Hill billed time for meeting with himself?)

There is rarely any comment about subject or topics discussed at these meeting or in these phone calls and when there is it simply states something like “discuss Resident Employment Tasks”.  Well, isn’t that rather evident since that was what Hill was hired for?  What about the meat of those meetings; what tasks, specifically, were discussed?

In the invoice marked April 2016, submitted for work performed in March of that year, there is finally some time marked for creating work product. Specifically, 10 hours were billed for the development of a Section 3 conflict of interest policy and 30 hours for an overview and presentation for the commission.

We took a look at the conflict of interest document and it seemed pretty straight forward, boiler plate type language that had been formatted to fit into what we presume to be the Trenton city code book style. A quick Google search turned up various links to similar conflict of interest forms. It sure didn’t take us any 10 hours to do that. A good cut, paste and format session would probably take no more than two hours, three tops.

The work claimed for the overview and presentation to the commission is really intriguing. First of all, we had already established that the commission was never formed and thus never met. Fifteen hours to create the never used powerpoint presentation seems a little high to us.

There are was another combined 10 hours charged for working on FAQ and flow chart attachments to the HUD Section 3 guidelines. Again, seems a little high but what do we know. Maybe Hill is a slow, methodical worker.

What did raise some concerns was the five hours of “Meetings with Community Groups”. There are no specifics given for these meetings. No dates, times, or attendance lists were provided. How does anyone even know if these meetings actually occurred or not? Wouldn’t a prudent steward of public money require and retain back up for auditing purposes?

The invoice labeled May 2016 for hours worked in April also includes mention of meetings with local contractors and community organizations plus development of an outreach document.  We received no example of the document from the city. Again there was no proof that any meetings were held, when they were held, or who attended.

We reached out to noted local contractor Tracey Syphax to see if he had been contacted or made aware of any meetings. His response was that he had no interaction with the consultant nor was he aware of any local contractor who benefited from this program.

We also inquired of John Harmon who leads the Trenton-based African American Chamber of Commerce of New Jersey if he had any contact with Hill or the city with regards to this local employment initiative. His response mirrored Tracey Syphax’s; No contact.

In amongst the papers we did receive from the city was an agenda for an April14, 2016 meeting of the Section 3 Local Hiring Commission. Again, when we followed up with the city we were told the commission was never formed and no meetings were ever held.

Another irregularity we caught was with the purchase orders submitted by Housing and Economic Director Diana Rogers requesting payment to Hill. The first PO was numbered 16-04659 and was for the December 2015 invoice (hours worked in November). The items in the PO pretty much match the invoice. Then Ms. Rogers appears to get lazy or sloppy or both.

The January PO, and all subsequent ones, use the same number of 16-05251. In fact she uses the exact same PO, with Hill’s verification signature dated in January, 2016, just adding handwritten notes telling what month it was for, what the amount being billed that month is, and then the check number that was issued to pay it. We’re not certified municipal comptrollers or finance directors but this doesn’t appear to be the best, cleanest record keeping.

Do they city’s auditors ever catch any of this stuff?

Where is the city council in all of this. Seven of them passed the ordinance creating the commission that was never formed; the commission one of their own was supposed to sit on. Are they not the least bit curious as to what happened to the commission?

Five of them voted to hire the consultant for $50,000 for a year. He billed the city for almost half of that with little to show. Six months later, he was gone. Aren’t they the least bit concerned about what happened?

And what about the Department of Community Affairs? They had concerns at the outset, did they not think it prudent to check back with the city to see how things were progressing? Or maybe their leaving it for the incoming administration of Governor-elect Phil Murphy to sort out. It's announced that incoming Lt. Governor Sheila Oliver will head up the DCA, maybe she can straighten this mess out.

Regardless, it’s yet another failure for the city; another plan of Jackson’s that was never fully executed.

Thursday, November 09, 2017


What do you think about this?

In April, 2016, the Trenton Housing Authority hired Mayor Eric Jackson's sister, Pamela Brooks, to fill an $85,000 position as the Director of Resident and Community Services.

You can find the job description from the THA here.

On the last page, the education requirements are listed:
Required: Bachelor's degree in Social Sciences, Urban Studies, Public Administration or related field.

