Housing Authority, Accused of Endangering Residents, Agrees to Oversight

NEW YORK — The federal government on Monday delivered a withering rebuke of New York City’s housing authority, accusing officials of systematic misconduct and indifference in the management of the city’s vast stock of public housing. The failures endangered tenants and workers for years and potentially left more children than previously known poisoned by lead paint in their apartments.

Federal prosecutors in Manhattan said the housing authority, the nation’s largest with 400,000 poor and working-class residents, also covered up its actions, lying to the government and the public about its failure to comply with lead paint regulations and training its staff on how to mislead federal inspectors.

The problems at the authority “reflect management dysfunction and organizational failure,” the prosecutors said, “including a culture where spin is often rewarded and accountability often does not exist.”

The accusations were contained in an 80-page civil complaint brought against the authority, known as NYCHA, by the office of Geoffrey S. Berman, the U.S. attorney in Manhattan, that was filed in federal court. In signing an accompanying consent decree, NYCHA admitted to the conduct, and as part of a broad settlement, the city agreed to spend an additional $1 billion on the authority over the next four years, and $200 million per year after that.

Berman, at a news conference Monday, called the settlement “the beginning of the end of this nightmare.”

“These violations will no longer be tolerated,” he said. “As is so often the case, where there are violations, there is a cover-up.”

The deception, he said, “ends today.”

The court will appoint a monitor to oversee NYCHA.

The authority is chartered by the state, funded mostly through federal grants and rent receipts. The mayor chooses its leadership and largely directs its strategy.

“This morning I entered our city government into a contract with the United States attorney that will aggressively address the infrastructure and accountability failures outlined in the consent decree,” Mayor Bill de Blasio said in a statement, which framed the new city spending as “investments” in the face of decades of disinvestment. “I didn’t run for mayor to continue that history. I ran to help turn it around.”

The settlement, which must be approved by a judge, follows recent news reports that the de Blasio administration was in the final stages of negotiating the agreement.

In 2016 it became known that prosecutors were investigating environmental, health and safety conditions in the city’s public housing — deteriorating conditions that followed years of federal disinvestment — as well as possible false claims submitted by the city to the Department of Housing and Urban Development. De Blasio, who has boasted of his record spending on public housing to fix roofs and other improvements, said in November that the investigation could end with a federal monitor.

The complaint released Monday showed how expansive the investigation was, encompassing fundamental aspects of NYCHA operations. It built a case that NYCHA had failed in its most basic mission — to provide “decent, safe and sanitary” housing, and that officials had actively sought to conceal the problems from outsiders.

The complaint does not name Shola Olatoye, the former NYCHA chairwoman who recently resigned amid public scrutiny over her handling of the lead paint issue, or other NYCHA officials, the authority said.

According to the consent decree, NYCHA residents each year have made thousands of complaints about mold growth, insufficient heat and infestations of cockroaches, mice and rats.

The complaint traces a pattern of NYCHA falsely reporting lead paint certification to federal regulators since at least 2010, during the administration of Michael Bloomberg, earlier than previously acknowledged by the city.

The government said the consequences were real. “Children have been harmed” by NYCHA’s failure to adequately inspect for or correct lead paint hazards. They noted that between 2010 and 2016, at least 19 lead-poisoned children were found to have been exposed to deteriorated lead paint in their NYCHA apartments.

But prosecutors said those cases were likely an understatement given the inadequate inspections of apartments and large numbers of children who may have been exposed and never tested. “There is every reason to believe the true number of children with lead poisoning is materially higher,” the government said.

The complaint lays out the kinds of maintenance failures that posed risks to residents and the efforts that public housing workers and managers went to cover them up in an orchestrated effort to improve scores on federal inspections.

In some of the “starkest misconduct,” the complaint said, workers in some developments would shut off a building’s water supply before an inspector arrived “to temporarily stop ongoing leaks that would otherwise be visible.”

They would turn the water back on after the inspector left.

Other problems were literally covered up. Staff members would “build false walls out of a single layer of plywood to conceal dilapidated rooms” from inspectors, the complaint said.

The housing authority also undermined the integrity of inspections by sending personnel ahead of inspectors to repair deficiencies, the prosecutors said.

The complaint cites one former NYCHA maintenance worker who said he would be given a single electric panel cover and “tasked with running ahead of the inspector to fit that single cover on each uncovered electrical box before the inspector arrived.”

So ingrained was the culture of concealment that for more than a decade, NYCHA gave staff members a “list of ‘Quick Fix Tips’ that served as a how-to manual for misleading inspectors.”

They included advice that where damaged or stained tiles needed to be replaced, painted cardboard could be used instead. “Flammable aerosol cans should be placed out of sight,” the advice continued.

These techniques were included in annual training for staff members on how to prepare for inspections, the complaint says. The list of “Quick Fix Tips” was also kept on NYCHA’s intranet as reference material for the staff, and was only removed last year after the U.S. attorney’s office questioned senior NYCHA executives about the document in front of NYCHA’s attorneys, the complaint said.

The scores NYCHA has received from HUD inspections have been generally passable if not always stellar, making the authority a “standard performer,” according to the published results.

But prosecutors said those numbers were not reliable because the authority had “systematically deceived HUD’s inspectors by concealing the true condition of NYCHA housing.” The authority had created a culture in which the staff felt “compelled” to obtain high scores, “no matter the cost,” the complaint said.