Preferred: MSW 

As pointed out in David Foster's Trentonian article linked above and confirmed by Brooks' resume, she has a Bachelor of Arts degree in Economics from Rutgers.

That certainly isn't the MSW (Masters of Social Work) that was preferred in the job description.

Wednesday, November 08, 2017

Misleading Trenton Together

Misrepresentation and misstatement seem to be a family affair for Trenton Mayor Eric Jackson and his sister, Pamela Brooks. Their handling of Jackson’s Moving Trenton Together private foundation provides ongoing evidence that they have no idea about how to properly manage their affairs and have no problem trying to cover up by giving misinformation.

The foundation lost its tax-exempt status with the IRS for failing to file the required tax returns for three consecutive years. It has lost its New Jersey state business entity status for not filing the required annual reports for two consecutive years. MTT never registered with the state charitable organization directory. On top of all that, it appears as though MTT used Jackson’s title as mayor to get the “government” rate for renting the War Memorial for holiday concerts when they should have paid a higher, non-profit rate.  And then there is the possibility that individuals on the city of Trenton payroll may have been taking care of some MTT business while on the city’s clock.

Politicians often set up some sort of non-profit as a means to circumvent election campaign finance rules on who can give money, how much can be given (plus offering a tax deduction to donors) and what the money can be spent on. MTT was Formed in December of 2014 by Jackson, his wife, Denice, and his sister, Pam Brooks. In an article published that month, Times reporter Jenna Pizzi wrote, The mayor said he wanted to form the group, rather than partner with the many nonprofits already registered in Trenton, because there are efforts he would like to move on that will compliment the activities of existing groups.”

While there is nothing overtly illegal or improper about setting up a non-profit like MTT, care should be taken to keep it separate from any official city business. No work should be performed for the corporation by city employees while on city time; no city resources expended in the execution of MTT work, etc.  (Just look at the recent scandal involving the Friends of Mercer County Parks non-profit and the Bannon brothers as an example of what can happen).

Corporations in New Jersey must file an annual report. At its most basic, it is a five-minute on-line exercise followed by a payment to the state. It keeps the business status active for a year. The state sends out notices of renewal to the registered agent of record three months prior to the due date. The website provides all current information and not only allows you to file the current report, but you can resolve any deficiencies in prior filing years. Failure to file for two consecutive years results in the state revoking the business’s status.

Moving Trenton Together never filed any annual reports and had its business registration revoked in July of 2016.

The registered agent for MTT is David Minchello. His name also appears on the application for IRS tax exempt status.  At the time of formation, Minchello was employed by the city of Trenton as it Law Director.  Did he prepare and submit the paperwork on city time or his own?  We really can’t say.

We do know this; Minchello used the address of his firm, Antonelli Minchello PC, in Union when registering MTT in December of 2014. In the spring of 2015, the partners closed their firm and joined the DeCotiis Fitzpatrick & Cole firm. Questions arose surrounding the fact that Minchello was the city law director and his new firm had a contract to work for the city as well. He left the city’s employ in the summer of 2015.

When Minchello resigned as law director for the city, nobody thought to change the registered agent.  Renewal notices were likely sent to Minchello’s former address and not forwarded.  Had Jackson/MTT been an actual client of Minchello, would he not have taken care to see that the records were updated and/or a new agent listed? Or did Minchello feel this “duty” was no longer his responsibility because he was no longer a Jackson appointee/city employee?

Certainly, neither Jackson, his wife, nor his sister could be bothered to pay attention to the legal necessities of paperwork regarding their private foundation. It’s easily done, again, on line. But they couldn’t be bothered.  So the business registration has lapsed for failure to file.

Charities in New Jersey are supposed to register with the Division of ConsumerAffairs. There are exemptions for charities which receive less than $10,000 in annual gross receipts.  It is possible that MTT falls into the category, but we don’t know because they haven’t filed any tax returns (more on that in a minute). We do know that a search of the NJ Charitable Organization database turns up no filing for Moving Trenton Together. Doug Palmer’s Trenton First Initiative is there. So is the now defunct Tony Mack Cares Foundation. Even presumed Mayoral candidate Paul Perez’s “Partnerships for Trenton” non-profit has filed the required reports
{Edited for clarity}. There is nothing from or about Jackson’s MTT.

The Trentonian reported in December of 2016 that MTT had yet to file any tax returns.  Indeed, in August, the IRS published the revocation of MTT’s   tax-exempt status for failing to file tax returns for three consecutive years. As a private foundation, MTT was required to file the 990-PF form. Yet they failed to do so for any of their first three years in existence…2014, 2015, or 2016.

Even after the published reports of December 2016, MTT failed to file their returns. As of May of this year the IRS deemed them delinquent and revoked the non-profits tax exempt status. Public notice was posted to the IRS website in August of this year.

The Trentonian reported the following from Jackson:
“With the filing, you get an initial couple years to file it,” the first-term mayor said. “We had attempted to do it internally. There were some errors with it. It came back rejected and we didn’t get it back timely. Now, I have a certified public accountant (CPA) group that’s working on it as we speak to get it done so I can get my reinstatement. We’re curing that now.”
Unfortunately, Jackson’s statement is incorrect. Organizations must file a tax return with the IRS each and every year. In fact, it says so very clearly in the IRS determination letter sent to Jackson’s home address advising him of MTT receiving tax exempt status:

“You’re required to file Form 990-PF, Return of Private Foundation or Section 4947 (a) (1) Trust Treated as Private Foundation, annually, whether or not you have income or activity during the year. If you don’t file a required return or notice for three consecutive years, your exempt status will be automatically revoked. “
There is nothing ambiguous about that statement. MTT was required to file. Period. There is no pass given for “an initial couple of years.” 

As for the statement that the returns were filed but had errors and came back rejected, we wanted to see if that was true. We submitted an FOIA request to the IRS for copies of any returns filed by MTT, erroneous or not. The response came back stating the 990s were "either unavailable, aren't open to public inspection under Section 6104 of the Internal Revenue Code, or destroyed (if it has been six years since the end of the processing year)".

We know that it hasn’t been six years since the end of the processing year because MTT was only founded in 2014 and thus ruled out that reason for no documents being available.

We checked Section 6104 of the Internal Revenue Code and determined that it wasn’t applicable to any returns filed by MTT.

That left open the possibility that there aren’t any records available because none were ever filed. To check on that, we called the IRS and spoke with a very nice fellow who answered a few questions with the adviso that he could only give general responses but that I could “read between the lines” to understand what he was saying.

First, we inquired if a tax-exempt organization is a Private Foundation but files the incorrect tax form three years running, would they have their status revoked. He answered in the affirmative.

Then we asked if, as in the case above, the wrong 990s had been filed
would there still be records available. He answered in the affirmative.

Anticipating my next question regarding MTT specifically, he answered "At this time, there are no records available."

We take this to mean that there are no records of any 990s filed by MTT because none were filed.

This directly contradicts Jackson’s statement that they filed but the form had errors and was returned to him. That simply does not appear to be the case at all. (As of the date of publication, MTT's tax exempt status is still listed as revoked for failure to file on the IRS website).

In the off chance we are drawing an incorrect conclusion, all Mayor Jackson must do is produce copies of the forms that he says were filed in error and returned. And if they have really engaged a CPA who is “working on curing that now”, show proof.  It’s that simple.  

With no tax returns available that report income and expenditures for the non-profit, we decided to look more closely into the shows MTT put on at the Patriots Theater in December 2014, 2015, and 2016. We submitted an Open Public Records Act request for the contracts and correspondence related to the three events.

We found out that MTT paid the “government” rate of $1500 for renting the theater, a 50% savings over the published rate of $3000 for not-for-profit groups. Interestingly, on the War Memorial’s own website there is no“government” rate but rather a “State Agency” rate available “only to state agency clients conducting government business.” We find it hard to see how MTT meets the definition that would qualify them for the discounted rental rate.

First, MTT by design is supposed to be an entity separate and distinct from the city of Trenton. It is therefore NOT an agency of municipal, county or state government. Secondly, per its incorporation documents, MTT was created for the business purpose of [presenting] “cultural events”. Hardly government business.

We raised the question of the rental rates to individuals at the state and were told,
“As previously communicated, the City of Trenton was represented as the Lessee for these events, so in keeping with past practice, the government rate was charged accordingly.”“The payment arrangements that are made between the Lessee, a sponsor, or a 3rd party does not impact the rental rate.”“Also, the identification of a concert for the Citizens of Trenton at no charge was deemed a municipal event.”

Indeed, on the three rental applications for the Patriots Theater, the listed organization/Presenter/Renter is listed as “Mayor Eric Jackson.” Was this done to subtly suggest that it was the City of Trenton renting the hall and thus qualify for the lower rental rate?

On the application for 2014, the check box for the renter’s non-profit status was not checked. On the 2015 and 2016 applications, the “Non-profit” box is checked, but not the government one. The War Memorial staff didn’t seem to pick up on the fact that it was not a government agency holding a government business event at the theater.

All the contact information regarding the rentals was directed to Ms. Brooks…we presume at either her or Jackson's home address and personal email (she’s not on the city payroll so there shouldn’t be a city email address for her). From the initial email correspondence in September of 2014 (before the non-profit was officially formed) Ms. Brooks identifies herself as working “on behalf of Trenton Mayor Eric Jackson” and often refers to the Mayor’s concert giving the impression it was a city event.

The security deposit for the December 2014 concert was a “starter” check such as one gets when one first opens a checking account. It was handwritten with the Payer Name and address listed as “Eric E. Jackson, Mayor” and the mayor’s home address and signed by Gilbert K. Bell. Mr. Bell is (or was at the time – we don’t know if there’s been any changes since Jackson hasn’t filed any campaign reports in three years) the treasurer of the Mr. Jackson’s Election Campaign. A second check bore the handwritten Payer name and address of Moving Trenton Together, and was signed by Jackson himself. In either event, this was NOT a city event and we maintain it should not have qualified for the lower rental rate.

And there’s another question here…the security deposit check signed by Mr. Bell in October 22 of 2014 bears the handwritten number “008”.  The second check, signed by Jackson, was dated December 18, 2014 and hand numbered 0002. It is possible that Jackson was originally going to pay for this from his campaign treasury and then decided to form the non-profit to cover the expenses. Probably because of the fewer restrictions on the donations to and expenditures from a non-profit compared to an election campaign account.

The 2015 and 2016 concerts saw checks written on fully printed checks with the Payer name and address of Moving Trenton Together at the Melrose Ave address. The 2015 checks were drawn on an account at Wells Fargo (same as the 2014 checks) but signed by Jackson himself. The 2016 checks were drawn on an account at Investors Bank and signed by Ms. Brooks.

Despite lots of evidence to the contrary, the state seemed to accept that Mayor Eric Jackson’s name on the contracts somehow made this a city (government) activity. Ms. Brooks never appears to offer up the information that this was not an official city sponsored event. Was it deliberate? You decide.

In another email thread received via the same OPRA request we find that at the beginning of 2017, MTT still owed the state money for the 2014 and 2015 rentals. Starting on February 10 of this year, the CFO of the Department of State reported to Ms. Brooks that MTT still owed the state a little over $3200 dollars. It took nearly a month to resolve the problem. The balances were paid by credit card. The outstanding $1000 balance from the 2014 show stemmed from Brooks claiming she thought the security deposit check had been cashed to cover the balance and only found out it had been returned after going through the mayor’s records.

Ms. Brooks should have paid closer attention. On the second page of the standard lease agreement with the War Memorial, it is explained in paragraph 3 (Payment of Fees) that:

A security damage/cleaning deposit of $1000.00 shall also be paid no less than 14 days prior to the event. (Please make this a separate check). The building security deposit of $1000 will be held by the Lessor until after the Event and consequent inspection of the facility. After a satisfactory inspection of the facility, and the after the Lessee has satisfied any and all financial and other obligations under the contract, the building security deposit will be returned to the Lessee.

Yet again, neither Jackson or Brooks seem capable of reading, comprehending and/or following simple directions. The check was returned and not applied to the balance due, just as is spelled out in the rental documents.

Jackson and Brooks and company repeatedly fail to do the right thing in a timely manner. The explanations offered when questioned about their ineptitude are always weak and don’t appear to stand up to scrutiny. Jackson’s method of operating is sloppy at best and may border on the unethical. 

Trentonians, think about this if he decides to seek a second term.